ASSET PURCHASE AGREEMENT
by and between
LOEWENSTEIN, INC.
and
XXXXXX-XXXXX, INC., XXXXXX-XXXXX OFFICE FURNITURE DIVISION, INC.,
AND XXXXXX-XXXXX MANUFACTURING, INC.
June___, 2000
iii
TABLE OF CONTENTS
ARTICLE 1
NATURE OF TRANSACTION
Section 1.1 Purchase and Sale .............................................. 1
Section 1.2 Description of Assets .......................................... 1
Section 1.3 Retained Assets ................................................ 3
Section 1.4 Transfer of Assets ............................................. 3
Section 1.5 Purchase Price ................................................. 4
Section 1.6 Payment of Purchase Price ...................................... 4
Section 1.7 Assumption of Certain Liabilities .............................. 4
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
OF SELLER
Section 2.1 Corporate Status of Seller .................................... 5
(a) Domicile, Powers and Qualification .................................. 5
(b) Authorization and Binding Effect .................................... 5
Section 2.2 No Breach ..................................................... 6
Section 2.3 Seller's Books and Records; Financial Statements .............. 6
Section 2.4 Title to Property ............................................. 6
Section 2.5 Leased Property ............................................... 7
Section 2.6 Contracts and Agreements ...................................... 7
Section 2.7 Insurance ..................................................... 8
Section 2.8 Tax Matters ................................................... 8
Section 2.9 No Finders .................................................... 8
Section 2.10 Special Taxes and Assessments ................................ 8
Section 2.11 Compliance With Law; Permits ................................. 8
Section 2.12 ERISA Matters ................................................ 9
Section 2.13 Actions Since December 31, 1999 .............................. 9
Section 2.14 Location and Condition of Inventory and Equipment ............ 10
Section 2.15 Accounts Receivable .......................................... 10
Section 2.16 Patents and Trademarks ....................................... 10
Section 2.17 Customers and Suppliers ...................................... 10
Section 2.18 Litigation ................................................... 11
Section 2.19 Product Warranties ........................................... 11
Section 2.20 Government Approval .......................................... 11
Section 2.21 Entities Owned by Seller ..................................... 11
Section 2.22 All Material Assets Conveyed ................................. 11
Section 2.23 Adverse Conditions ........................................... 11
Section 2.24 Exhibits ..................................................... 11
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF BUYER
Section 3.1 Corporate Status of Buyer ..................................... 12
Section 3.2 No Consents Required .......................................... 12
Section 3.3 No Finders .................................................... 12
ARTICLE 4
COVENANTS OF SELLER
Section 4.1 Recent of Inspection; Access to Information; Reliance ......... 12
Section 4.2 Operation of Business ......................................... 12
Section 4.3 Preservation of Business ...................................... 13
Section 4.4 Operation and Notification .................................... 13
Section 4.5 Consents ...................................................... 13
Section 4.6 Continuation of Employees ..................................... 13
Section 4.7 Change of Names ............................................... 13
Section 4.8 Cooperation ................................................... 13
Section 4.9 Further Assurances ............................................ 13
Section 4.10 Tax Matters .................................................. 14
Section 4.11 Adverse Actions .............................................. 14
Section 4.12 Negotiations ................................................. 14
ARTICLE 5
COVENANTS OF BUYER
Section 5.1 Payment of Liabilities Assumed ................................ 15
Section 5.2 Confidentiality ............................................... 15
Section 5.3 Further Assurances ............................................ 15
Section 5.4 Tax Matters ................................................... 15
Section 5.5 Operation and Notification .................................... 15
ARTICLE 6
THE CLOSING
Section 6.1 Time and Place of Closing ..................................... 16
Section 6.2 Closing Date .................................................. 16
Section 6.3 Conditions to the Obligations of Buyer ........................ 16
(a)Correctness of Representations and Warranties Compliance .............. 16
(b)Financing ............................................................. 16
(c)Approvals and Consents ................................................ 16
(d Due Diligence; Exhibits ............................................... 16
(e) Employment Agreements ................................................ 17
(f) Non-Competition and Non-Solicitation Agreement
17
(g)Purchase of WinsLoew Furniture, Inc. Equity ........................... 17
(h)Satisfaction of Buyer and Its Counsel ................................. 17
(i)No Material Adverse Change ............................................ 17
(j)Consent of Landlord to Remove Assets .................................. 17
Section 6.4 Conditions of Obligations of Seller ........................... 17
(a)Correctness of Representations and Warranties; Compliance ............. 18
(b)No Proceedings ........................................................ 18
(c)Approvals and Consents ................................................ 18
Section 6.5 Deliveries By Seller .......................................... 18
Section 6.6 Deliveries By Buyer ........................................... 19
ARTICLE 7
INDEMNIFICATION
Section 7.1 Indemnification by Seller ..................................... 19
Section 7.2 Notice to Seller .............................................. 20
Section 7.3 Indemnification By Buyer ...................................... 20
Section 7.4 Notice to Buyer ............................................... 20
Section 7.5 Deadline for Indemnification Claims ........................... 20
ARTICLE 8
TERMINATION
Section 8.1 Termination of This Agreement ................................. 21
Section 8.2 Notice of Termination ......................................... 21
Section 8.3 Effect of Termination ......................................... 21
ARTICLE 9
MISCELLANEOUS
Section 9. 1 Expenses ..................................................... 21
Section 9.2 Risk of Loss .................................................. 21
Section 9.3 Transfer Taxes ................................................ 22
Section 9.4 Notices ....................................................... 22
Section 9.5 Table of Contents; Captions ................................... 23
Section 9.6 Incorporation of Appendices and Exhibits ...................... 23
Section 9.7 Entire Agreement and Amendment ................................ 23
Section 9.8 Severability .................................................. 23
Section 9.9 Successors and Assigns ........................................ 23
Section 9.10 Governing Law ................................................ 23
Section 9.11 Counterparts ................................................. 24
Section 9.12 Attorneys Fees ............................................... 24
Section 9.13 Public Announcements ......................................... 24
Section 9.14 Survival ..................................................... 24
Section 9.15 Bulk Sales Laws .............................................. 24
Section 9.16 Arbitration .................................................. 24
INDEX TO EXHIBITS
Exhibit 1.2(a) ..... Assigned Leases
Exhibit 1.2(b) ..... Equipment
Exhibit 1.2(e) ..... Bank Accounts
Exhibit 1.2(g) ..... Assigned Contracts
Exhibit 1.2(j) ..... Intellectual Property
Exhibit 1.2(q) ..... Vehicles
Exhibit 1.6 ........ Escrow Agreement
Exhibit 1.7 ........ Other Assumed Liabilities
Exhibit 1.8(a) ..... March 31, 2000 Minimum Net Asset Value Calculation Sheet
Exhibit 2.3(a) ..... Reviewed Financial Statements
Exhibit 2.3(b) ..... Interim Financial Statements
Exhibit 2.4 ........ Permitted Encumbrances
Exhibit 2.5 ........ Assignment Restrictions - Leases
Exhibit 2.6 ........ Assignment Restrictions - Contracts
Exhibit 2.11 ....... Compliance With Laws
Exhibit 2.13 ....... Actions Since December 31, 1999
Exhibit 2.15 ....... Accounts Receivable
Exhibit 2.17 ....... Customers and Suppliers
Exhibit 2.18 ....... Litigation
Exhibit 2.19 ....... Product Warranties
Exhibit 2.21 ....... Entities Owned By Seller
Exhibit 4.10 ....... Purchase Price Allocation Sheet
Exhibit 6.3(a) ..... Seller's Certificate
Exhibit 6.3(e) ..... Employment Agreements
Exhibit 6.3(f) ..... Non-Competition and Non-Solicitation Agreement
Exhibit 6.3(g) ..... Shareholders Agreement
Exhibit 6.3(h) ..... Seller's Counsel's Opinion Letter
Exhibit 6.4(a) ..... Buyer's Certificate
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement") is made as of the ___ day of
June, 2000, by and among, XXXXXX-XXXXX, INC., XXXXXX-XXXXX OFFICE FURNITURE
DIVISION, INC., AND XXXXXX-XXXXX MANUFACTURING, INC., North Carolina
corporations (individually and collectively "Seller", and the three corporations
shall jointly and severally share all rights and liabilities under this
Agreement), and LOEWENSTEIN, INC. ("Buyer").
WITNESSETH:
WHEREAS, Seller is engaged in the business (the "Business") of manufacturing and
selling lodging and office furniture at its principal place of business in
Davidson County, North Carolina; and
WHEREAS, Seller desires to transfer all or substantially all of its assets used
or useful in the Business to Buyer in exchange for cash and the assumption by
Buyer of certain specified liabilities of Seller as herein provided; and
WHEREAS, Buyer desires to acquire such assets and assume such liabilities of
Seller, all as hereinafter more fully set forth;
NOW, THEREFORE, in consideration of the premises and of the mutual covenants and
agreements hereinafter set forth, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
mutually covenant and agree as follows:
ARTICLE 1
NATURE OF TRANSACTION
Section 1.1 Purchase and Sale. On the basis of the representations and
warranties and subject to the terms and conditions set forth in this Agreement,
Seller agrees to sell, convey, transfer, assign, set over and deliver to Buyer,
and Buyer agrees to buy from Seller, the Assets (as hereinafter defined) for the
purchase price specified in Section 1.5 hereof and payable in accordance with
Section 1.6 hereof.
Section 1.2 Description of Assets. On the terms and subject to the conditions
herein expressed, Seller agrees to sell, convey, transfer, assign, set over and
deliver to Buyer on the Closing Date (as hereinafter defined), and Buyer agrees
to buy from Seller, the following assets of Seller, whether owned jointly or
severally (hereinafter collectively referred to as the "Assets", all free and
clear of any and all liens, claims, charges, encumbrances or rights of consent
of any nature whatsoever (other than Permitted Encumbrances, as hereinafter
defined):
(a) all interests of Seller under the leases and other rental agreements listed
or described on Exhibit 1.2(a) hereto (collectively, the "Assigned Leases" (the
real and personal property subject to the Assigned Leases is hereinafter
referred to collectively as the "Leased Property");
(b) all machinery, equipment, furniture, vehicles, tools, handling equipment,
and other fixed assets and tangible personal property used or usable in the
Business, including, without limitation, those items listed or described on
Exhibit 1.2(b) hereto (collectively, the "Equipment");
(c) all inventories of raw materials, work-in-process and finished goods,
packaging, printed materials and supplies, in possession of Seller or suppliers
inventories (including, without limitation, parts, maintenance and operating
supplies, and spare parts for machinery and equipment), wherever located (the
"Inventory"), as of the Closing Date;
(d) all right, title and interest of Seller as of the Closing Date in purchase
orders for goods and services;
(e) all cash, cash equivalents and bank accounts of Seller as of the Closing
Date, which bank accounts are listed on Exhibit 1.2(e) hereto;
(f) all right, title, and interest of the Seller in its trade accounts
receivable, intercompany receivables, and all other receivables, credits, and
refunds as of the Closing Date;
(g) all right, title and interest of Seller under the contracts and other
agreements listed or described on Exhibit 1.2(g) hereto (collectively, the
"Assigned Contracts");
(h) all right, title and interest of Seller in and to all certificates of
occupancy and other licenses, permits and authorizations of governmental or
quasi governmental agencies and authorities or private parties relating to the
distribution, use, operation or enjoyment of the Assets;
(i) all claims of Seller against third parties relating to the Assets or the
Business;
(j) all right, title and interest of Seller in and to all patents, copyrights,
trademarks, servicemarks, trade names, trade styles, brand names and other
intangible property used in connection with the Business, and all designs,
plans, specifications, renderings, drawings, models, prototypes, methods and
processes relating to the products and services offered by the Seller including,
without limitation, those items listed or described on Exhibit 1.2(j) hereto;
(k) all right, title and interest of Seller in and to all bonds or deposits made
by Seller or its predecessors (or its agents) with any governmental agency or
authority or with any utility company or third party relating to the
distribution, use, operation or enjoyment of the Assets;
(l) all right, title and interest of Seller in and to all prepaid rentals and
other prepaid expenses arising from payments made by Seller in connection with
the Business on or prior to the Closing Date for goods and services, including,
without limitation, insurance premium refunds or returns;
(m) (i) originals or, at Seller's option, true and correct copies of all
personnel records of those employees of Seller to be employed by Buyer following
the Closing, marketing studies, customer lists, customer files, customer
purchase orders, customer materials, art works, supplier files, dealer files,
sales agent and manufacturers' representatives files, credit files, credit data,
appraisals, valuations, and consulting studies and all other books, records,
reports, ledgers, files, documents, data, information, correspondence and lists
relating to the Business, the Assets or the Assumed Liabilities (as hereinafter
defined) (all of the foregoing being hereinafter collectively referred to as the
"Records"), and (ii) all printed and other advertising, sales and promotional
materials, catalogues, stationery, office supplies, product descriptions,
printing plates, forms and other similar supplies and materials, and all
computer programs, computer software, computer manuals, flowcharts, printouts,
data files, program documentation and all other related materials relating to
the Business, the Assets or the Assumed Liabilities and all copies of each
hereof;
(n) any insurance proceeds paid or payable to Seller on or after the date hereof
pursuant to any contract of insurance as a result of damage to or loss of any of
the assets owned or operated by Seller that are to be, or in the absence of loss
would otherwise have been, sold to Buyer hereunder (other than the amounts paid
or payable to Seller as reimbursement for amounts actually paid by Seller for
repair or replacement of such assets), or as a result of damage or loss with
respect to or interruption of the operation of the Business, the purpose of this
provision being to assure that Buyer receives the insurance proceeds otherwise
payable to Seller intended to make Seller whole on account of any damage or loss
to the assets being, purchased by Buyer occurring on or prior to the Closing
Date, or damage or loss to or interruption of the operations of the Business
subsequent to the Closing Date;
(o) all goodwill associated with the Business; and,
(p) any and all other assets relating to the Business, tangible and
intangible, except the Retained Assets (as hereinafter defined).
(q)the vehicles described in Exhibit 1.2(q) which Buyer agrees to sell to
certain individual owners or employees of the Seller at the amounts
stipulated in Exhibit 1.2(q).
Section 1.3 Retained Assets. On and after the Closing Date, Seller shall
retain the following assets (collectively, the "Retained Assets"):
(a) the documents relating to Seller's organization, existence and
qualification to do business; and
(b) the life insurance policies and the underlying cash value of such policies.
Section 1.4 Transfer of Assets. The Assets shall be conveyed to Buyer on and as
of the Closing Date, free and clear of all liens, claims, charges, encumbrances
or rights of consent of any nature whatsoever (other than Permitted
Encumbrances, as hereinafter defined).
Section 1.5 Purchase Price. The total potential consideration to be paid by
Buyer for the Assets (the "Purchase Price") shall be Three Million Eight Hundred
Thousand United States Dollars (U.S. $3,800,000) to be paid by Buyer as provided
in Section 1.6 hereof. In addition, the Assumed Liabilities (as hereinafter
defined) shall be assumed by Buyer pursuant to Section 1.7.
Section 1.6 Payment of Purchase Price. Two Million Eight Hundred and Fifty
Thousand Dollars ($2,850,000)) of the Purchase Price shall be paid on and as of
the Closing Date by the delivery by Buyer to Seller in United States Dollars by
means of a wire transfer of immediately available funds, or in such other manner
or form as may be mutually satisfactory. Two Hundred and Fifty Thousand Dollars
($250,000)) (the "Escrow Funds") shall be paid on and as of the Closing Date by
the delivery by Buyer to Suntrust Bank, Atlanta office, as escrow agent (the
"Escrow Agent") pursuant to the terms of the "Escrow Agreement," attached as
Exhibit 1.6. As provided in the Escrow Agreement, the Escrow Funds shall be held
in an account (the "Escrow Account") to provide indemnification to the Buyer as
provided in Section 7.1 hereof. The Buyer shall also pay to Seller a contingent
deferred payment of up to Seven Hundred Thousand Dollars ($700,000) to be paid
as follows: For all sales from June 1, 2000 to December 31, 2000, if the Buyer's
sale of Seller's products produces up to $5,000,000 net sales on the top line
and------ 32% standard gross margin, then Buyer shall pay, on or before January
31, 2001, to Seller $140,000 per $1,000,000 of gross sales up to a maximum of
$700,000.
Section 1.7 Assumption of Certain Liabilities. On the Closing Date, Buyer shall
not be obligated to assume, and shall not assume, any of the liabilities or
obligations of Seller (absolute, accrued, contingent or otherwise), whether
existing prior to or as of the Closing Date, or asserted after the Closing Date
and relating to events that occurred before the Closing Date, or otherwise,
except Buyer shall assume and agrees to pay, perform and discharge, in
accordance with their respective terms, the following (collectively referred to
herein as the "Assumed Liabilities"):
(a) all obligations of Seller arising in the ordinary course of business under
the Assigned Leases or the Assigned Contracts to the extent transferable;
(b) all trade accounts payable, customer deposits and accrued expenses, but not
any accrued income or sales taxes or employee related expenses including, but
not limited to, withholding taxes, 401(k) withholdings or matching
contributions, company payroll taxes, vacation accruals, bonuses, miscellaneous
withholdings, or accrued salaries and wages, associated with the Assets of
Seller as of the Closing Date arising in the ordinary course of business;
(c) the obligations of Seller as of the Closing Date to fill orders received by
Seller in the ordinary course of business (i) for the manufacture and sale of
lodging and office furniture, (ii) for the sale of parts, or (iii) for service
and maintenance of said furniture or parts; and
(d) the other obligations and liabilities of Seller that are listed on Exhibit
1.7 hereto.
Nothing in this Agreement shall be deemed to create any obligation on the part
of Buyer to continue the employment of any individual or to create any contract
right or entitlement with respect thereto. Buyer shall have no responsibility
for any amounts, obligations, liabilities, compensation, severance pay or
benefits of any kind or nature due to Seller's employees through the Closing
Date or arising as a result of the termination by Seller of any such employees
in connection with the transactions contemplated by this Agreement, including,
without limitation, any benefits that may arise under the Consolidated Omnibus
Budget Reconciliation Act of 1985, as amended, and any and all such liabilities
and obligations shall be the sole responsibility of Seller. Seller shall prepare
and file all payroll reports and Forms W-2 for its employees through the Closing
Date.
Unless expressly stated in this Section 1.7 or in Exhibit 1.7, nothing in this
Agreement shall be deemed to create any obligation on behalf of the Buyer with
regard to any liabilities arising out of the operation of the Seller's Business
or the ownership of the Assets prior to or through the Closing Date of any
nature whatsoever, whether known or unknown, direct or indirect, contingent or
accrued, matured or unmatured including, but not limited to, claims for
violation of any statutes, laws, regulations, rules, ordinances or orders of any
authority, whether federal, state or local, tax claims or tax liens, labor
relation claims, OSHA related claims, EEOC related claims, employee benefit
claims, ERISA related claims, employee claims, environmental, health and safety
claims, EPCRA related claims, product warranty, product return and product
liability claims for products sold prior to or through the Closing Date,
medical, dental and workers' compensation claims, computer software license
claims, claims for personal injury, claims for injury to property, claims for
breach of contract, claims for compensatory damages, claims for punitive
damages, creditor claims, claims by lenders, claims on accounts, claims for
unpaid debts, any and all claims by Seller's shareholders, and any and all
litigation arising out of the foregoing claims.
All liabilities of the Seller not herein defined as Assumed Liabilities shall
hereinafter be referred to as the "Retained Liabilities."
Section 1.8 Minimum Net Asset Value Adjustment to Purchase Price. The Purchase
Price shall be subject to an adjustment after Closing pursuant to the following
provisions:
(a) As promptly as practicable, but in no event later than 45 business days
after the Closing Date, the Buyer shall prepare and deliver to the Seller a
balance sheet of the Seller's Business as of the open of business on the Closing
Date prepared in accordance with GAAP with no Change in Accounting Principles
from those utilized in preparing the Interim Financial Statements including with
respect to the nature of accounting in determining the level of reserves or in
determining the level of accruals (the "Closing Balance Sheet"), together with a
schedule setting forth in reasonable detail the Buyer's good faith calculation
of the Minimum Net Asset Value at Closing. The "Minimum Net Asset Value" means
the total value of the Assets acquired as of the Closing Date minus the total
amount of the Assumed Liabilities as of the Closing Date, and minus the total
amount of certain of Seller's Retained Liabilities as of the Closing Date as set
forth on Exhibit 1.8(a), as determined by reference to the amounts set forth on
the face (but not the notes) of the Closing Balance Sheet. The method of
calculation of the Minimum Net Asset Value should be consistent with the method
of calculation for the minimum net asset value as of March 31, 2000 found on
Exhibit 1.8(a).
(b) The Buyer and its accountants shall permit the Seller and its
representatives to have full access to the books, records and other documents
(including work papers) pertaining to or used in connection with preparation of
the Closing Balance Sheet and the Buyer's calculation of the Minimum Net Asset
Value at Closing and provide the Seller and its representatives with copies
thereof (as reasonably requested by the Seller). If the Seller disagrees with
the Buyer's calculation of the Minimum Net Asset Value as set forth on the
schedule attached to the Closing Balance Sheet or with any other aspect of the
Closing Balance Sheet for any purpose under this Agreement, the Seller shall
notify the Buyer in writing of such disagreement (the "Objection Notice") (such
Objection Notice setting forth the basis for such disagreement in reasonable
detail) within 15 business days after the Buyer's delivery of the Closing
Balance Sheet to the Sellers. The Buyer and the Seller thereafter shall
negotiate in good faith to resolve any such disagreements with respect to the
computation of the Minimum Net Asset Value or any other aspect of the Closing
Balance Sheet. If the Buyer and the Seller are unable to resolve any such
disagreements within 15 business days after the delivery of the Objection Notice
to the Buyer by the Seller, the Buyer and the Seller shall submit the dispute to
a so-called "big four" public accounting firm (or a successor thereto) jointly
selected by the Buyer and the Seller (the "Accountant") for resolution; and at
the time of such submission, the Buyer and the Seller shall each disclose to the
other any professional relationships by and between the Seller and the Buyer and
its shareholders, directors, and officers, and any such "big four" accounting
firms during the three (3) year period immediately prior to Closing. If the
Buyer and the Seller are unable to agree upon the Accountant, the Accountant
shall be a so-called "big four" accounting firm (or a successor thereto)
selected by lot (after the Buyer and the Seller each exclude one such accounting
firm). The Buyer and the Seller agree to release the Accountant from any and all
claims or liabilities for any services performed by the Accountant in resolving
any dispute concerning the computation of Minimum Net Asset Value.
(c) The Buyer and the Seller shall use their respective best efforts to cause
the Accountant to resolve all disagreements with respect to the Minimum Net
Asset Value or otherwise with respect to the Closing Balance Sheet as soon as
practicable, but in any event shall direct the Accountant to render a
determination within 30 days of its retention. The Accountant shall consider
only those items and amounts in the Closing Balance Sheet which are identified
in the Objection Notice as being items which the Buyer and the Seller are unable
to resolve. In resolving any disputed item, the Accountant may not assign a
value to any item greater than the greatest value for such item claimed by
either party or less than the smallest value for such item claimed by either
party. The Accountant's determination shall be based solely on presentations by
the Buyer and the Seller (i.e., not on independent review), and on the
definition of Minimum Net Asset Value included herein. The determination of the
Accountant shall be conclusive and binding upon the Seller and the Buyer and
constitute the Minimum Net Asset Value for purposes of this Agreement. The
Accountant's expenses shall be borne equally by the Buyer and Seller.
(d) Upon the final determination of the Minimum Net Asset Value, if the Minimum
Net Asset Value is less than $1,150,000.00, the Seller shall pay the amount of
any such deficiency to the Buyer no later than three business days after the
final determination of the Minimum Net Asset Value, by wire transfer of
immediately available funds to an account designated by the Buyer in writing;
and any payment made pursuant to this provision shall be treated by the Buyer
and the Seller as an adjustment to the Purchase Price.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
OF SELLER
Seller represents and warrants to and covenants with Buyer and its successors
and assigns as follows:
Section 2.1 Corporate Status of Seller.
(a) Domicile, Powers and Qualification. Seller is a corporation duly organized,
legally and validly existing, and in good standing under the laws of North
Carolina with full power and authority (corporate, governmental or otherwise)
necessary to own its properties and conduct its business as it now exists or is
being conducted and to enter into this Agreement and the transactions
contemplated hereby.
(b) Authorization and Binding Effect. All requisite corporate action required to
be taken by Seller or its shareholders to authorize the execution and delivery
of this Agreement and the transactions contemplated hereby have been taken, and
this Agreement constitutes a valid and binding agreement enforceable against
Seller in accordance with the terms and subject to the conditions hereof.
Section 2.2 No Breach. Neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby will (i) conflict with
or result in the breach of any provision of the Articles of Incorporation or
Bylaws of Seller, (ii) except as disclosed on any Exhibit to this Agreement,
constitute a default (or an event which, with notice or lapse of time or both,
would constitute a default) in the terms, conditions or provisions of any note,
bond, mortgage, indenture, license, agreement or other material instrument or
obligation to which Seller is a party or by which Seller or the Assets is bound,
or (iii) violate any judgment, order, injunction, decree, statute, rule or
regulation applicable to Seller or the Assets.
Section 2.3 Seller's Books and Records; Financial Statements. The books and
records of Seller have been regularly kept and maintained on the accounting
basis used by Seller for income tax purposes, and such books and records fairly
and accurately reflect, in all material respects, the transactions of Seller to
which either it is a party or by which its properties are bound; Seller's books
and records are maintained at its principal place of business in Davidson
County, North Carolina, and no portion of Seller's records, systems, controls,
data or information is recorded, stored, maintained, operated or otherwise
wholly or partly held by a means (electronic, mechanical, computerized or
otherwise) not under the exclusive ownership and control (including all means of
access) of Seller.
Seller has furnished Buyer with copies of reviewed, but not audited, financial
statements of Seller through the period ended December 31, 1999 (the "Reviewed
Financial Statements"). The Reviewed Financial Statements are attached hereto as
Exhibit 2.3(a). Since December 31, 1999, there has not been any material adverse
change in the financial condition, business, properties or results of operations
of Seller. The Seller has also furnished Buyer with copies of internally
generated monthly financial statements (the "Interim Financial Statements)
attached as Exhibit 2.3(b). The Interim Financial Statements are in accordance
with the books and records of Seller, present fairly the financial condition of
Seller at March 31, 2000, and the results of operations for the three month
period covered thereby, and have been prepared in accordance with generally
accepted accounting principles applied on a basis consistent with that of the
Reviewed Financial Statements. At March 31, 2000, Seller had no liabilities
which are required under generally accepted accounting principles to be shown or
provided for and are not fully shown or provided for in the Interim Financial
Statements .
Section 2.4 Title to Property. Except as set forth on Exhibit 2.4 hereto, Seller
is the owner, or with respect to the Leased Property, the lessee, of the Assets
being transferred hereunder, and has good and marketable title to all such
Assets (other than the Leased Property) and good and defensible title to the
Leased Property, free and clear of any mortgage, security interest, easement,
covenant, lien, charge or other encumbrance, other than the Permitted
Encumbrances (as hereinafter defined). Upon Seller's transfer and sale of such
Assets to Buyer pursuant to this Agreement, Buyer will have good and marketable
title to all of such Assets (other than the Leased Property) and good and
defensible title to the Leased Property, free and clear of any mortgage,
security interest, easement, covenant, lien, charge or other encumbrance, except
as set forth on Exhibit 2.4 hereto (all of which exceptions shall hereinafter be
collectively referred to as the "Permitted Encumbrances"). Except as disclosed
in Exhibit 1.2(a) hereto, Seller does not hold or use any of the Assets pursuant
to any lease, conditional sales contract, franchise or license.
Section 2.5 Leased Property. Exhibit 1.2(a) hereto sets forth as of the date
hereof a list of all leases under which Seller is lessee of any of the Assets,
and Seller has furnished to Buyer complete and correct copies of all such,
leases (including all amendments thereto). All such leases are valid, binding
and in full force and effect against Seller, are valid, binding and in full
force and effect against the respective lessors and, except as set forth on
Exhibit 1.2(a), have not been amended or modified. Seller is not in default, and
no notice of alleged default has been received by Seller, under any such leases,
no lessor is in default or alleged to be in default thereunder, and there exists
no condition or event which, after notice or lapse of time or both, would
constitute a default by Seller. Seller warrants that it shall make all payments
required to be paid and perform in all material respects all acts which are
required to be performed by Seller pursuant to such leases prior to Closing.
Seller does not know or have reason to know of any cancellations or
terminations, or threats to cancel, terminate or not renew or extend any such
lease by any other party thereto. Except as set forth in Exhibit 2.5 hereto, the
rights of Seller under all such leases are assignable by Seller on the same
terms, conditions and rentals as now apply to Seller, without the consent of any
other party.
Section 2.6 Contracts and Agreements. Exhibit 1.2(g) hereto sets forth a list of
all contracts or other agreements (other than those listed on Exhibit 1.2(a))
relating to the Business to which Seller is a party or by which Seller or any of
the Assets is or may become bound, and
Seller has furnished to Buyer complete and correct copies of all such contracts
or other agreements (including all amendments thereto). All contracts or other a
agreements referred to in Exhibit 1.2(g) hereto are valid, binding and in full
force and effect against Seller, are valid, binding and in full force and effect
against the other parties thereto, and, except as set forth on Exhibit 1.2(g)
hereto, have not been amended or modified. Seller is not in default, and no
notice of alleged default has been received by Seller, under any of such
contracts or other agreements, to the best of Seller's knowledge no other party
thereto is in default or alleged to be in default thereunder, and there exists
no condition or event which, after notice or lapse of time or both, would
constitute a default by any party thereto. Seller warrants that it shall make
all payments required to be paid and perform all acts which are required to be
performed by Seller pursuant to such contracts or other agreements prior to
Closing. Except as set forth on Exhibit 2.6 hereto, all such contracts or other
agreements are assignable by Seller on the same terms and conditions as now
apply to Seller without the consent of any other party thereto. As used in this
Agreement, "contracts or other agreements" shall mean all contracts, agreements,
purchase orders, franchises, commitments, leases, licenses, mortgages, notes,
bonds, indentures, loans or other instruments.
Section 2.7 Insurance. Seller's insurance policies are in full force and effect
and will remain in effect through the Closing Date.
Section 2.8 Tax Matters. For all periods prior to the date of this Agreement and
through the Closing Date, to the best of Seller's knowledge, all Federal, state,
and local taxes due from or with respect to Seller have been timely and fully
paid.
Section 2.9 No Finders. No finder or any agent, broker or other person acting
pursuant to Seller's authority is entitled to make any claim against Buyer for
any commission or finder's fee in connection with the transactions contemplated
by this Agreement, except that Buyer shall be responsible for the payment of any
broker or finder's fee charged by Xxxx, Xxxxxxxxx & Xxxxxxxx.
Section 2.10 Special Taxes and Assessments. No special taxes or assessments have
been levied against the Assets and not paid, and to the best of Seller's
knowledge, none are pending, contemplated or threatened.
Section 2.11 Compliance With Law; Permits. Set forth on Exhibit 2.11 hereto are
all judicial, administrative or regulatory judgments, decrees, orders or
injunctions issued specifically for the purpose of governing, directing or
restriction the conduct of the Business by Seller. Seller is not now, nor at the
Closing will be, in violation of (i) any applicable judgment, order, injunction,
award or decree relating to the Business or (ii) any federal, state or local
law, statute, ordinance, code, rule or regulation or any other requirement of
any governmental body, court or arbitrator (collectively "Laws") which is
applicable to the Business (including, without limitation, the Federal
Occupational Safety and Health Act of 1970, as amended, and the rules and
regulations issued thereunder, and Laws relating to matters of environmental
protection or hazardous waste disposal). Seller has remedied or caused to be
remedied all violations of any such Laws that had been brought to the attention
of Seller pursuant to a claim by any governmental agency, inspector, employee or
other person except those violations being contested in good faith by Seller.
There are not now pending, nor have there been pending at any time any such
contests by Seller, regardless of the outcome or disposition thereof, except as
may be described and set forth on Exhibit 2.11 hereto. To the extent that any
such contests are now pending, Seller warrants that an adverse determination
thereof shall not have an adverse material effect on the Assets or the conduct
of the Business. Except as set forth on Exhibit 2.11 hereto, all permits,
licenses, certificates of occupancy, orders or approvals of any federal, state,
local or foreign governmental or regulatory body that are material to or
necessary in the conduct of the Business as presently operated by Seller have
been obtained by Seller and are in full force and effect, except to the extent
that the failure to obtain such permits, licenses, certificates of occupancy,
orders or approvals would not have a material adverse effect on the Assets or
the Business. Except as set forth on Exhibit 2.11 hereto, Seller has furnished
to Buyer true and complete copies of all permits, licenses, certificates of
occupancy, orders or approvals of any federal, state, local or foreign
governmental or regulatory body (collectively, the "Permits") referred to
therein and, except as set forth on Exhibit 2.11 hereto, to the best of Seller's
knowledge, (a) all such Permits are in full force and effect, with no violations
having been reported in respect of any such Permit, and (b) no proceeding is
pending or threatened to revoke limit, cancel or not extend or renew any such
Permit. Except as set forth on Exhibit 2.11 hereto, all of the Permits are
assignable by Seller on the same terms and conditions as now apply to Seller,
without the consent of any other party. Seller warrants that it shall make all
payments and perform all acts which may be required to be paid or performed
pursuant to all Laws and Permits applicable to the Business prior to Closing.
There has been no adverse material change in the qualifications, limitations or
restrictions imposed by such Laws and Permits on the operation of the Business
since.
Section 2.12 ERISA Matters. None of the Assets are subject to a lien pursuant to
Section 302(f) or Section 4068 of ERISA and no event has occurred which could
subject any of the Assets to any such lien. Neither Seller nor any affiliate of
Seller has engaged in any transaction or is a successor to or parent corporation
of any party which has engaged in any transaction which could subject it to
liability under Section 4069 of ERISA.
Section 2.13 Actions Since December 31, 1999. Except as set forth in Exhibit
2.13 hereto, since December 31, 1999 Seller has not: (i) incurred or agreed to
incur any obligations or liabilities, except obligations or liabilities in the
ordinary course of business or under contracts, leases, documents and
transactions listed in the Exhibits hereto, or incurred or agreed to incur any
long term debt; (ii) satisfied and discharged any lien, or paid any obligation
or liabilities other than liabilities included in the Reviewed Financial
Statements, liabilities incurred since December 31, 1999 in the ordinary course
of business, and obligations and liabilities under contracts, leases,
transactions or documents listed or described in the Exhibits hereto; (iii)
declared or paid any distribution or dividend to Seller's shareholders or
effected any repurchase or other acquisition of Seller's capital stock; (iv)
mortgaged, pledged or subjected to lien or other encumbrance any of its property
(except in the ordinary course of business and except possible liens for current
state and local property taxes not in default); (v) sold or transferred any of
its assets or canceled any debts owing to it or claims owned by it, except in
each case in the ordinary course of business; (vi) sold, assigned or granted
rights under any patent, trade name, trademark, servicemark, or copyright, or
any application therefor; (vii) experienced any labor dispute materially and
adversely affecting the business or financial condition of Seller; (viii) waived
any rights of material value; (ix) experienced any change in the financial
condition or the operations or business of Seller, other than changes in the
ordinary course of business, none of which has been materially adverse; (x)
reduced or permitted the reduction of inventories of furniture, parts, and
supplies other than seasonal reductions consistent with past practice and in the
ordinary course of business; (xi) suffered any damage or destruction, whether or
not covered by insurance, materially and adversely affecting the properties or
business of Seller; or (xii) become aware of any other event or condition of any
character pertaining to and materially and adversely affecting, or which may
materially and adversely effect, the business or the financial condition of
Seller.
Section 2.14 Location and Condition of Inventory and Equipment. All of the
Inventory and the Equipment is located at Seller's principal place of business
in Davidson County, North Carolina, and is in good operating condition and in a
good state of maintenance and repair. The inventory shown in the Interim
Financial Statements, all current inventories of Seller, and all inventories
hereafter acquired by Seller through the Closing Date and as reflected on the
Closing Balance Sheet, consist or will consist generally of items of a quality
and quantity usable or saleable in the ordinary and regular course of the
Business; the value of obsolete items and of items below standard quality has
been written down to realizable market value; and the values at which inventory
is carried on the Interim Financial Statements reflect the normal inventory
valuation policy of Seller of stating inventory at the lower of cost or market,
all in accordance with generally accepted accounting principles. There will be
no material changes in the Seller's inventories between the date hereof and the
Closing Date, except those changes resulting from purchases in the ordinary and
regular course of business and from sales or leasing of inventory in the
ordinary and regular course of business consistent with prior years. Seller
guarantees Buyer that the inventory is usable in Seller's current product line.
Any of Seller's inventory which has not been used upon the expiration of six
months from the Closing Date will be disposed of or made available to Seller at
Seller's request. To the extent that Buyer does not receive the normal gross
margin on such inventory within six months from the Closing Date, the Buyer
shall send written notice to the Seller indicating the specific amount of the
actual gross margin received by Buyer and the specific amount of deficiency from
the normal grossmargin. The Seller shall pay the Buyer the amount of this
deficiency within 30 days of the receipt of any notice pursuant to this Section
2.14.
Section 2.15 Accounts Receivable. Except as provided in Exhibit 2.15 hereto, the
accounts receivable of Seller as of the date hereof are, and the accounts
receivable of Seller on the Closing Date will be, properly accrued on the books
of Seller, valid obligations of the respective makers thereof and not subject to
any valid offset or counterclaims, freely assignable by Seller to Buyer, and
fully collectible in the ordinary course of business. Seller guarantees that
neither CIT nor any other factoring company will have a lien on said accounts
receivable or any of the other Assets after the Closing Date. Any liens on
accounts receivable currently held by factoring companies must be paid in full,
satisfied and released on or before the Closing Date.
With respect to accounts receivable reflected on the Closing Balance Sheet (the
"Accounts Receivable"), the Seller guarantees the collectibility of the Accounts
Receivable in full. The Buyer agrees to use efforts consistent with the Seller's
past custom and practice to cause the Buyer to collect all Accounts Receivable,
but shall not be obligated to resort to litigation. Any sums payable by account
debtors on account of any accounts receivable of such account debtors shall be
credited to the earliest invoices of the Seller to such account debtors, unless
specifically directed otherwise by the account debtor. Subject to the foregoing,
to the extent any Accounts Receivable are unpaid for a period of 90 days after
the Closing, the Buyer shall send written notice to the Seller indicating the
specific account debtors, the amount of the unpaid invoices representing
Accounts Receivable to each such account debtor and the total of all such unpaid
Accounts Receivable. The Seller shall pay the Buyer the amount of all such
unpaid Accounts Receivable minus any remaining reserve for bad debts included in
the Closing Balance Sheet within 30 days of the receipt of any notice pursuant
to this Section 2.15 on the condition that the Buyer shall simultaneously assign
such unpaid Accounts Receivable (the "Assigned Receivables") to the Seller. Such
assignment shall include the right to xxx as an assignee of the Buyer. In the
event that after such assignment the Buyer receives any payment on the Assigned
Receivables, the Buyer shall promptly remit such amount to the Seller.
Thereafter, the Seller, as owner of the Assigned Receivables, may take any
action the Seller deems necessary to collect the Assigned Receivables and any
collections shall be the property of the Seller. The Buyer agrees to cooperate
with the Seller in any action the Seller wishes to take to collect the Assigned
Receivables consistent with the Seller's past custom and practice. In the event
the Buyer does not want to assign any Accounts Receivable to the Seller because
it does not want the Seller to initiate collection action thereon, the Seller
shall be relieved of any liability under this Section 2.15 with respect to such
Accounts Receivable.
28
In the event any Accounts Receivable are subject to a valid dispute by the
account debtor and the Buyer wishes to grant a discount on any said Accounts
Receivable, the Buyer shall send written notice or notices to the Seller
indicating the specific account debtors and the amount of the dispute or
discount. The Buyer shall consult with the Seller with respect to the resolution
of any dispute and/or the amount of any discount and shall not settle any such
dispute or grant any discount without the consent of the Seller, which consent
shall not be unreasonably withheld. Where consent is given to the settlement of
any dispute and/or the granting of any discount, the Seller shall pay the Buyer
the difference between the original amount of the Accounts Receivable and the
amount actually received by the Buyer after settlement or discount, with payment
to be made within 30 days after the settlement or granting of the discount.
Where consent is withheld by the Seller, the Buyer may either assign the
Accounts Receivable, or settle the dispute or grant the discount at its own
expense and the Seller shall be relieved of any liability under this Section
2.15 with respect to such Accounts Receivable.
Section 2.16 Patents and Trademarks. Seller owns (or possesses adequate and
enforceable licenses or other rights to use without payment of royalties) all
patents, trade secrets, copyrights, trade names, trademarks, servicemarks,
inventions and processes necessary for the conduct of, or use in, the Business;
and Seller has not received any notice of conflict with the asserted rights of
others or any other notice of any dispute with respect to any license under
which Seller is a licensor or licensee or any notice asserting that any of the
products or processes infringes upon patents claimed by others or is in conflict
with any asserted rights of others. Seller has not granted to any other party
any right to use any patent, trade secret, copyright, trade name, trademark,
servicemark, or invention. Exhibit 1.2(j) hereto sets forth all U.S. and foreign
patents and trademark registrations (and applications therefor), and license
agreements under which Seller is licensor or licensee relating to inventions,
trade secrets, knowhow, trade names and trademarks. Such registrations,
applications and agreements have been furnished to Buyer.
Section 2.17 Customers and Suppliers. Listed on Exhibit 2.17 hereto are the ten
(10) largest customers (by dollar volume) of Seller in terms of sales for 1999,
showing the approximate total sales to each such customer for such year. Also
listed on Exhibit 2.17 hereto are the ten (10) largest suppliers (by dollar
volume) of Seller in terms of purchases for 1999, showing the approximate total
purchases from each such supplier for such year. Except as set forth on Exhibit
2.17 hereto, there has not been any material adverse change in the business
relationship of Seller with any customer or supplier listed on Exhibit 2.17
hereto. Except as set forth on Exhibit 2.17 hereto, all sales of products and
goods by Seller during 1999 and between December 31, 1999 and the date hereof
were made to independent third parties not affiliated with Seller and arose in
the ordinary and usual course of business.
Section 2.18 Litigation. Set forth on Exhibit 2.18 hereto is a description of
each and every pending or, to Seller's knowledge, threatened judicial or
administrative action, suit, litigation, proceeding, or arbitration or
governmental investigation (collectively, the "Actions") against or involving
Seller which individually or together with any other(s), will have a material
adverse effect on the Assets or the Business following the Closing. Except as
described on Exhibit 2.18 hereto, Seller does not currently have pending, and is
not considering, any litigation or the pursuit of any rights or remedies that
may be available against any third parties relating to the Business or the
Assets. Seller is not in default with respect to any order, writ, injunction or
decree of any Federal, state, local or foreign court, department, agency or
instrumentality.
Section 2.19 Product Warranties. There are no written warranties or, to Seller's
best knowledge, oral warranties given by Seller applicable to any products sold
by Seller except as described on Exhibit 2.19 hereto. Except as set forth in
Exhibit 2.19 hereto, there is no Action pending, or to the knowledge of Seller,
threatened against Seller under any warranty, express or implied, with respect
to Seller.
Section 2.20 Government Approval. No consent, approval, waiver, order or
authorization of, or registration, declaration or filing with, any governmental
authority is required in connection with the execution and delivery of this
Agreement by Seller or the consummation by Seller of the transactions
contemplated hereby.
Section 2.21 Entities Owned By Seller. Seller does not, directly or indirectly,
now own, possess, control or have any direct or indirect ownership or equitable
interest in, or participation with, any corporation, limited liability company,
partnership, trust, or other business association, except as described on
Exhibit 2.21 hereto.
Section 2.22 All Material Assets Conveyed. The Assets constitute all of the
material properties, contracts, licenses, privilege and other assets owned or
used by Seller in connection with the operation of the Business.
Section 2.23 Adverse Conditions. Except to the extent disclosed in the Exhibits
hereto, there are no presently existing conditions with respect to the Assets or
the Business which are known to Seller and which may reasonably be expected to
have a material adverse effect on the Assets or the Business or the prospects or
conduct thereof by Buyer after the Closing Date.
Section 2.24 Exhibits. No representation or warranty by Seller in this
Agreement, the Exhibits attached hereto, or any statement, certificate or
schedule furnished or to be furnished to Buyer pursuant hereto, or in connection
with the transactions contemplated hereby, contains or will contain any untrue
statement of material fact, or omits or will omit to state a material fact
necessary to make the statements contained therein not misleading.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to and covenants with Seller as follows:
Section 3.1 Corporate Status of Buyer.
(a) Domicile, Powers and Qualification. Buyer is a corporation duly organized,
legally and validly existing, and in good standing under the laws of the State
of Florida with full power and authority (corporate, governmental or otherwise)
necessary to own its properties and conduct its business as it now exists or is
being conducted and to enter into this Agreement and the transactions
contemplated hereby.
(b) Authorization and Binding Effect. All requisite corporate action required to
be taken by Buyer or its shareholders to authorize the execution and delivery of
this Agreement and the transactions contemplated hereby have been taken, and
this Agreement constitutes a valid and binding agreement enforceable against
Buyer in accordance with the terms and subject to the conditions hereof.
Section 3.2 No Consents Required. Buyer has obtained all required consents, if
any, of third persons necessary to consummate the transactions contemplated
hereby or to make this Agreement and all other documents executed in connection
herewith binding, upon Buyer.
Section 3.3 No Finders. No finder or any agent, broker or other person acting
pursuant to Buyer's authority is entitled to make any claim against Seller for
any commission or finder's fee in connection with the transactions contemplated
by this Agreement.
ARTICLE 4
COVENANTS OF SELLER
Seller covenants and agrees with Buyer as follows:
Section 4.1 Right of Inspection; Access to Information; Reliance. At all times
during reasonable business hours between the date hereof and the Closing Date,
Seller shall make available for examination and inspection by Buyer and its
agents any facilities, inventories, other properties, books of account and
records, market studies and reports, consultant studies and reports,
manufacturers representatives agreements, customer lists, appraisals, valuation
studies and reports, contracts, documents, and other materials or information in
the possession or control of Seller to the extent that any of such materials or
information relates to the Business, the Assets or the Assumed Liabilities.
Section 4.2 Operation of Business. Seller shall conduct the Business diligently
and substantially in the same manner as heretofore.
Section 4.3 Preservation of Business. Seller will use its best effort to
preserve intact the business organization of Seller, to have available for
employment by Buyer on and after the Closing Date (without making any commitment
on Buyer's behalf) such of Seller's employees as Buyer shall deem necessary for
the continuation of the Business in an orderly and business like manner, and to
preserve the business relationships of Seller with its distributors, suppliers,
customers, landlords and other third parties, all to the end that the Business
and the Assets will be unimpaired at and through the time of Closing.
Section 4.4 Operation and Notification. Between the date hereof and the Closing
Date, Seller will not deliberately take any action that would cause any
representation or warranty of Seller contained herein to be untrue or incorrect
in any material respect. Between the date hereof and the Closing Date, Seller
shall give prompt notice to Buyer of any fact, occurrence or matter with respect
to which Seller obtains knowledge which would cause any of the representations,
warranties or covenants of Seller set forth herein to be untrue or incorrect in
any material respect.
Section 4.5 Consents. In each case where the properties, franchises, agreements,
leases, contracts or other rights or commitments of Seller are not transferable
or assignable to Buyer, or cannot be purchased or assumed by Buyer pursuant to
this Agreement, without the consent of another party, Seller shall use its best
efforts to obtain, prior to the Closing Date, all such consents of such other
party to the transfer to Buyer pursuant to this Agreement of those properties,
franchises, agreements, leases, contracts, rights and commitments.
Section 4.6 Continuation of Employees. Seller shall use reasonable efforts to
help ensure the employment by Buyer of the four employees of the Business which
Buyer wishes to employ.
Section 4.7 Change of Names. On, or within ten (30) days after, the Closing
Date, if requested by Buyer, Seller will amend its articles of incorporation, so
as to change its name and will thereafter cooperate with Buyer in making its
present name available to Buyer in each state in which Seller transacts, or has
transacted, business. Buyer acknowledges that Seller may continue indefinitely
its corporate existence.
Section 4.8 Cooperation. Between the date hereof and the Closing Date, Seller
shall cooperate with Buyer in any dealings with third parties that relate to the
Business or the transactions contemplated hereby or in the fulfillment of the
conditions precedent to the obligations of the parties hereunder.
Section 4.9 Further Assurances. Upon the reasonable request of Buyer at any time
and from time to time after the Closing Date, Seller will forthwith execute and
deliver such further instruments of assignment, transfer, conveyance,
endorsement, direction or authorization and do all things necessary or proper,
as Buyer or its counsel may reasonably request, in order to vest, perfect or
confirm, record or otherwise, the right, title and interest of Buyer, its
successors and assigns, in and to the Assets and the assignment to, and
assumption by Buyer of the Assigned Leases, Assigned Contracts, and Permits,
which are to be assigned to, and assumed by, Buyer pursuant to Section 1.7
hereof, or otherwise to consummate and finalize the transactions contemplated
herein, including, without limitation, executing and delivering such other
documents as may be reasonably calculated to effectuate the intentions of the
parties entering into the transactions contemplated by this Agreement.
Section 4.10 Tax Matters. Buyer and Seller will each complete and file with the
Internal Revenue Service (in the manner required by Section 1060 of the Code and
the regulations promulgated thereunder) an "Asset Acquisition Statement" on IRS
Form 8594 covering the transactions contemplated by this Agreement in a manner
consistent with this Agreement. The Purchase Price for the Assets shall be
allocated pursuant to Exhibit 4.10, the "Purchase Price Allocation Sheet." In
addition, neither Buyer nor Seller will, without the consent of the other, take
a position for tax purposes inconsistent with such Asset Acquisition Statement
in a claim for refund or otherwise.
Section 4.11 Adverse Actions. Seller will not directly or indirectly take any of
the actions which it warranted in Section 2.13 that it had not taken during the
period between December 31, 1999 and the date hereof. Seller shall not declare
or pay any distribution or other dividend to its shareholders between the date
hereof and the Closing Date; provided, however, that Seller, on or prior to the
Closing Date, may pay any declared but unpaid distributions or dividends listed
in Exhibit 2.13 hereof, and may declare and pay distributions and dividends for
the period between the date hereof and the Closing Date determined in accordance
with generally accepted accounting principles applied on a basis consistent with
that Seller's applications in prior years. Between the date hereof and the
Closing Date, Seller will not operate the Business other than in the ordinary
course consistent with past practices unless otherwise directed by Buyer,
including, without limitation, past practices with regard to inventory buildup
and depletion and pricing, and will not make any change in any method of
accounting, including, without limitation, any change in the depreciation or
amortization policies or rates theretofore adopted by Seller.
Section 4.12 Negotiations. Unless this Agreement is terminated pursuant to the
provisions herein, Seller, its officers, directors, employees and other agents
shall not, directly or indirectly, (i) take any action to solicit or initiate
any "Acquisition Proposal" (as hereinafter defined), or (ii) continue, initiate
or engage in discussions or negotiations with, or disclose any non-public
information, other than in the ordinary course of business, relating to the
Company or afford access to any other person or entity except the Buyer and
their respective representatives. The term "Acquisition Proposal" as used herein
means any offer, proposal or indication of interest in (a) the acquisition of
the company or substantially all of its assets, (b) a merger, consolidation or
other business combination in which the Company does to survive, or (c) the
acquisition of any of the capital stock of the Company. The Seller shall
promptly advise Buyer of any individual or entity expressing an interest in
acquiring an interest in the Assets of Seller or the capital stock of Seller.
ARTICLE 5
COVENANTS OF BUYER
Buyer covenants and agrees with Seller as follows:
Section 5.1 Payment of Liabilities Assumed. Buyer shall pay and discharge all
the Assumed Liabilities, when and as the same shall become due and payable or
dischargeable.
Section 5.2 Confidentiality. Buyer acknowledges and agrees that all information
regarding Seller, the Assets, the Business or the Assumed Liabilities, whether
written or oral, made available to Buyer is confidential information (the
"Confidential Information"). In exchange for Seller making the Confidential
Information available to Buyer, Buyer agrees that neither it nor its employees,
contractors, officers, directors, lawyers, accountants or agents will disclose
any of the Confidential Information to any other person other than prospective
financing sources and their employees and representatives, without Seller's
prior written consent. If this Agreement is terminated, Buyer shall return to
Seller the written Confidential Information and all copies thereof and the
provisions of this Section 5.2 shall remain fully applicable to Buyer.
Section 5.3 Further Assurances. Subsequent to the date hereof, Buyer shall
forthwith, at its expense, render such assistance as Seller may reasonably
require to orderly consummate and finalize the transactions contemplated herein,
including, without limitation, executing and delivering such other documents as
may be reasonably calculated to effectuate the intentions of the parties in
entering into the transactions contemplated by this Agreement.
Section 5.4 Tax Matters. Buyer and Seller will each complete and file with the
Internal Revenue Service (in the manner required by Section 1060 of the Code and
the regulations promulgated thereunder) an "Asset Acquisition Statement" on IRS
Form 8594 covering the transactions contemplated by this Agreement in a manner
consistent with this Agreement. The Purchase Price for the Assets shall be
allocated pursuant to Exhibit 4.10, the "Purchase Price Allocation Sheet." In
addition, neither Buyer nor Seller will, without the consent of the other, take
a position for tax purposes inconsistent. with such Asset Acquisition Statement
in a claim for refund or otherwise.
Section 5.5 Operation and Notification. Between the date hereof and the Closing
Date, Buyer will not deliberately take any action that would cause any
representation or warranty of Buyer contained herein to be untrue or incorrect
in any material respect. Between the date hereof and the Closing Date, Buyer
shall give prompt notice to Seller of any facts, occurrence or matter with
respect to which Buyer obtains knowledge which would cause any of the
representations, warranties or covenants of Buyer set forth herein to be untrue
or incorrect in any material respect.
ARTICLE 6
THE CLOSING
Section 6.1 Time and Place of Closing. The "Closing" under this Agreement shall
take place at the offices of Spain & Xxxxxx, L.L.C. in Birmingham, Alabama, on
June ___, 2000, or at such other location as the parties may agree, or by the
execution and delivery of the closing documents by a courier agreed to by the
parties.
Section 6.2 Closing Date. For purposes of this Agreement, the term "Closing
Date" shall mean the date on which the Closing shall occur. The consummation of
all of the transactions at the Closing shall be deemed to have occurred as of
the close of business on the Closing Date, or at such different time and place
upon which the parties may subsequently agree in writing.
Section 6.3 Conditions to the Obligations of Buyer. The obligations of Buyer to
purchase the Assets and to assume the Assumed Liabilities shall be subject to
the fulfillment at or prior to the Closing of each of the following conditions
precedent:
(a) Correctness of Representations and Warranties; Compliance. All
representations and warranties of Seller contained in this Agreement shall be
true and correct at and as of the Closing Date with the same force and effect as
though made at and as of the Closing Date, and Seller shall have performed and
complied with all of the obligations and conditions with respect to which this
Agreement requires performance or compliance by Seller at or prior to the time
of Closing. Seller will deliver to Buyer a certificate dated the date of the
Closing, as to the fulfillment of the matters described in this Section 6.3(a).
(b) Financing. Buyer shall have obtained financing to implement the transactions
provided for in this Agreement and to provide sufficient working capital on such
terms and conditions as are acceptable to Buyer.
(c) Approvals and Consents. All approvals, consents, waivers, exemptions, and
other actions that are necessary in connection with the consummation of the
transactions contemplated by this Agreement, including, without limitation,
third party consents to the transfer to Buyer of properties, franchises,
agreements, leases, contracts, rights and commitments that are material to the
Business shall have been duly given, taken, made, transferred or obtained, as
the case may be, shall be in full force and effect on the Closing Date.
(d) Due Diligence; Exhibits. Buyer shall have received from Seller all
information available to Seller that is requested by Buyer promptly after the
date hereof, and Buyer, upon review of such matters related to Seller, its
assets, liabilities, financial condition, Business, prospects or relations with
third parties as it shall deem necessary or appropriate (in which review Seller
shall cooperate), shall not have learned of any fact or matter that, in the good
faith determination of Buyer, causes Buyer to be dissatisfied in any material
respect with the transactions contemplated by this Agreement.
(e) Employment Agreements. Each of Xxx Xxxxx, Xxxxxxx Xxxxxxxx, Xxxx Xxxx, shall
have entered into five-year employment agreements with Buyer, and O.K. Xxxxx
shall have entered into a one-year employment agreement with Buyer, said
employment agreements to be substantially in the form attached as Exhibit 6.3(e)
hereto.
(f) Non-Competition and Non-Solicitation Agreement. Seller acknowledges that a
major component of this Agreement for Buyer is the exclusive right to
manufacture, distribute, and sell Seller's products in the United States and
throughout the world, the exclusive right to sell Seller's products and services
and similar products and services to Seller's existing customers, and the
exclusive right to use the services of the four employees signing employment
agreements under Section 6.3(e). On the Closing Date, Xxx Xxxxx and O.K. Xxxxx
shall have entered into a Non-Competition and Non-Solicitation Agreement which
shall be consistent with said objectives and substantially in the form of
Exhibit 6.3(f) hereto, prohibiting Seller and its shareholders from
participating in a business which competes in activity with the Buyer for a
period of five (5) years. (g) Purchase of WinsLoew Furniture, Inc. Equity.
Seller acknowledges that a major component of this Agreement for Buyer is Xxx
Xxxxx'x purchase of WinsLoew Furniture, Inc. equity. On the Closing Date, Xxx
Xxxxx shall have purchased $250,000 of WinsLoew Furniture, Inc. common equity at
the price of $124.34 per share and Xx. Xxxxx shall have executed a shareholders
and subscription agreement substantially in the form of Exhibit 6.3(g).
(h) Satisfaction of Buyer and Its Counsel. All proceedings to be taken in
connection with the consummation of the transactions contemplated by this
Agreement, and all documents incident thereto, shall be satisfactory in form and
substance to Buyer and its counsel, and Buyer and its counsel shall have
received copies of such documents as its counsel may reasonably request in
connection with said transactions, including without limitation, an opinion from
counsel for Seller, addressed to Buyer and the Buyer's Lender and dated the
Closing Date, in form and substance satisfactory to counsel for Buyer and in
substantially the form of Exhibit 6.3(h) hereto.
(i) No Material Adverse Change. There shall not have occurred any material
adverse change in the Assets or the assets, revenues, liabilities (whether
absolute, accrued, contingent or otherwise), or operations of the Business
between the date hereof and the Closing Date, and Seller shall have delivered to
Buyer a certificate dated as of the Closing Date certifying to such effect.
(j) Consent of Landlord to Remove Assets. The Seller shall have delivered to
Buyer a written consent to remove the Assets executed by Seller's landlord as to
each location where any of the Assets are located, along with a written waiver
executed by the landlord as to any fixture rights, encumbrances, or liens
relating to the Assets.
Section 6.4 Conditions of Obligations of Seller. The obligations of Seller to
sell, convey, transfer, assign, set over and deliver the Assets shall be subject
to the fulfillment at or prior to the time of Closing of each of the following
conditions precedent:
(a) Correctness of Representations and Warranties; Compliance. All
representations and warranties of Buyer contained in this Agreement shall be
true and correct at and as of the time of Closing, with the same force and
effect as though made at and as of the time of Closing and Buyer shall have
performed and complied with all of the obligations and conditions with which
this Agreement requires performance or compliance by it at or prior to the time
of Closing. Buyer will deliver to Seller its certificate dated the Closing Date
as to the fulfillment of the conditions set forth in this Section 6.4(a).
(b) No Proceedings. No proceeding or formal investigation by any governmental
authority or agency and no proceeding by any other person or entity shall have
been commenced with respect to any of the transactions contemplated in this
Agreement or the consummation thereof.
(c) Approvals and Consents. All approvals, consents, waivers, exemptions, and
other actions that are necessary in connection with the consummation of the
transactions contemplated by this Agreement, shall have been duly given, taken,
made, transferred or obtained, as the case may be, shall be in full force and
effect on the Closing Date, and copies evidencing the same shall have been
supplied to Seller.
Section 6.5 Deliveries By Seller. At the Closing, Seller shall execute,
acknowledge (if appropriate), and deliver to Buyer, in addition to all other
items specified elsewhere in this Agreement, the following:
(a) such instruments of sale, conveyance, transfer, assignment, endorsement,
direction or authorization as will be sufficient or requisite to vest in Buyer,
its successors and assigns, all right, title and interest (which title and
interest shall be good and marketable except for Permitted Encumbrances) in and
to the Assets; and
(b) the various certificates, instruments and documents referred to in this
Agreement, including without limitation, Section 6.3 of this Agreement.
(c) a copy of the resolution of Seller's Board of Directors and Shareholders,
certified as of the Closing Date by the secretary or an assistant secretary of
Seller, duly authorizing the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby; and
(d) a certificate dated not more than thirty (30) days prior to the Closing Date
from the appropriate authority of the state in which Seller is incorporated as
to its existence and good standing and as to the payment of any and all
franchise and similar taxes due;
(e) possession of the Assets.
Section 6.6 Deliveries By Buyer. At the Closing, Buyer shall execute,
acknowledge (if appropriate), and deliver to Seller, in addition to all other
items specified elsewhere in this Agreement, the following:
(a) the Purchase Price paid in accordance with Section 1.6 of this Agreement;
(b) the various certificates, instruments, and documents referred to in this
Agreement, including, without limitation, Section 6.4 of this Agreement;
(c) the documents evidencing the assumption by Buyer of the Assumed Liabilities.
(d) a copy of the resolution of Buyer's Board of Directors and Shareholders,
certified as of the Closing Date by the secretary or an assistant secretary of
Buyer, duly authorizing the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby.
ARTICLE 7
INDEMNIFICATION
Section 7.1 Indemnification by Seller. It is understood and agreed that Buyer
does not assume and shall not be obligated to pay any liabilities of Seller
under the terms of this Agreement or otherwise, except for the Assumed
Liabilities, and shall not be obligated to perform any obligations of Seller of
any kind or manner except for the Assumed Liabilities. Seller hereby agrees to
indemnify and hold Buyer, its successors and assigns, harmless from and against:
(a) Any and all claims, liabilities and obligations of Seller (other than the
Assumed Liabilities) of every kind and description, contingent or otherwise,
known or unknown, direct or indirect, matured or unmatured, arising from or
related to the operation of the Business prior to or through the Closing Date
hereunder, including, without limitation, any and all claims, liabilities and
obligations arising or required to be performed under any lease, contract or
agreement not assumed by Buyer hereunder, claims for violation of any statutes,
laws, regulations, rules, ordinances or orders of any authority, whether
federal, state or local, tax claims or tax liens, labor relation claims, OSHA
related claims, EEOC related claims, employee benefit claims, ERISA related
claims, employee claims, environmental, health and safety claims, EPCRA related
claims, product warranty, product return and product liability claims for
products sold prior to or through the Closing Date, medical, dental and workers'
compensation claims, computer software license claims, claims for personal
injury, claims for injury to property, claims for breach of contract, claims for
compensatory damages, claims for punitive damages, creditor claims, claims by
lenders, claims on accounts, claims for unpaid debts, and any and all claims by
Seller's shareholders.
(b) Any and all damage or loss incurred by Buyer resulting from Seller's failure
to pay federal, state or local taxes;
(c) Any and all damage or loss incurred by Buyer resulting from any
misrepresentation or breach of warranty by Seller in this Agreement, from any
nonfulfillment by Seller of any agreement, covenant or obligation of Seller
contained in this Agreement, or from any misrepresentation in or omission from
any certificate or other instrument furnished to Buyer pursuant to this
Agreement or in connection with any of the transactions contemplated hereby; and
(d) Any and all actions, suits, proceedings, damages, assessments, judgments,
costs and expenses, including reasonable attorneys' fees, incurred by Buyer as a
result of Seller's failure or refusal to compromise or defend any claim incident
to the foregoing provisions.
Any amounts payable by the Seller under this Section 7.1 shall first be
satisfied by resort to the Escrow Funds pursuant to the terms of the Escrow
Agreement and only after the Escrow Funds have been exhausted or distributed in
accordance with the Escrow Agreement shall the Seller be obligated to make any
further payment under this Section 7.1.
Section 7.2 Notice to Seller. If any claim or liability shall be asserted
against Buyer, or Buyer otherwise incurs any damage or loss, in either case
which would give rise to a claim by Buyer against Seller for indemnification
under the provisions of this Article 7, Buyer shall promptly notify Seller in
writing of the same and Seller shall be entitled at its own expense to
compromise or defend any such claim.
Section 7.3 Indemnification By Buyer. Buyer hereby agrees to indemnify and hold
Seller, its respective successors and assigns, harmless from and against:
(a) Any and all claims, liabilities and obligations of every kind and
description, contingent or otherwise, arising from or relating to the operation
of the Business subsequent to the Closing Date;
(b) Any and all damage or loss incurred by Seller resulting from Buyer's failure
to satisfy the Assumed Liabilities;
(c) Any and all damage or loss incurred by Seller resulting from any
misrepresentation or breach of warranty by Buyer in this Agreement or any
nonfulfillment by Buyer of any agreement, covenant or obligation of Buyer
contained in this Agreement, or assumed or required to be assumed by Buyer under
this Agreement, or from any misrepresentation in or omission from any
certificate or other instrument furnished to Seller pursuant to this Agreement
or in connection with any of the transactions contemplated hereby;
(d) Any and all actions, suits, proceedings, damages, assessments, judgments,
costs and expenses, including reasonable attorneys' fees, incurred by Seller as
the result of Buyer's failure or refusal to defend or compromise any claim
incident to any of the foregoing provisions.
Section 7.4 Notice to Buyer. If any claim or liability shall be asserted against
Seller or Seller otherwise incurs any damage or loss, in either case which would
give rise to a claim by Seller against Buyer for indemnification under the
provisions of this Article 7, Seller shall promptly notify Buyer of the same and
Buyer shall be entitled at its own expense to compromise or defend any such
claim.
Section 7.5 Deadline for Indemnification Claims. All claims for indemnification
under this Article must be made within two years of the Closing Date . A claim
is deemed to be made on the date when notice is provided as required under this
Article 7.
ARTICLE 8
TERMINATION
Section 8.1 Termination of This Agreement. This Agreement and the transactions
contemplated by it may be terminated:
(a) By the mutual consent of Buyer and Seller at any time;
(b) By Buyer, in the event of a breach by Seller of any of its representations,
warranties or covenants hereunder prior to the Closing, which is not cured
within fifteen (15) days after written notice from Buyer, and provided that, at
the time of such termination, Buyer shall not be in breach of any of its
representations, warranties or covenants and, if such termination occurs on the
Closing Date, all other conditions to Seller's obligations specified in Section
6.4 of this Agreement shall have been satisfied; or
(c) By Seller, in the event of a breach by Buyer of any of its representations,
warranties or covenants hereunder prior to the Closing, which is not cured
within fifteen (15) days after written notice from Seller, provided that, at the
time of such termination, Seller shall not be in breach of any of its
representations, warranties or covenants and, if such termination occurs on the
Closing Date, all other conditions to Buyer's obligations specified in Section
6.3 of this Agreement shall have been satisfied.
Section 8.2 Notice of Termination. Notice of termination of this Agreement, as
provided for herein, shall be given by the terminating party to the other party
in accordance with Section 9.4 of this Agreement.
Section 8.3 Effect of Termination. In the event of a termination of this
Agreement pursuant to this Article 8, this Agreement shall, except as
specifically provided herein, become void and of no further effect, and each
party shall pay the costs and expenses incurred by it in connection with this
Agreement and, except as otherwise provided herein, no party shall be liable to
any other party for any costs, expenses, damages or loss hereunder, so long as
any such party is not in default or breach of its obligations hereunder at the
time of said termination.
ARTICLE 9
MISCELLANEOUS
Section 9.1 Expenses. All expenses incurred by or on behalf of Seller on the one
hand, or Buyer on the other, in connection with the negotiation, execution and
performance of this Agreement, including, without limitation, legal and
accounting fees and expenses (collectively, the "Transaction Expenses"), shall
be paid by the party incurring such Transaction Expenses whether or not the
transactions contemplated in this Agreement are consummated.
Section 9.2 Risk of Loss. Seller assumes all risk of destruction, loss or damage
to the Assets due to fire or other casualty up to and including the Closing
Date. In the event of force majeure resulting in the destruction or substantial
impairment of Assets with a book value on the books and records of Seller of
greater than $100,000, Buyer shall have the option to terminate this Agreement,
or postpone the closing until Seller repairs, replaces or restores the damaged
Assets. In any such event set forth in this Section 9.2, if Buyer does not
terminate this Agreement, Buyer shall have the benefit by assignment or
otherwise of all insurance proceeds payable by reason of any such destruction,
loss or damage to the Assets, except to the extent such proceeds are to
reimburse Seller for amounts originally spent by Seller to repair or replace
such Assets.
Section 9.3 Transfer Taxes. Seller shall pay all sales, use, transfer, and
recordation and documentary taxes and fees arising out of the transfer of the
Assets.
Section 9.4 Notices. Any notice to a party hereto pursuant to this Agreement
shall be in writing and shall be given by delivery in person, by certified or
registered mail, by facsimile or transmittal, or by a nationally recognized
courier, addressed as follows:
If to Seller, then to:
______________________
______________________
______________________
Fax: (___)__________
with a copy to:
______________________
______________________
______________________
Fax: (___)__________
If to Buyer, then to:
Loewenstein, Inc. Attn: Xxxxx Xxxxxx 000 Xxxxxxx Xxxxxx Xxxxxxxxxx, Xxxxxxx
00000 Fax: (000) 000-0000 Any notice hereunder shall be deemed delivered when
placed in the mails so addressed (or to such other address as any party hereto
shall advise the other in writing), with postage prepaid, or when transmitted
and confirmation of such transmission has been received.
Section 9.5 Table of Contents; Captions. The table of contents and the captions
and other headings contained in this Agreement as to the contents of particular
articles, sections, paragraphs or other subdivisions contained herein, or to the
Exhibits, are inserted for convenience of reference only and are in no way to be
construed as part of this Agreement or as limitations on the scope of the
particular articles, sections, paragraphs or other subdivisions to which they
refer and shall not affect the interpretation or meaning of this Agreement.
Section 9.6 Incorporation of Appendices and Exhibits. Except as otherwise
expressly stated, each reference in this Agreement to an "Exhibit" refers to an
Exhibit to this Agreement. This Agreement shall be deemed to have incorporated
by reference all of the Exhibits referred to herein to the same extent as if
such Exhibits were fully set forth herein. Each reference herein to "this
Agreement" or "the Agreement" shall be construed to include each such Exhibit.
Section 9.7 Entire Agreement and Amendment. This Agreement and the Exhibits
hereto represent the entire understanding and agreement among, the parties with
respect to the subject matter hereof and shall supersede any prior agreements
and understanding between the parties with respect to that subject matter. This
Agreement may not be waived, extended, amended, supplemented or modified orally,
but only by a written instrument signed by the party against whom enforcement of
any such waiver, extension, amendment, supplement or modification is sought.
Section 9.8 Severability. In the event any provision or portion of this
Agreement is deemed to be invalid or unenforceable, in whole or in part, for any
reason, the remainder thereof shall not be invalidated or rendered unenforceable
or otherwise adversely affected.
Section 9.9 Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of and be enforceable by and against the parties
hereto, and their respective estates, successors, legal or personal
representatives, heirs, distributees, designees and assigns. This Agreement
cannot be assigned by Seller without the prior written consent of Buyer. This
Agreement cannot be assigned by Buyer without the prior written consent of
Seller. If Seller consents to Buyer's assignment of this Agreement to a
corporation or other entity, said assignee shall agree in writing to be bound by
the terms of this Agreement, and upon such assignment, Buyer shall be remain
personally liable for any liability or obligation arising under or by virtue of
this Agreement. No party other than the parties hereto and their respective
successors and assigns shall have any rights or interests under this Agreement,
nor shall there be any intended or incidental third party beneficiaries of this
Agreement.
Section 9.10 Governing Law. This Agreement shall be controlled, construed and
enforced in accordance with the laws of the State of Florida, without regard to
principles governing conflicts of law.
Section 9.11 Counterparts. This Agreement may be executed simultaneously and in
any number of counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
Section 9.12 Attorneys Fees. In the event of a dispute between or among any of
the parties hereto arising out of or related to this Agreement or the
interpretation or enforcement of this Agreement, the prevailing party or parties
shall be entitled to recover reasonable attorney's fees, costs and expenses from
the other party or parties.
Section 9.13 Public Announcements. No public announcements or press releases of
the terms of this Agreement shall be made prior to the Closing Date. After the
Closing, either Seller or Buyer may make such public announcements or press
releases with the prior written consent of the other, which consent shall not be
unreasonably withheld or delayed.
Section 9.14 Survival. Except as provided to the contrary herein, the provisions
hereof which are to be performed after the Closing Date and the several
covenants, agreements, representations and warranties of the parties contained
herein shall survive the Closing hereunder.
Section 9.15 Bulk Sales Laws. Seller and Buyer agree to waive compliance in all
respects with the requirements of the bulk sales or bulk transfer laws of any
jurisdiction which may be applicable to the transactions contemplated by this
Agreement, except as required by the U.S. Small Business Administration. Seller
and its shareholders hereby jointly and severally agree to indemnify and hold
Buyer harmless from and against any and all claims, losses, damages, costs,
expenses or liabilities which Buyer may incur or be subjected to or which may be
asserted against Buyer by reason of Seller's failure to comply in any respect
with the requirements of applicable bulk sales or bulk transfer laws with
respect to any liabilities not included in the Assumed Liabilities.
Section 9.16 Arbitration. Any controversy or claim arising out of or relating to
this Agreement, or the breach thereof, shall be settled by arbitration in
accordance with the Rules of the American Arbitration Association, and judgment
upon the award may be entered in any Court having jurisdiction thereof. Seller
and Buyer expressly waive the right to a trial by jury of any controversy or
claim arising out of or relating to this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
on their respective behalves by their respective duly authorized
representatives, all as of the date and year first above written.
SELLER: XXXXXX-XXXXX, INC.
_________________________________
By:______________________________
Its President
XXXXXX-XXXXX OFFICE FURNITURE DIVISION, INC.
_________________________________
By:______________________________
Its President
XXXXXX-XXXXX MANUFACTURING, INC.
_________________________________
By:______________________________
Its President
BUYER: XXXXXXXXXX, INC.
_________________________________
By: Xxxxx Xxxxxx
Its Chief Executive Officer
