ASSET PURCHASE AGREEMENT
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AGREEMENT dated this 19th day of October, 1998, between LS
Management, Inc., a Delaware corporation (the "Purchaser"), and Xxxxxxx
Enterprises, Inc., a Nevada corporation (the "Seller").
W I T N E S S E T H:
WHEREAS, the Seller desires to transfer, convey and assign,
and the Purchaser desires to purchase and acquire certain of the assets and
assume certain of the liabilities of the Seller described in this Agreement on
the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants hereinafter set forth, the parties hereto agree as follows:
1. Purchase and Sale of Assets.
1.1. The Seller shall sell, transfer, convey,
assign and deliver to the Purchaser, and the Purchaser shall purchase, acquire
and accept from the Seller, on the Closing Date (as such term is defined in
Article 4 below) all of the right, title and interest of the Seller in and to
the assets set forth on Schedule 1.1 hereto (collectively the "Assets").
1.2. The transfer of the Assets shall be effected
by such bills of sale, assignments and other instruments of transfer, conveyance
and assignment as shall be necessary or appropriate to transfer, convey and
assign the Assets to the Purchaser on the Closing Date and as shall be
reasonably requested by the Purchaser. The Seller shall, at any time and from
time to time after the Closing Date, execute and deliver such other instruments
of transfer and conveyance and do all such further acts and things as may be
requested by the Purchaser to transfer, convey, assign and deliver to the
Purchaser or to aid and assist the Purchaser in collecting and reducing to
possession, any and all of the Assets, or to vest in the Purchaser good, valid
and marketable title to the Assets.
2. Assumption of Liabilities.
2.1. Except for those certain liabilities and
obligations set forth on Schedule 2.1 (the "Assumed Obligations"), as of the
Closing Date, Purchaser will not assume any liabilities or obligations of
Seller, including, but not limited to, any accounts payable, administrative
claims, executory contracts and any costs relating to the termination of
employees.
3. Purchase Price and Payment: Allocation; Adjustment
of Purchase Price.
3.1. In consideration of the transfer, conveyance
and assignment of the Assets as contemplated herein, on the Closing Date, the
Purchaser shall pay the Seller and the Seller shall accept a purchase price
equal to $10,500,000 (Ten Million Five Hundred Thousand), by certified or bank
cashier's check payable to the order of the Seller, in addition to the
assumption of the Assumed Obligations (the "Purchase Price").
3.2. The Purchase Price shall be allocated to the
Assets as set forth on Schedule 3.2 attached hereto and made a part hereof.
4. Closing. The transactions contemplated by this
Agreement shall close and all deliveries to be made at the time of closing (the
"Closing") shall take place at 10:00 a.m., Central Standard Time on the date of
the execution of this Agreement (the "Closing Date"), by means of telephone
conference equipment or at such place as may be agreed upon in writing by the
parties hereto.
5. Representations and Warranties of the Seller. The
Seller hereby represents and warrants to the Purchaser as follows:
5.1. The Seller is a corporation duly organized,
validly existing and in good standing under the laws of the State of Nevada and
has all requisite power and authority, corporate or otherwise, to own, lease and
operate its properties and carry on its business as now being conducted. The
Seller is duly qualified to do business and is in good standing in all
jurisdictions in which such qualification is necessary because of the character
of the properties owned, leased or operated by it or the nature of its
activities.
5.2. The Seller has all requisite power and
authority, corporate or otherwise, to enter into this Agreement and to perform
its obligations hereunder. The execution and delivery of this Agreement and the
performance by the Seller of its obligations hereunder have been duly and
validly authorized by all necessary corporate action of the Seller and no
further action or approval, corporate or otherwise, is required in order to
constitute this Agreement as a valid, binding and enforceable obligation of the
Seller.
5.3. No action, approval, consent or
authorization, including, but not limited to, any action, approval, consent or
authorization by or filing with any governmental or quasi-governmental agency,
commission, board, bureau or instrumentality is necessary or required as to the
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Seller in order to constitute this Agreement as a valid, binding and enforceable
obligation of the Seller in accordance with its terms.
5.4. The Seller has good and marketable title to
the Assets, free and clear of any liens, claims, or other encumbrances of any
nature. To the best of Seller's knowledge, each such asset and item is in good
operating condition and repair.
5.5. Except as set forth on Schedule 5.5 since
the date of Seller's October 19, 1998 balance sheet, there have been no adverse
changes in the condition (financial or otherwise) of the Assets, and the Seller
has not other than in the ordinary course of business, mortgaged, pledged,
granted or suffered to exist any lien or other encumbrance or charge on any of
the Assets.
5.6. Within the times and in the manner
prescribed by law, Seller has filed all tax returns and reports required to be
filed by law, including, without limitation, estimated returns with respect to
Federal, state and local income taxes, sales tax returns, and personal property
returns and has paid all taxes, interest, penalties, assessments and
deficiencies which have become due and payable in connection with such returns.
Seller is not a party to any material, pending action or proceeding and, to the
knowledge of Seller, there is no material action or proceeding threatened by any
government authority for the assessment or collection of taxes or other
governmental charges and no unresolved claim or lien for assessment or
collection of taxes or have such charges been asserted against Seller or the
Assets being conveyed hereunder. There are no outstanding waivers or extensions
of time with respect to the assessment or audit of any tax or tax return of
Seller.
5.7. There are no claims, actions, suits,
proceedings or investigations pending or, to the best knowledge of Seller,
threatened against or affecting Seller with respect or to the Assets before any
federal, state, local or foreign court or other governmental body. Seller is not
subject to or in default with respect to any judgment, order, writ, injunction
or decree or any governmental restriction, which relates to or restricts the
transfer of the Assets to Purchaser or the operation of Seller's business.
5.8. All of the contracts of the Seller
constituting a portion of the Assets set forth on Schedule 1.1 (the "Contracts")
are valid and binding, in full force and effect and enforceable in accordance
with their respective provisions. Except as set forth in Schedule 5.8, no
consent is required to assign any of the Contracts to the Purchaser. Seller
covenants to obtain any such consents required for assignment of the Contracts
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listed on Schedule 5.8 as promptly as possible, but in no event shall such
consents be obtained later than October 31, 1998. The Seller has not assigned,
mortgaged, pledged, encumbered, or otherwise hypothecated any of its right,
title or interest under the Contracts. The Seller is not in violation of, in
default in respect of nor has there occurred an event or condition which, with
the passage of time or giving of notice (or both), would constitute a violation
or a default of any such Contract. No notice has been received by Seller
claiming any default by Seller or indicating the desire or intention of any
other party thereto to amend, modify, rescind or terminate any Contract.
6. Representations and Warranties of the Purchaser.
The Purchaser hereby represents and warrants to the
Seller as follows:
6.1. The Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has all requisite power and authority, corporate or otherwise, to
own, lease and operate its properties and carry on its business as and in the
places where such properties are now owned, leased or operated or such business
is now being conducted.
6.2. The Purchaser has all requisite power and
authority, corporate or otherwise, to enter into this Agreement and to assume
and perform its obligations hereunder. The execution and delivery of this
Agreement and the performance by the Purchaser or its obligations hereunder have
been duly authorized by all necessary corporate action of the Purchaser and no
further action or approval, corporate or otherwise, is required in order to
constitute this Agreement as a valid, binding and enforceable obligation of the
Purchaser.
6.3. No action, approval, consent or
authorization, including, but not limited to any action, approval, consent or
authorization by or filing with any governmental or quasi-governmental agency,
commission, board, bureau or instrumentality is necessary or required as to the
Purchaser in order to constitute this Agreement as a valid, binding and
enforceable obligation of the Purchaser in accordance with its terms.
7. Covenants.
7.1. Unless required by applicable law or
regulatory authority, none of the parties hereto shall issue any report,
statement or press release to the public, the trade or the press or any third
party relating to this Agreement and the transactions contemplated hereby,
except as mutually agreed to in writing by the parties hereto.
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7.2. Each of the parties hereto shall use its
reasonable commercial efforts to take or cause to be taken all action and do or
cause to be done all things necessary, proper or advisable to consummate the
transactions contemplated by this Agreement including, without limitation, to
obtain all permits, approvals (regulatory, governmental or otherwise),
authorizations and consents of all third parties and to make all filings with
and give all notices to third parties that may be necessary or required in order
to effectuate the transactions contemplated hereby.
8. Conditions of Closing.
8.1. The obligation of the Purchaser to close
hereunder shall be subject to the fulfillment and satisfaction, prior to or at
the Closing, of the following conditions or the written waiver thereof by the
Purchaser;
8.1.1. The representations and
warranties of the Seller in this Agreement shall be true and correct in all
material respects when made and shall be true and correct in all material
respects on and as of the Closing Date and the Purchaser shall have received a
certificate to that effect dated the Closing Date and executed by an authorized
officer of the Seller.
8.1.2. Each of the agreements and
covenants of the Seller to be performed under this Agreement at or prior to the
Closing Date shall have been duly performed in all material respects and the
Purchaser shall have received a certificate to that effect dated the Closing
Date and executed by an authorized officer of the Seller.
8.1.3. No injunction or restraining
order shall be in effect to forbid or enjoin the consummation of the
transactions contemplated by this Agreement and no Federal, state, local or
foreign statute, rule or regulation shall have been enacted which prohibits,
restricts or delays the consummation hereof.
8.1.4. The Seller shall have delivered
the written consent of all parties necessary in order to duly transfer or assign
all of the Assets in form acceptable to the Purchaser.
8.1.5. The Seller shall have delivered
a Good and sufficient General Conveyance, Assignment and Xxxx of Sale conveying,
selling, transferring and assigning to Purchaser title to all of the Assets,
free and clear of all security interests, liens, charges, encumbrances or
equities whatsoever.
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8.1.6. The Seller shall have delivered
Assignments and Assumptions relating to the Assumed Obligations.
8.1.7. Resolutions of the board of
directors of Seller authorizing the execution and delivery of this Agreement by
Seller and the performance of its obligations hereunder, certified by the
Secretary of Seller.
8.1.8. The Purchaser shall have
received such further certificates and documents as shall have been requested by
the Purchaser, including such other separate instruments of sale, assignment or
transfer that Purchaser may reasonably deem necessary or appropriate in order to
perfect, confirm or evidence title to all or any part of the Assets.
8.2. The obligation of the Seller to close
hereunder shall be subject to the fulfillment and satisfaction, prior to or at
the Closing, of the following conditions or the written waiver thereof by the
Seller:
8.2.1. The representations and
warranties of the Purchaser in this Agreement shall be true and correct in all
material respects when made and shall be true and correct in all material
respects on and as of the Closing Date and the Seller shall have received a
certificate to that effect dated the Closing Date and executed by an authorized
officer of the Purchaser.
8.2.2. Each of the agreements and
covenants of the Purchaser to be performed under this Agreement at or prior to
the Closing Date shall have been duly performed in all material respects and the
Seller shall have received a certificate to that effect dated the Closing Date
and executed by an authorized officer of the Purchaser.
8.2.3. No injunction or restraining
order shall be in effect to forbid or enjoin the consummation of the
transactions contemplated by this Agreement and no Federal, state, local or
foreign statute, rule or regulation shall have been enacted which prohibits,
restricts or delays the consummation hereof.
8.2.4. The Seller shall have received
the Purchase Price in accordance with the provisions of Article 3 hereof.
8.2.5. Resolutions of the board of
directors of Purchaser authorizing the execution and delivery of this Agreement
by Purchaser and the performance of its obligations hereunder, certified by the
Secretary of Purchaser.
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8.2.6. The Purchaser shall have
received a written opinion or valuation from a nationally recognized independent
firm, in form satisfactory to the Seller, that the Purchase Price for the Assets
is equal to or less than the fair market value of the Assets.
8.2.7. The Seller shall have received
such further certificates and documents as shall have been reasonably requested
by the Seller.
9. Further Covenants and Agreements of the Purchaser.
The Purchaser hereby covenants and agrees that the Purchaser shall pay or
otherwise discharge all sales taxes and compensating use taxes arising out of
the sale of the Assets and shall furnish to the Seller evidence of such payment
and all correspondence in connection therewith with all applicable taxing
authorities.
10. Indemnification.
10.1. The Purchaser shall defend and promptly
indemnify the Seller and save and hold the Seller harmless from, against, for
and in respect of and shall pay any and all damages, losses, obligations,
liabilities, claims, encumbrances, deficiencies, costs and expenses, including,
without limitation, reasonable attorneys fees and other costs and expenses
incident to any action, investigation, claim or proceeding (all hereinafter
collectively referred to as Losses ) suffered, sustained, incurred or required
to be paid by the Seller by reason of (i) the Assumed Obligations or (ii) any
breach or failure of observance or performance of any representation, warranty,
covenant, agreement or commitment made by the Purchaser hereunder or relating
hereto or as a result of any such representation, warranty, covenant, agreement
or commitment being untrue or incorrect in any respect.
10.2. The Seller shall defend and promptly
indemnify the Purchaser and save and hold the Purchaser harmless from, against,
for and in respect of and pay any and all damages, losses, obligations,
liabilities, claims, encumbrances, deficiencies, costs and expenses, including
without limitation, reasonable attorneys fees and other costs and expenses
incident to any suit, action, investigation, claim or proceeding (all
hereinafter collectively referred to as Losses) suffered, sustained, incurred or
required to be paid by the Purchaser by reason of (i) any and all obligations
and liabilities of the Seller other than the Assumed Obligations; or (ii) any
breach or failure of observance or performance of any representation, warranty,
covenant, agreement or commitment made by the Seller hereunder or relating
hereto or as a result of any such representation, warranty, covenant, agreement
or commitment being untrue or incorrect in any respect.
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10.3. For purposes of this Section, the party
entitled to indemnification shall be known as the Injured Party and the party
required to indemnify shall be known as the Other Party. In the event that the
Other Party shall be obligated to the Injured Party pursuant to this Section or
in the event that a suit, action, investigation, claim or proceeding is begun,
made or instituted as a result of which the Other Party may become obligated to
the Injured Party hereunder, the Injured Party shall give prompt written notice
to the Other Party of the occurrence of such event. The Other Party agrees to
defend, contest or otherwise protect against any such suit, action,
investigation, claim or proceeding at the Other Party's own cost and expense.
The Injured Party shall have the right but not the obligation to participate at
its own expense in the defense thereof by counsel of its own choice. In the
event that the Other Party fails timely to defend, contest or otherwise protect
against any such suit, action, investigation, claim or proceeding, the Injured
Party shall have the right to defend, contest or otherwise protect against the
same and may make any compromise or settlement thereof and recover the entire
cost thereof from the Other Party including without limitation, reasonable
attorneys fees, disbursements and all amounts paid as a result of such suit,
action, investigation, claim or proceeding or compromise or settlement thereof.
10.4. Expenses. The Purchaser and the Seller shall
each bear their own expenses in connection with this transaction.
11. Brokers. The Seller and the Purchaser covenant and
represent to each other that they had no dealings with any broker or finder in
connection with this Agreement or the transactions contemplated hereby and no
broker, finder or other person is entitled to receive any brokers commissions or
finders fee or similar compensation in connection with any such transaction.
Each of the parties agrees to defend, indemnify and hold harmless the other
from, against, for and in respect of any and all losses sustained by the other
as a result of any liability or obligation to any broker or finder on the basis
of any arrangement, agreement or acts made by or on behalf of such party with
any person or persons whatsoever.
12. Miscellaneous.
12.1. This Agreement constitutes the entire
agreement of the parties with respect to the subject matter hereof. The
representations, warranties, covenants and agreements set forth in this
Agreement and in any financial statements, schedules or exhibits delivered
pursuant hereto constitute all the representations, warranties, covenants and
agreements of the parties hereto and upon which the parties have relied and
except as may be specifically provided herein, no change, modification,
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amendment, addition or termination of this Agreement or any part thereof shall
be valid unless in writing and signed by or on behalf of the party to be charged
therewith.
12.2. Any and all notices or other communications
or deliveries required or permitted to be given or made pursuant to any of the
provisions of this Agreement shall be deemed to have been duly given or made for
all purposes if sent by certified or registered mail, return receipt requested
and postage prepaid, hand delivered or sent by telegraph or telex as follows:
If to the Purchaser, at:
LS Management, Inc.
000 Xxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxx 00000
Attn: Xxxx X. Xxxxx
President
If to the Seller, at:
Xxxxxxx Enterprises, Inc.
000 Xxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxx 00000
Attn: Xxxxx X. Xxxxxxx
President
or at such other address as any party may specify by notice given to other party
in accordance with this Section. The date of giving of any such notice shall be
the date of hand delivery, the date following the posting of the mail or
delivery to the telegraph company or when sent by telex.
12.3. No waiver of the provisions hereof shall be
effective unless in writing and signed by the party to be charged with such
waiver. No waiver shall be deemed a continuing waiver or waiver in respect of
any subsequent breach or default, either of similar or different nature, unless
expressly so stated in writing.
12.4. This Agreement shall be governed,
interpreted and construed in accordance with the laws of the State of Delaware
applicable to contracts to be performed entirely within that State. Should any
clause, section or part of this Agreement be held or declared to be void or
illegal for any reason, all other clauses, sections or parts of this Agreement
which can be effected without such illegal clause, section or part shall
nevertheless continue in full force and effect.
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12.5. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns or heirs and personal representatives; provided, however, that no party
may assign any of its rights or delegate any of its duties under this Agreement
without the prior written consent of the other parties hereto.
12.6. The headings or captions under sections of
this Agreement are for convenience and reference only and do not in any way
modify, interpret or construe the intent of the parties or effect any of the
provisions of this Agreement.
12.7. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be signed on the date and year first above written.
LS MANAGEMENT, INC.
By: /s/ Xxxx X. Xxxxx
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Name: Xxxx X. Xxxxx
Title: President
ATTEST:
/s/ Xxxxxx X. Xxxxx
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Name: Xxxxxx X. Xxxxx
Title: Secretary
[SEAL]
XXXXXXX ENTERPRISES, INC.
By: /s/ Xxxxx X. Xxxxxxx
--------------------
Name: Xxxxx X. Xxxxxxx
Title: President
ATTEST:
/s/ Xxxxxx X. Xxxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Secretary
[SEAL]
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