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EXHIBIT 10.1(a)
ASSET PURCHASE AND SALE AGREEMENT
THIS ASSET PURCHASE AND SALE AGREEMENT ("Agreement") made this 27th day
of February 1997, by and between Rustic Crafts Co., Inc., a corporation
organized and existing under the laws of Pennsylvania, with offices at 000
Xxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxxxx 00000 (the "Seller"), Xxxxx X. Xxxxx,
Xxxxx X. Xxxxx, and Xxxxxxx X. Xxxxx, present or former shareholders of Seller,
Lomma Enterprises, Inc., a Pennsylvania corporation with offices at 0000 Xxxxx
Xxxxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxxxx 00000 ("LEI"), and Regency Affiliates,
Inc., a corporation organized and existing under the laws of Delaware with
offices at 00 Xxxxxx Xxxx Xxxxx, Xxxxxx, Xxxxxxxxxx 00000 ("Purchaser"). Xxxxx
X. Xxxxx, Xxxxx X. Xxxxx, and Xxxxxxx X. Xxxxx are sometimes referred to
individually as "Shareholder" and collectively as "the Shareholders".
W I T N E S S E T H:
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WHEREAS, Seller is engaged in the business of manufacturing and selling
decorative fireplaces intended for use without a chimney in offices and
residences, and the manufacture and/or sale of equipment and supplies related to
such fireplaces (collectively the "Business"); and
WHEREAS, Seller is willing to sell to Purchaser and Purchaser is willing
to buy from Seller, and assume, upon the terms and conditions hereinafter set
forth, substantially all of the assets, liabilities, and business of Seller, as
more fully set forth in this Agreement; and
WHEREAS, the Shareholders are or were collectively the owners of all of
the outstanding shares of Seller, and have joined this Agreement for the purpose
of making
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certain representations and warranties to Purchaser, and for the purpose of
entering into certain undertakings with Purchaser as hereinafter provided; and
WHEREAS, the Shareholders have previously transferred their shares of the
Seller to LEI, or will transfer such shares to LEI prior to the Closing Date
hereof, and LEI has therefore joined this Agreement for the purpose of making
certain representations and warranties to Purchaser, and for the purpose of
entering into certain undertakings with Purchaser as hereinafter provided;
NOW THEREFORE, in consideration of the mutual covenants and agreements
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
I. SALE OF ASSETS
Upon the terms and subject to the conditions of this Agreement, Seller
shall, on the Closing Date (as hereinafter defined), convey, sell, transfer,
assign and deliver to Purchaser, and Purchaser shall purchase from Seller, all
of Seller's right, title and interest in all of the assets of Seller, whether
constituting real or personal, tangible or intangible property, and whether or
not in the possession or control of Seller, including without limitation the
following (hereinafter collectively referred to as the "Assets"), except for any
such assets which constitute "Excluded Property" as hereinafter defined:
(a) The goodwill and any and all slogans, trademarks, or trade names used
by Seller in connection with the Business, including but not limited to the
names listed in Schedule 1(a) annexed hereto, and all customer lists, books,
records and correspondence relating to the present and former customers of the
Business (such customers hereinafter sometimes referred to as the "Customers").
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(b) All files, papers, books, records, sales and advertising materials
and records, technical and user manuals, sales and purchase correspondence,
permits, licenses, certificates of any governmental body and quotations
affecting or pertaining to the Business, including but not limited to employee
records of Seller.
(c) All right, title and interest of the Seller in any licenses and
commercially practiced patents, copyrights, trademarks, trademark registration
applications (including all reissues, divisions, continuations and extensions
thereof), patent applications and patent disclosures docketed, if any, relating
to the Business.
(d) All right, title and interest of the Seller to all intellectual
property rights and proprietary expertise, including, without limitation,
proprietary information, technical and technological data, know-how, processes,
invention conception memoranda, manufacturing and engineering data, computer
programs, and trade secrets, relating to the Business.
(e) All permits, authorizations, approvals or indicia of authority to
conduct the Business which were issued by any local, state, federal or foreign
governmental agency.
(f) All right, title and interest of Seller to the purchase orders and
sales or purchase commitments of Seller relating to the Business, a true and
correct list of which is attached as Schedule 1(f) hereto, and Seller's rights
in any other contracts intended to be assumed by Purchaser hereunder, which
contracts are all listed and briefly described in Schedule 1(f) hereto (such
purchase orders and sales or purchase commitments and other agreements
hereinafter collectively referred to as the "Assumed Contracts").
(g) All right, title and interest of Seller to its vehicles, machinery,
tools, equipment, furniture, office equipment, leasehold improvements, and
fixtures wherever located (hereinafter collectively referred to as the "Tangible
Property"), including, without limitation,
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those items listed on Schedule 1(g) hereto. Not included in "Tangible Property"
are leasehold improvements and fixtures of such a type as are ordinarily
considered to remain with the premises upon the expiration of a lease, such as
electrical, plumbing, and heating and air conditioning systems, all of which
Seller has indicated are the property of its landlord and not the property of
Seller.
(h) All right, title and interest of Seller to its inventory existing as
of the close of business on the day before the Closing Date, including without
limitation inventory of spare parts for machinery and equipment, inventory of
purchased materials for use in assembling its products, inventory of finished
goods and work-in-process (hereinafter collectively referred to as the
"Inventory").
(i) All right, title and interest of Seller to its trade and other
accounts receivable, including unbilled receivables, existing as of the close of
business on the day before the Closing Date (hereinafter collectively referred
to as the "Receivables"), an up-to-date listing of which will be provided to
Purchaser on the Closing Date.
(j) All right, title and interest of Seller to its prepaid expenses,
except for any such items not usable by Purchaser after the Closing Date (i.e.,
prepaid taxes, prepaid expenses relating to employee benefit plans).
(k) All right, title and interest of Seller to its cash-on-hand and
marketable securities existing as of the close of business on the day before the
Closing Date whether or not held in one or more accounts with financial
institutions on such date, including any xxxxx cash on hand and any undeposited
payments from customers.
Specifically excluded from the definition of "Assets" for purposes of
this Section 1 are Seller's prepaid or deferred taxes, and
____________________("Excluded Assets").
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XX. XXXXXXXX PRICE FOR THE ASSETS
Purchaser shall pay to Seller for the Assets a purchase price (the
"Purchase Price") equal to the sum of One Million One Hundred Sixty Thousand
Dollars ($1,160,000), payable as provided in Section 3 hereof.
III. PAYMENT OF PURCHASE PRICE
Purchaser shall pay the Purchase Price as follows:
(a) On the Closing Date, Purchaser shall issue to Seller one hundred
thousand (100,000) shares of Purchaser's no par value common stock, such shares
having previously been valued by Purchaser's Board of Directors at $.60 per
share, or a total of $60,000.
(b) On the Closing Date, the sum of One Million, One Hundred Thousand
Dollars ($1,100,000) shall be paid to Seller by bank check or wire transfer of
funds.
(c) For purposes of this Agreement, the Purchase Price shall be allocated
to the respective assets and liabilities of Seller which are either purchased or
assumed by Purchaser at the Closing Date, in such reasonable manner as shall be
determined for the purpose by Purchaser and Seller. The parties agree to use the
resulting allocation for purposes of filing their local, state and federal
income tax returns.
(d) Except for Seller's Trade Accounts Payable as of the close of
business on the day before the Closing Date (the "Accounts Payable"), and the
total owing by Seller as of the close of business on the day before the Closing
Date under its line of credit and other bank debts (hereinafter referred to as
the "Bank Debt"), and any additional liabilities and obligations listed on
Schedule 3(d) (all such items collectively hereinafter referred to as the
"Assumed Liabilities"), the Purchaser shall assume no liabilities or other
obligations of
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Seller of any kind, whether commercial or otherwise, known or unknown, fixed or
contingent, xxxxxx or inchoate, liquidated or unliquidated, secured or
unsecured. Prior to closing, Seller shall provide Purchaser with a written
schedule detailing the Accounts Payable and the Bank Debt as of the close of
business on the previous day.
(e) Without limiting the generality of the foregoing, except as provided
to the contrary on Schedule 3(d) attached hereto, Purchaser shall not assume any
obligation or liability of Seller with respect to (i) any transaction involving
Seller occurring after the Closing Date; (ii) any liability of Seller for
federal, state or local taxes, fees, assessments or other similar charges
(including without limitation income taxes, real estate taxes, payroll taxes and
sales taxes); (iii) any liability for defects in merchandise, returns or
allowances arising out of products sold by Seller or services performed by
Seller on or before the Closing Date, except for the obligation to credit
customers for returns of merchandise made after the Closing Date in the normal
course of business; (iv) any responsibility of Seller with respect to salary,
wages, vacation pay, savings plans, severance pay, deferred compensation, or
other obligations for the benefit of any employee of Seller, including pension
benefits accrued (vested or unvested), or arising out of their employment
through the Closing Date; (v) any liability or obligation incurred in connection
with or related to the transfer of the Assets hereunder, including, but not
limited to sales taxes, transfer taxes or stamp taxes; (vi) any liability
resulting from the failure of Seller to comply with the requirements of
applicable building, fire, zoning and environmental laws, laws relating to
occupational health and safety and other laws applicable to Seller or the
conduct of its business; (vii) any liability under any Assumed Contract arising
out of Seller's failure to perform its obligations thereunder to the extent
performance is due on or prior to the Closing Date; (viii) any
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liability of Seller to Seller's stockholders; or (ix) any liability of Seller
arising out of any pension, profit sharing or other employee benefit plan.
IV. DOCUMENTS TO BE DELIVERED AT CLOSING
At the Closing:
(a) Seller shall execute and deliver to Purchaser a Xxxx of Sale in form
and substance acceptable to Purchaser and its counsel, transferring and
assigning to Purchaser all of the Assets free and clear of all defects, liens,
encumbrances, charges and equities whatsoever, except for liens relating to the
Bank Debt (hereinafter referred to as the "Permitted Encumbrances").
(b) Seller shall execute or endorse and deliver to Purchaser such other
duly executed separate instruments of sale, assignment or transfer as Purchaser
deems reasonably required, including, but not limited to assignments of contract
rights or leases in form suitable, where appropriate, for filing or recording
with the appropriate governmental office or agency, including without limitation
certificates of title for any motor vehicles.
(c) Seller shall deliver to Purchaser Seller's check in the amount of
Seller's total cash-on-hand and marketable securities as of the close of
business on the day before the Closing Date, in keeping with Section 1(k)
hereof.
(d) Purchaser shall pay the Purchase Price for the Assets in accordance
with the terms of Section 3 hereof.
(e) Seller shall deliver to Purchaser copies, certified by the Secretary
of Seller, of (i) certificates of good standing in the jurisdiction of the
Seller's incorporation and in each other jurisdiction in which the Seller is
doing or transacting business, and (ii) resolutions of the Board of Directors
and the shareholders of Seller authorizing this Agreement and the
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other agreements and instruments to be delivered pursuant thereto and the
transactions contemplated hereby and thereby.
(f) Purchaser shall deliver to Seller copies, certified by the Secretary
of Purchaser, of (i) certificates of good standing in the jurisdiction of the
Purchaser's incorporation, and (ii) resolutions of the Board of Directors of
Purchaser authorizing this Agreement and the other agreements and instruments to
be delivered pursuant thereto and the transactions contemplated hereby and
thereby.
(g) Seller shall deliver to the Purchaser all books and records of the
Seller relating to the Seller's Business, the Customers, the Assets , the
Receivables, and the Assumed Liabilities.
(h) Seller shall deliver to the Purchaser all necessary consents of third
parties to the execution and delivery of this Agreement and the consummation of
the transactions contemplated.
(i) Seller shall deliver to the Purchaser an opinion of Seller's counsel
in form and substance satisfactory to Purchaser and its counsel.
V. CLOSING
The Closing of the transactions contemplated by this Agreement, shall
take place on Thursday, March 13, 1997, at 2:00 p.m., at the offices of the
Company in Scranton, Pennsylvania, or at such other time and place as may be
agreed by the parties (said Closing and said date thereof, herein referred to as
the "Closing" and the "Closing Date", respectively).
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Seller and Purchaser represent that no further approval of their
respective Boards of Directors or stockholders or any other approvals will be
required to consummate the transactions contemplated herein after the parties
have signed this Agreement.
VI. CROSS INDEMNITIES
(a) Seller, LEI, and each of the Shareholders jointly and severally
hereby undertake and agree to indemnify Purchaser (and its shareholders,
officers, and directors and their respective successors, heirs, personal
representatives and assigns) and hold it and them harmless against and in
respect of the following:
(i) All claims, debts, liabilities, accounts payable and
obligations of Seller whether absolute or contingent, arising out of
or in connection with the Assets, the Customers and the Seller's
Business arising or which may arise in connection with the Seller's
Business by Seller on or prior to the Closing Date, except for the
Assumed Liabilities, and except for the obligation to credit
customers of the Business for returns of merchandise made after the
Closing Date in the normal course of business; and
(ii) Any products liability claim or related claim or action
relating to the Business, where the occurrence giving rise to such
liability, claim or action takes place on or prior to the Closing
Date; and
(iii) Any and all loss or damage sustained by Purchaser as a
result of any breach of Seller's representations, covenants and
warranties contained in this Agreement; and
(iv) Any and all actions, suits, proceedings, demands,
assessments, judgments, costs and reasonable legal and other
expenses incident to any of the foregoing.
(b) Purchaser hereby undertakes and agrees to indemnify Seller, LEI (and
their shareholders, officers, and directors and their respective successors,
heirs, personal representatives and assigns) and hold them harmless against and
in respect of the following:
(i) All claims, debts, liabilities and obligations of
Purchaser whether absolute or contingent, arising out of or in
connection with the Assets, the
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Customers and the Business arising or which may arise after the
Closing Date, including, but not limited to, the Assumed Liabilities
but expressly excluding any and all claims, debts, liabilities and
obligations described in Section 6(a) of this Agreement; and
(ii) Any products liability claim or related claim or action
relating to the Business, where the occurrence giving rise to such
liability, claim or action takes place after the Closing Date; and
(iii) Any and all loss or damage sustained by Seller as a
result of any breach of Purchaser's representations, covenants and
warranties contained in this Agreement; and
(iv) Any and all actions, suits, proceedings, demands,
assessments, judgments, costs and reasonable legal and other
expenses incident to any of the foregoing.
(c) The covenants of indemnity set forth in this Section 6 are intended
by the parties to be for the benefit of each other and their respective
shareholders, officers and directors and their respective successors, heirs,
personal representatives and assigns. All of the covenants of indemnity set
forth in this Section 6 shall be deemed renewed by the parties at the Closing as
if made at such time and shall survive after the Closing Date for a period of
one (1) year, except that indemnity obligations arising under Section 6(a))(ii)
shall survive indefinitely.
(d) If any legal proceeding shall be instituted or any claim or demand
made against a party (the "Nondefaulting Party") by any third party in respect
of which the other party (the "Defaulting Party") may be liable under the
indemnity set forth in this Section 6, the Nondefaulting Party shall give
written notice thereof to the Defaulting Party within 20 days following the date
of which the Nondefaulting Party is informed in writing of the institution of
such proceeding or receives such claim or demand. Upon receipt of such notice,
the Defaulting Party shall undertake the defense of such proceeding, claim or
demand through counsel selected by the Defaulting Party at its own expenses
(provided
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that the Nondefaulting Party shall be entitled, at its own expense, to
participate in any such legal proceeding or the negotiation and settlement
thereof through counsel of its choice).
(e) The Defaulting Party, in all cases, shall have the absolute right to
settle or compromise any such proceeding, claim or demand or to refrain
therefrom, provided that if the Nondefaulting Party does not consent to a
settlement or compromise proposed by the Defaulting Party and agreed to by the
third party, and such proceeding, claim or demand shall ultimately result in a
judgment or settlement greater than the proposed settlement or compromise, the
Defaulting Party shall be discharged from any liability hereunder with respect
to any amount in excess of the settlement or compromise so proposed and agreed
to by the third party and any expenses incurred subsequent to the date the
settlement or compromise originally was so proposed and agreed to. If the
Nondefaulting Party effects a settlement or compromise without the prior written
consent of the Defaulting Party, the Defaulting Party shall be discharged from
any liability hereunder in excess of expenses incurred prior to the date the
settlement or compromise was effected by the Nondefaulting Party, provided that
such expenses are reasonable in amount and were reasonably required for the
Nondefaulting Party's defense against the settled or compromised claim or demand
which, when it was asserted, reasonably appeared to be a liability for which the
Defaulting Party would be liable to the Nondefaulting Party hereunder.
VII. COVENANTS
(a) COVENANTS OF THE SELLER. Seller, LEI, and the Shareholders jointly
and severally covenant and agree as follows throughout the period from the date
hereof through and including the Closing:
(i) FURTHER ASSURANCE. From the date hereof, Seller shall take
all such action, both before and after the Closing, as may be
reasonably necessary or
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appropriate to consummate the transactions provided for in this
Agreement in accordance with the representations, warranties,
conditions and agreements contained herein, and shall refrain from
taking any action which would result in any of such representations
or warranties not being true and correct, or any of such conditions
not being satisfied, at the Closing.
(ii) CONDUCT OF BUSINESS. Seller covenants and agrees that
from the date hereof through and including the Closing, Seller shall
conduct its business and operations relating to the Business only in
the ordinary course and in accordance with sound business practices
in substantially the manner in which such business and operations
have been previously conducted. Without limiting the foregoing,
Seller agrees that except as provided to the contrary in Schedule
7(a), attached hereto, it will not during such period, institute any
change in accounting methods or practices without Purchaser's
consent, declare, set aside or pay a dividend or other distribution
in respect to the capital stock of Seller, or make any direct or
indirect redemption, purchase or other acquisition by Seller of any
of its shares of capital stock; increase the salary or other
compensation payable or to become payable by Seller to any of its
officers or directors; declare, pay or commit, or become obligated
to pay a bonus or other additional salary or compensation to any
person; lend any amounts to any person or entity; or waive or
release any right of claim of the Seller to collect any of its
accounts receivable, except in the ordinary course of business.
(iii) NOTICE OF BREACH. To the extent Seller or any of the
Shareholders obtains knowledge that any of the representations or
warranties contained in Section 9 hereof would be incorrect in any
material respect were those representations or warranties made
immediately after such knowledge was obtained, Seller or the
respective Shareholders shall notify Purchaser in writing promptly
of such fact and exercise reasonable efforts to remedy same.
(iv) ACCESS. Seller will permit Purchaser, its counsel, its
auditors and its appraisers to inspect and copy all records and
documents relating to the Assets, the Customers and the Seller's
Business in Seller's custody, care or control and to have access to
all places of Seller's Business during regular business hours.
(v) AUTHORIZATION FROM OTHERS. Seller shall use its best
efforts to obtain all authorizations, consents and approvals of
third parties and/or governmental agencies that may be required to
permit the consummation of the transactions contemplated by this
Agreement.
(vi) CONSUMMATION OF AGREEMENT. Seller shall use its best
efforts to satisfy all conditions to the Closing to the end that the
transactions contemplated by this Agreement shall be fully carried
out.
(vii) BUSINESS INTACT; RELATIONSHIPS WITH CUSTOMERS AND
SUPPLIERS. Seller shall use its best efforts to keep intact the
Seller's Business, to keep
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available its key employees and to maintain the goodwill of the
Customers and suppliers and other persons having business dealings
with Seller relating to the Seller's Business.
(viii) REGULATORY FILINGS. Seller will furnish to the
Purchaser such necessary information and reasonable assistance as
the Purchaser may reasonably request in connection with its
preparation of necessary filings or submissions to any governmental
agency. Seller agrees to timely file any information, reports,
applications or notices required to be filed in connection with the
transactions contemplated by this Agreement.
(b) COVENANTS OF THE PURCHASER. Purchaser covenants and agrees as follows
throughout the period from the date hereof through and including the Closing:
(i) FURTHER ASSURANCE. From the date hereof, Purchaser shall
take all action, both before and after the Closing, as may be
necessary or appropriate to consummate the transactions provided for
in this Agreement in accordance with the representations,
warranties, and agreements contained herein, and shall refrain from
taking any action which would result in any of such representations
or warranties not being true and correct at the Closing. However,
nothing in this paragraph shall require Purchaser to consummate this
transaction if any condition specified in Section 10(a) shall not
have been satisfied or waived prior to Closing.
(ii) NOTICE OF BREACH. To the extent Purchaser obtains
knowledge that any of the representations or warranties contained in
Section 8 hereof would be incorrect in any material respect were
those representations or warranties made immediately after such
knowledge was obtained, Purchaser shall notify Seller in writing
promptly of such fact and exercise its reasonable efforts to remedy
same to the extent within Purchaser's control.
(iii) AUTHORIZATION FROM OTHERS. Purchaser shall use its best
efforts to obtain all authorizations, consents and approvals of
third parties and/or governmental agencies that may be required to
permit the consummation of the transactions contemplated by this
Agreement.
(iv) REGULATORY FILINGS. The Purchaser will furnish to the
Seller such necessary information and reasonable assistance as the
Seller may reasonably request in connection with its preparation of
necessary filings or submissions to any governmental agency. Seller
agrees to timely file any information, reports, applications or
notices required to be filed in connection with the transactions
contemplated by this Agreement.
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(c) SPECIAL COVENANTS RELATING TO EMPLOYEES. Effective as of the Closing
Date Seller agrees to terminate all of its employees, except for any employees
who by mutual agreement of the parties will not be offered employment by
Purchaser. Purchaser agrees to offer employment as of the Closing Date to all
present employees of Seller, on substantially the same terms regarding
compensation and benefits as were provided by Seller immediately prior to the
Closing, except for any employees who are also shareholders of Seller or members
of their immediate families. In all cases such employment will be "at will", and
except as provided to the contrary in Schedule 3(d), Purchaser will not assume
any obligations to such persons relating to the period of their employment by
Seller. Notwithstanding the foregoing, Purchaser shall enter into an Employment
Agreement with Xxxx X. Xxxxxx.
VIII. REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Seller as follows:
(a) Purchaser is a corporation duly organized, validly existing and in
good standing under the laws of Delaware and is duly qualified, licensed and
authorized to do business as a foreign corporation and is in good standing as a
foreign corporation in each jurisdiction in which the conduct of its business
requires such qualification, licensing or authorization. Purchaser has full
corporate power to own or lease its properties and carry on its business as now
being conducted.
(b) Purchaser has full corporate power and authority to execute and
deliver this Agreement and the other agreements and instruments to be executed
and delivered by it in connection herewith, and to consummate the transactions
contemplated hereby and thereby. All corporate acts and other proceedings
required to be taken by or on the part of
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Purchaser to authorize it to carry out this Agreement and such other agreements
and instruments and the transactions contemplated hereby and thereby have been
duly and properly taken. This Agreement has been duly executed and delivered by
Purchaser and constitutes, and such other agreements and instruments when duly
executed and delivered by Purchaser will constitute, legal, valid and binding
obligations of Purchaser, enforceable in accordance with their respective terms.
(c) Neither the execution and delivery nor the performance of this
Agreement will (i) violate any provision of law, or any judgment, writ,
injunction, decree or order of any court or other governmental authority
relating to Purchaser, or (ii) violate any deed, mortgage, instrument,
indenture, agreement, contract, other commitment or restriction to which
Purchaser is a party or by which it is bound, or (iii) be in conflict with, or
result in or constitute a breach or default (or an occurrence which by lapse of
time and/or the giving of notice would constitute a breach or default), on the
part of Purchaser, under any such deed, mortgage, instrument, indenture,
agreement, contract, other commitment or restriction.
(d) All of the representations and warranties set forth in this
Section 8 shall be deemed renewed by Purchaser at the Closing as if made at such
time and shall survive the Closing Date for a period of one (1) year.
IX. REPRESENTATIONS AND WARRANTIES OF SELLER, LEI, AND THE SHAREHOLDERS
Seller, LEI, and the Shareholders jointly and severally represent and
warrant to Purchaser as follows:
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(a) Seller is duly organized, validly existing and in good
standing under the laws of Pennsylvania and is duly qualified, licensed and
authorized to do business as a foreign corporation and is in good standing as a
foreign corporation in each jurisdiction in which the conduct of its business
requires such qualification, licensing or authorization. Seller has full
corporate power and authority to execute and deliver this Agreement and the
other agreements and instruments to be executed and delivered by it in
connection herewith and to consummate the transactions contemplated hereby and
thereby. All corporate acts and other proceedings required to be taken by or on
the part of Seller, including, if necessary, all appropriate stockholder action,
to authorize it to carry out this Agreement and such other agreements and
instruments and the transactions contemplated hereby and thereby have been duly
and properly taken. This Agreement has been duly executed and delivered by
Seller and constitutes, and such other agreements and instruments when duly
executed and delivered by Seller will constitute, legal, valid and binding
obligations of Seller enforceable in accordance with their respective terms.
(b) Neither the execution and delivery nor the performance of this
Agreement will (i) violate any provision of law, or any judgment, writ,
injunction, decree or order of any court or other governmental authority
relating to Seller, or (ii) violate any deed, mortgage, instrument, indenture,
agreement, contract, other commitment or restriction to which Seller is a party
or by which it is bound, or (iii) be in conflict with, or result in or
constitute a breach or default (or any occurrence which by lapse of time and/or
giving of notice would constitute a breach or default), on the part of Seller,
under any such deed, mortgage, instrument, indenture, agreement, contract, other
commitment or restriction, or
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(iv) result in the creation or imposition of any lien, charge or encumbrance of
any nature whatsoever upon the Assets.
(c) The Business has been conducted by Seller in accordance with
all applicable laws, governmental regulations and judicial and administrative
decisions, including without limiting the generality of the foregoing, laws,
regulations and decisions concerning employment and environmental matters, the
failure to comply with which would have a material adverse effect on Purchaser's
ability to carry on the Seller's Business as now being conducted. All licenses
or permits issuable by any governmental authority which are necessary for
Seller's operation of the Business, if any, have been obtained and are currently
in full force and effect. All such licenses and permits are freely transferrable
to Purchaser without the consent of the issuing authority.
(d) Except for those matters set forth in Schedule 9(d), there is
(and has not been within the past three years) no claim, litigation, action,
suit or proceeding, administrative or judicial, pending or threatened against or
affecting Seller, or involving any of the Assets, at law or in equity or before
any foreign, federal, state, local or other governmental authority, including,
without limitation, any product liability claim, or any claim, proceeding, or
litigation for the purpose of enjoining or preventing the consummation of this
Agreement, or the transactions contemplated hereby, or otherwise claiming this
Agreement, or any of the transactions contemplated hereby or the consummation
thereof, is illegal or otherwise improper, nor to Seller's knowledge is there
any basis upon which any such claim, litigation, action, suit or proceeding
could be brought or initiated. Seller is not (and has not been within the past
three years) subject to or in default under any judgment, order, writ,
injunction or decree of any court or any governmental authority, and no
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replevins, attachments, or executions have been issued or are now in force
against Seller. No petition in bankruptcy or receivership has ever been filed by
or against Seller. Seller is not in default under any express or implied
contract, agreement, lease or other arrangement, oral or written, to which
Seller is a party. Neither Seller nor the other party to any of the Assumed
Contracts is in default thereunder.
(e) No consent, authorization, license, permit, order, certificate
or approval which has not heretofore been obtained is required by any person,
corporation, partnership, estate, trust, governmental agency or other person or
entity not a party to this Agreement in connection with the transactions
contemplated by this Agreement.
(f) Seller has not received any notice from any court or
governmental agency of any violation or alleged violation of any applicable
laws, ordinances, regulations, rules, decrees, awards or orders enacted or
entered by any federal, state or local governmental authority or court.
(g) Seller now has, and by virtue of the deliveries made at the
Closing, Purchaser will obtain good and marketable title to the Assets, free and
clear of all liens, encumbrances, charges and equities of any nature whatsoever,
except for the Permitted Encumbrances.
(h) The physical properties, business and assets of Seller's
business are and have been insured by such insurers, against such risks
(including but not limited to products liability claims), in such amounts, and
upon such terms and conditions as are disclosed in Schedule 9(h) annexed hereto
and all other insurance policies and similar arrangements of Seller's business
are disclosed in said Schedule. Said insurance policies and arrangements are in
full force and effect as of the date of the Closing and are adequate
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and customary for the business currently engaged in by Seller. Seller shall
exercise its reasonable efforts to execute such assignments and to take such
other actions as shall in Purchaser's reasonable opinion be appropriate to
ensure that Purchaser obtains the benefits of all of such policies to the extent
permissible thereunder, including but not limited to reasonable notice of the
cancellation or nonrenewal of any such policy of insurance for any reason.
(i) Neither the business of Seller as conducted prior to the
Closing nor the ownership or sale by Seller of any of the Assets were, are or
will be in contravention of any patent, trademark, copyright or franchise
agreements, licensing agreements, or other proprietary right of any third party
or was, is or will be dependent for no-contravention upon the acquiescence,
agreement or consent of any such third party.
(j) Schedule 1(a) attached hereto and incorporated herein by
reference sets forth all patents, patent applications, registered trademarks,
registered service marks, trademark and service xxxx applications, unregistered
trademarks and service marks, copyrights and copyright applications, owned or
filed by the Seller or in which the Seller has an interest and the nature of
such interest. No other patent, trademark or service xxxx, copyright or license
under any thereof, is necessary to permit the Business to be conducted as now
conducted or as heretofore conducted. No person, firm or corporation has any
proprietary, financial or other interest in any of such patents, patent
applications, registered trademarks, registered service marks, trademark and
service xxxx applications, unregistered trademarks and service marks, copyrights
and copyright applications, and there are no violations by others of any of the
rights of the Seller thereunder. To the best of Seller's knowledge, Seller is
not infringing upon any patent, trademark or service xxxx, or
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copyright or otherwise violating the rights of any third party. No proceedings
have been instituted or are threatened, and no claim has been received by the
Seller alleging any such violation, and Seller is not a party to, or bound by,
any license agreement requiring payment.
(k) Seller has delivered to Purchaser on or before the date hereof
originals or copies of (1) all current written contracts and agreements with the
Customers, except for purchase and sales orders made in the ordinary course of
business; (2) all constituent agreements relating to any indebtedness of the
Seller relating to the Business or the Assets; and (3) leases and any other
material contracts by which the Seller is bound or is a party including but not
limited to leases for its real property, and any contracts with any supplier or
distributor of materials used in connection with the development, manufacture,
marketing and sale of the Business; and (4) any other written agreements (and
summaries of any oral agreements) included in the Assumed Liabilities.
(l) Seller has no knowledge of any termination, cancellation,
limitation, modification or change in the business relationship of Seller with
any of its twenty largest Customers.
(m) As of the date hereof, Seller has no liabilities of any
nature, whether accrued, absolute, contingent or otherwise except (i)
liabilities as shown on Schedule 9(m) as liabilities intended to be retained by
Seller, and (ii) any other liabilities specifically included in the definition
of Assumed Liabilities contained in Section 3(d), and listed on Schedule 3(d).
(n) The items of Tangible Property included within the Assets to
be purchased hereunder, constitute all items of Tangible Property needed for
Purchaser to
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conduct the Business after the Closing Date as such Business has been conducted
by Seller in the twenty-four months prior to the Closing Date. All of the items
included in the Tangible Property have been well maintained and are in normal
operating condition.
(o) The Receivables to be assigned to Purchaser hereunder on the
Closing Date will on the Closing Date each be valid and subsisting obligations
owing to Seller in accordance with the respective amounts for which each
receivable is carried on the books of Seller on such date. An up-to-date
schedule of the receivables will be provided to Purchaser at the Closing.
(p) Each of the items of Inventory included in the Assets sold to
Purchaser hereunder will be usable or saleable by Purchaser in the ordinary
course of business, without the need for any significant write-down below cost.
(q) Seller has paid, or will cause to be paid, all income taxes,
payroll and employee benefits, social security, withholding, sales, use,
unemployment insurance taxes, and any and all other taxes due and payable by
Seller to all municipal, state and federal governmental authorities for periods
up to and including the Closing Date. To the extent any such obligations will be
an obligation of the Business after the purchase of the Assets and the Business
by Purchaser, and such amounts accrued during periods prior to the Closing Date,
all such amounts are listed in Schedule 9(q) hereof.
(r) All federal, state and municipal tax and information returns
required to have been filed prior to the Closing Date by Seller have been duly
and timely filed and each such return correctly reflects the income, franchise
and other tax liability and all other information required to be reported
thereon.
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(s) Since June 30, 1996, and continuing until the close of
business on the Closing Date, Seller has operated the Business in the ordinary
course of business, as it has been conducted in the twenty-four months prior to
the Closing Date, and the Business has operated profitably during such period,
at the same or greater levels of profit as have resulted during the two-year
period ending June 30, 1996. Since June 30, 1996, and continuing until the close
of business on the Closing Date, Seller has not directly or indirectly increased
the compensation paid or payable to any of its Shareholders or employees with
annual compensation of more than $30,000, and Seller has incurred no liabilities
and paid no dividends or other distributions to any of its Shareholders or their
immediate family members or affiliates, except for any payments of liabilities
carried on the Seller's unaudited June 30, 1996 balance sheet, or payments
disclosed on Schedule 9(s).
(t) Neither this Agreement, nor any Exhibit, schedule,
certificate, instrument or other document furnished or to be furnished to
Purchaser pursuant hereto or in connection with the transactions contemplated
hereby, contains or will contain any untrue statement of a material fact, or
omits or will omit to state a material fact necessary to make the statements
contained therein not misleading. There is no fact which materially adversely
affects, or may materially adversely affect, the business or condition
(financial or otherwise) of the Seller or any of its properties or assets which
has not been set forth herein, or in an Exhibit, Schedule, certificate or other
document furnished or to be furnished to Purchaser prior to the Closing Date
pursuant hereto.
(u) The foregoing representations and warranties set forth in this
Section 9 shall be deemed renewed by Seller and the Shareholders at the Closing
as if made at such time and shall survive for a period of one (1) year after the
Closing Date.
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X. CONDITIONS OF CLOSING
(a) CONDITIONS TO PURCHASER'S OBLIGATIONS. All obligations of
Purchaser hereunder shall be subject to the following conditions, any one of
which may be waived by Purchaser:
(i) All representations and warranties of Seller and the
Shareholders contained in this Agreement shall be true and correct
as of the Closing Date in all material respects.
(ii) Purchaser shall have executed a lease for the real
property presently occupied by Seller for a minimum three-year
term. Such lease shall be on terms reasonably acceptable to
Purchaser and its counsel, except that the rent and other
financial terms specified in such lease shall be fair market
rates, determined by current appraisal, which, however, shall in
no event exceed the rates paid by Seller for such items during the
twelve month period preceding the Closing Date.
(iii) During the period following execution of this Agreement,
and prior to the Closing Date, Purchaser shall have been provided
with reasonable access to the facilities, Customers, employees and
business records of Seller, and such third parties as Purchaser
deems necessary, for the purpose of conducting its due diligence,
and Purchaser's due diligence conducted during this period shall
not have revealed any material adverse changes in the Business, or
in the prospects that Purchaser will be able to operate the
Business profitably after the Closing Date. Without limiting the
foregoing, Purchaser shall have been provided with up to date
financial information regarding Seller for the period up and
including the close of business on the day before the Closing
Date, in such summary form as Purchaser shall deem reasonably
necessary to analyze the financial condition and prospects of the
Business as of the Closing Date. During the period immediately
preceding the Closing Date, Purchaser shall have been provided
with an opportunity to participate in a physical counting of the
Inventory with representatives of its choice, and shall have been
provided with access to Seller's employees and files for the
purpose of independently determining the value of individual items
of the Inventory. As a result of such investigation, Purchaser
shall not have determined that a material portion of the Inventory
is obsolete, or otherwise not usable or saleable in the ordinary
course of business, or is not carried on the financial books and
records of the company at appropriate costs. Furthermore, as a
result of such inspection of such Inventory, Purchaser shall not
have reasonably concluded that the assets include an unreasonably
large amount of Inventory (unless justified by backlogs), or an
unreasonably small amount of Inventory (except to the extent this
results from unusually large sales).
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(iv) As a result of its investigations prior to the Closing
Date, Purchaser shall not have concluded that it no longer wishes
to consummate this transaction. The parties acknowledge that a
determination by Purchaser not to consummate this transactions in
accordance with this paragraph may be made by Purchaser for any
reason, including, but not limited to, a determination by
Purchaser that the value of the Assets does not exceed the value
of the Assumed Liabilities by a sufficient amount to justify the
Purchase Price; that the Business has not generated levels of
profitability prior to the Closing Date in amounts high enough to
justify the specified Purchase Price; or that any materially
adverse circumstances exist which might affect the Business or its
prospects after the Closing Date.
(v) Purchaser shall have succeeded in obtaining financing
from a bank or other institutional lender in a minimum amount of
$1,000,000 for the purpose of consummating this transaction, on
interest rates and other terms reasonably acceptable to Purchaser.
Promptly after executing this Agreement, Purchaser shall make
application for such financing, and if Purchaser fails to apply
for such financing within thirty days after signing this
Agreement, then this condition shall be deemed waived.
(vi) Purchaser shall have entered into an employment agreement
with Xxxx X. Xxxxxx on terms reasonably acceptable to Purchaser to
take effect on the Closing Date.
(vii) Purchaser shall have obtained audited financial
statements for Seller covering the three-year period ending March
31, 1996 which financial statements are identical in all material
respects to financial statements previously furnished to Purchaser
by Seller. Promptly after execution of this Agreement, Purchaser
agrees to engage a qualified accounting firm to perform such
audit, and Purchaser agrees to bear the expense of such audit
regardless of whether this transaction is ultimately consummated.
(viii) Seller shall have performed all commitments hereunder up
to the Closing Date and shall have tendered the required
documents, instruments and certificates as set forth in Section 4
hereof.
(ix) No action, suit, proceeding or investigation by or before
any court, administrative agency or other governmental authority
shall have been instituted or threatened to restrain, prohibit or
invalidate the transactions contemplated by this Agreement or
which may affect the right of Purchaser to own, operate or control
the Assets and the Seller's Business after the Closing Date.
(x) All corporate action, necessary to authorize (a) the
execution, delivery and performance by the Seller of this
Agreement and any other agreements or instruments contemplated
hereby or thereby to which Seller is a party and (b) the
consummation of the transactions contemplated hereby and thereby
shall have
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been duly and validly taken by Seller, and Purchaser shall have
been furnished with copies of all applicable resolutions of Seller
certified by the Secretary or Assistant Secretary of the Seller.
(xi) The Seller shall have obtained the approvals, consents
and authorizations of all third parties and/or governmental
agencies if any necessary for the communication of the
transactions contemplated hereby in accordance with the
requirements of applicable laws and agreements.
(b) CONDITIONS TO SELLER'S OBLIGATIONS. All obligations of Seller
hereunder are, at the option of Seller, subject to the conditions that, at the
Closing:
(i) All representations and warranties made in this Agreement
by Purchaser shall be true and correct as of the Closing Date in
all material respects.
(ii) Purchaser shall have tendered the required documents and
certificates at the Closing as set forth in Section 4 hereof.
(iii) The payment described in Section 3 hereof due at the
Closing shall have been paid by Purchaser.
(iv) All corporate action necessary to authorize (a) the
execution, delivery and performance by Purchaser of this Agreement
and any other agreements or instruments contemplated hereby to
which Purchaser is a party and (b) the consummation of the
transactions and performance of its other obligations contemplated
hereby and thereby shall have
been duly and validly taken by Purchaser, and the Seller shall
have been furnished with copies of all applicable resolutions
adopted by the board of directors of Purchaser, certified by the
Secretary of Purchaser.
(v) Purchaser shall have repaid in full Seller's term loan
and working capital line of credit with PNC Bank (the "Loans"), or
Purchaser shall have assumed such Loans; provided, that in the
event of the assumption by Purchaser of the Loans, Seller, the
Shareholders, and any of their respective affiliates shall have
been relieved of any obligations relating to the Loans.
XI. TERMINATION OF AGREEMENT
(a) TERMINATION. At any time prior to the Closing Date, this
Agreement may be terminated (i) by the consent of the Purchaser and Seller, (ii)
by the Seller if the conditions stated in Section 10(b) have not been satisfied
at or prior to the Closing Date or (iii) by Purchaser if the conditions stated
in Section 10(a) have not been satisfied at or prior
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to the Closing Date. Purchaser agrees that, in the event of the termination of
this Agreement for any reason, it will return to Seller all information it has
obtained with respect to the Business, and it will not divulge, indicate, use to
the detriment of Seller and/or the Business, or for the benefit of any other
person or persons, or misuse in any way, any confidential information or trade
secrets of Seller relating to the Business, including personnel information,
secret processes, know-how, customer lists, formulas, or other technical data.
(b) RIGHT TO PROCEED. Anything in this Agreement to the contrary
notwithstanding, if any of the conditions specified in Section 10(a) hereof have
not been satisfied at or prior to the Closing, Purchaser shall have the right to
proceed with the transactions contemplated hereby without waiving any of its
rights hereunder, and if any of the conditions specified in Section 10(b) hereof
have not been satisfied at or prior to the Closing, the Seller may determine to
proceed with the transactions contemplated hereby without waiving any of its
rights hereunder.
XII. FINANCIAL ADVISORS
Seller and/or the Shareholders have previously entered into an Agreement
with Geneva Capital Markets Company and/or Dictor Capital Corporation regarding
the sale of Seller, and Shareholders agree that they will be solely responsible
for any compensation due to Geneva Capital Markets Company as a result of this
transaction and/or Dictor Capital Corporation. Seller and Purchaser each
acknowledge to the other that there are no other financial advisors or brokers
in connection with this Agreement and agree to indemnify the other for any
claims by any other financial advisors or broker in connection
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with this Agreement and the transactions contemplated hereby resulting from any
act by such party.
XIII. OTHER AGREEMENTS
(a) Between the date of this Agreement and the Closing Date,
neither Seller, LEI nor the Shareholders shall, directly or indirectly,
negotiate with any third party regarding the merger or consolidation of Seller,
or the sale of substantially all of the assets of Seller, or the sale of any
capital stock of Seller. In addition, neither Seller, LEI nor any of the
Shareholders shall solicit any inquiry regarding any of the foregoing from any
third-party during such period. Furthermore, neither Seller, LEI nor any of the
Shareholders shall during such period engage indirectly in any such activities
through a finder, broker, consultant, other stockholder of Seller, or other
intermediary.
(b) Seller, LEI, and each of the Shareholders agrees that they
will not, at any time within the five (5) year period immediately following the
Closing Date, directly or indirectly engage in, or have any interest in, any
person, firm, corporation, or business (whether as an employee, officer,
director, agent, creditor, consultant, or otherwise) that engages in any
activity in the continental United States which is the same as, similar to, or
competitive with, any activity now engaged in by the Seller; provided, however,
that the covenant contained in this paragraph shall not preclude Seller, LEI or
the Shareholders from owning securities of any firm or corporation which are
traded on a national or public securities exchange, or "over-the-counter",
unless the ownership of such securities gives any of such parties control,
directly or indirectly, of at least five percent (5%) of the voting stock of
such firm or corporation.
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(c) From the date of this Agreement and continuing indefinitely
after the Closing Date, Seller, LEI, and the Shareholders agree not to divulge,
indicate, use to the detriment of Purchaser or the Business, or for the benefit
of any other person or persons, or misuse in any way, any confidential
information or trade secrets of Seller relating to the Business, including
personnel information, secret processes, know-how, customer lists, formulas, or
other technical data.
(d) Seller, LEI, and the Shareholders acknowledge that their
agreements and covenants contained in this Section 13 have been materially
relied upon by Purchaser in agreeing to enter into this Agreement, and that the
terms of such provisions are reasonable. In the event of any breach or
threatened breach by Seller, LEI or any of the Shareholders of such provisions,
then in addition to any other right or remedy to which Purchaser is entitled
under the terms of this Agreement or at law or in equity, the parties agree that
Purchaser shall be entitled to obtain from any court of competent jurisdiction,
an injunction to prevent any threatened or actual breach of such provisions.
(e) After the Closing Date, Purchaser agrees that, should it
register any shares of its common stock or other voting securities under the
Securities Act of 1933, the Securities Exchange Act of 1934, or any other
applicable legislation, as such acts may be amended from time to time in the
future, then at such time it will also register the shares of common stock which
are described in Section 3(a) hereof.
(f) Purchaser acknowledges that the Shareholders have not been
involved in the day-to-day operation of the Business, and the Shareholders have
relied upon the
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information provided to them by management of Seller in joining in the
representations, warranties and covenants included in this Agreement.
(g) After the Closing, Seller, LEI and the Shareholders shall have
the right to review portions of the records of the Business relating to
operations prior to the Closing Date, as reasonably necessary to permit them to
file necessary tax returns.
XIV. NOTICES
Any notice or other documents to be given or delivered hereunder by any
party to any other party shall be in writing and shall be delivered by express
courier service, by fax transmission, or by certified mail, to the other party
at the following address:
If to Purchaser: Regency Affiliates, Inc.
Attention: Xxxxxxx X. Xxxxxxxx, Xx.
0000 XX Xxxxxxx Xxxxxxx, Xxx. 000
Xxxxxx, Xxxxxxx 00000
Copy to: Xxxxx X. Xxxxxxx, Esq.
Gallagher, Sharp, Xxxxxx & Xxxxxx
0000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
If to Seller or the
Shareholders: Rustic Crafts Co., Inc.
c/o Xxxxx X. Xxxxx
The Lomma Group
0000 X. Xxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Copy to: Xxxxxxx X. Xxxxx, Esq.
Xxxxx, Xxxxxxx and Xxxxxxx
0000 Xxxxxx Xxxxxxx West, Suite 210
Blue Xxxx, Pennsylvania 19422
XV. MERGER; AMENDMENT
This Agreement, the attachments hereto and the agreements and other
documents expressly referred to herein embody the entire representations,
warranties, agreements
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and conditions in relation to the subject matter hereof, and no representation,
warranty, understanding or agreement, oral or otherwise, in relation thereto
exists between the parties except as herein expressly set forth. This Agreement
may not be amended, augmented or terminated except as expressly provided herein
or by an instrument in writing duly executed by the parties hereto.
XVI. ASSIGNMENT
At any time before or after the Closing, Purchaser may assign all of its
rights and/or obligations under this Agreement to any person; provided, however,
that any such assignment by Purchaser shall not relieve Purchaser of its
obligations hereunder, and provided further, that Purchaser may only assign this
Agreement to a subsidiary of Purchaser or an affiliated corporation, except with
the advance written consent of Seller. This Agreement and the various rights and
obligations arising hereunder shall inure only to the benefit of and be binding
upon the parties hereto and their respective successors, heirs, personal
representatives and permitted assigns.
XVII. INVALIDITY
The invalidity or unenforceability of any term or provision of this
Agreement or the application of such term or provision to any person or
circumstances shall not impair or affect the remainder of this Agreement and its
application to other persons and circumstances, and the remaining terms and
provisions hereof shall not be invalidated but shall remain in full force and
effect.
XVIII. APPLICABLE LAW
This Agreement shall be governed by and construed in accordance with the
laws of Pennsylvania.
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XIX. COUNTERPARTS
This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which, taken together, shall be deemed
but one and the same instrument.
XX. SURVIVAL
The representations and warranties of the Purchaser and Seller set forth
in Sections 8 and 9 of this Agreement, the indemnities set forth in Section 6 of
this Agreement, and the covenants set forth in Section 7(a), (b) and (c), and
Section 12 of this Agreement, shall survive the execution and delivery of this
Agreement for a period of one (1) year after the Closing Date. The provisions of
Section 13 shall survive for the periods therein indicated.
XXI. CAPTIONS
The captions in this Agreement are for convenience only and shall not be
considered a part of or affect the construction or interpretations of any
provision of this Agreement.
IN WITNESS WHEREOF, this Agreement has been executed and delivered as of
the day and year first above written.
RUSTIC CRAFTS CO., INC.
By: /s/ Xxxx X. Xxxxxx
--------------------------------
Title: President
-----------------------------
/s/ Xxxxx X. Xxxxx
-----------------------------------
Xxxxx X. Xxxxx, Individually
/s/ Xxxxx X. Xxxxx
-----------------------------------
Xxxxx X. Xxxxx, Individually
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/s/ Xxxxxxx X. Xxxxx
-----------------------------------
Xxxxxxx X. Xxxxx, Individually
LOMMA ENTERPRISES, INC.
By: /s/ Xxxxx X. Xxxxx
-----------------------------------
Title: President
-----------------------------
REGENCY AFFILIATES, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------
Title: Chairman
----------------------------
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INDEX TO SCHEDULES
Schedule 1(a) - Trade Names, Patents and Trademarks
Schedule 1(f) - Assumed Contracts
Schedule 3(d) - Additional Assumed Liabilities
Schedule 7(a) - Exceptions to Section 7(a)
Schedule 9(d) - Litigation
Schedule 9(h) - Insurance
Schedule 9(m) - Seller's Retained Liabilities
Schedule 9(q) - Accrued Liabilities of the Business
Schedule 9(s) - Exceptions to Section 9(s)
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ASSIGNMENT AND ASSUMPTION OF PURCHASE AGREEMENT
-----------------------------------------------
This Assignment and Assumption of Purchase Agreement (the "Assignment")
is made and entered into as of the 17th day of March 1997, by and between
Regency Affiliates, Inc., a Delaware corporation ("Assignor") and Rustic Crafts
International, Inc., a Delaware corporation ("Assignee"), based upon the
following.
A. Assignor has agreed with Rustic Crafts Co., Inc., a Pennsylvania
corporation ("Seller") to purchase substantially all the assets and assume
certain of the liabilities of Seller, pursuant to a certain Asset Purchase and
Sale Agreement executed by Seller on February 27, 1997 (such Agreement
hereinafter referred to as the "Purchase Agreement").
B. Assignee is a wholly-owned subsidiary of Assignor.
C. Assignor wishes to assign Assignor's rights and interest in and to
the Purchase Agreement to Assignee, and Assignee wishes to complete such
assignment, and to assume the obligations of Assignor under the Purchase
Agreement.
D. Seller has joined in executing this document solely for purposes of
indicating its consent to the above assignment.
NOW THEREFORE, in consideration of the mutual promises and agreements
contained in this Assignment and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged by the parties hereto,
Assignor and Assignee hereby agree as follows:
1. Assignor hereby transfers and assigns to Assignee, all of Assignor's
right, title, and interest in, to and under the Purchase Agreement.
2. Assignee hereby accepts the transfer and assignment of Assignor's
interest in the Purchase Agreement.
3. Assignee hereby assumes and agrees to be bound by the terms and
provisions of the Purchase Agreement as if Assignee were an original party
thereto, and to perform all of the obligations of Assignor thereunder when due.
4. Assignor agrees that it shall not be relieved of liability for the
performance of its obligations under the Purchase Agreement, notwithstanding the
assignment to Assignee hereunder, but that Assignor shall nonetheless remain
jointly liable to Seller for the full and complete performance of Purchaser's
obligations under the Purchase Agreement.
5. This Agreement is governed by the laws of the state of Pennsylvania.
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The parties hereto have executed this Assignment as of the day and year
first above written.
ASSIGNOR:
REGENCY AFFILIATES, INC.
Witnesses:
X. Xxxxxxxxx By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------- --------------------------------------
Title: Chairman
---------------------------- ----------------------------------
ASSIGNEE:
RUSTIC CRAFTS INTERNATIONAL, INC.
Xxxxxx X. Xxxxxxx By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------- --------------------------------------
Title: Chairman
---------------------------- ----------------------------------
SELLER:
RUSTIC CRAFTS CO., INC.
X. Xxxxxxxxx By: /s/ Xxxx X. Xxxxxx
---------------------------- --------------------------------------
Title: President
---------------------------- -------------------------------
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