EXHIBIT 10.1
EXECUTION COPY
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "AGREEMENT") is made and entered into as
of February 19, 2002, by and among Quality Stores, Inc., a Delaware corporation
("SELLER"), and Alamo Group (IA) Inc., a Nevada corporation ("BUYER").
WHEREAS, on November 1, 2001, Seller filed a voluntary petition (the
"PETITION") pursuant to Title 11 of the United States Code, 11 U.S.C.ss.101 et
seq., as amended (the "BANKRUPTCY CODE"), in the United States Bankruptcy Court
for the Western District of Michigan (the "BANKRUPTCY COURT");
WHEREAS, Seller engages in the sale of products under the trade name
Valu-Bilt Tractor Parts ("VALU-BILT"); and
WHEREAS, Seller owns the Purchased Assets (as hereinafter defined), and
Buyer desires to become the owner of the Purchased Assets and Seller desires to
transfer the Purchased Assets to Buyer, on the terms and conditions of this
Agreement.
NOW, THEREFORE, in consideration of the good and valuable consideration,
the receipt and sufficiency thereof being hereby acknowledged, and intending to
be legally bound, Seller and Buyer hereby agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
1.1. DEFINITIONS. The following terms used in this Agreement shall have the
meanings set forth below:
(a) "ACCOUNTS RECEIVABLE" shall have the meaning set forth in
Section 2.2.
(b) "AFFILIATE" shall mean, with respect to any Person, any other
Person directly or indirectly controlling, controlled by or under direct common
control with such Person; PROVIDED, that in no event shall Buyer (or any
Affiliate of Buyer) be deemed to be an Affiliate of Seller. For purposes of this
definition, "CONTROL" when used with respect to any Person means the possession,
directly or indirectly, of the power to direct or cause the direction of
management and policies of such Person, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" shall have meanings correlative to the foregoing.
(c) "AGREEMENT" shall have the meaning ascribed to it in the preamble
herein.
(d) "ASSIGNMENT AND ASSUMPTION OF VALU-BILT AGREEMENTS" shall have
the meaning ascribed to such term in Section 3.2.
(e) "ASSUMED OBLIGATIONS" shall have the meaning ascribed to such
term in Section 2.3.
(f) "AUCTION" shall have the meaning ascribed to it in the Auction
Order.
(g) "AUCTION ORDER" shall mean the order of the Bankruptcy Court
pursuant to Title 11 of the United States Code approving the bid procedures for
the sale and purchase of the Purchased Assets and the payment of the Breakup Fee
(as hereinafter defined) pursuant to Sections 363 and 365 of the Bankruptcy
Code.
(h) "BANKRUPTCY CODE" shall have the meaning ascribed to it in the
Recitals herein.
(i) "BANKRUPTCY COURT" shall have the meaning ascribed to it in the
Recitals herein.
(j) "BENEFIT PLAN" shall mean each compensation, stock option,
employment, severance, insurance, pension or retirement plan, program or
agreement that is sponsored, maintained or contributed to by Seller for the
benefit of any employee or former employee of Seller employed in connection with
the Valu-Bilt Business.
(k) "XXXX OF SALE" shall have the meaning set forth in Section 3.2.
(l) "BREAKUP EVENT" shall have the meaning set forth in Section 6.8.
(m) "BREAKUP FEE" shall have the meaning set forth in Section 6.8.
(n) "BUSINESS DAY" shall mean any day other than Saturday, Sunday or
a day banks are authorized or required to be closed in New York, New York.
(o) "BUYER" shall have the meaning ascribed to it in the preamble
herein.
(p) "CLAIMS" shall mean any action, cause of action, demand, claim,
proceeding or investigation.
(q) "CLOSING" shall have the meaning set forth in Section 3.1.
(r) "CLOSING DATE" shall have the meaning set forth in Section 3.1.
(s) "ELEVENTH DAY" shall mean the later of (i) the eleventh calendar
day following the entry of the Sale Order, provided that if such eleventh
calendar day is not a Business Day then the first Business Day following such
eleventh calendar day or (ii) the date the Sale Order shall have become
Non-Appealable.
(t) "EMPLOYED VALU-BILT EMPLOYEES" shall have the meaning set forth
in Section 6.5.
(u) "EQUIPMENT" shall mean all of the furniture, fixtures, machinery
and equipment owned by Seller that is used primarily with the Valu-Bilt
Business, including, to the extent transferable, all warranties issued by third
parties for such furniture, fixtures, machinery and equipment.
(v) "EXCLUDED ASSETS" shall have the meaning set forth in
Section 2.2.
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(w) "EXCLUDED OBLIGATIONS" shall have the meaning set forth in
Section 2.5.
(x) "GOOD FAITH DEPOSIT" shall have the meaning set forth in
Section 2.11.
(y) "GOOD FAITH ESCROW" shall have the meaning set forth in
Section 2.11.
(z) "GOOD FAITH ESCROW AGENT" shall have the meaning set forth in
Section 2.11.
(aa) "GOOD FAITH ESCROW AGREEMENT" shall have the meaning set forth in
Section 2.11.
(bb) "GOVERNMENTAL ENTITY" shall mean any government or governmental
or regulatory body thereof, or political subdivision thereof, whether federal,
state, local or foreign, or any agency, instrumentality or authority thereof, or
any court or arbitrator (public or private).
(cc) "INTELLECTUAL PROPERTY" shall have the meaning set forth on
EXHIBIT A attached hereto.
(dd) "INVENTORY" shall mean all of the inventory of Seller that
relates to the Valu-Bilt Business, including, to the extent transferable, all
warranties issued by third parties for such inventory.
(ee) "INVENTORY ADJUSTMENT" shall have the meaning set forth in
Section 2.8.
(ff) "INVENTORY ESCROW" shall have the meaning set forth in
Section 2.7.
(gg) "INVENTORY ESCROW AGENT" shall have the meaning set forth in
Section 2.7.
(hh) "INVENTORY ESCROW AGREEMENT" shall have the meaning set forth in
Section 2.7.
(ii) "INVENTORY ESCROW AMOUNT" shall have the meaning set forth in
Section 2.7.
(jj) "LEASE ADJUSTMENT" shall have the meaning set forth in
Section 2.10.
(kk) "LEGAL PROCEEDING" shall mean any judicial, administrative or
arbitral actions, suits, proceedings (public or private), claims or governmental
proceedings.
(ll) "LETTER OF CREDIT" shall have the meaning set forth in
Section 2.4.
(mm) "LIABILITIES" shall mean, as to any Person, all debts, adverse
claims, liabilities, commitments, responsibilities, right to any equitable
remedies, and obligations of any kind or nature whatsoever, including warranty
obligations, direct, indirect, absolute or contingent, of such Person, whether
accrued, vested or otherwise, whether known or unknown, whether incurred in the
past, present or future and whether or not actually reflected, or required to be
reflected, in such Person's balance sheets or other books and records.
(nn) "LIEN" shall mean any lien, claim, pledge, option, charge,
hypothecation, easement, security interest, right-of-way, encroachment,
mortgage, deed of trust or other encumbrance.
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(oo) "MATERIAL ADVERSE EFFECT" shall mean any change or event (or
series of related changes or events) which, when taken individually or together,
could have a material adverse effect on the Purchased Assets taken as the whole.
(pp) "NON-APPEALABLE" shall mean, with respect to any order or
judgment of the Bankruptcy Court or any other court, an order or judgment as
entered on the docket that has not been reversed, stayed, modified or amended
and, as to which the time to appeal, petition for certiorari, or seek reargument
or rehearing has expired and no timely appeal, petition for certiorari, or
request for reargument or rehearing is pending or as to which any right to
appeal, reargue, petition for certiorari, or seek rehearing has been waived in
writing in a manner reasonably satisfactory to Buyer or, if an appeal,
reargument, petition for certiorari, or rehearing thereof has been denied, the
time to take any further appeal or to seek certiorari or further reargument or
rehearing has expired.
(qq) "OBSOLETE INVENTORY" shall mean all items of Inventory that, on a
stock keeping unit basis, have not been sold to a Person (other than Buyer
pursuant to this Agreement) in the two (2) fiscal years prior to the Closing
Date or used as a component in a rebuilt item that has not been sold to a Person
(other than Buyer pursuant to this Agreement) in the two (2) fiscal years prior
to the Closing Date. Any items of Inventory not previously carried by Seller
that are assigned a new stock keeping unit number, on a stock keeping unit
basis, that have been added to Inventory in the three (3) months prior to the
Closing Date shall not be marked as Obsolete Inventory.
(rr) "PARTY" shall mean any party to this Agreement.
(ss) "PERMITTED ENCUMBRANCES" shall mean Liens for Taxes that are not
yet due and payable.
(tt) "PERSON" shall mean any individual, corporation, partnership,
limited liability company, unincorporated organization or entity (including
without limitation any Governmental Entity).
(uu) "PETITION" shall have the meaning set forth in the Recitals.
(vv) "PURCHASED ASSETS" shall mean those assets described on EXHIBIT A
attached hereto.
(ww) "PURCHASE PRICE" shall have the meaning ascribed to it in Section
2.7 and as adjusted pursuant to Sections 2.8 and 2.10.
(xx) "SALE ORDER" shall mean the order of the Bankruptcy Court
pursuant to the Bankruptcy Code approving the sale and transfer of the Purchased
Assets pursuant to Sections 363 and 365 of the Bankruptcy Code.
(yy) "SALES-IN-TRANSIT" shall mean all receivables (including, without
limitation, cash, cash equivalents, undeposited and uncollected checks or any
instruments for the payment of money) which relate to any sales by Seller on or
prior to the Closing Date.
(zz) "SECURED PARTIES" shall have the meaning set forth in the Second
Amended and Restated Credit Agreement dated May 7, 1999 by and among Seller and
certain other parties (as amended from time to time).
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(aaa) "SELLER" shall have the meaning ascribed to it in the preamble
herein.
(bbb) "SUBLEASE AGREEMENT" shall have the meaning set forth in
Section 2.4.
(ccc) "SUBLEASE OBLIGATIONS" shall have the meaning set forth in
Section 2.4.
(ddd) "SUPERIOR PROPOSAL" shall mean a bona fide offer by any Person
(excluding Buyer): (i) to acquire a major portion of the Purchased Assets and
(ii) at a price which is determined to be feasible by Seller.
(eee) "TAX" or "TAXES" shall mean any federal, state, county, local,
foreign and other income, profits, gains, net worth, sales or use, AD VALOREM,
gross receipts, business and occupation, license, estimated, stamp, custom
duties, occupation, property (real or personal), franchise, capital stock,
license, excise, value added, payroll, employees, income withholding, social
security, unemployment or any other tax, any penalty, addition to tax and
interest on the foregoing, and any transfer taxes.
(fff) "VALU-BILT AGREEMENTS" shall mean those agreements identified on
EXHIBIT B attached hereto, including, to the extent transferable, any
prepayments made by Seller with respect to any of the Valu-Bilt Agreements.
(ggg) "VALU-BILT BUSINESS" shall mean the business conducted from the
Valu-Bilt Premises including the sale of various products through a catalog
distribution system under the trade name of Valu-Bilt Tractor Parts.
(hhh) "VALU-BILT EMPLOYEES" shall have the meaning set forth in
Section 6.5.
(iii) "VALU-BILT LEASE" shall mean the lease agreement dated as of
November 23, 1987 by and between 3815 Delaware Ltd. and Seller (as may be
amended from time to time).
(jjj) "VALU-BILT PREMISES" shall have the meaning set forth in
Section 2.4.
(kkk) "WARN ACT" shall mean the Worker Adjustment and Retraining
Notification Act of 1988, as amended, and any successor or similar state or
local Law, and the rules and regulations thereunder and under any successor or
similar state or local law.
ARTICLE II
SALE AND PURCHASE OF ASSETS
2.1. PURCHASED ASSETS. Subject to the terms and conditions set forth in
this Agreement, at the Closing, Seller shall sell, transfer and assign to Buyer
and Buyer shall buy, accept and assume from Seller the Purchased Assets. The
Purchased Assets shall be transferred to Buyer free and clear of all Liabilities
and Liens, except for (i) Assumed Obligations, (ii) Permitted Encumbrances and
(iii) Liens created by Buyer.
2.2. EXCLUDED ASSETS. The Purchased Assets shall not include any of
Seller's right, title or interest in or to the following assets and properties
of Seller (collectively, the "EXCLUDED ASSETS"):
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(a) any cash, cash equivalents, marketable securities, money orders,
promissory notes, undeposited and uncollected checks, undeposited food stamps,
bank accounts, certificates of deposit, Treasury bills or any instruments for
the payment of money;
(b) any assets of any Benefit Plan and any rights under any Benefit
Plan or any agreement relating to employee benefits, employment or compensation
of Seller or its employees;
(c) all Claims that Seller may have against any Governmental Entity
for refund or credit of any type with respect to Taxes accrued with respect to
periods ending on or prior to the Closing Date (including, without limitation,
any sales tax refund);
(d) all accounts receivables, including, but not limited to, refunds
of insurance premiums (the "ACCOUNTS RECEIVABLE");
(e) all Sales-in-Transit;
(f) except as otherwise provided in this Agreement, any of Seller's
right, title or interest in or to any of Seller's packaging designs or trade
dresses, any derivatives or combinations thereof, any patents, patent
registrations, patent applications, trademarks, trademark registrations,
trademark applications, tradenames, copyrights, copyright applications,
copyright registrations, or any franchises, licenses, processes, formulae,
inventions or royalties related to any of Seller's private label brands,
including, without limitation, the name or logos or any component, not used
primarily with the Valu-Bilt Business;
(g) except as otherwise provided in this Agreement, any of Seller's
books, records, files or papers, whether in hard copy or computer format,
including, without limitation, management information systems or software,
engineering information, sales and promotion literature, manuals and data, sales
and purchase correspondence, personnel and employment records, customer lists,
vendor lists, catalogs, research material, technical information, trade secrets,
technology, know how, specifications, designs, drawings, processes and quality
control data, if any, or any other intangible property and applications for the
same;
(h) except as otherwise provided in this Agreement, any signs or
personal property which contain the name (or trade derivative thereof) or logo
of Seller or its Affiliates, including all uniforms supplied to Seller's
employees, not used primarily with the Valu-Bilt Business;
(i) except as otherwise provided in this Agreement, trademarks, trade
names, and similar intangibles including any right to use or interest in the
name of Seller, or any other subsidiary, Affiliate or division of Seller, or any
similar name or intangible registered or licensed to any of the foregoing, or
any tradenames used by Seller;
(j) Seller's corporate seal, minute books, stock record books,
corporate charter documents, qualifications to conduct business as foreign
corporations, arrangements with registered agents relating to foreign
qualifications, taxpayer and other identification numbers and blank stock
certificates;
(k) any letters of credit issued to Seller;
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(l) any rights of Seller to recovery of money or property as
preferences, fraudulent conveyances or the like under the provisions of Sections
544, 547, 548, 549 and 550 of the Bankruptcy Code; and
(m) any other of Seller's assets not related to the Valu-Bilt
Business.
2.3. ASSUMED OBLIGATIONS. Buyer shall assume only the following: (i) those
Liabilities related to the Purchased Assets arising on or after the Closing
Date, (ii) those Liabilities related to each of the Valu-Bilt Agreements arising
on or after the Closing Date and (iii) the Sublease Obligations (collectively,
the "ASSUMED OBLIGATIONS"). The Assumed Obligations are the only Liabilities of
Seller to be assumed by Buyer in connection with the transactions contemplated
by this Agreement. Under no circumstance shall this Agreement be construed as
obligating Buyer to assume, perform, discharge, satisfy, or otherwise take
responsibility for the performance of the Excluded Obligations or the Excluded
Assets.
2.4. SUBLEASE OBLIGATIONS.
(a) Buyer shall be entitled to occupy a portion of the premises
described in the Valu-Bilt Lease (the "VALU-BILT PREMISES") pursuant to the
terms and conditions of the sublease agreement entered into between Buyer and
Seller, which sublease agreement shall be substantially in the form attached to
this Agreement as EXHIBIT C (the "SUBLEASE AGREEMENT"). The term of the Sublease
Agreement shall be for the period commencing on the Closing Date and terminating
on the date Seller must assume or reject the Valu-Bilt Lease, but in no event
shall the term of the Sublease Agreement extend beyond the six (6) month
anniversary of the Eleventh Day. During the term of the Sublease Agreement,
Buyer shall pay to Seller $20,000 per month (the "SUBLEASE OBLIGATIONS").
(b) With respect to the Sublease Obligations, at Closing, (i) Buyer
shall pay to Seller $20,000 by wire transfer of immediately available funds and
(ii) Bank of America shall issue a letter of credit in an amount equal to the
sum of $20,000 multiplied by the number of months (or portion thereof) from the
Eleventh Day that the Bankruptcy Court extends the time to reject or assume the
Valu-Bilt Lease pursuant to Section 365(d)(4) of the Bankruptcy Code, but in no
event shall the letter of credit exceed an amount equal to $100,000, that names
Seller as the beneficiary, which letter of credit shall be substantially in the
form attached to this Agreement as EXHIBIT D (the "LETTER OF CREDIT").
2.5. EXCLUDED OBLIGATIONS. Buyer shall not assume, and shall be deemed not
to have assumed, any Liabilities of Seller except for the Assumed Obligations,
and Seller shall be solely and exclusively liable with respect to all
Liabilities of Seller other than the Assumed Obligations (collectively, the
"EXCLUDED OBLIGATIONS").
2.6. CONDITION OF THE PURCHASED ASSETS. Except as expressly set forth in
this Agreement to the contrary, Buyer acknowledges and agrees that Buyer is
purchasing the Purchased Assets "as is," "where-is," and "with all faults,"
without any warranties, representations or guarantees, either express or
implied, of any kind, nature, or type whatsoever, from, or on behalf of, Seller.
Without limiting the generality of the foregoing, Buyer acknowledges and agrees
that Seller hereby expressly disclaim any and all implied warranties concerning
the condition of the Purchased Assets including, but not limited to, the implied
warranties of merchantability and fitness for a particular purpose.
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2.7. PURCHASE PRICE. In consideration for the sale of the Purchased Assets
and the assumption and assignment of the Valu-Bilt Agreements by Seller, Buyer
shall assume the Assumed Obligations and pay to Seller an aggregate amount equal
to $7,500,000 (the "PURCHASE PRICE"). At Closing, (i) $6,000,000 (less the Good
Faith Deposit (plus any interest and income accrued thereon) and less any Lease
Adjustment pursuant to Section 2.10) of the Purchase Price described above shall
be delivered to Seller by wire transfer of immediately available funds and (ii)
$1,500,000 (the "INVENTORY ESCROW AMOUNT") of the Purchase Price described above
shall be deposited by wire transfer of immediately available funds into an
escrow account (the "INVENTORY ESCROW") and shall be subject to the terms and
conditions set forth in an escrow agreement entered into by and among Seller,
Buyer and escrow agent (the "INVENTORY ESCROW AGENT"), which escrow agreement
shall be substantially in the form attached to this Agreement as EXHIBIT E (the
"INVENTORY ESCROW AGREEMENT").
2.8. INVENTORY ADJUSTMENT TO PURCHASE PRICE. The Purchase Price shall be
adjusted as follows, effective as of the Closing Date:
(a) The Purchase Price shall be reduced on a dollar for dollar basis
to the extent that the value of Inventory as of the Closing Date is less than
$6,406,783 (the "INVENTORY ADJUSTMENT"), and such Inventory valuation shall be
calculated in accordance with Section 2.9 below.
(b) After the determination of the Inventory Adjustment (if any) to
the Purchase Price as set forth in Section 2.8(a) above, Seller and Buyer shall
provide written notice within five (5) Business Days to Inventory Escrow Agent
of any such Inventory Adjustment to the Purchase Price or the lack of any
Inventory Adjustment to Purchase Price. The Inventory Escrow shall be
distributed to the appropriate Person(s) in accordance with the terms and
conditions of the Inventory Escrow Agreement.
(c) With respect to any Inventory Adjustment to the Purchase Price,
the Inventory Escrow shall be the sole and exclusive remedy of Buyer.
(d) The Inventory Adjustment to the Purchase Price shall be subject to
the mutual agreement of Buyer and Seller, which agreement shall not be
unreasonably withheld and both Buyer and Seller agree to act in good faith.
2.9. INVENTORY.
(a) For purposes of determining the Inventory Adjustment to the
Purchase Price as set forth in Section 2.8 above, a physical count of the
Inventory shall be conducted. The physical count of the Inventory shall begin at
a time to be mutually agreed upon by Seller and Buyer in good faith to allow for
the timely completion within fifteen (15) calendar days of the Closing Date. The
physical count of Inventory shall be conducted by Seller and/or Seller's
representatives. Buyer may have representatives present during the physical
count of the Inventory. Buyer and Seller each agree to be cooperative, fair and
reasonable and to act in good faith in connection with the count and valuation
of the Inventory. The physical count and valuation of the Inventory determined
as of the Closing Date shall be the amount of Inventory used to determine the
Inventory Adjustment to the Purchase Price as set forth in Section 2.8 above.
(b) The physical count of the Inventory shall include only items of
Inventory that are physically present on the Valu-Bilt Premises at the time the
count is taken. Items of Inventory
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that are to be returned to the Valu-Bilt Premises, but are not present at the
time the count is taken shall not be included in the physical count and
valuation of the Inventory. New Inventory shall be valued at perpetual cost,
without regard to margins or handling expenses. Rebuilt Inventory shall be
valued as follows: (i) the standard costs for any cores included, plus (ii) the
direct costs previously expended in rebuilding the Inventory. Indirect expenses,
such as overhead expenses, shall not be included in the valuation of rebuilt
Inventory. Any item of Inventory which is materially broken or materially
damaged shall be valued at zero and segregated. Any item of Inventory marked as
Obsolete Inventory shall be valued at zero and segregated, provided that an
amount equal to ten percent (10%) of the perpetual cost of all of the items of
Inventory marked as Obsolete Inventory shall be added to the total valuation of
the Inventory. Used Inventory shall be valued at the standard cost; provided,
however, that the entire value of the used Inventory as valued at standard cost
shall be discounted by fifty percent (50%). Any items of Inventory that Seller
has sold to a Person(s) (excluding Buyer pursuant to this Agreement) prior to
the Closing Date shall not be included in the physical count and valuation of
the Inventory.
(c) Purchased Assets shall include any Inventory that is valued at
zero.
2.10. LEASE ADJUSTMENT TO PURCHASE PRICE. The Purchase Price shall be
subject to adjustment on the Closing Date, as follows:
(a) The Purchase Price shall be reduced in accordance with
Section 2.10(b) below (the "LEASE ADJUSTMENT") to the extent that the Bankruptcy
Court has not approved an order pursuant to Section 365(d)(4) of the Bankruptcy
Code to extend the time to assume or reject the Valu-Bilt Lease to the six (6)
month anniversary of the Eleventh Day.
(b) If the Bankruptcy Court has not approved an order pursuant to
Section 365(d)(4) of the Bankruptcy Code to extend the time to assume or reject
the Valu-Bilt Lease to the six (6) month anniversary of the Eleventh Day, the
Lease Adjustment shall equal $500,000 if Seller must assume or reject the
Valu-Bilt Lease before the six (6) month anniversary of the Eleventh Day.
2.11. GOOD FAITH DEPOSIT. At the execution of this Agreement, Buyer shall
deposit $750,000 (the "GOOD FAITH DEPOSIT") by a wire transfer of immediately
available funds into an escrow account (the "GOOD FAITH ESCROW"), which shall be
subject to the terms and conditions set forth in an escrow agreement entered
into by and among Seller, Buyer and escrow agent (the "GOOD FAITH ESCROW
AGENT"), which escrow agreement shall be substantially in the form attached to
this Agreement as EXHIBIT F (the "GOOD FAITH ESCROW Agreement"). The Good Faith
Deposit shall be applied toward the Purchase Price at Closing. Unless otherwise
agreed to by Seller and Buyer and approved by the Bankruptcy Court, if this
Agreement is terminated pursuant to Article VIII, the Good Faith Deposit (plus
any interest and income accrued thereon) shall be returned to Buyer within one
week of such termination pursuant to the terms and conditions of the Good Faith
Escrow Agreement.
ARTICLE III
CLOSING
3.1. CLOSING. The consummation of the transactions contemplated by this
Agreement (the "CLOSING") shall occur at 10:00 a.m. at the offices of
Xxxxxxxx & Xxxxx, 000 X. 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx on the earlier of (i)
the Eleventh Day or (ii) such other time and date as shall be mutually
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agreed upon by Buyer and Seller (the date of the Closing being herein referred
to as the "CLOSING DATE").
3.2. SELLER'S OBLIGATIONS AT THE CLOSING. At the Closing, Seller shall
deliver or cause to be delivered to Buyer the following:
(a) the actual physical possession of the Purchased Assets and the
Valu-Bilt Premises;
(b) a duly executed counterpart of the Xxxx of Sale for the Purchased
Assets, in substantially the form of EXHIBIT G attached hereto (the "XXXX OF
SALE");
(c) a duly executed counterpart of the Assignment and Assumption of
Valu-Bilt Agreements, in substantially the form of EXHIBIT H attached hereto
(the "ASSIGNMENT AND ASSUMPTION OF VALU-BILT AGREEMENTS");
(d) a duly executed counterpart of the Good Faith Escrow Agreement;
(e) a duly executed counterpart of the Inventory Escrow Agreement;
(f) a duly executed counterpart of the Sublease Agreement;
(g) a copy of the duly executed Sale Order; and
(h) such other documents as may be reasonably requested by Buyer.
3.3. BUYER'S OBLIGATIONS AT THE CLOSING. At the Closing, Buyer shall
deliver or cause to be delivered to Seller (or Inventory Escrow Agent, if
applicable) the following:
(a) a wire transfer of the Purchase Price (less the Good Faith Deposit
(plus any interest and income accrued thereon) and less any Lease Adjustment) to
Seller;
(b) a wire transfer of $20,000 to Seller;
(c) a wire transfer of the Inventory Escrow Amount to Inventory Escrow
Agent;
(d) a duly executed counterpart of the Assignment and Assumption of
Valu-Bilt Agreements;
(e) a duly executed counterpart of the Good Faith Escrow Agreement;
(f) a duly executed counterpart of the Inventory Escrow Agreement;
(g) a fully executed Letter of Credit;
(h) a duly executed counterpart of the Sublease Agreement; and
(i) such other documents as may be reasonably requested by Seller.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
Except for exceptions set forth on the disclosure schedule provided by Seller to
Buyer with this Agreement, which disclosure schedule shall specifically identify
the representation and warranty to which the exception relates, Seller
represents, warrants and covenants that:
4.1. CORPORATE AUTHORITY, OPERATIONS, DELIVERIES.
(a) Seller is a corporation, duly organized, validly existing and in
good standing under the laws of the State of Delaware.
(b) Subject to the entry of the Sale Order, Seller has full and
requisite corporate power and authority to execute and deliver this Agreement,
the Xxxx of Sale, the Assignment and Assumption of Valu-Bilt Agreements, the
Good Faith Escrow Agreement, the Inventory Escrow Agreement and the Sublease
Agreement and to perform its obligations hereunder and thereunder.
(c) Subject to the entry of the Sale Order, this Agreement has been
duly and validly executed and delivered by Seller and constitutes, and each of
the other agreements to be executed and delivered by Seller pursuant hereto upon
their execution and delivery will constitute, a valid and legally binding
obligation of Seller, enforceable against Seller in accordance with their
respective terms.
4.2 PURCHASED ASSETS.
(a) Subject to the entry of the Sale Order, Seller has good and
marketable title to all of the Purchased Assets, free and clear of all Liens,
except Permitted Encumbrances and Liens (to be removed, by the order of the
Bankruptcy Court or otherwise, on or prior to the Closing Date).
(b) Subject to the entry of the Sale Order, there are no claims,
litigation, proceedings or disputes pending related to any of the Purchased
Assets.
(c) All of the Inventory and Equipment is located at the Valu-Bilt
Premises.
(d) There are no consignment agreements with respect to any of the
Inventory.
4.3 SUPPLIER AGREEMENTS. There are no supplier agreements or purchase
orders with respect to any of the Inventory that requires delivery beyond sixty
(60) days of the date of such agreement or purchase order.
4.4 VALU-BILT EMPLOYEES. The Valu-Bilt Employees are not party to any
collective bargaining agreement.
4.5 SURVIVAL. Seller's representations and warranties set forth in this
Article IV shall not survive the Closing Date.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
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Buyer represents, warrants and covenants that:
5.1. CORPORATE AUTHORITY, OPERATIONS, DELIVERIES.
(a) Buyer is a Nevada corporation, duly organized, validly existing
and in good standing under the laws of the State of Nevada.
(b) It has full and requisite corporate power and authority to execute
and deliver this Agreement, the Assignment and Assumption of any Valu-Bilt
Agreements, the Good Faith Escrow Agreement, the Inventory Escrow Agreement and
the Sublease Agreement and to perform its obligations hereunder and thereunder.
(c) This Agreement has been duly and validly executed and delivered by
Buyer and constitutes, and the Assignment and Assumption of Valu-Bilt
Agreements, the Good Faith Escrow Agreement, the Inventory Escrow Agreement and
the Sublease Agreement to be executed and delivered by Buyer at the Closing will
constitute, a valid and legally binding obligation of Buyer, enforceable against
Buyer in accordance with their respective terms.
(d) Neither the execution and delivery by Buyer of this Agreement, nor
the execution and delivery by Buyer of the Assignment and Assumption of
Valu-Bilt Agreements, the Good Faith Escrow Agreement, the Inventory Escrow
Agreement and the Sublease Agreement at the Closing, nor the compliance by Buyer
with any of the provisions hereof or thereof, will (i) conflict with, or result
in the breach of, any provision of the certificate of incorporation or by-laws,
or any other corporate organizational document of Buyer, (ii) conflict with,
violate, result in the breach or termination of, or constitute a default under
any note, bond, mortgage, indenture, license, agreement or other instrument or
obligation to which Buyer is a party or by which Buyer or its properties or
assets are bound or (iii) violate any statute, rule, regulation, order or decree
of any governmental body or authority by which Buyer is bound, except, in the
case of clauses (ii) and (iii), for such violations, breaches or defaults as
would not, individually or in the aggregate, have a Material Adverse Effect.
(e) No consent, waiver, approval, order, permit or authorization of,
or declaration or filing with, or notification to, any Person or Governmental
Entity is required on the part of Buyer in connection with the execution and
delivery of this Agreement or the execution and delivery by Buyer of the
Assignment and Assumption of Valu-Bilt Agreements, the Good Faith Escrow
Agreement, the Inventory Escrow Agreement and the Sublease Agreement at the
Closing, or the compliance by Buyer with any of the provisions hereof or
thereof, including, without limitation, any consents required under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended.
(f) There are no Legal Proceedings pending or, to the best knowledge
of Buyer, threatened that are reasonably likely to prohibit or restrain the
ability of Buyer to enter into this Agreement or consummate the transactions
contemplated hereby.
(g) Buyer has immediately available funds sufficient to consummate the
transactions contemplated by this Agreement.
5.2. SURVIVAL. Buyer's representations and warranties set forth in this
Article V shall not survive the Closing Date.
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ARTICLE VI
COVENANTS
6.1. VALU-BILT AGREEMENTS. From and after the date of this Agreement
through the Closing Date, Seller shall comply with all of its obligations under
each of the Valu-Bilt Agreements.
6.2. SUBMISSION FOR COURT APPROVAL . As promptly as practicable after the
date hereof, Seller shall submit to the Bankruptcy Court a motion(s) seeking
(i) the Auction Order, (ii) the Sale Order authorizing (y) the sale of the
Purchased Assets to Buyer pursuant to the terms and conditions of this Agreement
and (z) Seller entering into the Sublease Agreement and (iii) an order of the
Bankruptcy Court pursuant to Section 365(d)(4) of the Bankruptcy Code to extend
the time to assume or reject the Valu-Bilt Lease to the six (6) month
anniversary of the Eleventh Day.
6.3. SUPERIOR PROPOSALS. Seller shall notify Buyer as soon as practicable
if any Superior Proposals are received by Seller and shall deliver to Buyer a
copy of any written Superior Proposal. If a Superior Proposal is received by
Seller, Buyer shall have the right, in its exclusive discretion, to outbid any
Superior Proposal at the Auction. If Buyer elects to outbid any Superior
Proposal at the Auction, Buyer shall be entitled to receive a credit of $250,000
for any bid made by Buyer at the Auction, provided that (i) Buyer's bid at the
Auction is greater than $7,800,000 if the Bankruptcy Court has approved an order
pursuant to Section 365(d)(4) of the Bankruptcy Code to extend the time to
assume or reject the Valu-Bilt Lease to a date on or beyond the six (6) month
anniversary of the Eleventh Day or (ii) Buyer's bid at the Auction is greater
than $7,300,000 if the Bankruptcy Court has approved an order pursuant to
Section 365(d)(4) of the Bankruptcy Code to extend the time to assume or reject
the Valu-Bilt Lease to a date prior to the six (6) month anniversary of the
Eleventh Day.
6.4. ADEQUATE ASSURANCES. Buyer covenants and agrees to cooperate with
Seller in connection with furnishing information pertaining to the satisfaction
of the requirement of adequate assurances of future performance as required
under Section 365(f)(2)(B) of the Bankruptcy Code.
6.5. EMPLOYEES. Buyer agrees that prior to the Closing Date Buyer shall
offer employment to all of the current full-time employees of Seller employed in
connection with the Valu-Bilt Business (the "VALU-BILT EMPLOYEES") so as not to
trigger any WARN Act liabilities in respect of Seller (a list of the Valu-Bilt
Employees is attached hereto as SCHEDULE 6.5); provided that any such offers are
subject to the Closing. Buyer shall indemnify and hold harmless Seller from any
such liabilities under the WARN Act. Buyer shall provide Seller at least one
week prior to the Closing with (i) a written list of the Valu-Bilt Employees
receiving offers of employment with Buyer and (ii) a written list of the
Valu-Bilt Employees accepting offers of employment with Buyer (the "EMPLOYED
VALU-BILT EMPLOYEES"). Nothing herein shall obligate Buyer to employ any of the
Valu-Bilt Employees for any particular length of time following the Closing
Date. After the Closing, the Employed Valu-Bilt Employees shall be entitled to
receive compensation and benefits based on Buyer's current compensation and
benefit structure, provided that each Employed Valu-Bilt Employee shall be
entitled to receive credit for such Employed Valu-Bilt Employee's years of
service with Seller for purposes of calculating certain benefits such as
vacation. Buyer shall not assume any responsibility for any pension or
retirement obligations or any vacation obligations of any of the Employed
Valu-Bilt Employees accumulated prior to the Closing Date and any amounts vested
in any pension or retirement accounts of any of the Employed Valu-Bilt Employees
shall be transferred directly from Seller to the Employed Valu-Bilt Employees.
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6.6. UNCOLLECTED ACCOUNTS RECEIVABLE. Buyer acknowledges that it is not
purchasing from Seller any Accounts Receivable. Buyer shall promptly remit to
Seller any and all proceeds from accounts receivable existing on or prior to the
Closing Date which Buyer may receive after the Closing Date. Buyer will have no
right to set off or otherwise withhold or delay timely payment to Seller of any
such amount for any amount owed or alleged to be owed to Buyer by Seller.
6.7. NOTICE OF DEVELOPMENTS. Each Party will give prompt written notice to
the other Party of any material adverse development causing a breach of any of
its own representations and warranties in Articles IV and V above, as
applicable. No disclosure by any Party pursuant to this Section 6.7, however,
shall be deemed to amend or supplement the schedules to this Agreement or to
prevent or cure any misrepresentation, breach of warranty, or breach of
covenant.
6.8. BREAKUP FEE. A Breakup Fee (as defined below) shall be payable to
Buyer in the event that: (i) Seller sells all or a major portion of the
Purchased Assets to a Person(s) other than Buyer; (ii) the Bankruptcy Court
grants relief from the automatic stay so as to permit the Secured Parties to
sell or otherwise dispose of a major portion of the Purchased Assets to a Person
other than Buyer; or (iii) the Bankruptcy Court orders the dismissal of Seller's
bankruptcy case or the conversion of Seller's bankruptcy case under Chapter 11
of the Bankruptcy Code to a bankruptcy case under Chapter 7 of the Bankruptcy
Code (each of these events is hereinafter referred to as a "BREAKUP EVENT"). The
"BREAKUP FEE" shall be an amount equal to $250,000.
6.9. FORM OF SALE ORDER. The Sale Order shall provide that the Bankruptcy
Court approves the: (i) sale of the Purchased Assets, free and clear of all
liens, claims and interests under Section 363 of the Bankruptcy Code; (ii)
assumption and assignment of each of the Valu-Bilt Agreements under Section 365
of the Bankruptcy Code; (iii) Seller's cure of any default in the Valu-Bilt
Agreements at the Closing out of the sale proceeds; and (iv) designation of
Buyer as a "good faith purchaser" within the meaning of Section 363(m) of the
Bankruptcy Code.
6.10. GRANT OF LICENSE. Effective as of the Closing, Seller hereby grants
to Buyer a non-exclusive, royalty-free license for a period of six (6) months to
the names "Central Tractor" and "CT", to the extent Seller has rights in such
names, as follows: (i) to the extent necessary for Buyer to dispose of Inventory
that is in packing bearing the name "Central Tractor" or "CT" and (ii) to allow
Buyer to continue to use any Valu-Bilt catalog printed through the Closing, to
the extent such catalog contains references to "Central Tractor" or "CT". Seller
makes no representation or warranty concerning the names "Central Tractor" or
"CT" or its rights therein. Buyer shall maintain the quality of all aspects of
any Inventory or catalog bearing the names "Central Tractor" or "CT", and Buyer
shall remedy any deficiencies in its use of such names upon notice from Seller.
ARTICLE VII
CONDITIONS TO BUYER'S AND SELLER'S OBLIGATIONS TO CLOSE
7.1. CONDITIONS TO EACH PARTY'S OBLIGATIONS. Each Party's respective
obligations to effect the transactions contemplated by this Agreement shall be
subject to the satisfaction at or prior to the Closing of the following
conditions:
(a) There shall not be in effect any statute, regulation, order,
decree or judgment of any Governmental Entity which makes illegal or enjoins or
prevents the consummation of the transactions contemplated by this Agreement.
14
(b) The Bankruptcy Court shall have approved and entered the Sale
Order authorizing (i) the sale of the Purchased Assets to Buyer pursuant to the
terms and conditions of this Agreement, which shall have authorized Seller to
convey to Buyer all its right, title and interest in and to the Purchased Assets
free and clear of all liens, (ii) the assumption and the assignment of the
Valu-Bilt Agreements as contemplated hereby and (iii) Seller entering into the
Sublease Agreement, and such Sale Order shall have become Non-Appealable.
(c) The Good Faith Escrow Agent shall have executed and delivered a
counterpart of the Good Faith Escrow Agreement to Seller and Buyer.
(d) The Inventory Escrow Agent shall have executed and delivered a
counterpart of the Inventory Escrow Agreement to Seller and Buyer.
(e) All authorizations, consents and approvals by any third parties,
including any governmental authority, that are necessary for the consummation of
the transactions contemplated by this Agreement must have been received and must
be in full force and effect.
7.2. CONDITIONS TO OBLIGATIONS OF BUYER. Buyer's obligation to effect the
transactions contemplated by this Agreement shall be further subject to the
satisfaction at or prior to the Closing of the following conditions:
(a) The representations and warranties of Seller set forth in Article
IV shall be true and correct as of the Closing Date with the same effect as
though such representations and warranties had been made at and as of the
Closing Date, except for breaches or inaccuracies that could not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(b) Seller shall have performed and complied with all of its
obligations under this Agreement, except for failures to perform or comply with
its obligations that could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(c) The Bankruptcy Court shall have approved an order pursuant to
Section 365(d)(4) of the Bankruptcy Code to extend the time to assume or reject
the Valu-Bilt Lease to a date on or beyond the three (3) month anniversary of
the Eleventh Day and such order shall have become Non-Appealable; provided that
this condition shall be deemed forever waived and Buyer shall lose its right to
terminate this Agreement pursuant to Section 8.4 for failure of this condition
to be satisfied, if Buyer fails to terminate this Agreement pursuant to Section
8.4 for failure of this condition to be satisfied within five (5) Business Days
of the order pursuant to Section 365(d)(4) of the Bankruptcy Code to extend the
time to assume or reject the Valu-Bilt Lease becomes Non-Appealable.
7.3. CONDITIONS TO SELLER'S OBLIGATIONS. Seller's obligations to effect the
transactions contemplated by this Agreement shall be further subject to the
satisfaction at or prior to the Closing of the following conditions:
(a) The representations and warranties of Buyer set forth in Article V
shall be true and correct as of the Closing Date with the same effect as though
such representations and warranties had been made at and as of the Closing Date
except for breaches or inaccuracies that could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
15
(b) Buyer shall have performed and complied with all of its
obligations under this Agreement.
(c) Buyer shall have delivered the Letter of Credit to Seller.
ARTICLE VIII
TERMINATION
8.1. MUTUAL AGREEMENT. This Agreement may be terminated by mutual agreement
of the Parties.
8.2. BREAKUP EVENT. Upon the occurrence of a Breakup Event, this Agreement
shall be automatically terminated, except that the Breakup Fee shall still be
due and payable.
8.3. DROP DEAD DATE. If the Closing has not occurred on or before April 30,
2002, Buyer or Seller shall have the right to terminate this Agreement. If this
Agreement is terminated pursuant to this Section 8.3, Buyer shall be entitled to
reimbursement of its reasonable out-of-pocket expenses arising in connection
with the negotiation and execution of this Agreement; provided that such
reimbursement amount shall not exceed $25,000; further provided, that the
failure of the Closing to occur on or before April 30, 2002 and the resulting
termination pursuant to this Section 8.3 is not the result of (i) the Buyer's
failure to satisfy the conditions set forth in Section 7.3 above and/or (ii)
Buyer's bad faith.
8.4. BY BUYER. If any of the conditions set forth in Sections 7.1 or 7.2
above have not been satisfied as of the Closing Date and Buyer has not waived
such condition(s) on or before the Closing Date, Buyer shall have the right to
terminate this Agreement.
8.5. BY SELLER. If any of the conditions set forth in Sections 7.1 or 7.3
above have not been satisfied as of the Closing Date and Seller has not waived
such condition(s) on or before the Closing Date, Seller shall have the right to
terminate this Agreement.
8.6. EFFECTS OF TERMINATION. In the event of termination of this Agreement
pursuant to this Article VIII, this Agreement shall forthwith become void and
there shall be no liability on the part of any Party to any other Party under
this Agreement. Upon termination of this Agreement pursuant to this Article
VIII, the Good Faith Deposit (plus any interest and income accrued thereon)
shall be returned to Buyer within one week of such termination pursuant to the
terms and conditions of the Good Faith Escrow Agreement.
ARTICLE IX
MISCELLANEOUS
9.1. NOTICES. All notices, demands and other communications to be given or
delivered under or by reason of the provisions of this Agreement shall be in
writing and shall be deemed to have been given when personally delivered or
mailed by certified or express mail, or by Federal Express or similar overnight
courier service, with acknowledgement of receipt, postage or fees prepaid.
Notices, demands and communications to Seller and Buyer shall, unless another
address is specified in writing, be sent to the addresses indicated below:
16
Notice to Seller:
Quality Stores, Inc.
000 X. Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx Xxxxxxxxxxx
with copy to (which shall not constitute notice to Seller):
Xxxxxxxx & Xxxxx
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxxxx
Xxxx Xxxxxxx
Notice to Buyer:
Alamo Group (IA) Inc.
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxx X. Xxxxxxxx
with copy to (which shall not constitute notice to Buyer):
Xxxxxxxxxxx, Blend, Xxxxxxxx & Xxxx
000 Xxxxxxx, 0xx Xxxxx
Xxx Xxxxxxx, Xxxxx 00000
Attn: Xxxxx Xxxxx
9.2. FURTHER ASSURANCES. Each Party agrees to use its reasonable best
efforts to cause the conditions of its obligations hereunder to be satisfied on
or prior to the Closing Date. Each Party agrees to execute and deliver and
provide access to any and all further agreements, documents and instruments
reasonably necessary to effectuate this Agreement or the transactions referred
to herein or which may reasonably be requested by the other Party to perfect or
evidence its or their rights hereunder, including, but not limited, any
documents which constitute, relate or refer to the files. Each Party will use
its reasonable best efforts to effect an orderly transfer in control of the
Purchased Assets to Buyer and to complete the transactions contemplated by this
Agreement as promptly as practical. Each Party will promptly notify the other
Party of any material information delivered to or obtained by such Party which
would prevent the consummation of the transactions contemplated by this
Agreement, or would indicate a breach of the representations and warranties or
covenants of any of the Parties.
9.3. EXPENSES. Except as otherwise provided in this Agreement, each of the
Parties hereto will bear its respective expenses incurred by and in connection
with this Agreement and the transactions contemplated hereby, including, without
limitation, attorney's and accountant's fees.
9.4. COUNTERPARTS. This Agreement may be executed in separate counterparts.
It shall be fully executed when each Party whose signature is required has
signed at least one counterpart even though no one counterpart contains the
signatures of all the Parties.
17
9.5. BROKERS. Each Party warrants and represents to the other Party that it
has not incurred and will not incur any liability for brokerage fees or agent's
commissions in connection with this transaction, except for any payments by
Seller to Xxxxx X. Xxxxxxx Company and/or Xxx Xxxx Services, LLC. Each Party
agrees that it will hold harmless and indemnify the other Party against and in
respect of any claim of brokerage or other commissions relative to this
Agreement and to the transactions contemplated hereby based on any agreement or
commitment made or alleged to have been made by or on behalf of the indemnifying
Party.
9.6. PUBLICITY. Each Party shall not, without the prior written consent of
the other Party, make any public announcement (including, but not limited to,
press releases and advertising) of the transactions contemplated by this
Agreement, except as required by law. Upon the filing of this Agreement with the
Bankruptcy Court, this Section 9.6 shall no longer apply.
9.7. DESCRIPTIVE HEADINGS. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
9.8. SUCCESSORS AND ASSIGNS. Neither Party hereto shall assign or transfer
any rights or obligations hereunder, except with the consent of the other Party.
9.9. ENTIRE AGREEMENT. This Agreement (including the Schedules and Exhibits
and the other documents and instruments referred to herein) constitutes the
entire agreement and supersedes all other prior agreements and understanding,
both written and oral, among Seller and Buyer, with respect to the subject
matter hereof.
9.10. GOVERNING LAW. All questions concerning the construction, validity
and interpretation of this Agreement shall be governed by and construed in
accordance with Title 11 of the Bankruptcy Code and the domestic laws of the
State of Michigan, without giving effect to any choice of law or conflict of law
provision (whether of the State of Michigan or any other jurisdiction) that
would cause the application of the laws of any jurisdiction other than the State
of Michigan. Seller and Buyer each hereto irrevocably and unconditionally
consents to submit to the Bankruptcy Court for any litigation arising out of or
relating to this Agreement and the transactions contemplated hereby (and agrees
not to commence any litigation relating thereto except in the Bankruptcy Court),
waives any objection to the laying of venue of any such litigation therein, and
agrees not to plead or claim that such litigation has been brought in an
inconvenient forum.
9.11. AMENDMENTS. This Agreement and any of terms herein may only be
amended, changed or modified by a writing entered into between Seller and Buyer.
9.12. EXHIBITS. All Exhibits and Schedules to this Agreement, as now
existing and as modified hereafter, are incorporated in this Agreement by this
reference.
9.13. SEVERABILITY. No provision of this Agreement that is held to be
inoperative, unenforceable or invalid shall affect the remaining provisions, and
to this end all such provisions are declared to be severable.
9.14. NO STRICT CONSTRUCTION. The language used in this Agreement shall be
deemed to be the language chosen by the Parties to express their mutual intent,
and no rule of strict construction shall be applied against any of the Parties.
18
9.15. WAIVER. The failure by any Party to seek redress for the breach, or
to insist upon strict performance of any covenant, agreement, provision or
condition of this Agreement, shall not constitute a waiver thereof, and such
Party shall have all remedies provided herein and by applicable law with respect
to any subsequent act which would have originally constituted a breach.
9.16. PREPARATION OF AGREEMENT. This Agreement shall not be construed for
or against any Party. Each Party acknowledges that each Party contributed
jointly and equally to the preparation of this Agreement.
9.17. TIME OF THE ESSENCE. Time is of the essence with respect to this
Agreement and the transactions contemplated by this Agreement.
9.18. NO IMPEDIMENT TO LIQUIDATION. Nothing herein shall be deemed or
construed so as to limit, restrict or impose any impediment to Seller's right to
liquidate, dissolve and wind up its affairs and to cease all business activities
and operations at such time as it may determine following the Closing.
* * * * *
19
IN WITNESS WHEREOF, Seller and Buyer have executed this Asset Purchase
Agreement as of the date hereof.
SELLER:
QUALITY STORES, INC.
By:
----------------------------------------
Name: Xxxxx X. Xxxxxxxxxxx
Title: Chief Executive Officer
BUYER:
ALAMO GROUP (IA) INC.
By:
----------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
SCHEDULE 6.5
EXHIBITS
EXHIBITS DESCRIPTION
-------- -------------------------------------------------
A Purchased Assets
A-1 Equipment
B Valu-Bilt Agreements
C Sublease Agreement
D Letter of Credit
E Inventory Escrow Agreement
F Good Faith Escrow Agreement
G Xxxx of Sale for the Purchased Assets
H Assignment and Assumption of Valu-Bilt Agreements
EXHIBIT A
PURCHASED ASSETS
The Purchased Assets shall include all assets used primarily with the
Valu-Bilt Business, including, without limitation, the following:
(a) all of the Inventory;
(b) all of the Equipment, including the equipment listed on
EXHIBIT A-1 attached hereto, and including any equipment which has become
affixed to the Valu-Bilt Premises such as shelving and machinery;
(c) all intellectual property, including, without limitation, all
designs, layout, trade dress and packaging, any patents, patent applications,
patent disclosures, inventions upon which patent applications have not yet been
filed, service marks, trade names, trademarks, trademark registrations and
applications, including Registration No. 1801863 for service xxxx "Valu-Bilt"
with design, slogans, logos (as well as any goodwill associated with any of the
foregoing), Internet domain names, copyrightable works, copyright registrations
and applications, computer software (including, without limitation, software
licenses, source code, object code, data and databases), trade secrets,
formulae, technology, designs, processes, inventions and know-how ("INTELLECTUAL
PROPERTY"), presently owned by Seller and used primarily with the Valu-Bilt
Business; and
(d) to the extent assignable and transferable, all records, customer
and supplier lists, payroll and personnel records, product information, product
drawings, production documentation, material specifications, formulae,
specifications, flowcharts, drawings, plans, reports, data, notes,
correspondence, contracts, labels, catalogues, brochures, art work, photographs,
advertising materials, marketing and production literature, files, and other
records and documents used primarily with the Valu-Bilt Business, including,
without limitation, Seller's books of account, ledgers, and other financial
records, but excluding Seller's corporate records and minute books.
X-0
XXXXXXX X-0
LIST OF EQUIPMENT
A-1-1
EXHIBIT B
VALU-BILT AGREEMENTS
1. Agreement for Support Services with Hewlett Packard dated
September 15, 2001. The term of this agreement expires on
November 14, 2002. The monthly fee payable to Hewlett Packard
is $1,547.00.
2. Contract for Purchase and Services for Xxxxx-Xxxxxxx, Inc.
dated October 7, 1999. Under this agreement there (i) is a
monthly service fee of $2,865 (which may be terminated by
customer with 30 days prior notice) and (ii) an annual fee for
third party utilities for $2,300 (invoiced annually by
Ecometry Corporation).
3. Agreement with Pitney Xxxxx Credit Corporation - payment due
quarterly for metered mail.
B-1
SIGNING COPY
EXHIBIT C
SUBLEASE AGREEMENT
THIS SUBLEASE AGREEMENT ("SUBLEASE") is made and entered into as of
_________, 2002 (the "EFFECTIVE DATE") between Quality Stores, Inc., a Delaware
corporation, the successor to Central Tractor Farm & Country, Inc., a Delaware
corporation ("SUBLESSOR"), and Alamo Group (IA) Inc., a Nevada corporation
("SUBLESSEE"):
WHEREAS, on November 1, 2001, Sublessor filed a voluntary petition pursuant
to Title 11 of the United States Code, 11 U.S.C. Section 101 et seq., as amended
(the "BANKRUPTCY CODE"), in the United States Bankruptcy Court for the Western
District of
Michigan (the "BANKRUPTCY COURT");
WHEREAS, Sublessor, is lessee under that certain lease dated November 23,
1987, and executed by and between Sublessor as lessee, and 3815 Delaware, Ltd.
(the "MASTER LESSOR"), as lessor (as amended from time to time, the "MASTER
LEASE"); and
WHEREAS, Sublessee desires to sublease the Leased Premises (as hereinafter
defined) from Sublessor.
NOW, THEREFORE, in consideration of the good and valuable consideration,
the receipt and sufficiency thereof being hereby acknowledged, Sublessor and
Sublessee hereby agree as follows:
ARTICLE I
MASTER LEASE
1.01 SUBLEASE SUBJECT TO MASTER LEASE.
This Sublease is subject and subordinate to the Master Lease. Copies of the
Master Lease and amendments thereto are attached hereto as EXHIBIT A and made a
part hereof for all purposes as if fully set forth herein.
1.02 COMPLIANCE WITH MASTER LEASE.
Sublessee hereby covenants and agrees to comply with all terms of the
Master Lease during the Term (as hereinafter defined) of this Sublease, except
as otherwise provided herein.
1.03 REPRESENTATIONS AND WARRANTIES OF SUBLESSOR.
(a) Sublessor has the right, power and capacity to make this Sublease,
and no person, firm, corporation or entity other than Sublessor has any right,
title, interest or claim as "Lessee" in or to the Master Lease.
C-1
(b) Sublessor has delivered to Sublessee, and attached hereto as
EXHIBIT A is, a true, complete and correct copy of the Master Lease, together
with all supplements, addenda, amendments and modifications thereto, and except
as set forth in EXHIBIT A, the Master Lease has not been amended, modified or
supplemented in any way.
(c) The person executing this Sublease on behalf of Sublessor is fully
authorized to do so, and this Sublease represents a binding agreement of
Sublessor, enforceable in accordance with its terms.
ARTICLE II
DEMISE AND DESCRIPTION
2.01 DEMISE OF LEASED PREMISES.
Subject to and upon the terms and conditions set forth herein, Sublessor
hereby subleases to Sublessee, and Sublessee hereby subleases from Sublessor for
the term herein set forth, all of Sublessor's right, title and interest in and
to the use and occupancy of a portion of the premises leased by Sublessor under
the Master Lease (the "LEASED PREMISES").
2.02 CONDITION OF THE LEASED PREMISES.
Sublessee is subleasing the Leased Premises in its current "AS-IS"
condition.
ARTICLE III
TERM; SURRENDER OF POSSESSION; OPTION TO EXTEND
3.01 TERM.
The term of this Sublease (the "TERM") shall be for the period commencing
on _______, 2002 (the "COMMENCEMENT DATE") and terminating on the earlier of (i)
the date Sublessor must assume or reject the Master Lease pursuant to an order
under Section 365(d)(4) of the Bankruptcy Code or (ii) _______, 2002.
3.02 SURRENDER OF THE LEASED PREMISES.
At the termination of this Sublease, by lapse of time or otherwise,
Sublessee shall deliver up the Leased Premises to Sublessor in as good condition
as existed on the date of possession by Sublessee, ordinary wear and tear only
excepted. Upon such termination of this Sublease, Sublessor shall have the right
to re-enter and resume possession of the Leased Premises.
ARTICLE IV
RENT
4.01 BASE RENTAL.
As rent hereunder, Sublessee hereby agrees to pay to Sublessor the sum of
$20,000.00 per month, commencing on the Commencement Date. The rent for the
first month of this Sublease shall be prorated for the actual number of days
remaining in such month and shall be
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paid by Sublessee to Sublessor upon execution of this Sublease. The rent for the
last month of this Sublease shall be prorated for the actual number of days in
such month that are within the Term of this Sublease.
4.02 PAYMENT OF RENTALS AND OTHER EXPENSES.
Each subsequent monthly installment of rent under this Sublease shall be
payable by Sublessee on the first day of each month. Sublessor shall remain
liable for all rent and other charges due to Master Lessor under the Master
Lease. The only expense that Sublessee will have under this Sublease in addition
to the payment of rent described in Section 4.01 above will be the payment of
all charges for telephone service to the Leased Premises. All other utilities
and services will continue to be provided to the Leased Premises at Sublessor's
sole cost and expense. Sublessor shall also pay all other costs, expenses and
additional rental that are payable to Master Lessor or others under the terms of
the Master Lease. If Sublessor fails to pay the costs of utilities and other
services to the Leased Premises or any additional rental or other costs and
expenses that are payable under the Master Lease, and if Sublessee pays any such
costs and expenses, Sublessee will be entitled to offset from the monthly
installments of rent payable under this Sublease to Sublessor all such costs and
expenses that are paid by Sublessee.
ARTICLE V
QUIET ENJOYMENT
5.01 COVENANT OF QUIET ENJOYMENT.
Provided Sublessee has performed all of the terms, covenants, agreements
and conditions of this Sublease, including the payment of rental due hereunder,
Sublessee shall peaceably and quietly hold and enjoy the Leased Premises against
Sublessor and all persons claiming by, through or under Sublessor, for the term
herein described, subject to the provisions and conditions of this Sublease and
of the Master Lease.
ARTICLE VI
ASSIGNMENT AND SUBLETTING
6.01 ASSIGNMENT.
Sublessee shall have the right to assign this Sublease or sublet the Leased
Premises, subject only to the consent of the Master Lessor. No such assignment
or subletting shall release Sublessee of its obligations under this sublease.
ARTICLE VII
INDEMNIFICATION
7.01 SUBLESSEE INDEMNITY.
Sublessee shall indemnify Sublessor for and hold Sublessor harmless from
and against all costs, expenses (including reasonable attorneys' fees), fines,
suits, claims, demands, liabilities and actions resulting from any breach,
violation or nonperformance of any covenant or condition hereof or from the use
or occupancy of the Leased Premises by Sublessee or Sublessee's
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employees, agents, contractors, licensees and invitees, that arise on or after
the Commencement Date.
7.02 SUBLESSOR INDEMNITY.
Sublessor shall indemnify Sublessee for and hold Sublessee harmless from
and against all costs, expenses (including reasonable attorney's fees), fines,
suits, claims, demands, liabilities and actions resulting from any breach,
violation or non-performance of any covenant or condition of the Master Lease by
Sublessor arising either before or after the Commencement Date.
ARTICLE VIII
DEFAULTS AND REMEDIES
8.01 DEFAULT BY SUBLESSEE: REMEDIES OF SUBLESSOR.
In case of any breach hereof by Sublessee, in addition to all other rights
of Sublessor hereunder or available to Sublessor at law or equity, Sublessor
shall have all the rights against Sublessee as would be available to the Master
Lessor against Sublessor under the Master Lease if such breach were by Sublessor
thereunder. In the event Sublessee defaults in the performance of any of the
terms and provisions hereof and Sublessor places the enforcement of this
Sublease in the hands of an attorney, Sublessee agrees to reimburse Sublessor
for all reasonable expenses incurred by Sublessor as a result thereof including,
but not limited to, reasonable attorneys' fees.
ARTICLE IX
MISCELLANEOUS
9.01 AMENDMENT.
No amendment, modification or alteration of the terms hereof shall be
binding unless the same shall be in writing, dated subsequent to the date hereof
and duly executed by the parties hereto.
9.02 HEADINGS; INTERPRETATION.
Descriptive headings are for convenience only and shall not control or
affect the meaning or construction of any provision of this Sublease. Whenever
the context of this Sublease requires, words used in the singular shall be
construed to include the plural and vice versa and pronouns of whatsoever gender
shall be deemed to include and designate the masculine, feminine or neuter
gender.
9.03 COUNTERPARTS.
For the convenience of the parties, any number of counterparts of this
Sublease may be executed by one or more parties hereto and each such executed
counterpart shall be, and shall be deemed to be, an original instrument.
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9.04 NOTICES.
All notices, consents, requests, instructions, approvals and other
communications provided for herein and all legal process in regard hereto shall
be validly given, made or served, if in writing and delivered personally or sent
by United States certified or registered mail, postage prepaid, return receipt
requested, if to:
Notice to Sublessor:
Quality Stores, Inc.
000 X. Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx Xxxxxxxxxxx
with copy to (which shall not constitute notice to Sublessor):
Xxxxxxxx & Xxxxx
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxxxx
Xxxx Xxxxxxx
Notice to Sublessee:
Alamo Group (IA) Inc.
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxx X. Xxxxxxxx
with copy to (which shall not constitute notice to Sublessee):
Xxxxxxxxxxx, Blend, Xxxxxxxx & Xxxx
000 Xxxxxxx, 0xx Xxxxx
Xxx Xxxxxxx, Xxxxx 00000
Attn: Xxxxx Xxxxx
or to such other addresses as any party hereto may, from time to time, designate
in writing delivered in a like manner.
C-5
9.05 SUCCESSORS AND ASSIGNS.
This Sublease shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns in accordance with the terms
of this Sublease.
9.06 TIME OF THE ESSENCE.
Time is of the essence in the performance by Sublessee of its obligations
hereunder.
9.07 REMEDIES CUMULATIVE.
All rights and remedies of Sublessor under this Sublease shall be
cumulative and none shall exclude any other rights or remedies allowed by law.
9.08 GOVERNING LAW.
All questions concerning the construction, validity and interpretation of
this Sublease shall be governed by and construed in accordance with the
Bankruptcy Code and the domestic laws of the State of
Michigan, without giving
effect to any choice of law or conflict of law provision (whether of the State
of
Michigan or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of
Michigan. Seller and Buyer each
hereto irrevocably and unconditionally consents to submit to the Bankruptcy
Court for any litigation arising out of or relating to this Sublease and the
transactions contemplated hereby (and agrees not to commence any litigation
relating thereto except in the Bankruptcy Court), waives any objection to the
laying of venue of any such litigation therein, and agrees not to plead or claim
that such litigation has been brought in an inconvenient forum.
9.09 ENTIRE AGREEMENT.
The terms and provisions of all Schedules and Exhibits described herein and
attached hereto are hereby made a part hereof for all purposes. This Sublease
constitutes the entire agreement of the parties with respect to the subject
matter hereof, and all prior correspondence, memoranda, agreements or
understandings (written or oral) with respect hereto are merged into and
superseded by this Sublease.
9.10 SEVERABILITY.
If any term or provision of this Sublease, or the application thereof to
any person or circumstance, shall to any extent be invalid or unenforceable, the
remainder of this Sublease, or the application of such provision to persons or
circumstances other than those as to which it is invalid or unenforceable, shall
not be affected thereby, and each provision of this Sublease shall be valid and
shall be enforceable to the extent permitted by law.
9.11 NO STRICT CONSTRUCTION.
The language used in this Sublease shall be deemed to be the language
chosen by the parties to this Sublease to express their mutual intent, and no
rule of strict construction shall be applied against any of the parties.
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9.12 WAIVER.
The failure by any party to seek redress for the breach, or to insist upon
strict performance of any covenant, agreement, provision or condition of this
Agreement, shall not constitute a waiver thereof, and such party shall have all
remedies provided herein and by applicable law with respect to any subsequent
act which would have originally constituted a breach.
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IN WITNESS WHEREOF, the undersigned Sublessor and Sublessee have executed
this Sublease effective as of the date hereof.
"Sublessor"
QUALITY STORES, INC.
BY:
-----------------------------
Name:
------------------------
Title:
------------------------
"Sublessee"
ALAMO GROUP (IA) INC.
BY:
------------------------------
Name:
-------------------------
Title:
------------------------
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DRAFT FOR DISCUSSION PURPOSES ONLY EXHIBIT D
DATE: FEBRUARY__, 2002
IRREVOCABLE STANDBY LETTER OF CREDIT NUMBER:
BENEFICIARY APPLICANT
QUALITY STORES, INC. ALAMO GROUP (IA) INC.
000 X. XXXXX XX [XXXXXXX]
XXXXXXXX, XXXXXXXX 00000
AMOUNT
$[AMOUNT IN FIGURE]
[AMOUNT IN WORDS] U.S. DOLLARS
EXPIRATION
_________ AT OUR COUNTERS
WE HEREBY ESTABLISH IN YOUR FAVOR OUR IRREVOCABLE STANDBY LETTER OF CREDIT NO.
_____ WHICH IS AVAILABLE WITH BANK OF AMERICA, N.A. BY PAYMENT AGAINST
PRESENTATION OF THE ORIGINAL OF THIS LETTER OF CREDIT AND YOUR DRAFTS AT SIGHT
DRAWN ON BANK OF AMERICA, N.A., ACCOMPANIED BY THE FOLLOWING DOCUMENT(S):
BENEFICIARY'S SIGNED STATEMENT CERTIFYING THAT ALAMO GROUP (IA) INC. IS IN
DEFAULT OF THEIR PAYMENT OBLIGATIONS PURSUANT TO THAT CERTAIN SUBLEASE
AGREEMENT DATED _____ BETWEEN ALAMO GROUP (IA) INC. AND QUALITY STORES,
INC.
THE AMOUNT AVAILABLE UNDER THIS LETTER OF CREDIT WILL BE AUTOMATICALLY REDUCED
ON THE REDUCTION DATE TO THE AVAILABLE AMOUNT AS PER THE FOLLOWING SCHEDULE:
REDUCTION DATE AVAILABLE XXXXXX
[00 BUSINESS DAYS AFTER [L/C AMOUNT LESS $20,000.00
A PAYMENT DUE DATE A MONTH]
UNDER THE SUBLEASE
AGREEMENT]*
WE HEREBY AGREE WITH THE BENEFICIARY THAT DOCUMENTS PRESENTED TO OUR OFFICE IN
COMPLIANCE WITH THE TERMS AND CONDITIONS OF THIS LETTER OF CREDIT WILL BE DULY
HONORED AS SPECIFIED HEREIN.
THIS LETTER OF CREDIT IS SUBJECT TO THE INTERNATIONAL STANDBY PRACTICES 1998,
ICC PUBLICATION NO. 590.
IF YOU REQUIRE ANY ASSISTANCE OR HAVE ANY QUESTIONS REGARDING THIS LETTER OF
CREDIT PLEASE CALL (000) 000-0000.
BANK OF AMERICA, N.A.
------------------------ ---------------------------
AUTHORIZED OFFICER AUTHORIZED OFFICER
*ALAMO GROUP IS TO PROVIDE US WITH THE SPECIFIC DATES AND AMOUNTS PRIOR TO
ISSUANCE
D-1
SIGNING COPY
EXHIBIT E
INVENTORY ESCROW AGREEMENT
THIS INVENTORY ESCROW AGREEMENT (this "AGREEMENT"), is made and entered
into as of _______, 2002, by and among Quality Stores, Inc., a Delaware
corporation ("SELLER"), Alamo Group (IA) Inc., a Nevada corporation ("BUYER")
and Chicago Title Insurance Company, as escrow agent ("INVENTORY ESCROW AGENT").
WHEREAS, Seller has filed for bankruptcy protection before the United
States Bankruptcy Court for the Western District of
Michigan (the "BANKRUPTCY
COURT");
WHEREAS, Seller and Buyer are parties to that certain
Asset Purchase
Agreement dated as of February __, 2002 by and between Seller and Buyer (the
"
ASSET PURCHASE AGREEMENT"), a copy of which is attached hereto as EXHIBIT A.
Each capitalized term which is used but not otherwise defined in this Agreement
shall have the meaning assigned to such term in the
Asset Purchase Agreement;
WHEREAS, the execution and delivery of this Agreement by Buyer and
Inventory Escrow Agent is a condition to Seller's obligation to effect the
Closing pursuant to the
Asset Purchase Agreement; and
WHEREAS, the execution and delivery of this Agreement by Seller and
Inventory Escrow Agent is a condition to Buyer's obligation to effect the
Closing pursuant to the
Asset Purchase Agreement;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency whereof is hereby acknowledged, the parties hereto agree as follows:
1. APPOINTMENT. Seller and Buyer hereby appoint Inventory Escrow Agent as
their escrow agent for the purposes set forth herein, and Inventory Escrow Agent
hereby accepts such appointment under the terms and conditions set forth herein.
2. INVENTORY ESCROW FUND. At the Closing, Buyer shall deliver to Inventory
Escrow Agent $1,500,000 by wire transfer of immediately available funds pursuant
to Section 2.7 of the
Asset Purchase Agreement, to be held pursuant to this
Agreement as security for the Inventory Adjustment, if any, to the Purchase
Price, pursuant to the terms and conditions of Section 2.8 of the
Asset Purchase
Agreement. The funds held by Inventory Escrow Agent from time to time pursuant
to this Agreement, together with all income and interest accrued thereon which
has not been distributed pursuant to this Agreement, is referred to as the
"Inventory Escrow Fund". Inventory Escrow Agent hereby agrees to hold the
Inventory Escrow Fund in a separate and distinct account (the "INVENTORY ESCROW
ACCOUNT") as a trust fund. The Inventory Escrow Fund shall not be subject to any
lien, attachment, trustee process, or any other judicial process of any
E-1
creditor of any party hereto, and shall be used solely for the purposes of and
subject to the terms and conditions of this Agreement and the Asset Purchase
Agreement.
3. INVESTMENT OF INVENTORY ESCROW FUND. At the written direction of Seller,
Inventory Escrow Agent shall invest the Inventory Escrow Fund in one or more of:
(a) direct obligations of the United States of America, (b) obligations for
which the full faith and credit of the United States of America is pledged to
provide for the payment of principal and interest, (c) commercial paper rated of
the highest quality by Xxxxx'x Investors Services, Inc. ("MOODY'S") or Standard
& Poor's Corporation ("S&P"), (d) certificates of deposit or time deposits
issued by commercial banks having at least $1 billion in assets, (e) federally
tax-exempt municipal obligations bearing interest and rated AAA or better by
Moody's or rated AA or better by S&P, and/or (f) money market funds authorized
to invest in short-term securities issued or guaranteed as to principal and
interest by the U.S. Government and repurchase agreements with respect to such
securities (collectively, the "PERMITTED INVESTMENTS"). Inventory Escrow Agent
is hereby authorized to execute the purchase and sale of Permitted Investments
through the facilities of its own trading or capital markets operations. In the
event that Inventory Escrow Agent does not receive investment instructions to
invest funds held in the Inventory Escrow Account, Inventory Escrow Agent shall
invest such funds in the One Group U.S. Government Securities Cash Management
Money Market Fund, or a successor or similar fund, which invests in (i)
short-term securities issued or guaranteed by the U.S. Government, its agencies
or instrumentalities and/or (ii) repurchase agreements relating to such
securities. Inventory Escrow Agent can liquidate any investment in order to
comply with disbursement instructions without any liability for any resulting
loss. Any loss incurred from an investment shall be borne by the Inventory
Escrow Fund.
4. INVENTORY ESCROW AGENT'S DISBURSEMENTS OF THE INVENTORY ESCROW ACCOUNT.
(a) DISBURSEMENT TO BUYER. In the event of an Inventory Adjustment
pursuant to Section 2.8 of the Asset Purchase Agreement, Inventory Escrow
Agent shall disburse to Buyer an amount of the Inventory Escrow Fund equal
to such Inventory Adjustment.
(b) DISBURSEMENT TO SELLER. Subject to any and all disbursements made
pursuant to Sections 4(a) above, Inventory Escrow Agent shall disburse to
Seller the balance of the Inventory Escrow Fund.
(c) METHOD OF DISBURSEMENT. Notwithstanding anything to the contrary
contained herein, Inventory Escrow Agent shall only disburse amounts held
in the Inventory Escrow Account (i) in accordance with the terms and
conditions of this Agreement and the Asset Purchase Agreement, (ii) by wire
transfer of immediately available funds and (iii) subject to Section 9
hereof, upon receipt of a written notice jointly executed by Buyer and
Seller specifying the amount to be disbursed and the manner of
disbursement.
5. DUTIES AND LIABILITIES OF INVENTORY ESCROW AGENT. Inventory Escrow Agent
undertakes to perform only such duties as are expressly set forth herein and no
other or further duties or responsibilities shall be implied. Inventory Escrow
Agent shall have no liability under and no duty to inquire as to the provisions
of any agreement other than this Agreement.
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Inventory Escrow Agent may rely upon and shall not be liable for acting or
refraining from acting upon any written notice, instruction or request furnished
to it hereunder and believed by it to be genuine and to have been signed or
presented by the proper party or parties. Inventory Escrow Agent shall be under
no duty to inquire into or investigate the validity, accuracy or content of any
such document. Inventory Escrow Agent shall have no duty to solicit any payments
which may be due it hereunder. Inventory Escrow Agent shall not be liable for
any action taken or omitted by it in good faith except to the extent that a
court of competent jurisdiction determines that Inventory Escrow Agent's gross
negligence or willful misconduct was the primary cause of any loss to Buyer or
Seller. Inventory Escrow Agent may execute any of its powers and perform any of
its duties hereunder directly or through agents or attorneys (and shall be
liable only for the careful selection of any such agent or attorney) and may
consult with counsel, accountants and other skilled persons to be selected and
retained by it. Inventory Escrow Agent shall not be liable for anything done,
suffered or omitted in good faith by it in accordance with the advice or opinion
of any such counsel, accountants or other skilled persons. In the event that
Inventory Escrow Agent shall be uncertain as to its duties or rights hereunder
or shall receive instructions, claims or demands from any party hereto which, in
its opinion, conflict with any of the provisions of this Agreement, it shall be
entitled to refrain from taking any action and its sole obligation shall be to
keep safely all property held in escrow until it shall be directed otherwise in
writing by all of the other parties hereto or by a final order or judgment of a
court of competent jurisdiction. Anything in this Agreement to the contrary
notwithstanding, in no event shall Inventory Escrow Agent be liable for special,
indirect or consequential loss or damage of any kind whatsoever (including but
not limited to lost profits), even if Inventory Escrow Agent has been advised of
the likelihood of such loss or damage and regardless of the form of action.
6. FEES. Buyer and Seller each agree to (i) pay Inventory Escrow Agent upon
execution of this Agreement and from time to time thereafter reasonable
compensation for the services to be rendered hereunder, which unless otherwise
agreed in writing shall be as described in SCHEDULE 6 hereto, and (ii) pay or
reimburse Inventory Escrow Agent upon request for all expenses, disbursements
and advances, including reasonable attorney's fees and expenses, incurred or
made by it in connection with the preparation, execution, performance, delivery,
modification and termination of this Agreement, provided that Buyer and Seller
shall each be obligated to only pay for one-half of any of the fees referred to
above.
7. INDEMNITY. Buyer and Seller shall jointly and severally indemnify,
defend and save harmless Inventory Escrow Agent and its directors, officers,
agents and employees (collectively, the "INDEMNITEES") from all loss, liability
or expense (including the fees and expenses of in house or outside counsel)
arising out of or in connection with (i) Inventory Escrow Agent's execution and
performance of this Agreement, except in the case of any Indemnitee to the
extent that such loss, liability or expense is due to the gross negligence or
willful misconduct of such Indemnitee, or (ii) its following any instructions or
other directions from Buyer or Seller, except to the extent that its following
any such instruction or direction is expressly forbidden by the terms hereof.
The parties hereto acknowledge that the foregoing Indemnities shall survive the
resignation or removal of Inventory Escrow Agent or the termination of this
Agreement. The parties hereby grant Inventory Escrow Agent a lien on, right of
set-off against and security interest in the Inventory Escrow Account for the
payment of any claim for indemnification, compensation, expenses and amounts due
hereunder.
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8. TINS. Buyer and Seller each represent that its correct Taxpayer
Identification Number ("TIN") assigned by the Internal Revenue Service or any
other taxing authority is set forth in SCHEDULE 8 hereto. Upon execution of this
Agreement, each party shall provide Inventory Escrow Agent with a fully executed
W-8 or W-9 Internal Revenue Service form. All interest or other income earned
under this Agreement shall be retained in Inventory Escrow Account and
reinvested from time to time by Inventory Escrow Agent as provided in Section 3
of this Agreement. All income and earnings upon the Inventory Escrow Account
shall be deemed for tax purposes to have accrued for the account of Seller and
reported by the recipient to the Internal Revenue Service (where applicable) as
having been so allocated and paid. Notwithstanding such written directions,
Inventory Escrow Agent shall report and, as required withhold any taxes as it
determines may be required by any law or regulation in effect at the time of the
distribution. In the event that any earnings remain undistributed at the end of
any calendar year, Inventory Escrow Agent shall report to the Internal Revenue
Service or such other authority such earnings as it deems appropriate or as
required by any applicable law or regulation or, to the extent consistent
therewith, as directed in writing by Buyer and Seller. In addition, Inventory
Escrow Agent shall withhold any taxes it deems appropriate and shall remit such
taxes to the appropriate authorities.
9. TERMINATION. This Agreement shall remain in effect unless and until (i)
the Inventory Escrow Fund is distributed in full, or (ii) it is terminated in a
written instrument executed by Seller and Buyer, in which event, termination
shall take effect no later than twenty (20) days after notice to Inventory
Escrow Agent of such termination.
10. MERGER OR CONSOLIDATION. Any banking association or corporation into
which Inventory Escrow Agent (or substantially all of its corporate trust
business) may be merged, converted or with which Inventory Escrow Agent may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which Inventory Escrow Agent shall be a party, shall succeed to
all Inventory Escrow Agent's rights, obligations and immunities hereunder
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding.
11. MISCELLANEOUS.
(a) NOTICES. All notices, demands and other communications to be given
or delivered under or by reason of the provisions of this Agreement shall
be in writing and shall be deemed to have been given when personally
delivered or mailed by certified or express mail, or by Federal Express or
similar overnight courier service, with acknowledgement of receipt, postage
or fees prepaid. Notices, demands and communications to Inventory Escrow
Agent, Seller and Buyer shall, unless another address is specified in
writing, be sent to the addresses indicated below:
NOTICE TO INVENTORY ESCROW AGENT:
Chicago Title Insurance Company
000 X. Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx Xxxxxxxx
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NOTICE TO BUYER:
Alamo Group (IA) Inc.
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxx X. Xxxxxxxx
WITH COPY TO (WHICH SHALL NOT CONSTITUTE NOTICE TO BUYER):
Xxxxxxxxxxx, Blend, Xxxxxxxx & Xxxx
000 Xxxxxxx, 0xx Xxxxx
Xxx Xxxxxxx, Xxxxx 00000
Attn: Xxxxx Xxxxx
NOTICE TO SELLER:
Quality Stores, Inc.
000 X. Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx Xxxxxxxxxxx
WITH COPY TO (WHICH SHALL NOT CONSTITUTE NOTICE TO SELLER):
Xxxxxxxx & Xxxxx
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxxxx
Xxxx Xxxxxxx
or to such other representative or at such other address of a party as such
party hereto may furnish to the other parties in writing.
(b) COUNTERPARTS. This Agreement may be executed in separate
counterparts. It shall be fully executed when each Party whose signature is
required has signed at least one counterpart even though no one counterpart
contains the signatures of all the parties.
(c) DESCRIPTIVE HEADINGS. Paragraph and subparagraph headings are
included for convenience of reference only and shall not constitute a part
of this Agreement for any other purpose or be given any substantive effect.
(d) SUCCESSORS AND ASSIGNS. Neither Party hereto shall assign or
transfer any rights or obligations hereunder, except with the consent of
the other Party.
(e) ENTIRE AGREEMENT. This Agreement (including the Schedules and the
other documents and instruments referred to herein) constitutes the entire
agreement and supersedes all other prior agreements and understanding, both
written and oral, among Inventory Escrow Agent, Seller and Buyer, with
respect to the subject matter hereof.
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(f) GOVERNING LAW. All questions concerning the construction, validity
and interpretation of this Agreement shall be governed by and construed in
accordance with Title 11 of the Bankruptcy Code and the domestic laws of
the State of
Michigan, without giving effect to any choice of law or
conflict of law provision (whether of the State of Michigan or any other
jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Michigan. Seller and Buyer each hereto
irrevocably and unconditionally consents to submit to the Bankruptcy Court
for any litigation arising out of or relating to this Agreement and the
transactions contemplated hereby (and agrees not to commence any litigation
relating thereto except in the Bankruptcy Court), waives any objection to
the laying of venue of any such litigation therein, and agrees not to plead
or claim that such litigation has been brought in an inconvenient forum.
(g) AMENDMENTS. This Agreement and any of terms herein may only be
amended, changed or modified by a writing entered into between Seller and
Buyer.
(h) EXHIBITS AND SCHEDULES. All exhibits and schedules to this
Agreement, as now existing and as modified hereafter, are incorporated in
this Agreement by this reference.
(i) SEVERABILITY. No provision of this Agreement that is held to be
inoperative, unenforceable or invalid shall affect the remaining
provisions, and to this end all such provisions are declared to be
severable.
(j) NO STRICT CONSTRUCTION. The language used in this Agreement shall
be deemed to be the language chosen by the parties to this Agreement to
express their mutual intent, and no rule of strict construction shall be
applied against any of the parties.
(k) WAIVER. The failure by any party to seek redress for the breach,
or to insist upon strict performance of any covenant, agreement, provision
or condition of this Agreement, shall not constitute a waiver thereof, and
such party shall have all remedies provided herein and by applicable law
with respect to any subsequent act which would have originally constituted
a breach.
* * * * *
E-6
IN WITNESS WHEREOF, the parties hereto have executed this Inventory Escrow
Agreement as of the date hereof.
CHICAGO TITLE INSURANCE COMPANY
By:
----------------------------------
Name:
Title:
QUALITY STORES, INC.
By:
----------------------------------
Name:
Title:
ALAMO GROUP (IA) INC.
By:
----------------------------------
Name:
Title:
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SCHEDULE 6
INVENTORY ESCROW AGENT FEES
The Inventory Escrow Agent shall be paid a total amount of $300 as
reasonable compensation for all of the services to be rendered in connection
with this Agreement.
Schedule 6, Page 1
SCHEDULE 8
TAX IDENTIFICATION NUMBER
Buyer: 00-0000000
Seller: 00-0000000
Schedule 8, Page 1
SIGNING COPY
EXHIBIT F
GOOD FAITH ESCROW AGREEMENT
THIS GOOD FAITH ESCROW AGREEMENT (this "AGREEMENT"), is made and entered
into as of February __, 2002, by and among Quality Stores, Inc., a Delaware
corporation ("SELLER"), Alamo Group (IA) Inc., a Nevada corporation ("BUYER")
and Chicago Title Insurance Company, as escrow agent ("GOOD FAITH ESCROW
AGENT").
WHEREAS, Seller has filed for bankruptcy protection before the United
States Bankruptcy Court for the Western District of Michigan (the "BANKRUPTCY
COURT");
WHEREAS, Seller and Buyer are parties to that certain Asset Purchase
Agreement dated as of February __, 2002 by and between Seller and Buyer (the
"ASSET PURCHASE AGREEMENT"), a copy of which is attached hereto as Exhibit A.
Each capitalized term which is used but not otherwise defined in this Agreement
shall have the meaning assigned to such term in the Asset Purchase Agreement;
and
WHEREAS, this Agreement is entered into pursuant to the terms of the Asset
Purchase Agreement. Seller and Buyer have made, given or received certain
agreements, covenants, representations and warranties in the Asset Purchase
Agreement and, as security for certain of Buyer's obligations under the Asset
Purchase Agreement, Buyer has agreed to deposit and maintain $750,000 in an
escrow account to be administered pursuant to this Agreement;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency whereof is hereby acknowledged, the parties hereto agree as follows:
1. APPOINTMENT. Seller and Buyer hereby appoint Good Faith Escrow Agent as
their escrow agent for the purposes set forth herein, and Good Faith Escrow
Agent hereby accepts such appointment under the terms and conditions set forth
herein.
2. GOOD FAITH ESCROW FUND. Pursuant to Section 2.11 of the Asset Purchase
Agreement, Buyer shall deliver to Good Faith Escrow Agent, on the date hereof,
$750,000 by wire transfer of immediately available funds, to be held pursuant to
this Agreement as security for certain of Buyer's obligations under the Asset
Purchase Agreement. The funds held by Good Faith Escrow Agent from time to time
pursuant to this Agreement, together with all income and interest accrued
thereon which has not been distributed pursuant to this Agreement, is referred
to as the "GOOD FAITH ESCROW FUND." Good Faith Escrow Agent hereby agrees to
hold the Good Faith Escrow Fund in a separate and distinct account (the "Good
FAITH ESCROW ACCOUNT") as a trust fund. The Good Faith Escrow Fund shall not be
subject to any lien, attachment, trustee process, or any other judicial process
of any creditor of any party hereto, and shall be used solely for the purposes
of and subject to the terms and conditions of this Agreement and the Asset
Purchase Agreement.
F-1
3. INVESTMENT OF GOOD FAITH ESCROW FUND. At the written direction of
Seller, Good Faith Escrow Agent shall invest the Good Faith Escrow Fund in one
or more of: (a) direct obligations of the United States of America, (b)
obligations for which the full faith and credit of the United States of America
is pledged to provide for the payment of principal and interest, (c) commercial
paper rated of the highest quality by Xxxxx'x Investors Services, Inc.
("Moody's") or Standard & Poor's Corporation ("S&P"), (d) certificates of
deposit or time deposits issued by commercial banks having at least $1 billion
in assets, (e) federally tax-exempt municipal obligations bearing interest and
rated AAA or better by Moody's or rated AA or better by S&P, and/or (f) money
market funds authorized to invest in short-term securities issued or guaranteed
as to principal and interest by the U.S. Government and repurchase agreements
with respect to such securities (collectively, the "PERMITTED INVESTMENTS").
Good Faith Escrow Agent is hereby authorized to execute the purchase and sale of
Permitted Investments through the facilities of its own trading or capital
markets operations. In the event that Good Faith Escrow Agent does not receive
investment instructions to invest funds held in the Good Faith Escrow Account,
Good Faith Escrow Agent shall invest such funds in the One Group U.S. Government
Securities Cash Management Money Market Fund, or a successor or similar fund,
which invests in (i) short-term securities issued or guaranteed by the U.S.
Government, its agencies or instrumentalities and/or (ii) repurchase agreements
relating to such securities. Good Faith Escrow Agent can liquidate any
investment in order to comply with disbursement instructions without any
liability for any resulting loss. Any loss incurred from an investment shall be
borne by the Good Faith Escrow Fund.
4. GOOD FAITH ESCROW AGENT'S DISBURSEMENTS OF THE GOOD FAITH ESCROW
ACCOUNT.
(a) DISBURSEMENT TO BUYER. In the event of a termination of the Asset
Purchase Agreement pursuant to Article VIII thereof, Good Faith Escrow
Agent shall disburse to Buyer the amount of the Good Faith Escrow Fund
within one week of such termination in accordance with the written
directions executed by Buyer, provided that Buyer and Seller immediately
deliver joint written notice of such termination to Good Faith Escrow
Agent. Such notice shall not unreasonably be withheld by either party.
(b) DISBURSEMENT TO SELLER. At the Closing or in the event of a
termination of the Asset Purchase Agreement not pursuant to Article VIII
thereof, Good Faith Escrow Agent shall disburse the amount of the Good
Faith Escrow Fund to Seller in accordance with the written directions
executed by Seller, provided that Buyer and Seller immediately deliver
joint written notice of the Closing or such termination to Good Faith
Escrow Agent. Such notice shall not unreasonably be withheld by either
party.
(c) METHOD OF DISBURSEMENT. Notwithstanding anything to the contrary
contained herein, Good Faith Escrow Agent shall only disburse amounts held
in the Good Faith Escrow Account (i) in accordance with the terms and
conditions of this Agreement and the Asset Purchase Agreement, (ii) by wire
transfer of immediately available funds and (iii) subject to Section 9
hereof, upon receipt of a written notice executed by Buyer and Seller
specifying the amount to be disbursed and the manner of disbursement.
5. DUTIES AND LIABILITIES OF GOOD FAITH ESCROW AGENT. Good Faith Escrow
Agent undertakes to perform only such duties as are expressly set forth herein
and no other or further
F-2
duties or responsibilities shall be implied. Good Faith Escrow Agent shall have
no liability under and no duty to inquire as to the provisions of any agreement
other than this Agreement. Good Faith Escrow Agent may rely upon and shall not
be liable for acting or refraining from acting upon any written notice,
instruction or request furnished to it hereunder and believed by it to be
genuine and to have been signed or presented by the proper party or parties.
Good Faith Escrow Agent shall be under no duty to inquire into or investigate
the validity, accuracy or content of any such document. Good Faith Escrow Agent
shall have no duty to solicit any payments which may be due it hereunder. Good
Faith Escrow Agent shall not be liable for any action taken or omitted by it in
good faith except to the extent that a court of competent jurisdiction
determines that Good Faith Escrow Agent's gross negligence or willful misconduct
was the primary cause of any loss to Buyer or Seller. Good Faith Escrow Agent
may execute any of its powers and perform any of its duties hereunder directly
or through agents or attorneys (and shall be liable only for the careful
selection of any such agent or attorney) and may consult with counsel,
accountants and other skilled persons to be selected and retained by it. Good
Faith Escrow Agent shall not be liable for anything done, suffered or omitted in
good faith by it in accordance with the advice or opinion of any such counsel,
accountants or other skilled persons. In the event that Good Faith Escrow Agent
shall be uncertain as to its duties or rights hereunder or shall receive
instructions, claims or demands from any party hereto which, in its opinion,
conflict with any of the provisions of this Agreement, it shall be entitled to
refrain from taking any action and its sole obligation shall be to keep safely
all property held in escrow until it shall be directed otherwise in writing by
all of the other parties hereto or by a final order or judgment of a court of
competent jurisdiction. Anything in this Agreement to the contrary
notwithstanding, in no event shall Good Faith Escrow Agent be liable for
special, indirect or consequential loss or damage of any kind whatsoever
(including but not limited to lost profits), even if Good Faith Escrow Agent has
been advised of the likelihood of such loss or damage and regardless of the form
of action.
6. FEES. Buyer and Seller each agree to (i) pay Good Faith Escrow Agent
upon execution of this Agreement and from time to time thereafter reasonable
compensation for the services to be rendered hereunder, which unless otherwise
agreed in writing shall be as described in Schedule 6 hereto, and (ii) pay or
reimburse Good Faith Escrow Agent upon request for all expenses, disbursements
and advances, including reasonable attorney's fees and expenses, incurred or
made by it in connection with the preparation, execution, performance, delivery,
modification and termination of this Agreement, provided that Buyer and Seller
shall each be obligated to only pay for one-half of any of the fees referred to
above.
7. INDEMNITY. Buyer and Seller shall jointly and severally indemnify,
defend and save harmless Good Faith Escrow Agent and its directors, officers,
agents and employees (collectively, the "INDEMNITEES") from all loss, liability
or expense (including the fees and expenses of in house or outside counsel)
arising out of or in connection with (i) Good Faith Escrow Agent's execution and
performance of this Agreement, except in the case of any Indemnitee to the
extent that such loss, liability or expense is due to the gross negligence or
willful misconduct of such Indemnitee, or (ii) its following any instructions or
other directions from Buyer or Seller, except to the extent that its following
any such instruction or direction is expressly forbidden by the terms hereof.
The parties hereto acknowledge that the foregoing Indemnities shall survive the
resignation or removal of Good Faith Escrow Agent or the termination of this
Agreement. The parties hereby grant Good Faith Escrow Agent a lien on,
F-3
right of set-off against and security interest in the Good Faith Escrow Account
for the payment of any claim for indemnification, compensation, expenses and
amounts due hereunder.
8. TINS. Buyer and Seller each represent that its correct Taxpayer
Identification Number ("TIN") assigned by the Internal Revenue Service or any
other taxing authority is set forth in Schedule 8 hereto. Upon execution of this
Agreement, each party shall provide Good Faith Escrow Agent with a fully
executed W-8 or W-9 Internal Revenue Service form. All interest or other income
earned under this Agreement shall be retained in Good Faith Escrow Account and
reinvested from time to time by Good Faith Escrow Agent as provided in Section 3
of this Agreement. All income and earnings upon the Good Faith Escrow Account
shall be deemed for tax purposes to have accrued for the account of Seller and
reported by the recipient to the Internal Revenue Service (where applicable) as
having been so allocated and paid. Notwithstanding such written directions, Good
Faith Escrow Agent shall report and, as required withhold any taxes as it
determines may be required by any law or regulation in effect at the time of the
distribution. In the event that any earnings remain undistributed at the end of
any calendar year, Good Faith Escrow Agent shall report to the Internal Revenue
Service or such other authority such earnings as it deems appropriate or as
required by any applicable law or regulation or, to the extent consistent
therewith, as directed in writing by Buyer and Seller. In addition, Good Faith
Escrow Agent shall withhold any taxes it deems appropriate and shall remit such
taxes to the appropriate authorities.
9. TERMINATION. This Agreement shall remain in effect unless and until (i)
the Good Faith Escrow Fund is distributed in full, or (ii) it is terminated in a
written instrument executed by Seller and Buyer, in which event, termination
shall take effect no later than twenty (20) days after notice to Good Faith
Escrow Agent of such termination.
10. MERGER OR CONSOLIDATION. Any banking association or corporation into
which Good Faith Escrow Agent (or substantially all of its corporate trust
business) may be merged, converted or with which Good Faith Escrow Agent may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which Good Faith Escrow Agent shall be a party, shall succeed
to all Good Faith Escrow Agent's rights, obligations and immunities hereunder
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding.
11. MISCELLANEOUS.
(a) NOTICES. All notices, demands and other communications to be given
or delivered under or by reason of the provisions of this Agreement shall
be in writing and shall be deemed to have been given when personally
delivered or mailed by certified or express mail, or by Federal Express or
similar overnight courier service, with acknowledgement of receipt, postage
or fees prepaid. Notices, demands and communications to Good Faith Escrow
Agent, Seller and Buyer shall, unless another address is specified in
writing, be sent to the addresses indicated below:
F-4
NOTICE TO GOOD FAITH ESCROW AGENT:
Chicago Title Insurance Company
000 X. Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx Kroetters
NOTICE TO BUYER:
Alamo Group (IA) Inc.
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxx X. Xxxxxxxx
WITH COPY TO (WHICH SHALL NOT CONSTITUTE NOTICE TO BUYER):
Xxxxxxxxxxx, Blend, Xxxxxxxx & Xxxx
000 Xxxxxxx, 0xx Xxxxx
Xxx Xxxxxxx, Xxxxx 00000
Attn: Xxxxx Xxxxx
NOTICE TO SELLER:
Quality Stores, Inc.
000 X. Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx Xxxxxxxxxxx
WITH COPY TO (WHICH SHALL NOT CONSTITUTE NOTICE TO SELLER):
Xxxxxxxx & Xxxxx
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxxxx
Xxxx Xxxxxxx
or to such other representative or at such other address of a party as such
party hereto may furnish to the other parties in writing.
(b) COUNTERPARTS. This Agreement may be executed in separate
counterparts. It shall be fully executed when each Party whose signature is
required has signed at least one counterpart even though no one counterpart
contains the signatures of all the parties.
(c) DESCRIPTIVE HEADINGS. Paragraph and subparagraph headings are
included for convenience of reference only and shall not constitute a part
of this Agreement for any other purpose or be given any substantive effect.
F-5
(d) SUCCESSORS AND ASSIGNS. Neither Party hereto shall assign or
transfer any rights or obligations hereunder, except with the consent of
the other Party.
(e) ENTIRE AGREEMENT. This Agreement (including the Schedules and the
other documents and instruments referred to herein) constitutes the entire
agreement and supersedes all other prior agreements and understanding, both
written and oral, among Good Faith Escrow Agent, Seller and Buyer, with
respect to the subject matter hereof.
(f) GOVERNING LAW. All questions concerning the construction, validity
and interpretation of this Agreement shall be governed by and construed in
accordance with Title 11 of the Bankruptcy Code and the domestic laws of
the State of Michigan, without giving effect to any choice of law or
conflict of law provision (whether of the State of Michigan or any other
jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Michigan. Seller and Buyer each hereto
irrevocably and unconditionally consents to submit to the Bankruptcy Court
for any litigation arising out of or relating to this Agreement and the
transactions contemplated hereby (and agrees not to commence any litigation
relating thereto except in the Bankruptcy Court), waives any objection to
the laying of venue of any such litigation therein, and agrees not to plead
or claim that such litigation has been brought in an inconvenient forum.
(g) AMENDMENTS. This Agreement and any of terms herein may only be
amended, changed or modified by a writing entered into between Seller and
Buyer.
(h) EXHIBITS AND SCHEDULES. All exhibits and schedules to this
Agreement, as now existing and as modified hereafter, are incorporated in
this Agreement by this reference.
(i) SEVERABILITY. No provision of this Agreement that is held to be
inoperative, unenforceable or invalid shall affect the remaining
provisions, and to this end all such provisions are declared to be
severable.
(j) NO STRICT CONSTRUCTION. The language used in this Agreement shall
be deemed to be the language chosen by the parties to this Agreement to
express their mutual intent, and no rule of strict construction shall be
applied against any of the parties.
(k) WAIVER. The failure by any party to seek redress for the breach,
or to insist upon strict performance of any covenant, agreement, provision
or condition of this Agreement, shall not constitute a waiver thereof, and
such party shall have all remedies provided herein and by applicable law
with respect to any subsequent act which would have originally constituted
a breach.
* * * * *
F-6
IN WITNESS WHEREOF, the parties hereto have executed this Good Faith Escrow
Agreement as of the date hereof.
CHICAGO TITLE INSURANCE COMPANY
By:
----------------------------------
Name:
Title:
QUALITY STORES, INC.
By:
-----------------------------------
Name:
Title:
ALAMO GROUP (IA) INC.
By:
-----------------------------------
Name:
Title:
F-7
SCHEDULE 6
GOOD FAITH ESCROW AGENT FEES
The Good Faith Escrow Agent shall be paid a total amount of $185 as
reasonable compensation for all of the services to be rendered in connection
with this Agreement.
Schedule 6, Page 1
SCHEDULE 8
TAX IDENTIFICATION NUMBER
Buyer: 00-0000000
Seller: 00-0000000
Schedule 8, Page 1
SIGNING COPY
EXHIBIT G
XXXX OF SALE
THIS XXXX OF SALE (this "XXXX OF SALE") is made and entered into as of
__________, 2002, from Quality Stores Inc., a Delaware corporation ("SELLER"),
to Alamo Group (IA) Inc., a Nevada corporation ("BUYER").
WHEREAS, Seller has filed for bankruptcy protection before the United
States Bankruptcy Court for the Western District of Michigan (the "BANKRUPTCY
COURT");
WHEREAS, Seller and Buyer are parties to that certain Asset Purchase
Agreement dated as of February __, 2002 by and between Seller and Buyer (the
"ASSET PURCHASE AGREEMENT"), a copy of which is attached hereto as Exhibit A.
Each capitalized term which is used but not otherwise defined in this Xxxx of
Sale shall have the meaning assigned to such term in the Asset Purchase
Agreement; and
WHEREAS, the execution and delivery of this Xxxx of Sale by Seller is a
condition to Buyer's obligation to effect the Closing pursuant to the Asset
Purchase Agreement;
NOW THEREFORE, in consideration of the premises and mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Seller hereby sells, grants, transfers, contributes, assigns, and
delivers to Buyer, all of its right, title and interest in and to all of the
Purchased Assets.
2. Notwithstanding anything contained in Section 1 to the contrary,
Seller is not selling and Buyer is not purchasing any of the Excluded Assets,
all of which shall be retained by Seller.
3. Seller agrees and covenants that Seller will, whenever and as often
as reasonably requested to do so by Buyer or its successors and assigns and
without further consideration, execute, acknowledge and deliver such further
instruments of sale, grant, transfer, contribution, assignment, conveyance,
assumption and delivery and such consents, assurances, powers of attorney and
other instruments and take such other actions as may reasonably be necessary in
order to vest in Buyer all of Seller's right, title and interest in and to the
Purchased Assets and to otherwise carry out the purpose and intent of this Xxxx
of Sale.
4. Notwithstanding any other provisions of this Xxxx of Sale to the
contrary, nothing contained in this Xxxx of Sale shall in any way supersede,
modify, replace, amend, change, rescind, waive, exceed, expand, enlarge or in
any way affect the provisions set forth in the Asset Purchase Agreement nor
shall this Xxxx of Sale reduce, expand or enlarge any remedies under the Asset
Purchase Agreement including without limitation any rights to indemnification
specified therein. This Xxxx of Sale is intended only to effect the transfer of
the Purchased Assets
G-1
sold and purchased pursuant to the Asset Purchase Agreement and shall be
governed entirely in accordance with the terms and conditions of the Asset
Purchase Agreement.
5. MISCELLANEOUS.
(a) NOTICES. All notices, demands and other communications to be given or
delivered under or by reason of the provisions of this Xxxx of Sale shall be in
writing and shall be deemed to have been given when personally delivered or
mailed by certified or express mail, or by Federal Express or similar overnight
courier service, with acknowledgement of receipt, postage or fees prepaid.
Notices, demands and communications to Seller and Buyer shall, unless another
address is specified in writing, be sent to the addresses indicated below:
Notice to Buyer:
Alamo Group (IA) Inc.
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxx X. Xxxxxxxx
with copy to (which shall not constitute notice to Buyer):
Xxxxxxxxxxx, Blend, Xxxxxxxx & Xxxx
000 Xxxxxxx, 0xx Xxxxx
Xxx Xxxxxxx, Xxxxx 00000
Attn: Xxxxx Xxxxx
Notice to Seller:
Quality Stores, Inc.
000 X. Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx Xxxxxxxxxxx
with copy to (which shall not constitute notice to Seller):
Xxxxxxxx & Xxxxx
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxxxx
Xxxx Xxxxxxx
or to such other representative or at such other address of a party as such
party hereto may furnish to the other parties in writing.
G-2
(b) COUNTERPARTS. This Xxxx of Sale may be executed in separate
counterparts. It shall be fully executed when each party whose signature is
required has signed at least one counterpart even though no one counterpart
contains the signatures of all the parties.
(c) DESCRIPTIVE HEADINGS. Paragraph and subparagraph headings are included
for convenience of reference only and shall not constitute a part of this Xxxx
of Sale for any other purpose or be given any substantive effect.
(d) SUCCESSORS AND ASSIGNS. Neither party hereto shall assign or transfer
any rights or obligations hereunder, except with the consent of the other party.
(e) ENTIRE AGREEMENT. This Xxxx of Sale (including the Exhibits and the
other documents and instruments referred to herein) constitutes the entire
agreement and supersedes all other prior agreements and understanding, both
written and oral, among Seller and Buyer, with respect to the subject matter
hereof.
(f) GOVERNING LAW. All questions concerning the construction, validity and
interpretation of this Xxxx of Sale shall be governed by and construed in
accordance with Title 11 of the Bankruptcy Code and the domestic laws of the
State of Michigan, without giving effect to any choice of law or conflict of law
provision (whether of the State of Michigan or any other jurisdiction) that
would cause the application of the laws of any jurisdiction other than the State
of Michigan. Seller and Buyer each hereto irrevocably and unconditionally
consents to submit to the Bankruptcy Court for any litigation arising out of or
relating to this Xxxx of Sale and the transactions contemplated hereby (and
agrees not to commence any litigation relating thereto except in the Bankruptcy
Court), waives any objection to the laying of venue of any such litigation
therein, and agrees not to plead or claim that such litigation has been brought
in an inconvenient forum.
(g) AMENDMENTS. This Xxxx of Sale and any of terms herein may only be
amended, changed or modified by a writing entered into between Seller and Buyer.
(h) EXHIBITS AND SCHEDULES. All exhibits and schedules to this Xxxx of
Sale, as now existing and as modified hereafter, are incorporated in this Xxxx
of Sale by this reference.
(i) SEVERABILITY. No provision of this Xxxx of Sale that is held to be
inoperative, unenforceable or invalid shall affect the remaining provisions, and
to this end all such provisions are declared to be severable.
(j) NO STRICT CONSTRUCTION. The language used in this Xxxx of Sale shall be
deemed to be the language chosen by the parties to this Xxxx of Sale to express
their mutual intent, and no rule of strict construction shall be applied against
any of the parties.
(k) WAIVER. The failure by any party to seek redress for the breach, or to
insist upon strict performance of any covenant, agreement, provision or
condition of this Xxxx of Sale, shall not constitute a waiver thereof, and such
party shall have all remedies provided herein and by
G-3
applicable law with respect to any subsequent act which would have originally
constituted a breach.
G-4
IN WITNESS WHEREOF, Seller has caused this Xxxx of Sale to be executed and
delivered as of the date hereof.
QUALITY STORES, INC.
By:
--------------------------------
Name:
Title:
ALAMO GROUP (IA) INC.
By:
--------------------------------
Name:
Title:
G-5
SIGNING COPY
EXHIBIT H
ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (this "AGREEMENT") is made and
entered into as of __________, 2002 by and among Quality Stores, Inc.,
a Delaware corporation ("SELLER") and Alamo Group (IA) Inc., a Nevada
corporation ("BUYER").
WHEREAS, Seller has filed for bankruptcy protection before the United
States Bankruptcy Court for the Western District of Michigan (the "BANKRUPTCY
COURT");
WHEREAS, Seller and Buyer are parties to that certain Asset Purchase
Agreement dated as of February __, 2002 by and between Seller and Buyer (the
"ASSET PURCHASE AGREEMENT"), a copy of which is attached hereto as EXHIBIT A.
Each capitalized term which is used but not otherwise defined in this Agreement
shall have the meaning assigned to such term in the Asset Purchase Agreement;
WHEREAS, the execution and delivery of this Agreement by Buyer is a
condition to Seller's obligation to effect the Closing pursuant to the Asset
Purchase Agreement;
WHEREAS, the execution and delivery of this Agreement by Seller is a
condition to Buyer's obligation to effect the Closing pursuant to the Asset
Purchase Agreement; and
WHEREAS, at the same time as the execution of this Agreement, Seller has
transferred to Buyer the Purchased Assets, and in connection with such transfer,
Seller and Buyer desire that Seller assign its interest in the Valu-Bilt
Agreements to Buyer, a list of the Valu-Bilt Agreements is attached hereto as
EXHIBIT B, and that Buyer perform the obligations of Seller under the Valu-Bilt
Agreements after the effective date of such assignment;
NOW THEREFORE, in consideration of the premises and mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. ASSIGNMENT. Seller hereby assigns, to the extent assignable, to Buyer
all of its rights and interests under the Valu-Bilt Agreements.
2. ASSUMPTION. Buyer hereby assumes and agrees to perform all of the terms,
covenants and conditions of the Valu-Bilt Agreements to be performed on the part
of Buyer under the Valu-Bilt Agreements from and after the date of this
Agreement.
3. FURTHER ASSURANCES. In furtherance of the transfer of the Valu-Bilt
Agreements, each party to this Agreement will take all such further actions,
execute and deliver all such further documents and do all other acts and things
as the other party may reasonably request for the purpose of carrying out the
intent of this Agreement.
4. MISCELLANEOUS.
H-1
(a) NOTICES. All notices, demands and other communications to be given or
delivered under or by reason of the provisions of this Agreement shall be in
writing and shall be deemed to have been given when personally delivered or
mailed by certified or express mail, or by Federal Express or similar overnight
courier service, with acknowledgement of receipt, postage or fees prepaid.
Notices, demands and communications to Seller and Buyer shall, unless another
address is specified in writing, be sent to the addresses indicated below:
Notice to Buyer:
Alamo Group (IA) Inc.
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxx X. Xxxxxxxx
with copy to (which shall not constitute notice to Buyer):
Xxxxxxxxxxx, Blend, Xxxxxxxx & Xxxx
000 Xxxxxxx, 0xx Xxxxx
Xxx Xxxxxxx, Xxxxx 00000
Attn: Xxxxx Xxxxx
Notice to Seller:
Quality Stores, Inc.
000 X. Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx Xxxxxxxxxxx
with copy to (which shall not constitute notice to Seller):
Xxxxxxxx & Xxxxx
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxxxx
Xxxx Xxxxxxx
or to such other representative or at such other address of a party as such
party hereto may furnish to the other parties in writing.
(b) COUNTERPARTS. This Agreement may be executed in separate counterparts.
It shall be fully executed when each Party whose signature is required has
signed at least one counterpart even though no one counterpart contains the
signatures of all the parties.
H-2
(c) DESCRIPTIVE HEADINGS. Paragraph and subparagraph headings are included
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
(d) SUCCESSORS AND ASSIGNS. Neither Party hereto shall assign or transfer
any rights or obligations hereunder, except with the consent of the other Party.
(e) ENTIRE AGREEMENT. This Agreement (including the Exhibits and the other
documents and instruments referred to herein) constitutes the entire agreement
and supersedes all other prior agreements and understanding, both written and
oral, among Seller and Buyer, with respect to the subject matter hereof.
(f) GOVERNING LAW. All questions concerning the construction, validity and
interpretation of this Agreement shall be governed by and construed in
accordance with Title 11 of the Bankruptcy Code and the domestic laws of the
State of Michigan, without giving effect to any choice of law or conflict of law
provision (whether of the State of Michigan or any other jurisdiction) that
would cause the application of the laws of any jurisdiction other than the State
of Michigan. Seller and Buyer each hereto irrevocably and unconditionally
consents to submit to the Bankruptcy Court for any litigation arising out of or
relating to this Agreement and the transactions contemplated hereby (and agrees
not to commence any litigation relating thereto except in the Bankruptcy Court),
waives any objection to the laying of venue of any such litigation therein, and
agrees not to plead or claim that such litigation has been brought in an
inconvenient forum.
(g) AMENDMENTS. This Agreement and any of terms herein may only be amended,
changed or modified by a writing entered into between Seller and Buyer.
(h) EXHIBITS AND SCHEDULES. All exhibits and schedules to this Agreement,
as now existing and as modified hereafter, are incorporated in this Agreement by
this reference.
(i) SEVERABILITY. No provision of this Agreement that is held to be
inoperative, unenforceable or invalid shall affect the remaining provisions, and
to this end all such provisions are declared to be severable.
(j) NO STRICT CONSTRUCTION. The language used in this Agreement shall be
deemed to be the language chosen by the parties to this Agreement to express
their mutual intent, and no rule of strict construction shall be applied against
any of the parties.
(k) WAIVER. The failure by any party to seek redress for the breach, or
to insist upon strict performance of any covenant, agreement, provision or
condition of this Agreement, shall not constitute a waiver thereof, and such
party shall have all remedies provided herein and by applicable law with respect
to any subsequent act which would have originally constituted a breach.
* * * *
H-3
IN WITNESS WHEREOF, the parties hereto have executed this Assignment and
Assumption Agreement as of the date hereof.
QUALITY STORES, INC.
By:
--------------------------------
Name:
Title:
ALAMO GROUP (IA) INC.
By:
--------------------------------
Name:
Title:
H-4
