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EXHIBIT 2.1
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "Agreement") is made and entered
into on the 9th day of February, 1998, by and among Palm Harbor Homes, Inc., a
Florida corporation ("Purchaser"), Xxxxxx Manufactured Housing Group, Inc.
("Housing Group"), Xxxxxx Mobile Homes, Inc. ("Mobile Homes"), Pleasant Valley
Mobile Homes, Inc. ("PV Mobile Homes"), Countryside Mobile Homes, Inc. ("CMH"),
Cumberland Homes, Inc. ("Cumberland"), All Star Mobile Homes, Inc. ("All
Star"), First Home Mortgage Corporation ("First Home," and together with
Housing Group, Mobile Homes, PV Mobile Homes, CMH, Cumberland and All Star
shall be referred to herein collectively as the "Xxxxxx Companies"), Xxxxxx X.
Xxxxxx ("X. Xxxxxx"), Xxxx X. Xxxxxx ("X. Xxxxxx"), Xxxx X. Xxxxxx
("Xxxxxx"), Xxxx X. Xxxxx ("Xxxxx"), Xxxx X. Xxxxxx ("X.X. Xxxxxx"), and the
Estate of Xxxxxx X. Xxxxxx (the "Estate," and together with X. Xxxxxx, X.
Xxxxxx, Xxxxxx, Xxxxx and X.X. Xxxxxx shall be referred to herein collectively
as the "Selling Shareholders").
a. The Xxxxxx Companies are in the business of retail
sales and financing of the purchase of manufactured homes (the
"Business").
b. The Selling Shareholders own in the aggregate 100% of
the issued and outstanding shares of the common stock of the
Xxxxxx Companies (the "Common Stock")
c. Upon the terms and subject to the conditions of this
Agreement, the Selling Shareholders desire to sell to Purchaser,
and Purchaser desires to purchase from the Selling Shareholders,
all of the issued and outstanding Common Stock of the Xxxxxx
Companies.
In consideration of the mutual covenants, agreements, warranties and
representations made herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged and accepted, the
parties hereby agree as follows:
ARTICLE I. DEFINITIONS
Unless the context otherwise requires, the terms defined in this
Article I shall have the meanings herein specified for all purposes of this
Agreement, applicable to both the singular and plural forms of any of the terms
herein defined.
"Affiliate" shall mean as to any party, an individual or entity that
directly or indirectly through one or more intermediaries, controls or is
controlled by, or is under common control with, the specified party.
"Affiliated Group" shall mean any affiliated group within the meaning
of Code Section 1504 or any similar group defined under a similar provision of
state, local or foreign law.
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"Agreement" shall mean this Agreement, including the Recitals and all
Schedules and Exhibits hereto, as this Agreement may be from time to time
amended, modified or supplemented.
"Balance Sheet" shall have the meaning assigned to it in Section
3.6(b).
"Business" shall have the meaning assigned to it in the Recitals to
this Agreement.
"Cash" shall have the meaning assigned to it in Section 2.2.
"Closing" means the closing of the purchase and sale of the Purchase
Shares, which shall occur on the Closing Date.
"Closing Date" shall have the meaning assigned to it in Section 2.2.
"Code" means the Internal Revenue Code of 1986, as amended.
"Damages" shall have the meaning assigned to it in Section 9.1.
"Environmental Claim" means any claim, demand, action, cause of
action, suit, loss, cost, including, but not limited to, attorneys' fees,
diminution in value, experts' fees, damage, punitive damage, fine, penalty,
expense, liability, strict liability, criminal liability, judgment,
governmental or private investigation, testing, notification of status of being
potentially responsible for clean-up of any facility, or for being in violation
or in potential violation of any Requirement of Environmental Law relating to
Remediation or compliance with Requirements of Environmental Laws, proceeding,
Lien, personal injury or death of any person, or property damage, whether
threatened, sought, brought or imposed, that is related to or that seeks to
recover costs or Damages related to, or seeks to impose liability regarding the
Xxxxxx Companies or operations conducted by the Xxxxxx Companies for: (i)
improper use or treatment of wetlands, pinelands or other protected land or
wildlife; (ii) noise; (iii) radioactive materials (including naturally
occurring radioactive materials); (iv) explosives; (v) pollution,
contamination, preservation, protection, remediation, removal or clean-up of
the air, surface water, ground water, soil or protected lands; (vi) solid,
gaseous or liquid waste generation, handling, discharge, release, threatened
release, treatment, storage, disposal or transportation; (vii) exposure of
persons or property to Materials of Environmental Concern and the effects
thereof; (viii) the release, threatened release, manufacture, processing,
distribution in commerce, use, treatment, storage, disposal or Remediation of
Materials of Environmental Concern other than in compliance with Environmental
Laws; (ix) injury to, death of or threat to the health or safety of any person
or persons caused directly or indirectly by Materials of Environmental Concern;
(x) destruction caused directly or indirectly by Materials of Environmental
Concern or the release or threatened release of any Materials of Environmental
Concern on any property (whether real or personal) owned or leased by the
Xxxxxx Companies; (xi) the implementation of spill prevention and/or disaster
plans relating to Materials of Environmental Concern; (xii) community
right-to-know and other disclosure laws; or (xiii) maintaining, disclosing or
reporting information to governmental authorities under any Environmental Law.
The term,
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"Environmental Claim" also includes, without limitation, any Damages, costs or
expenses incurred in testing for the likelihood of Remediation or breach or
violation of any Requirements of Environmental Laws, monitoring or responding
to efforts to require Remediation and any claim based upon any asserted or
actual breach or violation of any Requirements of Environmental Law, or upon
any event, occurrence or condition as a consequence of which, pursuant to any
Requirements of Environmental Law, the assets of the Xxxxxx Companies shall be
subject to any restriction on use after Closing.
"Environmental Laws" means any and all laws, rules, regulations,
ordinances, orders or guidance documents now or hereafter in effect of any
applicable federal, state or local executive, legislative, judicial, regulatory
or administrative agency, board or authority or any judicial or administrative
decision relating thereto that relate in any manner to health, worker
protection, the environment, or a community's right to know.
"Indemnified Parties" shall have the meaning assigned to it in Section
9.1.
"Indemnifying Party" shall have the meaning assigned to it in Section
9.1.
"Liability" means any liability (whether known or unknown, whether
asserted or unasserted, whether absolute or contingent, whether accrued or
unaccrued, whether liquidated or unliquidated, and whether due or to become
due), including any liability for Taxes.
"Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind, including, without limitation, any Tax
liens, any conditional sale or other title retention agreement, any lease in
the nature thereof and the filing of or agreement to give any financing
statement under the Uniform Commercial Code of any jurisdiction and including
any lien or charge arising by statute or other law.
"Material Adverse Effect" shall mean any event, occurrence, change in
facts, conditions or other change or effect materially adverse to the business,
operations, results of operations or conditions (financial or otherwise) of the
Xxxxxx Companies taken as a whole.
"Materials of Environmental Concern" means: (i) those substances
included within the statutory and/or regulatory definitions of "hazardous
substance," "hazardous waste," "extremely hazardous substance," "regulated
substance," "hazardous materials," "toxic substances," under any Environmental
Law; (ii) any material, waste or substance which is: (A) petroleum, oil or a
fraction thereof, (B) explosives, (C) radioactive materials (including
naturally occurring radioactive materials), or (D) solid wastes that pose
imminent and substantial endangerment to health or the environment; and (iii)
such other substances, materials, or wastes that are or become (prior to the
Closing Date) classified or regulated as hazardous or toxic under any
applicable federal, state or local law or regulation.
"Noncompetition Term" shall have the meaning assigned to it in Section
6.3.
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"Permits" shall mean any permit, registration, notice, notice with
intent, permit by rule, or other authorization which is necessary for the
Business and/or the Xxxxxx Companies to be in compliance with Requirements of
Environmental Laws.
"Person" shall mean all natural persons, corporations, business
trusts, associations, companies, partnerships, joint ventures and other
entities and governments and agencies and political subdivisions.
"Purchase Price" shall have the meaning assigned to it in Section 2.2.
"Purchaser" shall mean Palm Harbor Homes, Inc., a Florida corporation.
"Purchase Shares" shall have the meaning assigned to it in Section
2.1.
"Remediation" means any action necessary to: (i) comply with and
ensure compliance with the Requirements of Environmental Laws and (ii) the
taking of all reasonably necessary precautions to protect against and/or
respond to, remove or remediate or monitor the release or threatened release of
Materials of Environmental Concern at, on, in, about, under, within or near the
air, soil, surface water, groundwater or soil vapor at the business of the
Xxxxxx Companies or any public domain affected by the business of the Xxxxxx
Companies.
"Requirement(s) of Environmental Law(s)" means all requirements,
conditions, restrictions or stipulations of Environmental Laws imposed upon or
related to the Xxxxxx Companies and/or the business of the Xxxxxx Companies.
"Selling Shareholders" shall have the meaning assigned to it in the
introductory paragraph of this Agreement.
"Stock" shall have the meaning assigned to it in Section 2.2.
"Tax" means any federal, state, local, or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under Code Section
59A), customs duties, capital stock, franchise, profits, withholding, social
security (or similar), unemployment, disability, real property, personal
property, sales, use, transfer, registration, value added, alternative or
add-on minimum, estimated, or other tax of any kind whatsoever, including any
interest, penalty, or addition thereto, whether disputed or not.
"Tax Return" means any return, declaration, report, claim for refund,
or information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
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ARTICLE II. PURCHASE AND SALE OF STOCK
2.1 TRANSFER OF STOCK. On the terms and subject to the conditions
set forth in this Agreement and based upon the representations, warranties,
covenants and agreements contained herein, the Selling Shareholders agree to
sell, convey, assign, transfer, deliver and set over to Purchaser or its
designated Affiliate, and Purchaser agrees to purchase, accept and acquire from
the Selling Shareholders, all of the issued and outstanding Common Stock of
the Xxxxxx Companies (the "Purchase Shares").
2.2 TRANSFER OF STOCK AND REBATES. (a) In consideration for the
Purchase Shares, Purchaser shall pay to the Selling Shareholders on February
27, 1998 or such later date which is three business days after Purchaser
completes its due diligence investigation of the Xxxxxx Companies and all of
the conditions precedent in Article VII are satisfied, which date shall not be
later than March 8, 1998 (such date shall be referred to herein as the "Closing
Date"), in the aggregate, the sum of $26,757,215 cash ("Cash") and 157,975
shares of Purchaser's Common Stock (Stock") (the Cash and the Stock shall be
referred to herein collectively as the "Purchase Price"). The Purchase Price
shall be divided among the Selling Shareholders as set forth in Schedule 2.2.
2.3 THE CLOSING. The Closing shall occur at the offices of
Purchaser, 00000 Xxxxxx Xxxxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000, or at such
other location as the parties may mutually agree, on the Closing Date. At the
Closing, Purchaser shall pay the Selling Shareholders the Cash via wire
transfer. As used herein, the actual date of Closing is herein sometimes
called the "Closing Date."
2.4 OBLIGATIONS AT CLOSING. At the Closing:
(a) The Selling Shareholders shall deliver to Purchaser:
(i) certificates representing all of the Purchase Shares,
duly endorsed (or accompanied by appropriate stock powers duly
endorsed) in blank by the registered holder thereof for
transfer, together with such supporting documents,
endorsements, assignments, affidavits and other necessary
instruments of sale and transfer as are necessary to permit
Purchaser to acquire the Purchase Shares free of any adverse
claims;
(ii) the stock books, stock ledgers, minute books and
corporate seal of each of the Xxxxxx Companies;
(iii) resignations tendered by the Directors of the Xxxxxx
Companies, effective as of the Closing Date;
(iv) copies of all consents (including consents to lease
assignments), approvals, authorizations or other requirements
which must be obtained or satisfied for the consummation of
the transactions contemplated by this Agreement;
(v) leases relating to all of the Xxxxxx Companies'
retail sales center locations;
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(vi) schedules updated through the Closing Date;
(vii) the certificate required to be delivered pursuant to
Section 7.7;
(viii) waivers of each of the Selling Shareholders or
evidence of termination of any rights each Selling
Shareholder may have under any shareholder
agreements with any of the Xxxxxx Companies; and
(ix) executed amendments to the Employment Agreements of
Messrs. Helm and Fields reasonably acceptable to
Purchaser.
(b) The Purchaser shall deliver to the Selling Shareholders the
Cash and Stock, the certificate required to be delivered pursuant to Section
8.5, and the agreements regarding share purchases with certain employees
designated by Purchaser and X. Xxxxxx.
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF
THE SELLING SHAREHOLDERS
The Selling Shareholders severally represent and warrant to Purchaser
solely with respect to the Xxxxxx Company in which such Selling shareholder
owns shares, as follows:
3.1 ORGANIZATION AND QUALIFICATION. Each of the Xxxxxx Companies
is a corporation duly organized, validly existing and in good standing under
the laws of the State of Georgia, and has all requisite authority and power
(corporate and other), licenses, registrations, authorizations, permits,
consents, notices of intent, and approvals to carry on its business as
presently conducted, to own, hold and operate its properties and assets, and to
enter into this Agreement. The Xxxxxx Companies have no subsidiaries, branches
or offices other than those listed on Schedule 3.1 hereto. None of the Xxxxxx
Companies has an interest, direct or indirect, and has no commitment to
purchase any interest, direct or indirect, in any other corporation or in any
partnership, joint venture or other business enterprise or entity. Except as
set forth on Schedule 3.1, the Business carried on by the Xxxxxx Companies has
not been conducted through any other direct or indirect subsidiary or Affiliate
of the Xxxxxx Companies or any shareholder.
3.2 CAPITAL STOCK. The authorized capital stock of each of the
Xxxxxx Companies is as follows:
Housing Group - 100,000 shares
Mobile Homes - 100,000 shares
PV Mobile Homes - 100,000 shares
CMH - 100,000 shares
Cumberland - 100,000 shares
All Star - 100,000 shares
First Home - 100,000 shares
, all of which the following number of shares shall be issued and outstanding,
fully-paid and non-assessable at and immediately prior to the Closing:
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Housing Group - 10,000 shares
Mobile Homes - 10,000 shares
PV Mobile Homes - 10,000 shares
Cumberland - 20,000 shares
CMH - 10,000 shares
All Star - 27,500 shares
First Home - 4,000 shares
No shares of preferred stock or any other security will be issued and
outstanding at and immediately prior to the Closing. Except as set forth on
Schedule 3.2, there are no outstanding options, warrants or other agreements of
any nature whatsoever relating to the issuance of any shares of capital stock
or any other security of any of the Xxxxxx Companies, all of which shall be
waived or terminated on or prior to the Closing Date.
3.3 ARTICLES AND BYLAWS. The copies of the Articles of
Incorporation and Bylaws, and all amendments thereto, of each of the Xxxxxx
Companies, which have heretofore been delivered to Purchaser, are complete and
correct as of the date hereof.
3.4 CONFLICTS. The execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby do not and will not
violate any provisions of any agreement or violate or conflict with any other
obligation of any kind or character to which each of the Xxxxxx Companies or
the Selling Shareholders are a party or by which any of them is bound. The
Selling Shareholders have the unqualified right to sell, assign and deliver the
Purchase Shares to Purchaser, and the unqualified right upon consummation of
the transaction contemplated by this Agreement, to transfer to Purchaser good
and valid title to the Purchase Shares, free and clear of all Liens or options
of whatsoever nature.
3.5 PRIOR COVENANTS; CHANGES IN CIRCUMSTANCES. Except as
disclosed on Schedule 3.5 hereto, none of the Xxxxxx Companies has since
January 1, 1998:
(a) except in the ordinary course of business, purchased or sold
any assets, incurred any indebtedness, made any capital expenditures, changed
any loan or lease arrangements, or made other payments or commitments;
(b) merged or consolidated with another entity, invested in or
otherwise purchased the business or assets of another business, or sold
substantially all of its assets or negotiated or entered into any agreement
concerning the foregoing;
(c) made loans to any of the Selling Shareholders, employees or
other persons, or increased the compensation of any officer or director;
(d) made bonus distributions or other distributions except in
accordance with past practice to any officer or director of any of the Selling
Shareholders; or
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(e) paid dividends or other distributions on its stock,
repurchased its stock, issued additional shares of capital stock or otherwise
changed its capital structure.
3.6 FINANCIAL STATEMENTS. (a) The Xxxxxx Companies have
delivered to Purchaser unaudited compiled (as to 1995 and 1996) financial
statements of each of the Xxxxxx Companies and combined unaudited financial
statements for all of the Xxxxxx Companies (containing balance sheets and
related statements of income, shareholders' equity and cash flows, and
accompanying notes) for each of the years ended December 31, 1995, December 31,
1996 and December 31, 1997 (or, with respect to any of the Xxxxxx Companies
that do not have a December 31 year end, financial statements for each of their
last three fiscal years). Such financial statements fairly present the
financial position of the Xxxxxx Companies and the results of their operations
and their cash flows for the year then ended and were prepared on a
comprehensive basis.
(b) The Xxxxxx Companies have delivered to Purchaser unaudited
financial statements of each of the Xxxxxx Companies and unaudited combined
financial statements for all of the Xxxxxx Companies, each containing a balance
sheet as of December 31, 1997, and related statements of income, shareholders'
equity and cash flows and accompanying notes (if any) for the period then
ended. Such financial statements fairly present the financial position of the
Xxxxxx Companies as of December 31, 1997, and the result of its operations for
the period then ended, were prepared on a comprehensive basis (subject to
normal year-end adjustments and any other adjustments described therein) and
include no material misstatements or omissions. The December 31, 1997
individual and combined balance sheets are collectively referred to herein as
the "Balance Sheet."
3.7 TAX MATTERS. (a) Each of the Xxxxxx Companies has
filed all Tax Returns that it was required to file. All such Tax Returns were
correct and complete in all material respects. All Taxes owed by each of the
Xxxxxx Companies (whether or not shown on any Tax Return) have been paid or
accrued. None of the Xxxxxx Companies is currently the beneficiary of any
extension of time within which to file any Tax Return. To the knowledge and
belief of the Selling Shareholders, no claim has ever been made by an authority
in any jurisdiction where any of the Xxxxxx Companies does not file Tax Returns
that they are or may be subject to taxation by that jurisdiction. There are no
Liens on any of the assets of any of the Xxxxxx Companies that arose in
connection with any failure (or alleged failure) to pay any Tax.
(b) Each of the Xxxxxx Companies has withheld and paid all Taxes
required to have been withheld and paid in connection with amounts paid or
owing to any employee, independent contractor, creditor, stockholder, or other
third party.
(c) No shareholder or director or officer (or employee responsible
for Tax matters) of any of the Xxxxxx Companies expects any authority to assess
any additional Taxes for any period for which Tax Returns have been filed.
There is no dispute or claim concerning any Tax Liability of any of the Xxxxxx
Companies either (i) claimed or raised by any authority in writing or (ii) as
to which any of the shareholders or the directors or officers (or employees
responsible for Tax matters) of any of the Xxxxxx Companies has knowledge based
upon personal contact with any agent of such authority. Schedule 3.7 hereto
lists all federal, state, local and foreign income Tax Returns filed with
respect to each of the Xxxxxx Companies for taxable periods ended on or after
January 1, 1992
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which have been audited, and indicates those Tax Returns that currently are the
subject of audit. The Selling Shareholders have delivered to the Purchaser
correct and complete copies of all federal income Tax Returns, examination
reports, and statements of deficiencies assessed against or agreed to by each
of the Xxxxxx Companies since January 1, 1992.
(d) None of the Xxxxxx Companies has waived any statute of
limitations in respect of Taxes or agreed to any extension of time with respect
to any Tax assessment or deficiency.
(e) None of the Xxxxxx Companies has filed a consent under Section
341(f) of the Code concerning collapsible corporations. None of the Xxxxxx
Companies has made any payments, is not obligated to make any payments, and is
not a party to any agreement that under any circumstances could obligate it to
make any payments, that will not be deductible under Section 280G of the Code.
None of the Xxxxxx Companies has been a United States real property holding
corporation within the meaning of Section 897(c)(2) of the Code during the
applicable period specified in Section 897(c)(1)(A)(ii) of the Code. Each of
the Xxxxxx Companies has disclosed on its federal income Tax Returns all
positions taken therein that could give rise to a substantial understatement of
federal income Tax within the meaning of Code Section 6662. None of the Xxxxxx
Companies is a party to any Tax allocation or sharing agreement. None of the
Xxxxxx Companies (i) is currently a member of an Affiliated Group filing a
consolidated federal income Tax Return at any time and (ii) has incurred any
Liability for the Taxes of any other Person, as a transferee or successor, by
contract, or otherwise.
3.8 LIABILITIES. Except as and to the extent reflected or
reserved against in the Balance Sheet or in any of the Schedules attached
hereto, and except for contracts, commitments and liabilities incurred in the
ordinary course of business and not required to be disclosed in any Schedule
hereto, each of the Xxxxxx Companies, as of the date of such Balance Sheet, had
no liabilities or obligations of any nature, whether absolute, accrued,
contingent or otherwise and whether due or to become due, including, without
limitation, liabilities for Taxes in respect of or measured by the income of
such Xxxxxx Companies through January 31, 1998 and liabilities for Taxes
(including sales taxes) arising out of any transaction of such Xxxxxx Company
entered into on or before such date or out of any set of facts existing on or
before such date.
3.9 ASSETS OF COMPANY; GOOD TITLE. Each of the Xxxxxx Companies
has good and marketable title to all of its properties and assets, real and
personal, tangible and intangible, including, without limitation, the
properties and assets reflected in the Balance Sheet. Except as disclosed on
Schedule 3.9 hereto, such properties and assets (as well as any other
properties and assets used in the Business) are subject to no Lien, except for
Liens for current Taxes not yet due, and minor imperfections of title and
encumbrances, if any, which are not in the aggregate substantial in amount, do
not materially detract from the value of the property subject thereto or
materially impair the operations of any of the Xxxxxx Companies, and have
arisen only in the ordinary course of business and are consistent with past
practice.
3.10 LEASES. Schedule 3.10 hereto identifies all leases pursuant
to which each of the Xxxxxx Companies leases or intends to lease real or
personal property. All such leases are valid and in full force and effect.
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3.11 ACCOUNTS AND NOTES RECEIVABLE. Schedule 3.11 hereto contains
a true and correct listing by customer of the accounts and notes receivable of
each of the Xxxxxx Companies as of the Balance Sheet date, and any reserve for
uncollectible accounts and notes receivable as included on the Balance Sheet
has been calculated on a basis consistent with the financial statements
(subject to normal year-end adjustments and any other adjustments described
therein) delivered to Purchaser pursuant to Section 3.6. The accounts and
notes receivable on Schedule 3.11 hereto are current and collectable, and,
except in the ordinary course of business, there are no counterclaims or
set-offs as against accounts and notes receivable currently outstanding.
3.12 INVENTORY. Schedule 3.12 hereto contains a complete listing
of inventory of each of the Xxxxxx Companies as of January 31, 1998.
3.13 INTELLECTUAL PROPERTY. There are no patents, patent
applications, trademarks, trade names, copyrights or licenses presently owned
or held by any of the Xxxxxx Companies or under which any of the Xxxxxx
Companies holds any license, except as set forth on Schedule 3.13 hereto.
3.14 INSURANCE. The policies of fire, liability, and other forms
of insurance described on Schedule 3.14 hereto are in effect with respect to
each of the Xxxxxx Companies and to the knowledge and belief of the Selling
Shareholders, are valid, outstanding and enforceable policies. The amount of
coverage for each policy has been at least equal to the amount required by
contracts entered into by each of the Xxxxxx Companies; and such policies or
comparable policies will by their terms (absent cancellation after the Closing)
remain in full force and effect for at least 30 days after the Closing.
3.15 BANK ACCOUNTS. Schedule 3.15 hereto sets forth the names and
locations of all banks in which each of the Xxxxxx Companies has accounts, the
applicable account numbers and the names of all persons authorized to draw
thereon.
3.16 CONTRACTS. Except as set forth on Schedule 3.16 hereto or in
this Agreement and the schedules hereto:
(a) none of the Xxxxxx Companies has contracts or commitments
which are material to the business, operations or financial condition of the
Xxxxxx Companies;
(b) the Selling Shareholders do not have any information
indicating that any of the Xxxxxx Companies has any outstanding contracts, bids
or sales or service proposals quoting prices which in the aggregate will not
result in a reasonable profit to any of the Xxxxxx Companies;
(c) none of the Xxxxxx Companies has outstanding contracts with
officers, employees, agents, consultants, advisors, salesmen, sales
representatives, distributors or dealers that are not cancelable by it on
notice of not longer than 30 days and without liability, penalty or premium; or
(d) except in the ordinary course of business, neither the Xxxxxx
Companies nor the Selling Shareholders has knowledge or has received any notice
that any of the Xxxxxx Companies is in default under any contracts made or
obligations owed by it, and neither the Xxxxxx Companies nor the Selling
Shareholders has received any information that there is any basis for any valid
claim of default.
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3.17 INDEBTEDNESS. Except with respect to indebtedness incurred in
the ordinary course of business, Schedule 3.17 hereto describes all
indebtedness of the Xxxxxx Companies (including description of the amount,
term, payment obligations, interest rate and payee) and none of the agreements
relating thereto allow modification of such terms by the lender as a result of
the Closing.
3.18 LITIGATION. Except as listed on Schedule 3.18, there are no
actions, proceedings, or investigations pending, or to the best knowledge of
the Selling Shareholders threatened against or involving any of the Xxxxxx
Companies, nor to the best knowledge of the Selling Shareholders is there any
basis for any such action, proceeding or investigation that may adversely
affect the business or assets of any of the Xxxxxx Companies.
3.19 POWER OF ATTORNEY. None of the Xxxxxx Companies has given an
irrevocable power of attorney to any person, firm or corporation for any
purpose whatsoever.
3.20 RESTRICTIONS ON BUSINESS. None of the Xxxxxx Companies is
restricted by agreement from carrying on its Business anywhere in the United
States.
3.21 EMPLOYEES AND EMPLOYEE RELATIONS. Schedule 3.21 hereto
contains the commission schedule for non- salaried employees, and a complete
list of the names and current annual cash compensation and other material
benefits of each salaried employee of the Xxxxxx Companies and any employment
contracts, confidentiality agreements or non-compete agreements to which any of
the Xxxxxx Companies is a party. Schedule 3.21 also contains a description of
each of the Xxxxxx Companies' employee benefit plans. Except as disclosed on
Schedule 3.21 hereto, with respect to employees of the Xxxxxx Companies, (i)
the Xxxxxx Companies are in compliance with all applicable laws respecting
employment and employment practices, term and conditions of employment and
wages and hours, and is not engaged in any unfair labor practice; (ii) there is
no unfair labor practice charge or complaint against the Xxxxxx Companies
pending or, to the best knowledge of the Selling Shareholders, threatened
against the Xxxxxx Companies; and (iii) (A) no charges with respect to or
relating to the Xxxxxx Companies are pending before the Equal Employment
Opportunity Commission or any state or local agency responsible for the
prevention of unlawful employment practices and (B) none of the Xxxxxx
Companies has received a notice of the intent of any federal, state or local
agency responsible for the enforcement of labor or employment laws to conduct
an investigation with respect to or relating to the Xxxxxx Companies and no
such investigation is in progress. None of the Xxxxxx Companies has terminated
employee benefit plans, as such term is defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended.
3.22 COMPENSATION. All compensation owed by the Xxxxxx Companies
to directors or employees has been paid, or will be paid prior to Closing,
except for routine payroll for the pay period which includes the date of
Closing, and other accrued employee benefits such as accrued vacation pay,
accrued sick pay, accrued profit sharing plan payments and other obligations
for employee benefits incurred in the ordinary course of business. Except as
set forth on Schedule 3.22, no bonuses, awards or incentive compensation
payments are now owed to any director or employee
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by the Xxxxxx Companies, nor shall any bonuses, awards or incentive
compensation payments be owed by the Xxxxxx Companies to any director or
employee as of the time of Closing. Since January 1, 1998, there has been no
increase in the compensation of any officer, director or employee of the Xxxxxx
Companies.
3.23 UNFILLED ORDERS. Set forth on Schedule 3.23 hereto is a
complete and accurate description of all unfilled orders, including the
customer identification, price of order and expected delivery date, as of
January 31, 1998.
3.24 REGULATORY COMPLIANCE. Neither the execution nor delivery of
this Agreement nor the consummation of the transactions contemplated hereby
will constitute a violation of any rule, regulation, order, judgment or decree
of any court or of any local government. To the best knowledge of the Selling
Shareholders, each of the Xxxxxx Companies and its officers are and have been
in material compliance with all laws, ordinances, regulations, orders,
licenses, franchises and permits applicable to it, its properties and assets,
and to the operation of its Business, including, but not limited to such laws
and regulations relating to protection of the public health or environment,
waste disposal, hazardous substances or wastes and occupational health and
safety. None of the Xxxxxx Companies has received notification that it or the
owners of the real estate and buildings are in violation of any applicable
building, zoning or other law, ordinance or regulation in respect of its plans
or structures and the Selling Shareholders do not believe that any such
violation exists.
3.25 ENVIRONMENTAL. Without in any manner limiting any other
representations and warranties set forth in this Agreement, except as expressly
limited to the best knowledge of the Selling Shareholders and except as set
forth in the reports listed on Schedule 3.25 (all of which will be supplied to
Purchaser prior to Closing).
(a) Neither the Xxxxxx Companies, nor any of the assets of the
Xxxxxx Companies or their use is in violation of, or has violated, or has been
or is in non-compliance with, any Environmental Laws in connection with the
ownership, use, maintenance or operation of, or conduct of the business of the
Xxxxxx Companies or any of their assets.
(b) Without in any manner limiting the generality of (a) above:
(i) To the knowledge of the Selling Shareholders, except
in compliance with Environmental Laws (including, without
limitation, the obtaining of necessary Permits), no Materials
of Environmental Concern have been used, generated,
manufactured, stored or treated, or disposed of, or in any
other way released (and no release is threatened), on, under
or about any property on which any of the Xxxxxx Companies has
conducted business or transported to or from any of the Xxxxxx
Companies' places of business, and no materials of
Environmental Concern have been generated, stored or treated
or disposed of, or in any way released (and no release is
threatened), on, under, about or from any property adjacent to
any of the Xxxxxx Companies' places of business;
(ii) None of the Xxxxxx Companies is now, as a result of
the operation or condition of the Business or its assets prior
to or at Closing, subject to any (i) (to the
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knowledge of the Selling Shareholders) contingent Liability in
connection with any release or threatened release of any
Materials of Environmental Concern into the environment
whether on or off property of any of the Xxxxxx Companies;
(ii) reclamation or Remediation requirements under
Environmental Laws, or any reporting requirements related
thereto; or (iii) consent order, compliance order or
administrative order relating to or issued under any
Environmental Law;
(iii) There are no Environmental Claims existing, pending
or, to the knowledge of the Selling Shareholders, threatened
against any of the Xxxxxx Companies, the Selling Shareholders,
any property on which the Xxxxxx Companies has conducted
business and there is no basis for same;
(iv) The Xxxxxx Companies have all Permits to comply with
Requirements of Environmental Laws governing the Xxxxxx
Companies and/or the Business, the Xxxxxx Companies have all
environmental and pollution control equipment necessary for
compliance with all Environmental Laws (including, without
limitation, all applicable Permits) and operation of the
Business as it is presently conducted, and is hereunder
transferring to Purchaser, all environmental and pollution
control equipment necessary for compliance with all
Environmental Laws and operation of the Business as it is
presently conducted;
(v) To the knowledge of the Selling Shareholders, there
are no storage tanks or solid waste management units located
on or under any property on which the Xxxxxx Companies have
conducted business, and there are no Materials of
Environmental Concern on the property of any of the Xxxxxx
Companies in an amount exceeding background levels for such
geographic area or which would require reporting to any
governmental authority or Remediation to comply with
Requirements of Environmental Laws;
(vi) To the knowledge of the Selling Shareholders, none
of the off-site locations where Materials of Environmental
Concern generated from the Business or from any of the assets
of the Xxxxxx Companies or for which the Xxxxxx Companies have
arranged for their disposal have been stored, treated,
recycled, disposed of or released has been nominated or
identified as a facility which is subject to an existing or
potential claim under Environmental Laws or is otherwise not
in compliance with Requirements of Environmental Laws;
(vii) None of the Xxxxxx Companies has been named as a
potentially responsible party under, and the Business has not
been nominated or identified as a facility which is subject
to an existing or potential claim under, CERCLA or comparable
federal or state Environmental Laws, and the Business is not
subject to any Lien arising under Environmental Laws;
(viii) None of the Xxxxxx Companies has received notice of
any release or threatened release of Materials of
Environmental Concern, or of any violation of, noncompliance
with, or remedial obligation under, Environmental Laws or
Permits,
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relating to the ownership, use, maintenance, operation of, the
Business, its assets, or any property on which the Xxxxxx
Companies has conducted business, nor is there any basis for
any of the foregoing, nor has any of the Xxxxxx Companies
voluntarily undertaken Remediation or other cleanup of any
facility or site or entered into any agreement for the payment
of costs associated with such activity;
(ix) To the knowledge of the Selling Shareholders, none
of the Xxxxxx Companies is aware of any Requirement of
Environmental Laws that will require future compliance cost on
the part of the Xxxxxx Companies or Purchaser in excess of
$5,000;
(x) To the knowledge of the Selling Shareholders, there
are no present or past events, facts, conditions,
circumstances, activities, practices, incidents, actions or
plans which may interfere with or prevent continued compliance
by the Xxxxxx Companies with Requirements of Environmental
Laws or which may give rise to any common law or statutory
liability under Environmental Laws or form the basis of an
Environmental Claim against the Xxxxxx Companies, the Selling
Shareholders or Purchaser; or
(xi) There are no obligations, undertakings or
liabilities arising out of or relating to Environmental Laws
which the Xxxxxx Companies have agreed to, assumed or
retained, by contract or otherwise.
3.26 NO BROKERS OR FINDERS. No person or entity has or will have,
as a result of the transactions contemplated herein, any right or valid claim
against Purchaser or the Xxxxxx Companies for any commission, fee or other
compensation as a finder or broker, or in any similar capacity.
3.27 INTERESTED PARTIES. Except as set forth on Schedule 3.27
hereto, no Selling Shareholder or his Affiliate (i) has any interest in any
contract or property (real or personal), tangible or intangible, used in or
pertaining to the Business or (ii) provides a service or products to any of the
Xxxxxx Companies other than in his capacity as an employee of any of the Xxxxxx
Companies.
3.28 THIRD-PARTY DEBT; GUARANTEES. As of the time of Closing,
there will not be in effect any agreement pursuant to which any of the Xxxxxx
Companies has guaranteed the debt or any other obligation of any third party,
or any of the Selling Shareholders' debt.
3.29 TRANSACTIONS WITH MANAGEMENT. Except as set forth on Schedule
3.29 hereto, since January 1, 1998, there have been no transactions and there
are no currently proposed transactions to which any of the Xxxxxx Companies or
any of theirs subsidiaries was or is to be a party in which the amount involved
exceeds $5,000 and in which the Selling Shareholders or any director or officer
or employee of any of the Xxxxxx Companies or any of their respective relatives
had or will have, a direct or indirect material interest in any such
transactions. Schedule 3.29 contains a complete description of any such
transaction, including the names of the parties involved and the amount of the
transaction.
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3.30 DISCLOSURE. Neither this Agreement, nor any Schedule or other
document furnished by or on behalf of the Selling Shareholders or the Xxxxxx
Companies in connection with this Agreement contains any untrue statement of a
material fact or omits to state any material fact necessary to make the
statements contained herein or therein not misleading. There is no fact or
circumstance known to the Selling Shareholders which is likely to materially
adversely affect the condition of the properties, assets and liabilities of the
Xxxxxx Companies which have not been set forth in this Agreement or the
Schedules hereto.
3.31 CERTAIN DEFAULTS. None of the Xxxxxx Companies is in
violation of its Articles of Incorporation or Bylaws, or in breach or default
under any of the terms or provisions of any order, judgment or decree to which
it or the Selling Shareholders is a party or by which any of them is bound, and
there exists no condition or event which, after notice or lapse of time or
both, would result in such violation or default.
3.32 REBATES. The amount of manufacturer rebates due and owing to
the Xxxxxx Companies at February 1, 1998 are set forth on Schedule 3.32.
3.33 ABSENCE OF CERTAIN COMMERCIAL PRACTICES. Neither the Xxxxxx
Companies nor the Selling Shareholders or any person acting on behalf of the
Xxxxxx Companies has given or agreed to give any gift or similar benefit of
more than nominal value to any customer, supplier, governmental employee or
official, or any other person who is or may be in a position to help, hinder or
assist the Xxxxxx Companies or the person giving such gift or benefit in
connection with any actual or proposed transaction relating to the Business,
which gifts or similar benefits (other than entertainment expenses provided in
the ordinary and normal course of business in accordance with applicable law)
would individually or in the aggregate subject the Xxxxxx Companies, or any
officer, director, employee or agent of the Xxxxxx Companies, to any fine,
penalty, cost or expense or to any criminal sanctions. No such gift or benefit
is required in connection with the operations of the Xxxxxx Companies and their
Business to avoid any penalty, cost, expense or material adverse change in the
financial condition, results of operations, business or prospects of the Xxxxxx
Companies.
3.34 BOOKS AND RECORDS. The books and records of the Xxxxxx
Companies maintained in connection with the Business (including, without
limitation, (i) books and records relating to the purchase of inventory,
personnel records and Taxes of the Xxxxxx Companies, (ii) minute books of the
Xxxxxx Companies, and (iii) computer software and data in computer readable and
human readable form used to maintain such books and records, together with the
media on which such software and data are stored and all documentation relating
thereto) accurately record all transactions of the Xxxxxx Companies in all
material respects, and have in all material respects been maintained consistent
with good business practice.
3.35 AVAILABILITY OF DOCUMENTS. The Xxxxxx Companies and Selling
Shareholders have delivered or made available to Purchaser true, correct and
complete copies of all documents listed in the Schedules to, or referenced in
this Agreement, and all modifications and amendments thereto.
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3.36 DISTRIBUTIONS. Since January 1, 1998, no distributions or
dividends have been paid to any shareholder other than distributions in an
amount consistent with past practice prior to January 1, 1998.
ARTICLE IV. ADDITIONAL REPRESENTATIONS AND WARRANTIES
OF THE SELLING SHAREHOLDERS
The Selling Shareholders severally represents and warrants as follows:
4.1 SELLING SHAREHOLDERS; TITLE TO SHARES. The Selling
Shareholders own all the outstanding shares of the Xxxxxx Companies' capital
stock, and the Selling Shareholders will at and immediately prior to the
Closing own all such shares free and clear of all Liens and options of
whatsoever nature.
4.2 CAPACITY OF SELLING SHAREHOLDERS; BINDING OBLIGATION. Except
as described on Schedule 3.2. each of the Selling Shareholders has all
requisite power, authority and capacity to enter into and perform this
Agreement and all other agreements and instruments entered into by the Selling
Shareholders in connection herewith, and to perform the obligations required to
be performed by him hereunder. This Agreement and all other agreements and
instruments entered into by the Selling Shareholders in connection herewith
have been duly executed and delivered by, and constitute the valid and legally
binding obligations of the Selling Shareholders, enforceable against the
Selling Shareholders in accordance with their respective terms.
4.3 NONCOMPETITION. The Selling Shareholders do not have any
direct or indirect interest in any corporation or business which competes with
or conducts any business similar to the business of retail distribution of
manufactured homes conducted by the Xxxxxx Companies, except for the possible
ownership of not more than five percent (5%) of the outstanding equity
securities of any corporation whose shares are regularly traded on any stock
exchange or in the over-the-counter market.
ARTICLE V. REPRESENTATIONS AND WARRANTIES
OF PURCHASER
Purchaser represents and warrants as follows:
5.1 ORGANIZATION AND STANDING; CORPORATE POWER AND AUTHORITY.
Purchaser is a corporation duly organized, validly existing and in good
standing under the laws of the State of Florida, and has all requisite
authority and power (corporate and other), licenses, authorizations, consents
and approvals to carry on its business, to own, hold and operate its properties
and assets, and to enter into this Agreement.
5.2 AUTHORIZATION AND VALIDITY OF THIS AGREEMENT. The execution,
delivery and performance by Purchaser of this Agreement are within Purchaser's
corporate powers, have been duly authorized by all necessary corporate action,
do not require from the Board of Directors or shareholders of Purchaser or any
other Person any consent or approval that has not been validly and lawfully
obtained, require no authorization, consent, approval, license, exemption of or
filing or
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registration with any court or governmental department, commission, board,
bureau, agency or instrumentality of government, do not and will not violate or
contravene (i) any provision of law; (ii) any rule or regulation of any agency
or government, domestic or foreign; (iii) any order, writ, judgment,
injunction, decree, determination or award; or (iv) any provision of the
Articles of Incorporation or Bylaws of Purchaser, do not and will not violate
or be in conflict with, result in a breach of or constitute (with or without
notice or lapse of time or both) a default under, or result in the termination
of, or accelerate the performance required by (or give any party any right to
terminate or accelerate upon notice or lapse of time or both), any indenture,
license, franchise, loan or credit agreement, note, deed of trust, mortgage,
security agreement or other agreement, lease or instrument, commitment or
arrangement to which Purchaser is a party or by which Purchaser or any of its
properties, assets or rights is bound or affected and do not and will not
require the consent, approval or authorization of any other party to
agreements, licenses, leases, sales orders, permits, franchises, rights and
other obligations of the Purchaser.
5.3 BINDING OBLIGATION. This Agreement constitutes the legal,
valid and binding obligation of Purchaser and is enforceable against Purchaser
in accordance with its terms, except as such enforcement is limited by
bankruptcy, insolvency and other similar laws affecting the enforcement of
creditors rights generally.
5.4 NO BROKERS OR FINDERS. No person or entity has or will have,
as a result of the transactions contemplated herein, any right or valid claim
against the Xxxxxx Companies or Purchaser for any commission, fee or other
compensation as a finder or broker, or in any similar capacity.
5.5 DISCLOSURE. Neither this Agreement, nor any schedule or other
document furnished by or on behalf of Purchaser in connection with this
Agreement contains any untrue statement of a material fact or omits to state
any material fact necessary to make the statements contained herein or therein
not misleading. There is no fact or circumstance known to Purchaser which is
likely to materially adversely affect the condition of the properties, assets
and liabilities of Purchaser which have not been set forth in this Agreement or
the Schedules hereto.
5.6 REGISTRATION; INVESTMENT INTENT. Purchaser acknowledges that
the Purchase Shares to be delivered to Purchaser pursuant to this Agreement
have not and will not be registered under the Securities Act of 1933, as
amended, nor any state securities laws, and represents and warrants that the
Purchase Shares being acquired by Purchaser are being acquired for investment
purposes only and not with a view to the re-offer or redistribution thereof.
5.7 LIABILITIES. Except as and to the extent reflected or
reserved against in Purchaser's balance sheet dated December 31, 1997 or as
disclosed on Schedule 5.7 attached hereto, and except for contracts,
commitments and liabilities incurred in the ordinary course of business and not
required to be disclosed in any Schedule hereto, Purchaser, as of January 31,
1998, had no liabilities or obligations of any nature, whether absolute,
accrued, contingent or otherwise and whether due or to become due, including,
without limitation, liabilities for Taxes in respect of or measured by the
income of Purchaser through January 31, 1998 and Liabilities for Taxes
(including sales taxes) arising out of any transaction of Purchaser entered
into on or before such date or out of any set of facts existing on or before
such date.
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ARTICLE VI. COVENANTS
6.1 NONDISPARAGEMENT. For a period of five years from and after
the date of this Agreement, none of the parties to this Agreement shall say,
publish or cause to be published or do anything that casts any other party
hereto in an unfavorable light, or disparage or injure any other party's
goodwill, business reputation or relationship with existing or potential
suppliers, vendors, customers, employees, contractors, investors or the
financial community in general, or the good will or business reputation of such
party.
6.2 NONDISCLOSURE. Each of the Selling Shareholders acknowledges
that during the course of his ownership of the Common Stock and his performance
of services for the Xxxxxx Companies, he acquired and in connection with his
continued employment by the Xxxxxx Companies or Purchaser, will acquire,
confidential information with respect to the Xxxxxx Companies' and Purchaser's
business operations, including, by way of illustration, the Xxxxxx Companies'
and Purchaser's existing and contemplated product lines, trade secrets,
business and financial methods or practices, plans, pricing, marketing,
merchandising and selling techniques and information and confidential
information relating to the Xxxxxx Companies' and Purchaser's business strategy
(all of such information herein referenced to as the "Confidential
Information"). Each Selling Shareholder agrees that the terms of this
Agreement, including, without limitation, the consideration paid to Selling
Shareholder hereunder, shall be treated as Confidential Information. To the
extent the Selling Shareholder has revealed the terms of this Agreement to any
Person (other than the attorney, accountant and tax preparer for the Xxxxxx
Companies and/or Selling Shareholders) prior to the date of execution of this
Agreement, prior to the Closing, he shall cause such Persons to execute
confidentiality agreements that are in the form supplied to him by Purchaser.
Unless required by law, the Selling Shareholders shall not show or give a copy
of this Agreement to any Person except the attorney, accountant and tax
preparer for the Xxxxxx Companies and/or Selling Shareholders. The protection
of the Confidential Information against unauthorized disclosure or use is of
critical importance to Purchaser. The Selling Shareholders agree that except
as required by law, he will not divulge to any person, directly or indirectly,
any Confidential Information acquired by him. Notwithstanding the foregoing,
the term "Confidential Information," does not include information which becomes
generally available to the public other than as a result of a disclosure by any
of the Selling Shareholders or their spouses, the Xxxxxx Companies or any of
their Affiliates.
6.3 NONCOMPETITION AND NON-INTERFERENCE. (a) The Selling
Shareholders agree for a period of five years from and after the date of the
Closing (the "Noncompetition Term") that he or and his Affiliates will not
directly or indirectly, either through any form of ownership or as a director,
officer, principal, agent, employee, employer, adviser, consultant,
shareholder, partner or in any other individual or representative capacity
whatsoever, either for his own benefit or for the benefit of any other person,
firm, corporation, governmental or private entity, or any other entity of
whatever kind, without the prior written consent of Purchaser (with the
approval of its Board of Directors) which consent may be withheld by Purchaser
in its sole discretion, compete with the Xxxxxx Companies, Purchaser or its
Affiliates, within any of the states in which Xxxxxx Companies' retail sales
centers exist on the date of this Agreement in the retail sale of new and
pre-owned
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manufactured homes. Any such acts during the Noncompetition Term shall be
considered breaches and violations of this Agreement. Additionally, during the
Noncompetition Term, the Selling Shareholders shall not directly or indirectly
request or advise any customer or supplier of Purchaser or the Xxxxxx Companies
to withdraw, curtail or cancel its business activities with Purchaser or the
Xxxxxx Companies or their Affiliates.
(b) Prior to the expiration of the Noncompetition Term, the
Selling Shareholders agree that he shall not attempt, on his own behalf or on
behalf of any other person or entity, or cause any other person or entity, for
any reason, whether directly or indirectly, to (i) solicit, interview, take
away or hire, any person working for the Xxxxxx Companies or Purchaser or their
respective Affiliates or subsidiaries, or who has worked for the Xxxxxx
Companies, Purchaser or their Affiliates at any time within six months prior
thereto; (ii) make known to any person or entity the names and addresses of
any of the employees of the Xxxxxx Companies or Purchaser or their Affiliates
or any other information pertaining to them; or (iii) act as an advisor or
consultant to any Person in connection with such Person's potential sale,
negotiations or sale of assets, real property or stock to Purchaser or its
Affiliates.
(c) If, during any period within the Noncompetition Term, any Selling
Shareholder is not in compliance with the terms of this Section 6.3, Purchaser
shall be entitled to, among other remedies, compliance by such Selling
Shareholder with the terms of Section 6.3(a) or (b), as applicable, for an
additional period equal to the period of such noncompliance. For purposes of
this Agreement, the term "Noncompetition Term" shall also include this
additional period. Each of the Selling Shareholders hereby acknowledges that
the geographic boundaries, scope of prohibited activities and the time duration
of the provisions of this Section 6.3 are reasonable and are no broader than
are necessary to protect the legitimate business interests of Purchaser and the
Xxxxxx Companies. The Selling Shareholders also acknowledge that the
provisions of Section 6.3 are fair in light of the consideration they are
receiving from Purchaser under this Agreement.
6.4 REFORMATION OF SECTION 6.3. The parties hereto agree and
stipulate that the agreements and covenants not to compete and not to solicit
employees contained in Section 6.3 are fair and reasonable in light of all of
the facts and circumstances of the relationship between Purchaser and the
Selling Shareholders and that without such agreements and covenants, Purchaser
would not purchase the Purchase Shares; however, Purchaser and the Selling
Shareholders are aware that in certain circumstances courts and arbitration
panels have refused to enforce certain agreements not to compete. Therefore,
in furtherance of, and not in derogation of the provisions of Section 6.3,
Purchaser and the Selling Shareholders agree that in the event a court should
decline to enforce the provisions of Section 6.3, that Section 6.3 shall be
deemed to be modified or reformed to restrict the Selling Shareholders'
competition with Purchaser and the Xxxxxx Companies, as applicable, or their
respective Affiliates to the maximum extent, as to time, geography and business
scope, which the court shall find enforceable; provided, however, in no event
shall the provisions of Section 6.3 be deemed to be more restrictive to the
Selling Shareholders than those contained herein.
6.5 INJUNCTIVE RELIEF. The parties hereto acknowledge that the
breach of agreements contained herein, including, without limitation, the
nondisclosure covenants specified in Section 6.2 and the noncompetition and
nonsolicitation covenants specified in Section 6.3, will give rise to
irreparable injury to the other parties hereto, inadequately compensable in
damages. Accordingly,
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the other parties hereto shall be entitled to injunctive relief to prevent or
cure breaches or threatened breaches of the provisions of this Agreement and to
enforce specific performance of the terms and provisions hereof in any court of
competent jurisdiction, in addition to any other legal or equitable remedies
which may be available to Purchaser against the individual who breached this
Agreement. Each of the parties hereto agrees that the enforcement of a remedy
hereunder by way of injunction shall not prevent it or him from earning a
reasonable livelihood or otherwise remaining in business. Each of the parties
hereto further acknowledges and agrees that the covenants contained herein are
necessary for the protection of the other parties' legitimate business
interests and are reasonable in scope and content.
6.6 FURTHER ASSURANCES. Each of the Selling Shareholders shall,
at any time and from time to time after the Closing, upon request of Purchaser
and without further cost or expense to Purchaser, execute and deliver such
instruments of conveyance and assignment and shall take such action as
Purchaser may reasonably request to more effectively transfer to and vest in
Purchaser, and to put Purchaser in possession of, any and all of the Purchase
Shares, or otherwise carry out the transactions contemplated by this Agreement.
6.7 CORPORATE ACTION AND CONSENTS OF PURCHASER. Purchaser will
take all necessary corporate and other action and will use its commercially
reasonable efforts to obtain the consents and applicable approvals, including
approvals of any regulatory authority, required to be obtained by the Purchaser
to enable it to carry out the transactions contemplated by this Agreement.
6.8 EFFORTS TO FULFILL CONDITIONS OF PURCHASER. Purchaser agrees
at all times to use commercially reasonable efforts to insure that all
conditions precedent to the obligations of the Purchaser hereunder are
fulfilled at or prior to the Closing.
6.9 REPRESENTATIONS, WARRANTIES AND CONDITIONS OF PURCHASER PRIOR
TO CLOSING. Purchaser shall use its best efforts to cause its representations
and warranties contained in this Agreement or in any Schedule attached hereto
to be true and correct on and as of the Closing Date in all material respects.
Prior to the Closing, Purchaser shall promptly notify the Xxxxxx Companies and
the Selling Shareholders in writing (a) if any representation or warranty
contained in this Agreement is discovered to be or becomes untrue or (b) if
Purchaser fails to perform or comply with any of its covenants or agreements
contained in this Agreement or it is reasonably expected that the Purchaser
will be unable to perform or comply with any of its covenants or agreements
contained in this Agreement.
6.10 COOPERATION OF PURCHASER. Purchaser will cooperate with the
Xxxxxx Companies and the Selling Shareholders in supplying such information as
may be reasonably requested by the Xxxxxx Companies or the Selling Shareholders
in connection with obtaining consents and approvals to the transactions
contemplated by this Agreement.
6.11 CORPORATE ACTION AND CONSENTS OF THE XXXXXX COMPANIES. The
Selling Shareholders shall cause the Xxxxxx Companies to take all necessary
corporate and other action and will use its commercially reasonable efforts to
obtain the consents and applicable approvals, including approvals of any
regulatory authority, required to be obtained by the Xxxxxx Companies to enable
it to carry out the transactions contemplated by this Agreement.
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6.12 EFFORTS TO FULFILL CONDITIONS OF THE XXXXXX COMPANIES. The
Xxxxxx Companies and the Selling Shareholders agree at all times to use
commercially reasonable efforts to ensure that all conditions precedent to the
obligations of the Xxxxxx Companies and the Selling Shareholders hereunder are
fulfilled at or prior to the Closing.
6.13 REPRESENTATIONS, WARRANTIES AND CONDITIONS OF THE SELLING
SHAREHOLDERS PRIOR TO CLOSING. The Selling Shareholders shall use their best
efforts to cause the representations and warranties of the Selling Shareholders
contained in this Agreement or in any Schedule attached hereto to be true and
correct on and as of the Closing Date in all material respects. Prior to the
Closing, the Selling Shareholders shall promptly notify Purchaser (a) if any
representation or warranty contained in this Agreement is discovered to be or
becomes untrue or (b) if the Selling Shareholders or the Xxxxxx Companies fail
to perform or comply with any of their respective covenants or agreements
contained in this Agreement or it is reasonably expected that the Selling
Shareholders or the Xxxxxx Companies will be unable to perform or comply with
any of their respective covenants or agreements contained in this Agreement.
6.14 COOPERATION OF THE XXXXXX COMPANIES AND THE SELLING
SHAREHOLDERS. The Xxxxxx Companies and the Selling Shareholders will cooperate
with Purchaser in supplying such information as may be reasonably requested by
Purchaser in connection with obtaining consents and approvals to the
transactions contemplated by this Agreement.
6.15 ACCESS TO INFORMATION. From and after the execution and
delivery of this Agreement and until the Closing Date, the Selling Shareholders
and the Xxxxxx Companies will give representatives of the Purchaser full
access, during normal business hours and upon reasonable notice, to the (a)
facilities where the Xxxxxx Companies conduct Business, which shall include,
without limitation, the right to conduct at Purchaser's expense such
environmental sampling or testing as Purchaser or its representatives deem to
be reasonably necessary; and (b) books, records, agreements and other documents
of the Xxxxxx Companies relating directly to the Business, and furnish such
representatives with such other information relating directly to the Xxxxxx
Companies as the Purchaser may reasonably request.
6.16 BUSINESS. Until the Closing, the Selling Shareholders shall
operate the Xxxxxx Companies only in the ordinary course and not introduce any
materially new method of management or operation to the Xxxxxx Companies.
Without limiting the foregoing, the Selling Shareholders shall not, unless
contemplated by this Agreement, including the Schedules, or approved by
Purchaser, take any action to and shall prevent the Xxxxxx Companies from
taking any action, other than in the ordinary course of business, to:
(a) change in any material respect the manner, scope or operation
of the Xxxxxx Companies as they have historically been conducted;
(b) except for sales of inventory in the ordinary course of
business, sell or commit to sell any properties or assets of the Xxxxxx
Companies having a net book value (as reflected in the financial statements) or
a fair market value of more than $5,000 in a single transaction or series of
related transactions;
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(c) sell, assign, license or dispose of any intellectual property
rights;
(d) enter into any material contract, agreement, commitment or
transaction;
(e) default in the performance of any term or condition of any
material contract, agreement, certificate, license or permit of the Xxxxxx
Companies;
(f) incur any material indebtedness or incur or pay indebtedness
secured by mortgages or other Liens upon any of the assets or properties of the
Xxxxxx Companies;
(g) declare or pay any dividend or distribution on the outstanding
securities of the Xxxxxx Companies other than distributions which are in an
amount consistent with past practice prior to January 1, 1998;
(h) enter into any agreements, take any action or engage in any
activity outside of the ordinary course of business or inconsistent with the
transactions contemplated by this Agreement;
(i) amend the Articles of Incorporation or Bylaws of the Xxxxxx
Companies;
(j) enter into any complete or partial voluntary liquidation,
dissolution or winding up of the affairs of the Xxxxxx Companies;
(k) redeem, purchase, retire or otherwise acquire for value,
directly or indirectly, any capital stock or other securities of the Xxxxxx
Companies;
(l) enter into any transactions with any officers, directors or
Selling Shareholders of the Xxxxxx Companies; or
(m) hire any relative of any officer, director or stockholder of
the Xxxxxx Companies.
6.17 AFFIRMATIVE ACTIONS. Prior to the Closing, the Selling
Shareholders shall and shall cause the Xxxxxx Companies to:
(a) maintain in full force and effect, in accordance with past
custom and practice, the existence and effectiveness of all insurance policies
relating to the Xxxxxx Companies;
(b) use commercially reasonable efforts to maintain good relations
with the suppliers, customers, landlords and employees of the Xxxxxx Companies;
(c) promptly pay, prior to delinquency, any and all Taxes and
other obligations which become due and payable with respect to the ownership of
the Xxxxxx Companies' properties or the operation of the Business on or prior
to the Closing; and
(d) do all things reasonably necessary to keep in full force and
effect the legal existence of the Xxxxxx Companies and keep in full force and
effect all material rights, licenses and franchises relating to the Business.
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6.18 MATERIAL CHANGE. Prior to the Closing, the Selling
Shareholders shall promptly inform Purchaser in writing of any change,
condition or event that has or could have a Material Adverse Effect.
Notwithstanding the disclosure to Purchaser of any such Material Adverse
Effect, the Selling Shareholders shall not be relieved of any Liability for,
nor shall the providing of such information by the Selling Shareholders to
Purchaser be deemed a waiver by Purchaser of the breach of any representation
or warranty of the Selling Shareholders contained in this Agreement.
6.19 EMPLOYEE COMPENSATION. Except as otherwise set forth in this
Agreement (including the Schedules), prior to the Closing, except with
Purchaser's prior written consent, the Xxxxxx Companies shall not make or agree
to make any increase in the compensation or rate of compensation payable or to
become payable to the directors, officers or employees of any the Xxxxxx
Companies, and will not pay, agree to pay or set aside any bonus, profit
sharing, retirement, insurance, death, severance, fringe benefit or other
extraordinary or indirect compensation to, for or on behalf of any of such
directors, officers or employees other than as required by presently existing
pension, profit sharing, bonus and similar benefit plans or policies as
presently constituted, and no agreement, policy or plan other than those now in
effect shall be adopted or committed for by the Xxxxxx Companies.
6.20 COMPLIANCE WITH LAWS. The Selling Shareholders shall, and
shall cause the Xxxxxx Companies to, prior to the Closing, comply with all
applicable laws, rules and regulations of all governmental authorities
applicable to them.
6.21 REGISTRATION OF SHARES. On or before 30 days from the date
of the Closing, Purchaser shall file with the Securities and Exchange
Commission a registration statement to register the shares of Purchaser's
Common Stock being issued to the Selling Shareholders hereunder.
6.22 APPOINTMENT OF DIRECTOR. On the Closing Date or as soon as
practicable thereafter, X. Xxxxxx shall be appointed as a director of
Purchaser.
6.23 DELIVERY OF SCHEDULES. Within 14 days of the date of
execution of this Agreement, the Xxxxxx Companies and the Selling Shareholders
shall deliver to Purchaser the Schedules required by this Agreement and updated
Schedules shall be delivered to Purchaser at least five business days prior to
the Closing Date.
6.24 LEASES. On or prior to the Closing Date, the Selling
Shareholders and the Xxxxxx Companies shall have caused all real property
leases of the Xxxxxx Companies to be assigned to Purchaser on terms and
conditions acceptable to Purchaser in its reasonable discretion.
6.25 OTHER OFFERS. Until the Closing or the termination of this
Agreement by Purchaser, the Xxxxxx Companies, the Selling Shareholders and
their Affiliates and spouses shall not solicit or respond to any offer from any
Person for the issuance of equity or convertible debt securities of any or all
of the Xxxxxx Companies or any offers for all or substantially all of the
assets or stock of any or all of the Xxxxxx Companies or rights or options to
acquire securities or assets of any or all of the Xxxxxx Companies or the
Selling Shareholders or their Affiliates or spouses. If any or all of the
Xxxxxx Companies, the Selling Shareholders or their Affiliates or spouses
violate this Section 6.25, or if the Xxxxxx Companies or the Selling
Shareholders or any of them intentionally or in a
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grossly negligent or reckless manner fail to satisfy the conditions set forth
in Article VII of this Agreement, Purchaser shall have the right to terminate
this Agreement and in the event of such termination, Seller shall pay to
Purchaser, as liquidated damages and not as a penalty or forfeiture, the sum of
$1,000,000.
6.26 VIP PROGRAM. After the Closing Date, the Xxxxxx Companies
shall participate in the most favorable VIP program available to Purchaser's
retailers.
ARTICLE VII. CONDITIONS PRECEDENT TO THE
OBLIGATIONS OF PURCHASER
The obligations of Purchaser under this Agreement are subject to the
fulfillment, at or prior to the Closing Date, of the following conditions:
7.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Selling Shareholders set forth in this Agreement shall be
true and correct in all material respects on and as of the Closing Date with
the same force and effect as though all such representations and warranties had
been made on and as of such date.
7.2 THIRD PARTY APPROVALS. All third party consents, permits and
other approvals which are necessary to consummate the transaction contemplated
hereby and to enable Purchaser to operate the Business as such Business was
operated as of the date hereof, shall have been received.
7.3 CORPORATE AUTHORIZATION. All corporate and other actions
necessary to authorize and effectuate the consummation of the transactions
contemplated hereby by the Xxxxxx Companies shall have been duly taken prior to
the Closing.
7.4 PERFORMANCE OF COVENANTS. Each of the Xxxxxx Companies and
the Selling Shareholders shall have performed in all material respects all of
the covenants and agreements required to be performed by them under this
Agreement prior to the Closing Date.
7.5 ABSENCE OF MATERIAL ADVERSE CHANGE. Since January 31, 1998,
there shall have been no material adverse change in the business, assets,
condition (financial or otherwise), operating results, employee relations,
customer or supplier relations (other than suppliers that terminate their
relationship with the Xxxxxx Companies because of the transactions contemplated
hereunder) or business prospects of the Xxxxxx Companies or the Business, and
there shall have been no material casualty loss or damage to the assets of the
Business whether or not covered by insurance.
7.6 ABSENCE OF LITIGATION. As of the Closing Date, there shall
not be (a) any injunction, writ or temporary restraining order or any other
order of any nature issued by a court or governmental authority of competent
jurisdiction directing that the transactions provided for herein or any of them
not be consummated as herein provided; or (b) any action, suit or proceeding
pending or threatened before any governmental authority with respect to the
transactions contemplated by this Agreement.
7.7 CERTIFICATE. The Selling Shareholders shall have delivered to
Purchaser a certificate to the effect that each of the conditions precedent in
this Article VII shall have been satisfied.
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7.8 DUE DILIGENCE. Prior to the Closing Date, Schedules to this
Agreement shall have been delivered to Purchaser in accordance with Section
6.23 and such Schedules shall be in form and substance reasonably acceptable to
the Purchaser. Purchaser shall have completed its due diligence review of the
Xxxxxx Companies and not discovered any fact which could have a Material
Adverse Effect on the Xxxxxx Companies.
ARTICLE VIII. CONDITIONS PRECEDENT TO THE
OBLIGATIONS OF THE SELLING SHAREHOLDERS
The obligations of the Selling Shareholders under this Agreement are
subject to the fulfillment, on or before the Closing Date, of the following
conditions:
8.1 REPRESENTATIONS AND WARRANTIES. All representations and
warranties of Purchaser contained herein shall be true on the Closing Date with
the same force and effect as though such representations and warranties had
been made on the Closing Date.
8.2 CORPORATE AUTHORIZATION. All corporate and other actions
necessary to authorize and effectuate the consummation of the transactions
contemplated hereby by Purchaser shall have been duly taken prior to the
Closing.
8.3 THIRD PARTY APPROVALS. All third party consents, permits and
other approvals, including approvals of any governmental authority which are
necessary to consummate the transaction contemplated hereby shall have been
received.
8.4 ABSENCE OF LITIGATION. As of the Closing Date, there shall
not be (a) any injunction, writ or temporary restraining order or any other
order of any nature issued by a court or governmental authority of competent
jurisdiction directing that the transactions provided for herein or any of them
not be consummated as herein provided; or (b) any action, suit or proceeding
pending or threatened before any governmental authority with respect to the
transactions contemplated by this Agreement.
8.5 CERTIFICATE. Purchaser shall have delivered to the Selling
Shareholders a certificate to the effect that each of the conditions precedent
in this Article VIII shall have been satisfied.
8.6 ABSENCE OF MATERIAL ADVERSE CHANGE. Since December 31, 1997,
there shall have been no material adverse change in the business, assets,
condition (financial or otherwise), operating results, employee relations,
customer or supplier relations or business prospects of Purchaser, and there
shall have been no material casualty loss or damage to the assets of Purchaser
whether or not covered by insurance. Notwithstanding the foregoing, a material
adverse change in the Purchaser shall not be deemed to have occurred solely
based upon any decrease in the trading price of the Purchaser's Common Stock.
ARTICLE IX. INDEMNIFICATION AND RELEASE
9.1 INDEMNIFICATION FOR BREACHES. Each of the parties hereto
(hereafter, the "Indemnifying Party") will severally (in the same percentage as
the Purchase Price allocation set forth on Schedule 2.2 hereto) indemnify and
hold harmless the other party and its respective representatives,
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successors and assigns, and any officer, director, agent or employee of any
such person or entity (hereafter, the "Indemnified Parties"), from and against
any damages, loss, cost, expense, obligation, claim or Liability, including
reasonable attorneys' fees and reasonable third party expense of investigating
(if the investigation relates to a matter that is or becomes a claim, suit,
litigation or proceeding or relates to an investigation by a governmental
body), defending or prosecuting litigation (collectively, the "Damages")
suffered by the Indemnified Parties, arising from or by reason of the breach by
or any material inaccuracy of any warranty, representation or covenant to this
Agreement made by the Indemnifying Party.
9.2 INDEMNIFICATION RELATING TO THE ASSETS. The Selling
Shareholders, severally (in the same percentage as described in Section 9.1),
will indemnify Purchaser for any Damages arising out of: (i) the operation of
the Business or the sales of their assets (including inventory) prior to the
Closing Date; (ii) the sale and transfer of the Purchase Shares to Purchaser,
and further agree, jointly and severally, to indemnify Purchaser for any and
all Damages relating or attaching to the Assets; (iii) any Environmental Claim
asserted against Purchaser or for which Purchaser otherwise becomes liable or
must investigate, or any actual or threatened violation of or non-compliance
with, or Remediation obligation arising under, any Environmental Laws arising
from any event, condition, circumstance, activity, practice, incident, action
or plan relating in any way to the assets, Business of the Xxxxxx Companies or
the Xxxxxx Companies (including, without limitation, the ownership, operation
or use of the assets and/or the conduct of the Business of the Xxxxxx
Companies) which arose prior to the Closing Date; the presence of any Materials
of Environmental Concern (other than in compliance with Environmental Laws) on,
in, under or affecting all or any portion of any property on which the Xxxxxx
Companies have conducted business and/or the assets, and any release or
threatened release with respect to Materials of Environmental Concern; and the
storage, disposal or treatment, or transportation for storage, disposal or
treatment, of Materials of Environmental Concern, regardless of location; and
(iv) any employee or former employee claim, the basis of which arose prior to
the Closing Date.
9.3 EFFECT OF NEGLIGENCE. It is the expressed intention and
agreement of the Xxxxxx Companies, the Selling Shareholders and Purchaser that
all indemnity and hold harmless obligations and liabilities assumed by the
Selling Shareholders and Purchaser in this Article IX, be without regard to the
negligence of any of the Purchaser indemnitees or the Selling Shareholder
indemnities or the cause thereof, including, but not limited to, the Purchaser
indemnitees' or the Selling Shareholder indemnitees' own negligence, as the
case may be, whether the Purchaser indemnitees' or the Selling Shareholder
indemnitees' negligence be sole, contributory, joint or concurrent, active or
passive.
9.4 NOTIFICATION. If any action or claim shall be brought or
asserted against an Indemnified Party in respect of which indemnity may be
sought from an Indemnifying Party, the Indemnified Party shall promptly notify
the Indemnifying Party in writing (but the omission to notify the Indemnifying
Party shall not release such person from any Liability which it may have to the
Indemnified Party, except to the extent that such failure materially prejudices
the rights of the Indemnifying Party). The Indemnified Party shall have the
right to retain control of any such action or claim; provided, however, counsel
for the Indemnified Party must be reasonably acceptable to the Indemnifying
Party. The Indemnifying Party shall not be liable for any settlement of any
such action effected without its written consent, but if any such action is
settled with the Indemnifying Party's
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written consent, or if there shall be a final judgment for the plaintiff in any
such action, the Indemnifying Party shall indemnify and hold harmless the
Indemnified Party from and against any loss or Liability by reason of such
settlement or judgment.
9.5 NATURE AND SURVIVAL OF REPRESENTATIONS, WARRANTIES AND
INDEMNITIES. All representations, warranties, covenants and agreements made by
the parties hereto in this Agreement or in the documents and instruments
delivered pursuant hereto or in connection herewith shall survive the Closing,
the delivery of any instrument of conveyance, and the dissolution or other
reorganization or merger of the Xxxxxx Companies and shall remain effective and
enforceable for a period of two years from the Closing Date . Any claim for
indemnification asserted in writing before the expiration of the survival
period shall survive until resolved or determined by arbitration or barred by
the applicable statute of limitations.
9.6 PAYMENT OF DAMAGES. Any Damages for which an Indemnified
Party is entitled to indemnification under this Article IX shall be paid by the
Indemnifying Party to the Indemnified Party as such Damages are incurred.
9.7 COOPERATION. In any event involving a claim of any third
party, the Indemnified Party and the Indemnifying Party shall cooperate fully
with each other in the defense of any such claim under this Article IX.
Without limiting the generality of the foregoing, the Indemnified Party shall
furnish the Indemnifying Party with such documentation or other evidence as is
then in its possession as may reasonably be requested by the Indemnifying Party
for the purpose of defending against any such claim.
9.8 DE MINIMIS AND MAXIMUM AMOUNT. Notwithstanding anything in
this Article IX to the contrary, the Selling Shareholders shall not be required
to indemnify Purchaser pursuant to Article IX unless and until the aggregate
net amount of all the Damages equal or exceed $50,000, at which time the
Selling Shareholders shall be obligated to indemnify Purchaser with respect to
the aggregate net amount of all such damages which exceed $50,000. Further, in
no event will the Selling Shareholders be required to indemnify Purchaser
pursuant to this Article IX in an aggregate net amount in excess of $5,000,000.
ARTICLE X. MISCELLANEOUS
10.1 EXPENSES. Each of the parties hereto (including the Selling
Shareholders individually) shall pay the fees and expenses of its own counsel,
accountants or other experts, and all expenses incurred by such party incident
to the negotiation, preparation, execution, consummation and performance of
this Agreement and the transactions contemplated hereby.
10.2 NOTICES. Any notice necessary under this Agreement shall be
in writing and shall be considered delivered three days after the mailing is
sent certified mail, return receipt requested, or when received, if sent by
telecopy, prepaid courier, express mail or personal delivery to the following
addresses:
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(a) If to the Xxxxxx Companies or the Selling
Shareholders:
c/o Xxxxxx X. Xxxxxx
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxx 00000
Fax: (000) 000-0000
(b) If to Purchaser:
Palm Harbor Homes, Inc.
00000 Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attn: President
Fax: (000) 000-0000
10.3 WAIVER. No amendment or waiver of any provision of this
Agreement, nor consent to any departure therefrom, shall be effective unless
the same shall be in writing and signed by an officer of each party hereto, and
then such waiver or consent shall be effective only in a specific instance and
for the specific purpose for which given. No failure on the part of a party
hereto to exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right hereunder preclude any other or further exercise thereof or the exercise
of any other right. The remedies provided in this Agreement are cumulative and
not exclusive of any remedies provided by law.
10.4 PRIOR AGREEMENTS SUPERSEDED. Except as otherwise provided in
this Agreement or the agreements with employees referenced in Section 2.4(b),
this Agreement constitutes the entire agreement between the parties with
respect to the subject matter hereof and supersedes any and all prior written
or oral agreements and understandings with respect to the matters covered
hereby.
10.5 BINDING EFFECT. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns.
10.6 GOVERNING LAW. THIS AGREEMENT, AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HERETO, SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE INTERNAL SUBSTANTIVE LAWS OF THE STATE OF TEXAS, WITHOUT
REGARD TO ITS PRINCIPLES OF CONFLICT OF LAWS.
10.7 HEADINGS, GENDER, ETC.. The headings used in this Agreement
have been inserted for convenience only and do not constitute matters to be
construed or interpreted in connection with this Agreement. Unless the context
of this Agreement otherwise requires, (a) words of any gender shall be deemed
to include each other gender; (b) words using the singular or plural number
shall also include the plural or singular number, respectively; and (c) the
terms "hereof," "herein," "hereby," "hereto" and derivative or similar words
shall refer to this entire Agreement.
10.8 ATTORNEYS' FEES. The prevailing party in any legal or
arbitration proceedings brought by or against the other party to enforce any
provision of this Agreement shall be entitled to recover against the
non-prevailing party the reasonable attorneys' fees, court costs and other
expenses incurred by the prevailing party.
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10.9 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
10.10 ARBITRATION. In the event of a dispute hereunder which cannot
be resolved by the parties, such dispute shall be settled by arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association and judgment on the award rendered by the arbitration panel may be
entered in any court or tribunal of competent jurisdiction. The parties agree
that no member of the arbitration panel shall be a competitor of either
Purchaser or the Xxxxxx Companies and that all arbitration occurring under this
Section 10.10 shall be held in Dallas, Texas.
10.11 SEVERABILITY AND REFORMATION. Subject to the reformation
provision in Section 6.4, if any provision of this Agreement is held to be
illegal, invalid or unenforceable under any current or future law, and if the
rights or obligations of the parties under this Agreement would not be
materially and adversely affected thereby, such provision shall be fully
separable, and this Agreement shall be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part thereof,
the remaining provisions of this Agreement shall remain in full force and
effect and shall not be affected by the illegal, invalid or unenforceable
provision or by its severance therefrom. In lieu of such illegal, invalid or
unenforceable provision, there shall be added automatically as a part of this
Agreement, a legal, valid and enforceable provision as similar in terms to such
illegal, invalid or unenforceable provision as may be possible, and the parties
hereto request the court or any arbitrator to whom disputes relating to this
Agreement are submitted to reform the otherwise illegal, invalid or
unenforceable provision in accordance with this Section 10.11.
10.12 THIRD PARTIES. Nothing expressed or implied in this Agreement
is intended, or shall be construed, to confer upon or give any person or entity
other than the Xxxxxx Companies Purchaser and the Selling Shareholders (or
their successors, heirs, representatives and permitted assigns) any rights or
remedies under or by reason of this Agreement.
10.13 ANNOUNCEMENTS. The parties hereto agree that all public
announcements relating to the transaction contemplated by this Agreement will
be made solely by Purchaser; provided that Purchaser shall give X. Xxxxxx at
least one day's advance notice of any such announcement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the date first above written.
PALM HARBOR HOMES, INC.
/s/ Xxx Xxxxx
---------------------------------------
Xxx Xxxxx, Chairman of the Board
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XXXXXX MANUFACTURED HOUSING
GROUP, INC.
/s/ Xxxxxx X. Xxxxxx
-------------------------------------
Xxxxxx X. Xxxxxx, President
XXXXXX MOBILE HOMES, INC.
/s/ Xxxxxx X. Xxxxxx
-------------------------------------
Xxxxxx X. Xxxxxx, President
PLEASANT VALLEY MOBILE HOMES, INC.
/s/ Xxxxxx X. Xxxxxx
-------------------------------------
Xxxxxx X. Xxxxxx, President
COUNTRYSIDE MOBILE HOMES, INC.
/s/ Xxxxxx X. Xxxxxx
-------------------------------------
Xxxxxx X. Xxxxxx, President
CUMBERLAND HOMES, INC.
/s/ Xxxxxx X. Xxxxxx
-------------------------------------
Xxxxxx X. Xxxxxx, President
ALL STAR MOBILE HOMES, INC.
/s/ Xxxxxx X. Xxxxxx
-------------------------------------
Xxxxxx X. Xxxxxx, President
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FIRST HOME MORTGAGE CORPORATION
/s/ Xxxxxx X. Xxxxxx
-------------------------------------
Xxxxxx X. Xxxxxx, President
SELLING SHAREHOLDERS
/s/ Xxxxxx X. Xxxxxx
-------------------------------------
Xxxxxx X. Xxxxxx
/s/ Xxxx X. Xxxxxx
-------------------------------------
Xxxx X. Xxxxxx
/s/ Xxxx X. Xxxxxx
-------------------------------------
Xxxx X. Xxxxxx
/s/ Xxxx X. Xxxxx
-------------------------------------
Xxxx X. Xxxxx
/s/ Xxxx X. Xxxxxx
-------------------------------------
Xxxx X. Xxxxxx
Estate of Xxxxxx X. Xxxxxx
By: /s/ Xxxxx X. Xxxxxx
----------------------------------
Title: Co-Executor
-------------------------------
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The undersigned spouses have joined in this Agreement for the sole
purpose of subjecting to the provisions of this Agreement any community
property interest in the Xxxxxx Companies Common Stock that such spouse may
own.
/s/ XXXXXX X. XXXXXX
-------------------------------------
/s/ XXXXX X. XXXXXX
-------------------------------------
/s/ XXXXX X. XXXXXX
-------------------------------------
/s/ XXXXXX X. XXXXX
-------------------------------------
/s/ XXXXXXXX X. XXXXXX
-------------------------------------
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