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EXHIBIT 2.6
ASSET PURCHASE AGREEMENT
by and among
AMRE, INC.,
AMERICAN REMODELING, INC.
and
FACELIFTERS HOME SYSTEMS, INC.,
as Sellers,
REUNION HOME SERVICES, INC.,
as Purchaser,
and
XXXXXX X. XXXXXX
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TABLE OF CONTENTS
Page
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ARTICLE I CERTAIN DEFINITIONS ........................................... 1
ARTICLE II PURCHASE AND SALE ............................................ 4
Section 2.2 Consideration .............................................. 4
Section 2.2 Consideration .............................................. 4
Section 2.3 Limitations of Liabilities Assumed ......................... 5
Section 2.4 NO WARRANTIES .............................................. 5
ARTICLE III CLOSING ...................................................... 6
Section 3.1 Time and Place ............................................. 6
Section 3.2 Transactions at Closing .................................... 6
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SELLERS ..................... 6
Section 4.1 Corporate Organization ..................................... 6
Section 4.2 Authority Relative to This Agreement ....................... 6
Section 4.3 Title ...................................................... 7
Section 4.4 Intellectual Property ...................................... 7
ARTICLE V COVENANTS, REPRESENTATIONS AND WARRANTIES OF PURCHASER
AND XXXXXX ............................................................... 7
Section 5.1 Corporate Organization ..................................... 7
Section 5.2 Charter and Bylaws ......................................... 7
Section 5.3 Authority Relative to This Agreement ....................... 7
Section 5.4 Noncontravention ........................................... 7
Section 5.5 Governmental Approvals ..................................... 8
Section 5.6 Litigation, etc ............................................ 8
Section 5.7 Financing .................................................. 8
Section 5.8 Completion of Certain Contracts and Payment of Certain
Liabilities .......................................................... 8
Section 5.9 Brokerage Agreements ....................................... 8
Section 5.10 Conduct of the Business ................................... 8
Section 5.11 Hiring of Former Employees ................................ 8
ARTICLE VI ADDITIONAL AGREEMENTS ........................................ 9
Section 6.1 Certain Tax Matters ........................................ 9
Section 6.2 Bankruptcy Court Approval .................................. 9
Section 6.3 Notification of Certain Matters ............................ 9
Section 6.4 Announcement ............................................... 9
Section 6.5 Fees and Expenses .......................................... 10
Section 6.6 Bulk Sales Waiver .......................................... 10
Section 6.7 Competition Waiver ......................................... 10
Section 6.9 Storage, Protection and Availability of Records ........... 10
ARTICLE VII CONDITIONS TO CLOSING ........................................ 10
Section 7.1 Conditions to the Obligation of Each Party to Consummate the
Transactions Contemplated Hereby ..................................... 10
Section 7.2 Additional Conditions to the Obligation of Sellers ......... 12
Section 7.3 Additional Conditions to the Obligation of Purchaser ....... 13
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ARTICLE VIII TERMINATION ................................................. 13
Section 8.1 Termination ................................................ 13
Section 8.2 Effect of Termination ...................................... 14
ARTICLE IX WAIVER, RELEASES AND INDEMNIFICATION ......................... 14
Section 9.1 Release of AMRE ............................................ 14
Section 9.2 Release of Xxxxxx .......................................... 15
Section 9.3 Prior Releases to be Given Effect .......................... 15
Section 9.4 No Waiver of Certain Rights of Xxxxxx ...................... 15
Section 9.5 Survival of This Article IX ................................ 15
ARTICLE X MISCELLANEOUS .................................................. 15
Section 10.1 Notices ................................................... 15
Section 10.2 Survival of Representations and Warranties ................ 17
Section 10.3 Entire Agreement .......................................... 17
Section 10.4 Binding Effect; Assignment ................................ 17
Section 10.5 Amendment and Waiver; Rights and Remedies ................. 17
Section 10.6 Severability .............................................. 17
Section 10.7 GOVERNING LAW.............................................. 17
Section 10.8 Descriptive Headings ...................................... 18
Section 10.9 Gender .................................................... 18
Section 10.10 References ............................................... 18
Section 10.11 Counterparts ............................................. 18
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Schedules and Exhibits
Schedule 1.1 - Sales Offices
Schedule 2.1(a) - Leases
Schedule 2.1(b) - Furniture, Fixtures and Equipment of the Sales Offices
Schedule 2.1(c) - Furniture, Fixtures and Equipment of the Algonquin Building
Schedule 2.1(d) - Furniture, Fixtures and Equipment of the Telemarketing Center
Schedule 2.1(f) - Equipment Leases
Schedule 2.1(i) - Telephone Numbers
Schedule 2.2(g) - Liabilities and Obligations
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ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (the "Agreement") is dated as of the 12th day
of February, 1997, by and among AMRE, Inc., a Delaware corporation ("AMRE"),
American Remodeling, Inc., a Texas corporation ("ARI"), Facelifters Home
Services, Inc., a Delaware corporation ("Facelifters"), Reunion Home Services,
Inc., a Texas corporation ("Purchaser"), and Xxxxxx X. Xxxxxx, formerly an
officer and director of AMRE ("Xxxxxx"). AMRE, ARI and Facelifters are
sometimes referred to herein individually as a "Seller" and collectively as
"Sellers".
RECITALS
WHEREAS, Sellers are in the cabinet refurbishing and products business; and
WHEREAS, each Seller is currently a debtor in possession in that certain
Chapter 11 bankruptcy proceedings in the United States Bankruptcy Court for the
Northern District of Texas, Dallas Division (the "Bankruptcy Court"), styled In
re AMRE, Inc. et al., Case No. 397-30567-SAF-11 (Jointly Administered); and
WHEREAS, Purchaser, Xxxxxx, XXXX and XXX have previously entered into the
Interim Period Letter Agreement (as hereinafter defined); and
WHEREAS, Purchaser desires to buy and Sellers desire to sell those
portions of the cabinet refurbishing and products business of Sellers conducted
at the Sales Offices (as hereinafter defined), the Telemarketing Center (as
hereinafter defined) and the Algonquin Building (as hereinafter defined) (the
"Business"), and to finally, irrevocable, absolutely and unconditionally
terminate all rights and obligations of Sellers, and to the extent applicable,
the bankruptcy estates of Sellers, in the Business Assets (as hereinafter
defined);
NOW, THEREFORE, in consideration of the above recitals, which constitute a
part of this Agreement, the mutual promises and agreements set forth herein,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Purchaser, Xxxxxx and Sellers, intending to be
legally bound hereby, agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
As used in this Agreement, the following terms have the following
respective meanings:
"Agreement" has the meaning specified in the opening paragraph hereof.
"Algonquin Building" means that certain building located at 0000 X.
Xxxxxxxxx Xxxx, Xxxxxxxxx Xxxxxxx, Xxxxxxxx 00000, that is subject to the
Algonquin Lease.
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"Algonquin Lease" means that certain lease by and between ARI and Xxxxxx
dated January 1, 1996.
"AMRE" has the meaning specified in the opening paragraph hereof.
"AMRE Released Parties" has the meaning specified in Section 9.1.
"Applicable Law" means any statute, law, rule, or regulation or any
judgment, order, writ, injunction or decree of any Governmental Entity to which
a specified person or property is subject.
"ARI" has the meaning specified in the opening paragraph hereof.
"Assumed Liabilities" means (a) the obligations of each of the Sellers
under the Leases and (b) the liabilities and obligations of each of the Sellers
set forth on Schedule 2.2(g) hereto.
"Bankruptcy Court" has the meaning specified in the Recitals.
"Business" has the meaning specified in the Recitals.
"Business Assets" has the meaning specified in Section 2.1 hereof.
"Cash Purchase Price" means the amounts specified in subsections (a), (b)
and (c) of Section 2.2 hereof.
"Claims" means any and all losses, claims, causes of action, lawsuits,
liabilities, demands, damages, costs and expenses, including, without
limitation, reasonable attorneys' fees and
disbursements.
"Closing" means the consummation of the transactions contemplated by
Article II of this Agreement in accordance with the terms and upon the
conditions set forth in this Agreement.
"Closing Date" means the date on which the Closing occurs.
"Encumbrances" means liens, charges, pledges, options, mortgages, security
interest, claims (including, without limitation, trust fund claims),
restriction (whether on voting, sale, transfer, disposition or otherwise) and
other encumbrances of every type and description, whether imposed by law,
agreement, understanding or otherwise.
"Equipment Leases" means those equipment leases set forth on Schedule
2.1(f) hereto.
"FF&E" means the furniture, fixtures and equipment set forth on Schedule
2.1(b), Schedule 2.1(c) and Schedule 2.1(d) hereto.
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"Governmental Entity" means any court or tribunal in any jurisdiction
(domestic or foreign) or any public, governmental, or regulatory body, agency,
department, commission, board, bureau, or other authority or instrumentality
(domestic or foreign).
"Interim Period Letter Agreement" means that certain letter agreement
dated January 27, 1997, by and among AMRE, ARI, Purchaser and Xxxxxx.
"Inventory" means all inventory (including raw materials, work-in-progress
and finished goods) and related spare parts and supplies with respect to the
Business that is owned by a Seller, located at all Sales Offices, the
Telemarketing Center and the Algonquin Building, and on hand at the Closing,
but does not include any inventory (including raw materials, work-in-progress
and finished goods) and related spare parts and supplies with respect to the
Business that is subject to a valid claim for reclamation.
"Leases" means those real property leases set forth on Schedule 2.1(a)
hereto and for which any necessary consents of lessors to the assignment to
Purchaser have been obtained prior to the Closing Date.
"Proceedings" means all proceedings, actions, suits, investigations, and
inquiries by or before any arbitrator or Governmental Entity.
"Purchaser" has the meaning specified in the opening paragraph hereof.
"Sale and Assignment Hearing" has the meaning specified in Section 6.2
hereof.
"Sale and Assignment Motion" has the meaning specified in Section 6.2
hereof.
"Sale and Assignment Order" has the meaning specified in Section 6.2
hereof.
"Sales Offices" means those offices of AMRE, ARI or Facelifters, as the
case may be, set forth on Schedule 1.1 hereto.
"Seller" and "Sellers" have the meanings specified in the opening
paragraph hereof.
"Separation Agreement" means that certain Separation Agreement, dated as
of December 1, 1995, by and between Xxxxxx and AMRE.
"Taxes" means all taxes, charges, fees, levies or other assessments,
including, without limitation, income, excise, property, sales and franchise
taxes, imposed by the United States or any state, county, local or foreign
government or subdivision or agency thereof. Such term shall include any
interest, penalties or additions attributable to such assessments.
"Telemarketing Center" means that certain telemarketing center of AMRE
located at 0000 Xxxxxx X. Xxxxxx Xxxx., Xxxx Xxx, Xxxxxxx 00000.
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"Toll-Free Numbers" means those "800" and toll-free numbers used by either
or both of Sellers in connection with the Business.
"Trademark" has the meaning specified in Section 2.1(g) hereof.
"Xxxxxx" has the meaning specified in the opening paragraph hereof.
ARTICLE II
PURCHASE AND SALE
Section 2.1 Business Assets. Subject to the terms and conditions set forth
in this Agreement, on the Closing Date Sellers will sell, assign, transfer,
convey and deliver to Purchaser free and clear of all Encumbrances, and
Purchaser will purchase, acquire and receive an assignment, a conveyance and
the delivery of the following assets of each of the Sellers (all such assets
included in this Section 2.1 are herein collectively referred to as the
"Business Assets"):
(a) all rights of each of the Sellers in, under and to each of the Leases
listed on Schedule 2.1(a) hereto, it being understood that Purchaser
is not acquiring any fee title to real property;
(b) all furniture, fixtures and equipment that is located at the Sales
Offices and listed on Schedule 2.1(b) hereto;
(c) all furniture, fixtures and equipment that is located in the
Algonquin Building formerly leased by ARI from Xxxxxx pursuant to the
Algonquin Lease and listed on Schedule 2.1(c) hereto;
(d) all furniture, fixtures and equipment that is located in the
Telemarketing Center and listed on Schedule 2.1(d) hereto;
(e) the Inventory;
(f) all rights of each of the Sellers in, under and to each of the
Equipment Leases listed on Schedule 2.1(f) hereto;
(g) all right, title and interest of each Seller, if any, in the
trademarks, service marks and trade names "Kitchen Magic" and all
related goodwill of the Business associated therewith (collectively,
the "Trademark");
(h) all books, records and customer lists owned and used by each of the
Sellers in connection with the Business; and
(i) all telephone numbers, including the Toll-Free Numbers, used by each
of the Sellers in connection with the Business and listed on Schedule
2.1(i) hereto.
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Section 2.2 Consideration. The aggregate consideration for the Business
Assets, which is in addition to, and not in lieu of, any and all consideration
given by Purchaser pursuant to the Interim Period Letter Agreement, shall
consist of :
(a) cash in the amount of Six Hundred Seventy-Five Thousand Dollars
($675,000) for FF&E;
(b) cash in an amount equal to 30% of the cost of Inventory on hand as of
the date of the Closing and used in the Business, excluding obsolete,
damaged and scrap Inventory;
(c) cash in the amount agreed upon at least three (3) days prior to the
Closing by Purchaser and Sellers for obsolete, damaged and scrap
Inventory;
(d) release of Claims of Purchaser and Xxxxxx associated with the
Algonquin Lease, including, without limitation, any and all claims
for unpaid rent and other charges under such lease (claims of
approximately $400,733) and any and all claims in connection with
rejection of such lease, including, without limitation, any
administrative rent claim;
(e) release of any and all amounts owed to Purchaser and Xxxxxx by
Sellers and any and all claims of Purchaser and Xxxxxx under the
Separation Agreement (claims of approximately $500,000);
(f) release of any and all other claims of Purchaser and Xxxxxx against
AMRE, ARI and/or Facelifters arising out of accounting and
professional reimbursement claims from 1995 (claims of approximately
$90,000); and
(g) assumption of the Assumed Liabilities.
Section 2.3 Limitations of Liabilities Assumed. Except for the
obligations expressly assumed by Purchaser and/or Xxxxxx under the Interim
Period Letter Agreement or this Agreement, Purchaser does not assume or agree
to pay, perform or discharge any other liabilities or obligations of any
Seller, whether accrued, absolute, contingent or otherwise, including, without
limitation, liabilities based on or arising out of or in connection with (a)
any defects in work performed by any Seller, (b) any implied or express
warranties relating to such work or (c) any pension or other benefit liability
relating to any of Sellers' employees.
Section 2.4 NO WARRANTIES. EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED IN
THIS AGREEMENT, SELLERS MAKE NO REPRESENTATION OR WARRANTY WHATSOEVER,
INCLUDING, WITHOUT LIMITATION, NO WARRANTY AS TO FITNESS FOR A PARTICULAR
PURPOSE, WITH RESPECT TO ANY OF THE BUSINESS ASSETS, AND THE BUSINESS ASSETS
ARE TRANSFERRED "AS IS-WHERE IS."
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ARTICLE III
CLOSING
Section 3.1 Time and Place. The Closing shall be held at 9:00 a.m. (local
time), at the offices of Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P., 0000
Xxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000, on the fifth business day
following the date on which the Sale and Assignment Order becomes final and is
no longer subject to stay, or at such other time or place as the parties shall
mutually agree in writing.
Section 3.2 Transactions at Closing.
(a) Sellers shall deliver to Purchaser at the Closing:
(i) a xxxx of sale conveying the Business Assets, other than the
Leases and the Equipment Leases, to Purchaser, signed by each
Seller;
(ii) an assignment and assumption agreement with respect to each of
the Leases and the Equipment Leases;
(iii) an assignment of the Trademark;
(iv) the books, records and customer lists listed on Schedule
2.1(g) hereto; and
(v) the certificate contemplated by Section 7.3.
(b) Purchaser and Xxxxxx, as applicable, shall deliver to Sellers at the
Closing:
(i) a wire transfer in the amount of the Cash Purchase Price;
(ii) an assignment and assumption agreement with respect to each of
the Leases and Equipment Leases;
(iii) the certificates contemplated by Section 7.2; and
(iv) the opinion of counsel contemplated by Section 7.2.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLERS"
Each Seller represents and warrants to Purchaser and Xxxxxx as follows:
Section 4.1 Corporate Organization. Each of AMRE and Facelifters is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware. ARI is a corporation duly organized, validly
existing and in good standing under the laws of the State of Texas.
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Section 4.2 Authority Relative to This Agreement. Each Seller has full
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution, delivery and
performance by each Seller of this Agreement, and the consummation by it of the
transactions contemplated hereby, have been duly authorized by such Seller's
Board of Directors, and no other corporate proceedings on the part of such
Seller are necessary to authorize the execution, delivery and performance by it
of this Agreement and the consummation by such Seller of the transactions
contemplated hereby.
Section 4.3 Title. Either AMRE, ARI or Facelifters owns good and
marketable title to the FF&E and the Inventory.
Section 4.4 Intellectual Property. None of AMRE, ARI or Facelifters has
taken any action to impair the use of the Trademark since acquiring any rights
to such Trademark from Xxxxxx. After the Closing, (a) no person or business
entity other than Purchaser will be authorized, directly or indirectly, to use
the Trademark, and (b) Sellers shall not object to Purchaser's use of the
"Century 21" trademark and shall have no right to royalties or other payments
from Purchaser on account of Purchaser's use of the "Century 21" trademark.
Sellers shall reasonably cooperate with Purchaser in taking such actions
reasonably requested by Purchaser to assist Purchaser in causing TM Acquisition
Corporation to allow Purchaser to use the "Century 21" trademark in connection
with the Business.
ARTICLE V
COVENANTS, REPRESENTATIONS AND WARRANTIES
OF PURCHASER AND XXXXXX
Purchaser and Xxxxxx represent and warrant to Sellers as follows:
Section 5.1 Corporate Organization. Purchaser is a corporation duly
organized, validly existing, and in good standing under the laws of the State
of Texas.
Section 5.2 Charter and Bylaws. Purchaser has made available to Sellers
accurate and complete copies of its articles of incorporation and bylaws, each
as currently in effect.
Section 5.3 Authority Relative to This Agreement. Purchaser has full
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution, delivery and
performance by Purchaser of this Agreement, and the consummation by it of the
transactions contemplated hereby, have been duly authorized by the Board of
Directors of Purchaser, and no other corporate proceedings on the part of
Purchaser are necessary to authorize the execution, delivery and performance by
it of this Agreement and the consummation by Purchaser of the transactions
contemplated hereby. This Agreement has been duly executed and delivered by
Purchaser and constitutes a valid and legally binding obligation of Purchaser,
enforceable against Purchaser in accordance with its terms.
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Section 5.4 Noncontravention. The execution, delivery and performance by
Purchaser of this Agreement and the consummation by it of the transactions
contemplated hereby do not and will not (a) conflict with or result in a
violation of any provision of the charter or bylaws of Purchaser, (b) conflict
with or result in a violation of any provision of, or constitute (with or
without the giving of notice or the passage of time or both) a default under,
or give rise (with or without the giving of notice or the passage of time or
both) to any right of termination, cancellation or acceleration under, any
bond, debenture, note, mortgage, indenture, lease, agreement or other
instrument or obligation to which Purchaser is a party or by which Purchaser or
any of its properties may be bound, (c) result in the creation or imposition of
any Encumbrance upon the properties of Purchaser, or (d) violate any Applicable
Law (other than any applicable "bulk sales" laws) binding upon Purchaser,
except, in the cases of clauses (b), (c) and (d) of this Section 5.4, for any
such conflicts, violations, defaults, terminations, cancellations,
accelerations or Encumbrances which would not, individually or in the
aggregate, have a material adverse effect on the business, assets, results of
operations or financial condition of Purchaser or on the ability of Purchaser
to consummate the transactions contemplated hereby.
Section 5.5 Governmental Approvals. No consent, approval, order or
authorization of, or declaration, filing or registration with, any Governmental
Entity is required to be obtained or made by Purchaser in connection with its
execution, delivery or performance of this Agreement or the consummation by it
of the transactions contemplated hereby.
Section 5.6 Litigation, etc. No Proceeding is pending or, to the knowledge
of Purchaser, threatened, against Purchaser (a) relating to or affecting any of
the Business Assets, other than the bankruptcy case referred to in the
Recitals, or (b) that questions the validity of this Agreement or challenges
any of the transactions contemplated hereby.
Section 5.7 Financing. Purchaser has, and at the Closing Date Purchaser
will have, such funds as are necessary for the consummation by Purchaser of the
transactions contemplated hereby.
Section 5.8 Completion of Certain Contracts and Payment of Certain
Liabilities. In addition to, and not in lieu of, the consideration set forth in
this agreement, Purchaser shall remain liable for any and all amounts
contemplated by, and any and all obligations under, the Interim Period Letter
Agreement, including, without limitation, (a) completion all contracts and/or
sales entered into by Purchaser as contemplated by paragraph I.3. of the
Interim Period Letter Agreement, and Purchaser shall pay all amounts specified
under paragraph I.3. of the Interim Period Letter Agreement, and (b) payment of
any and all amounts and fees that have become or may become due and owing as a
result of the Purchaser's use of radio and television commercials referred to
in the Interim Period Letter Agreement.
Section 5.9 Brokerage Agreements. Purchaser and Xxxxxx shall hold Sellers
harmless against any broker, finder, consultant or other intermediary retained
directly or indirectly by Purchaser and/or Xxxxxx in connection with the
transactions contemplated by this Agreement who would be entitled to any
commission or broker's or finder's fee in connection with the transactions
contemplated hereby.
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Section 5.10 Conduct of the Business. From and after the date hereof
through the Closing Date, Purchaser shall continue to operate the Business in
accordance with the terms of the Interim Period Letter Agreement and subject to
Bankruptcy Court action.
Section 5.11 Hiring of Former Employees. With respect to hiring decisions,
Purchaser shall give preference to former employees of Sellers employed in
connection with the Business. Notwithstanding the foregoing, Purchaser shall
have no obligation to employ any employee of either of the Sellers or in any
manner whatsoever be responsible for the payment of any compensation, severance
and/or termination pay relating to any former employee of either of the Sellers
or due to any union or other labor organization. In the event that Purchaser
elects to employee any former employee of a Seller, Purchaser shall be
responsible for all salary and other compensation solely to the extent that the
same accrues and becomes payable to such employee after the inception of such
employee's employment by Purchaser. Purchaser shall assume no liability for any
obligation of either of the Sellers associated with the current or former
employees or independent contractors of a Seller.
ARTICLE VI
ADDITIONAL AGREEMENTS
Section 6.1 Certain Tax Matters. Any sales Tax or transfer Tax or similar
Tax upon the transfer of the Business Assets to Purchaser shall be borne by
Sellers. All other taxes with respect to the Business Assets which are assessed
or become due prior to the Closing Date shall be borne by Sellers, subject to
reimbursement if any by Purchaser and/or Xxxxxx pursuant to the Interim Period
Letter Agreement.
Section 6.2 Bankruptcy Court Approval. As promptly as practicable after
the date hereof, Sellers shall file a motion (the "Sale and Assignment Motion")
with the Bankruptcy Court pursuant to Sections 363 and 365 of the Bankruptcy
Code, in a form reasonably acceptable to Purchaser, seeking an order (the "Sale
and Assignment Order") approving the sale, assignment and transfer of the
Business Assets free and clear of all Encumbrances. Prior to the filing of the
Sale and Assignment Motion, Sellers shall consult with Purchaser about the
scope, manner and form of notice for the hearing on the Sale and Assignment
Motion (the "Sale and Assignment Hearing"), and Sellers shall provide proper
notice of such motion in accordance with applicable law. If the Sale and
Assignment Order shall be appealed by any party (or a petition for certiorari
or motion for rehearing or argument shall be filed with respect thereto),
Sellers shall take all steps, as may be reasonable and appropriate to prosecute
such appeal, petition or motion, or defend against such appeal, petition or
motion, and Purchaser shall cooperate in such efforts. Purchaser and Sellers
agree to use their best efforts to obtain an expedited resolution of any such
appeal.
Section 6.3 Notification of Certain Matters. Sellers shall give prompt
notice to Purchaser and Xxxxxx, and Purchaser and Xxxxxx shall give prompt
notice to Sellers, of (a) the occurrence or nonoccurrence of any event the
occurrence or nonoccurrence of which would be likely to cause any
representation or warranty contained in this Agreement to be untrue or
inaccurate in any material respect at or prior to the Closing and (b) any
material failure of
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Purchaser, Xxxxxx or Sellers, as the case may be, to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder; provided, however, that neither the delivery of nor the failure to
deliver any notice pursuant to this Section 6.3 shall limit or otherwise affect
the remedies available hereunder to the party receiving such notice.
Section 6.4 Announcement. Following the execution of this Agreement,
Purchaser shall approve an announcement of Sellers prepared to satisfy the
requirements of public disclosure applicable to Sellers, such approval not to
be unreasonable withheld by Purchaser. In addition, Sellers and Purchaser agree
to consult with each other before issuing any press release or making any
public statement with respect to this Agreement or the transactions
contemplated hereby, and, except as may be required by applicable law or any
listing agreement with any national securities exchange, will not issue any
such press release or make any such public statement prior to such
consultation.
Section 6.5 Fees and Expenses. Except as provided in Section 7.1(a)(iv)
and Section 8.2(b), all costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such costs or expenses.
Section 6.6 Bulk Sales Waiver. Sellers, Purchaser and Xxxxxx hereby waive
compliance by Sellers with the bulk sales law of Chapter 6 of the Uniform
Commercial Code or any similar Applicable Law in connection with the sale of
the Business Assets contemplated by this Agreement.
Section 6.7 Competition Waiver. Sellers hereby agree that, in undertaking
and performing the actions contemplated by this Agreement, neither Purchaser
nor Xxxxxx shall be deemed to have violated or breached any (a) non-competition
or similar provision of any other agreement between or among the parties
hereto, including, without limitation, the Separation Agreement or (b)
provision of any agreement between or among the parties hereto prohibiting or
restricting Purchaser or Xxxxxx from hiring any employee or independent
contractor of AMRE, ARI or Facelifters.
Section 6.8 Storage, Protection and Availability of Records. Purchaser
agrees to safeguard, protect and store at the current location all of the
contracts, books, records, customer lists, purchase orders and customer
information relating to the Business acquired by Purchaser pursuant to this
Agreement that is located at the Sales Offices, the Telemarketing Center and
the Algonquin Building for a minimum of one hundred twenty (120) days from the
Closing Date. Purchaser agrees to xxxxx Xxxxxxx access to, and allow Sellers
to copy, all such contracts, books, records, customer lists, purchase orders
and customer information for a minimum of two (2) years from the Closing Date.
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ARTICLE VII
CONDITIONS TO CLOSING
Section 7.1 Conditions to the Obligation of Each Party to Consummate the
Transactions Contemplated Hereby. The respective obligations of the parties
hereto shall be subject to the fulfillment on or prior to the Closing Date of
each of the following conditions:
(a) Application. The Sale and Assignment Motion shall have been filed
with the Court requesting approval of:
(i) the assumption and assignment by Sellers to the Purchaser of
each of the Leases;
(ii) the assumption and assignment by Sellers to the Purchaser of
each of the Equipment Leases;
(iii) the sale by Sellers to the Purchaser, free and clear of all
liens, claims and encumbrances, of the Business Assets other
than the Leases and Equipment Leases;
(iv) a break-up fee to be paid to Purchaser if the Court fails to
approve this Agreement because another offer for the Business
or any part thereof has been approved by the Court, to be paid
immediately upon the closing of the transaction resulting from
such other offer, with such break-up fee to be in the amount
of $35,000 for reimbursement of Purchaser's costs and expenses
in connection with the negotiation of and activities incident
to this Agreement; and
(v) the mutual releases provided for in Article IX.
(b) Findings. The Sale and Assignment Motion shall have requested a
finding that, with respect to each Lease and Equipment Lease to be
assumed and assigned to Purchaser pursuant to this Agreement:
(i) AMRE, ARI or Facelifters, whichever is lessee, is not in
default under the lease or such default will be waived, or if
a default exists under such lease that is not waived, the
amount required to be paid by AMRE, ARI or Facelifters to cure
such default prior to assumption or assignment of such lease;
(ii) assignment of such lease to Purchaser does not violate or
constitute a breach of such lease; and
(iii) assumption and assignment of such lease is authorized pursuant
to Section 365 of the Bankruptcy Code.
(c) Good Faith. The Sale and Assignment Motion shall request a finding
that Purchaser is a good faith purchaser pursuant to Section 363(m)
of the Bankruptcy Code, and
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that this Agreement constitutes an arms-length transaction between
Sellers and the Purchaser and Xxxxxx.
(d) Overbids. The Sale and Assignment Motion shall have included an
express requirement that the first overbid, if any, offered in
competition with the offer represented by this Agreement, offer at
least $35,000 more in total consideration than the total
consideration offered by Purchaser under this Agreement, and that
each subsequent competing bid represent at least an additional $5,000
in cash more than the immediately preceding bid. For purposes of
establishing the value of total consideration offered by Purchaser,
the Sellers have determined that the non-cash consideration offered
by Purchaser is valued at no less than $90,000.
(e) Hearing. The Sale and Assignment Motion shall have been brought on
for the Sale and Assignment Hearing on or before March 31, 1997.
(f) Order. The Sale and Assignment Order by the Court in form
satisfactory to counsel to Purchaser and Xxxxxx shall have been
entered granting the relief requested pursuant to the Sale and
Assignment Motion, and the Sales and Assignment Order shall have been
entered by March 31, 1997 and not stayed.
(g) No preliminary or permanent injunction or other order, decree or
ruling shall have been issued by a Governmental Entity, and no
statute, rule, regulation or executive order shall have been
promulgated or enacted by a Governmental Entity, which prevents
consummation of the transactions contemplated by this Agreement and
which is in effect on the Closing Date; no Proceeding by a
Governmental Entity shall have been commenced or threatened (and be
pending or threatened on the Closing Date) against Purchaser of any
of their respective affiliates, associates, officers or directors
seeking to prevent or challenging the transactions contemplated by
this Agreement; and no Proceeding before a court of competent
jurisdiction shall have been commenced (and be pending on the Closing
Date) against Purchaser or Sellers or any of their respective
affiliates, associates, officers or directors seeking to prevent or
challenging the transactions contemplated hereby and seeking material
damages in connection therewith.
Section 7.2 Additional Conditions to the Obligation of Sellers. The
obligations of Sellers to consummate the transactions contemplated by this
Agreement is also subject to the fulfillment of each of the following
conditions:
(a) The representations and warranties of Purchaser and Xxxxxx set forth
in this Agreement shall be true and correct on and as of the Closing
Date as if made on and as of such date, except as affected by
transactions contemplated or permitted by this Agreement and except
to the extent that any such representation or warranty is made as of
a specified date, in which case such representation or warranty shall
have been true and correct as of such date.
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(b) Purchaser and Xxxxxx shall have performed each obligation to be
performed by it or him, as the case may be, hereunder on or prior to
the Closing Date.
(c) Sellers shall have received such certificates of Purchaser dated the
Closing Date, signed by officers of Purchaser and others, to evidence
compliance with the conditions set forth in Section 7.1 and this
Section 7.2 as may be reasonably requested by Sellers.
(d) Sellers shall have received an opinion of Xxxxx & Associates or
Xxxxxx & Xxxx, L.L.P., counsel to Purchaser, dated the Closing Date,
with respect to the due organization of Purchaser and the due
authorization, execution and delivery of this Agreement by Purchaser.
In rendering such opinion, such counsel may rely as to factual
matters upon certificates or other documents furnished by officers
and directors of Purchaser and by government official and upon such
other documents and data as such counsel deems necessary.
(e) Sellers shall have received the documents listed below:
(i) A copy of the resolutions of the Board of Directors of
Purchaser authorizing the execution, delivery and performance
by Purchaser of this Agreement and the consummation by
Purchaser of the transactions contemplated hereby, certified
by the secretary or an assistant secretary of Purchaser.
(ii) A certificate from each of the Secretary of State of Texas and
the Comptroller of the State of Texas dated not more than five
(5) days prior to the Closing Date, as to the legal existence
and good standing of Purchaser under the laws of such state.
Section 7.3 Additional Conditions to the Obligation of Purchaser. The
obligation of Purchaser to consummate the transactions contemplated hereby is
also subject to fulfillment of each of the following conditions:
(a) Sellers shall have performed each obligation to be performed by them
hereunder on or prior to the Closing Date.
(b) Purchaser shall have received such certificates of Sellers, dated the
Closing Date, signed by officers of Sellers and others, to evidence
compliance with the conditions set forth in Section 7.1 and this
Section 7.3 as may be reasonably requested by Purchaser.
(c) Purchaser shall have received a copy of the Sale and Assignment Order
authorizing the execution, delivery and performance by the Sellers of
this Agreement.
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ARTICLE VIII
TERMINATION
Section 8.1 Termination. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time prior to the
Closing:
(a) by mutual written consent of Purchaser or Sellers;
(b) by either Purchaser or Sellers if there shall be any statute, rule or
regulation that makes consummation of the transactions contemplated
hereby illegal or otherwise prohibited or a Governmental Entity shall
have issued an order, decree or ruling or taken any other action
permanently restraining, enjoining or otherwise prohibiting the
consummation of the transactions contemplated hereby, and such order,
decree, ruling or other action shall have become final and
nonappealable; or
(c) by Sellers if Sellers receive, and the Court approves, a bona fide
third-party offer to acquire all or substantially all of the Business
Assets on terms and conditions determined in good faith by Sellers
which offer meets the following conditions:
(i) the third-party offer represents a higher and better offer
than the transaction set forth herein (which determination
shall include reference to price and contractual terms and
conditions);
(ii) the third party is reasonable certain to pay the purchase
price under such offer in cash upon closing of such
transaction; and
(iii) any initial third-party offer is determined to be a higher
offer than the transaction set forth herein by at least
Thirty-Five Thousand Dollars ($35,000), and any subsequent
third-party offers are in increments of not less than Five
Thousand Dollars ($5,000).
Section 8.2 Effect of Termination
(a) In the event of the termination of this Agreement pursuant to Section
8.1 by Purchaser or Sellers, written notice thereof shall forthwith
be given to the other party specifying the provision hereof pursuant
to which such termination is made, and this Agreement shall become
void and have not effect, and there shall be no liability hereunder
on the part of Purchaser or Sellers or any of their respective
directors, officers, employees, stockholders or representatives,
except that the agreements contained in this Section 8.2 and in
Sections 5.10 and 6.5 shall survive the termination hereof. Nothing
contained in this Section 8.2 shall relieve any party from liability
for any breach of this Agreement.
(b) If termination of this Agreement is pursuant to Section 8.1(c),
Sellers agree to provide in a motion to the Bankruptcy Court for
payment to Purchaser of Thirty-Five Thousand Dollars ($35,000) to
reimburse Purchaser's costs, expenses and
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loss. Sellers and Purchaser agree that this is fair consideration to
induce Purchaser to enter into this Agreement.
ARTICLE IX
WAIVER, RELEASES AND INDEMNIFICATION
Section 9.1 Release of AMRE. Purchaser and Xxxxxx, on behalf of
themselves and, as applicable, their respective successors, assigns, employees,
agents, officers, directors, heirs, attorneys and representatives, hereby
release and discharge AMRE and its affiliates (including, without limitation,
ARI and Facelifters) and their respective officers, directors, employees and
agents (the "AMRE Released Parties") from any and all Claims now existing or
which may hereafter accrue, whether known or unknown, liquidated or
unliquidated, direct or indirect, whether suspected or unsuspected, whether
having arisen or hereafter to arise, in each case in any way relating to any
acts, events, facts or circumstances associated with or relating to AMRE, ARI,
Facelifters, the Business or the transactions contemplated hereby or by the
Interim Period Letter Agreement. In addition, Purchaser and Xxxxxx shall
indemnify Sellers against any and all damages, costs, expenses, obligations or
liabilities, including, without limitation, the reasonable attorneys' fees and
disbursements, arising out of any breach by Purchaser or Xxxxxx, as applicable,
of the representations and warranties of Purchaser and Xxxxxx contained herein.
Without limiting the generality of the foregoing, Purchaser and Xxxxxx hereby
release the AMRE Released Parties for any and all unpaid rent, rejection
damages or any other Claim whatsoever in connection with the Algonquin Lease.
In addition, Xxxxxx hereby releases the AMRE Released Parties from any and all
liabilities and/or obligations under the Separation Agreement, including,
without limitation, AMRE's obligation under Section 3 of the Separation
Agreement to pay Xxxxxx $250,000 on each of December 1, 1997 and December 1,
1999.
Section 9.2 Release of Xxxxxx. Sellers, on behalf of themselves and their
affiliates, successors, assigns, employees, agents, officers, directors,
attorneys, and representatives (in their capacity as such), hereby release and
discharge Xxxxxx, his agents, heirs, successors, and assigns of and from any
and all Claims, whether known or unknown, liquidated or unliquidated, direct or
indirect, whether suspected or unsuspected, whether having arisen or hereafter
to arise, in each case in any way relating to Sellers or their affiliates,
including but not limited to any claims of fraudulent conveyance, actual and
constructive fraud, preferential transfers, breach of fiduciary, contractual or
other duties, misconduct, conversion, or wrongful action or failure to act,
including without limitation any claim based upon Xxxxxx'x alleged negligence,
which the Sellers or their affiliates or their respective estates ever had, now
have or claims to have, or hereafter can, shall or may for any reason have
against Xxxxxx arising out of any matter or event relating to Sellers and
occurring contemporaneously with or prior to the Closing Date. In connection
with the matters subject to the release contained in this Section 9.2, each
Seller represents and warrants to Xxxxxx that it has not transferred, assigned
or encumbered any Claims subject to the release granted hereby.
Section 9.3 Prior Releases to be Given Effect. Notwithstanding anything
to the contrary in this Agreement, any release provided for herein is in
addition to, and does not restrict, alter or negate the scope, effectiveness
and validity of any release contained in the Separation
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Agreement; any release contained in the Separation Agreement is intended to be
left unaltered by this Agreement.
Section 9.4 No Waiver of Certain Rights of Xxxxxx. Notwithstanding
Section 9.1 hereof, nothing herein shall be construed as a waiver or release by
Xxxxxx to any right he may have to indemnification or contribution by Sellers,
or under any applicable policy of insurance, with respect to his service as an
officer, director or employee of AMRE, ARI, Facelifters, or their affiliates.
Section 9.5 Survival of This Article IX. The provisions of this Article IX
shall survive the Closing indefinitely.
ARTICLE X
MISCELLANEOUS
Section 10.1 Notices. All notices, requests, demands and other
communications required or permitted to be given or made hereunder by any party
hereto shall be in writing and shall be deemed to have been duly given if
delivered personally or transmitted by first class registered or certified
mail, postage prepaid, return receipt requested, or sent by prepaid overnight
delivery service, or sent by cable, telegram, or facsimile, to the parties at
the following addresses (or at such other addresses as shall be specified by
the parties by like notice):
If to Purchaser:
Reunion Home Services, Inc.
0000 Xxxxx Xxxxxxxx Xxxxxxx, Xxxxx Xxxxx
Xxxxxx, Xxxxx 00000
Attention: Xx. Xxxxxx X. Xxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
with a copy to:
Xxxxxx & Xxxx
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxxxx, Esq.
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
If to Xxxxxx:
Xx. Xxxxxx X. Xxxxxx
00 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxx 00000
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Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
If to Sellers:
AMRE, Inc.
0000 Xxxxx Xxxxxxxx Xxxxxxx, Xxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
Attention: Mr. J. Xxxxx Xxxxxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
with a copy to:
Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P.
0000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: G. Xxxxxxx Xxxxxx, Esq.
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Section 10.2 Survival of Representations and Warranties. The
representations and warranties contained in this Agreement and in any
instrument delivered pursuant hereto shall survive beyond the Closing or a
termination of this Agreement for a period of one (1) year.
Section 10.3 Entire Agreement. This Agreement, including the Schedules,
Exhibits and other writings referred to herein (including, without limitation,
the Interim Period Letter Agreement) or delivered pursuant hereto, constitute
the entire agreement between the parties hereto with respect to the subject
matter hereof and supersede all prior agreements and understandings, both
written and oral, between the parties with respect to the subject matter
hereof.
Section 10.4 Binding Effect; Assignment. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns; provided, however, that neither this Agreement nor any
of the rights, interests or obligations hereunder shall be assigned by any of
the parties hereto (by operation of law or otherwise) without the prior written
consent of the other parties. Except as provided in Article IX, nothing in this
Agreement, express or implied, is intended to or shall confer upon any person
other than Purchaser, Xxxxxx and Sellers any rights, benefits or remedies of
any nature whatsoever under or by reason of this Agreement.
Section 10.5 Amendment and Waiver; Rights and Remedies. This Agreement may
be amended, superseded, canceled, renewed or extended, and the terms hereof may
be waived, only by a written instrument signed by the parties or, in the case
of a waiver, by the party waiving compliance. No delay on the part of any party
in exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any waiver on the part of either party of any
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such right, power or privilege, or any single or partial exercise of any such
right, power or privilege, preclude any further exercise thereof or the
exercise of any other such right, power or privilege. The rights and remedies
herein provided are cumulative and are not exclusive of any rights or remedies
that any party may otherwise have at law or in equity. The rights and remedies
of any party based upon, arising out of or otherwise in respect of any
inaccuracy in or breach of any representation, warranty, covenant or agreement
contained in this Agreement shall in no way be limited by the fact that the
act, omission, occurrence or other state of facts upon which any claim of any
such inaccuracy or breach is based may also be the subject matter of any other
representation, warranty, covenant or agreement contained in this Agreement (or
in any other agreement between the parties) as to which there is no inaccuracy
or breach.
Section 10.6 Severability. If any provision of this Agreement is held to
be unenforceable, this Agreement shall be considered divisible and such
provision shall be deemed inoperative to the extent it is deemed unenforceable,
and in all other respects this Agreement shall remain in full force and effect;
provided, however, that if any such provision may be made enforceable by
limitation thereof, then such provision shall be deemed to be so limited and
shall be enforceable to the maximum extent permitted by applicable law.
Section 10.7 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS,
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF; PROVIDED,
HOWEVER, THAT THE BANKRUPTCY COURT SHALL RETAIN EXCLUSIVE JURISDICTION AS TO
ALL MATTERS PERTAINING TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED
HEREBY UNTIL THE CLOSING.
Section 10.8 Descriptive Headings. The descriptive headings herein are
inserted for convenience of reference only, do not constitute a part of this
Agreement, and shall not affect in any manner the meaning or interpretation of
this Agreement.
Section 10.9 Gender. Pronouns in masculine, feminine and neuter genders
shall be construed to include any other gender, and words in the singular form
shall be construed to include the plural and vice versa, unless the context
otherwise requires.
Section 10.10 References. All references in this Agreement to Articles,
Sections and other subdivisions refer to the Articles, Sections and other
subdivisions of this Agreement unless expressly provided otherwise. The words
"this Agreement," "herein," "hereof," "hereby," "hereunder," and words of
similar import refer to this Agreement as a whole and not to any particular
subdivision unless expressly so limited.
Section 10.11 Counterparts. This Agreement may be executed by facsimile
signature and in any number of counterparts, each of which shall be deemed an
original, but all of which shall constitute one and the same agreement.
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IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf by its representative thereunto duly authorized, all as
of the day and year first above written.
AMRE, INC., Individually and on behalf of
its affiliates, Century 21 Home Improvements,
Inc. and Congressional Construction Corporation
By: /s/ J. XXXXX XXXXXXXXX
--------------------------------------------
Name: J. Xxxxx Xxxxxxxxx
------------------------------------
Title: President
-----------------------------------
AMERICAN REMODELING, INC.
By: /s/ J. XXXXX XXXXXXXXX
--------------------------------------------
Name: J. Xxxxx Xxxxxxxxx
------------------------------------
Title: President
-----------------------------------
FACELIFTERS HOME SYSTEMS, INC.
By: /s/ J. XXXXX XXXXXXXXX
--------------------------------------------
Name: J. Xxxxx Xxxxxxxxx
------------------------------------
Title: President
-----------------------------------
REUNION HOME SERVICES, INC.
By: /s/ XXXXXX SEDALLA
--------------------------------------------
Name: Xxxxxx Sedalla
------------------------------------
Title: Secretary
-----------------------------------
/s/ XXXXXX X. XXXXXX
-----------------------------------------------
XXXXXX X. XXXXXX
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OMITTED SCHEDULES
REUNION HOME SERVICES, INC.
ASSET PURCHASE AGREEMENT
SCHEDULE CONTENTS
Schedule 1.1 Sales Offices of the Debtors from which Reunion
Home Services, Inc. purchased assets.
Schedule 2.1(a) Real property leases to be assumed by
Reunion Home Services, Inc.
Schedule 2.1(b) Furniture, fixtures, and equipment located at
the Sales Offices and purchased by Reunion Home
Services, Inc. pursuant to the Asset Purchase
Agreement.
Schedule 2.1(c) Furniture, fixtures and equipment located at the
Algonquin Building and purchased by Reunion Home
Services, Inc. pursuant to the Asset Purchase
Agreement.
Schedule 2.1(d) Furniture, fixtures and equipment located at the
Telemarketing Center and purchased by Reunion
Home Services, Inc. pursuant to the Asset
Purchase Agreement.
Schedule 2.1(f) Equipment leases to be assumed by Reunion Home
Services, Inc.
Schedule 2.2(g) Liabilities and obligations assumed by Reunion
Home Services, Inc. pursuant to the Asset
Purchase Agreement (those liabilities in
connection with the equipment leases).
Schedule 2.1(i) Telephone numbers to be assumed by Reunion Home
Services, Inc.
The Registrant hereby agrees to provide supplemental copies of any and all of
the above omitted schedules should the Commission so request.
