ASSET PURCHASE AGREEMENT
AGREEMENT entered into as of the 7th day of April, 1998,
among SOUTHERN ENERGY HOMES S.C. RETAIL, CORP., INC., a Delaware
corporation, with its principal place of business in Addison,
Alabama (the "Buyer"), RAINBOW HOMES, INC., a Kentucky
corporation, with its principal place of business in Xxxxx Xxxx,
Kentucky (the "Company"), and XXXXXX X. XXXX, who is the sole
stockholder of the Company (the "Stockholder").
R E C I T A L S:
WHEREAS, the Company is engaged in the retail marketing and
sales of new and used manufactured homes at several locations
within the States of Kentucky and West Virginia, including, but
not limited to, retail lot locations at Ashland, Winchester,
Frankfort, South Xxxxxxxxxx and Ivel, within the State of
Kentucky, and Chapmanville and Nitro, within the State of West
Virginia, with the hereinbefore specifically identified retail
lot locations being hereafter referred to as (the "Business");
and
WHEREAS, subject to the terms and conditions set forth in
this Agreement, the Buyer wishes to acquire the sales centers
operated by the Company located at Ashland, Winchester,
Frankfort, South Xxxxxxxxxx and Ivel, within the State of
Kentucky, and Chapmanville and Nitro, within the State of West
Virginia, including substantially all of the properties and
assets of the Company at those locations and is prepared to
assume certain liabilities and obligations of the Company, and
the Company wishes to convey the Business as a going concern and
such assets to the Buyer, subject to such liabilities.
NOW, THEREFORE, in consideration of the mutual agreements
contained herein and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound, agree as follows:
ARTICLE 1. PURCHASE AND SALE OF ASSETS.
1.1 Purchase and Sale of Assets.
(a) Purchased Assets. Subject to the provisions
of this Agreement, the Company agrees to sell and the Buyer
agrees to purchase, at the Closing (as defined in Section 1.4
hereof), the following assets which collectively represent
substantially all of the assets of the Business (the "Purchased
Assets"):
(i) the inventory of new manufactured homes listed on
Exhibit A;
(ii) those fixtures, equipment items and furniture
listed on Exhibit B;
(iii) those customer purchase orders listed on
Exhibit C; and
(iv) the inventory of used manufactured homes listed on
Exhibit D (the "Used Home Inventory"); and
(v) the other assets listed on Exhibit E.
1.2 Assumed and Retained Liabilities. Upon the sale
and purchase of the Purchased Assets, the Buyer shall assume,
pay, perform or discharge when due those liabilities and
obligations (and only those liabilities and obligations) of the
Company which are listed on Exhibit F. The liabilities to be
assumed by the Buyer under this Agreement are hereinafter
sometimes referred to as the "Assumed Liabilities". Except to
the extent expressly listed on Exhibit F, the Buyer does not
assume and shall not be liable for any debt, obligation,
responsibility or liability of the Company, or any affiliate of
the Company, or any claim against any of the foregoing, whether
known or unknown, contingent or absolute, or otherwise.
1.3 Purchase Price.
(a) Payments at Closing. In consideration of
the sale by the Company to the Buyer of the Purchased Assets, the
Buyer shall assume the Assumed Liabilities and pay to the Company
at Closing the following amount (the "Purchase Price"):
(i) $1,150,000.00 plus;
(ii) $3,775,158.00 for New Home Inventory on hand at
Closing listed on Exhibit A;
(iii) The sum of $32,393.00 for customer purchase
orders listed on Exhibit C;
(iv) The sum of $47,500 for the used home inventory
listed on Exhibit D;
(v) The sum of $73,117 for other assets listed on
Exhibit E; and
(vi) Rent reimbursement for sales centers at
Winchester, South Xxxxxxxxxx, and Ivel in Kentucky
and at Nitro, West Virginia as listed on Exhibit G
in the amount of $8,200.
The purchase price shall be paid by the Buyer by certified
check or by federal funds wire transfer of immediately available
federal funds.
1.4 Time and Place of Closing. The closing of the
purchase and sale provided for in this Agreement (herein called
the "Closing") shall be held at the offices of Wells, Porter,
Xxxxxxx & Xxxxx, 000 Xxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxx 00000, at
10:00 A.M., on the date hereof or at such other place, date or
time as may be fixed by mutual agreement of the parties.
1.5 Transfer of Purchased Assets. At the Closing,
the Company shall deliver to the Buyer good and sufficient
instruments of transfer, transferring to the Buyer title to all
the Purchased Assets including a xxxx of sale and such other
instruments of transfer as may be required. Such instruments of
transfer (i) shall be in the form and will contain the
warranties, covenants and other provisions (not inconsistent with
the provisions hereof) which are usual and customary for
transferring the type of property involved under the laws of the
jurisdictions applicable to such transfers, (ii) shall be in the
form and substance satisfactory to counsel for the Buyer, and
(iii) shall effectively vest in the Buyer good and marketable
title to all the Purchased Assets, free and clear of all liens,
restrictions and encumbrances.
1.6 Further Assurances. The Company from time to
time after the Closing at the request of the Buyer and without
further consideration shall execute and deliver further
instruments of transfer and assignment (in addition to those
delivered under Section 1.5) and take such other action as the
Buyer may reasonably require to effectively transfer and assign
to, and vest in, the Buyer each of the Purchased Assets.
ARTICLE 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE
STOCKHOLDER.
The Company and the Stockholder hereby jointly represent and
warrant to the Buyer as follows:
2.1 Organization and Qualification of the Company.
The Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of Kentucky, with
full power and authority to own or lease its properties and to
conduct its business in the manner and in the places where such
properties are owned or leased or such business is conducted by
it.
2.2. Authorization of Transaction. All necessary
action, corporate or otherwise, has been taken by the Company to
authorize the execution, delivery and performance of this
Agreement and the transactions contemplated hereby, and the
Agreement is the valid and binding obligation of the Company,
enforceable in accordance with its terms, subject to laws of
general application affecting creditor's rights generally.
2.3 Payment of Taxes. The Company has filed all
federal, state, local, and foreign government income, excise or
franchise tax returns, real estate and personal property tax
returns, sales and use tax returns and all other tax returns
required to be filed by the Company with respect to the Business,
and the Company has paid all taxes owing by the Company with
respect to the Business, except taxes which have not yet accrued
or otherwise become due.
2.4 Title to Purchased Assets. The Company has good
title to all of the Purchased Assets property, free and clear of
all liens, restrictions and encumbrances.
2.5 Inventories. All manufactured homes included in
the New Home Inventory and the Used Home Inventory are of a
quality and quantity saleable in the ordinary course of the
business at prevailing market prices.
2.6 Litigation. There is no suit, action, proceeding
or governmental investigation pending (or, to the knowledge of
the Company, threatened) against the Company with respect to the
Business, and there are no outstanding court orders, court
decrees, or court stipulations with respect to the Business to
which the Company is a party or by which any of its assets are
bound. The Company does not have any reason to believe that any
such action, suit, proceeding or investigation may be brought
against the Company.
ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF BUYER.
The Buyer hereby represents and warrants to the Company and
the Stockholder as follows:
3.1 Organization of the Buyer. The Buyer is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware with full corporate power
to own or lease its properties and to conduct its business in the
manner and in the places where such properties are owned or
leased or such business is conducted by it.
3.2 Authorization of Transaction. All necessary
action, corporate or otherwise, has been taken by the Buyer to
authorize the execution, delivery and performance of this
Agreement, and the same is the valid and binding obligation of
the Buyer enforceable in accordance with its terms, subject to
the laws of general application affecting creditor's rights
generally.
3.3 Inspection of Inventories. The Buyer has
inspected all manufactured homes included in the New Home
Inventory and the Used Home Inventory and found them to be of
merchantable quality saleable in the ordinary course of business
at prevailing market prices.
3.4 Referral of Complaints and Inquiries. The Buyer
shall refer all customer complaints and inquiries concerning
manufactured homes sold prior to Closing date to the Company at
its address at P. O. Xxx 000, Xxxxxxxxxxx, Xxxxxxxx 00000, and
shall, in addition to referring any written communication to the
Company, report all complaints and inquiries to the Company at
its corporate office at Paintsville, Kentucky at Telephone No.
(000) 000-0000.
3.5 Storage of Property. The Buyer shall permit the
Company to store property not purchased hereunder on its leased
premises for a period not to exceed thirty (30) days.
ARTICLE 4. CONDITIONS TO OBLIGATIONS OF BUYER.
The obligations of the Buyer to complete the transactions
contemplated hereby are subject to the condition that on or
before the Closing the actions required by this Article 4 will
have been accomplished.
4.1 Non-Competition Agreement. The Stockholder shall
have executed and delivered to the Buyer a non-competition
agreement in the form and substance reasonably satisfactory to
the Buyer.
4.2 Property Lease. The Buyer shall have either
assumed the real estate leases for the property listed on Exhibit
H or shall have entered into new leases with the landlords for
the property.
ARTICLE 5. RIGHTS AND OBLIGATIONS SUBSEQUENT TO CLOSING.
5.1 Survival of Warranties. All representations,
warranties, agreements, covenants and obligations set forth in
this Agreement are material, shall be deemed to have been relied
upon by the other parties and shall survive the Closing and shall
not merge in the performance of any obligation by any party
hereto.
5.2 Payment of Debts. The Company shall as promptly
as possible after the Closing pay all debts and obligations not
to be assumed by the Buyer hereunder.
ARTICLE 6. GENERAL PROVISIONS.
6.1 Fees and Expenses. Each of the parties will bear
its own expenses in connection with the negotiation and the
consummation of the transactions contemplated by this Agreement.
6.2 Entire Agreement. This Agreement (including all
exhibits appended to this Agreement and all documents delivered
pursuant to or referred to in this Agreement, all of which are
hereby incorporated herein by reference) constitutes the entire
agreement between the parties. The invalidity or
unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision
hereof.
6.3 Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of
Kentucky.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed in multiple counterparts as of the date
set forth above by their duly authorized representatives.
SOUTHERN ENERGY HOMES S.C. RETAIL, CORP.
By:________________________________
Name:
Title:
RAINBOW HOMES, INC.
By:_________________________________
Xxxxxx X. Xxxx, President
STOCKHOLDER:
__________________________________
Xxxxxx X. Xxxx
STATE OF KENTUCKY,
COUNTY OF XXXXXXX, SCT.
The foregoing Instrument was acknowledged before me by
_______________________
______________________, for and on behalf of Southern Energy
Homes S.C. Retail, Corp., this _____ day of April, 1998.
My Commission expires:_______________________.
WITNESS my hand and Notarial Seal, this ____ day of April,
1998.
______________________________
______
NOTARY PUBLIC
STATE OF KENTUCKY,
COUNTY OF XXXXXXX, SCT.
The foregoing Instrument was acknowledged before me, this
____ day of April, 1998 by XXXXXX X. XXXX, President of Rainbow
Homes, Inc., for and on behalf of said corporation.
My Commission expires:_______________________.
WITNESS my hand and Notarial Seal, this ____ day of April,
1998.
______________________________
______
NOTARY PUBLIC
I CERTIFY TO PREPARATION
OF THE FOREGOING ASSIGNMENT:
_______________________________
XXXXXXX X. XXXXXXX
ATTORNEY AT LAW
WELLS, PORTER, XXXXXXX & XXXXX
X.X. XXXXXX 0000
XXXXXXXXXXX, XX 00000-0000
