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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
---------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) MARCH 31, 1997
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AMRE, INC.
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(Exact Name of Registrant as Specified in Charter)
DELAWARE 1-9632 75-2041737
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
8585 N. STEMMONS FREEWAY, SOUTH TOWER, DALLAS, TX 75247
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including are code: (214) 658-6300
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N/A
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
As reported on the Registrant's Form 8-K dated January 20, 1997, an
involuntary petition of reorganization was filed by I Rent America,
Telequestion, Inc. and Good Design against AMRE, Inc. under Chapter 11 of title
11 of the United States Code, 11 U.S.C. Sections 101-1330 (hereinafter the
"BANKRUPTCY CODE"), as amended. On January 22, 1997, AMRE, Inc. consented to
an order for relief under Chapter 11 of the Bankruptcy Code. The entry of the
order for relief under Chapter 11 of the Bankruptcy Code was entered on January
23, 1997.
Four subsidiaries of AMRE, Inc., American Remodeling, Inc.,
Facelifters Home Systems, Inc., Century 21 Home Improvements, Inc. and
Congressional Construction Corporation, filed voluntary petitions for
reorganization under Chapter 11 of the Bankruptcy Code on January 22, 1997.
These filings acted as an order for relief under Chapter 11 of the Bankruptcy
Code.
All of the above proceedings were filed in the United States
Bankruptcy Court for the Northern District of Texas, Dallas Division and have
been administratively consolidated under case number 397-30567-SAF-11.
As previously disclosed in the Registrant's Form 8-K, dated as of
January 20, 1997, the Registrant issued a press release dated as of January 17,
1997 stating that it had ceased operations, was planning to seek protection
under Chapter 11 of the Bankruptcy Code and would thereafter liquidate its
assets. The Registrant further stated it did not believe that any transactions
would yield any residual value for distribution to its stockholders. In
connection therewith, the Registrant is in the process of liquidating its
assets to maximize the value of the estate for the creditors. Accordingly, and
in accordance with the bankruptcy court Order (i) Pursuant to Sections 105 and
363 of the Bankruptcy Code Authorizing the Emergency Sale of Certain Assets of
the Debtors Free and Clear of Liens, Claims, and Encumbrances, Subject to the
Terms of an Asset Purchase Agreement and (ii) Pursuant to Sections 105 and 363
of the Bankruptcy Code Approving Asset Purchase Agreement (the "ORDER"), the
Registrant and its subsidiaries (collectively, the "DEBTORS") have sold
substantially all of their assets (the "PURCHASED ASSETS"). The Purchased
Assets which have been sold include furniture, fixtures and equipment, as well
as inventory, of the Debtors. The Purchased Assets were located in various
branch offices of the Debtors and at the Registrant's headquarters.
The Purchased Assets have been sold for a cash consideration of
$2,363,976.60, including the assets subject to the pending sale described in
the next sentence. To date, the sale of assets to Steve Belnap has not
closed. In addition, debt of certain of the Debtors was assumed in one of the
sales, in an amount of $481,750.00. Certain leases, both real property and
equipment, have also been assumed by various purchasers in connection with the
sale of assets.
The Purchased Assets have been sold, pursuant to the Order, to Reunion
Home Services, Inc., U.S. Remodelers, Inc., REDO, L.L.C., ReVive Remodeling,
Inc. and to Steve Belnap (collectively, the "PURCHASERS"). Several of the
principals of the Purchasers have previously served as officers , directors, or
employees of certain of the Debtors. However, the bankruptcy court
specifically found in its Order that the "negotiations for and sale of the
Purchased Assets were at arm's length, without collusion and in good faith,"
and that the sales were for "reasonable and equivalent value and fair
consideration."
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Substantially all of the assets of the Debtors' estates, including the
Purchased Assets with the exception of the inventory, were appraised by an
independent third party. Those values were used as a basis for negotiations
and the subsequent sales. Furthermore, notice of the proposed sales was filed
with the bankruptcy court and thereafter published in several papers around the
United States. All parties which might have been affected or impacted by the
sales received an opportunity to appear and protect their interests.
The Debtors conducted a marketing process to sell all or substantially
all of their assets. As a result, the Debtors received proposals to purchase
substantially all of their assets in several packages. Based upon analyses of
the terms and economics of each offer, the Boards of Directors of the Debtors
exercised their business judgment and concluded that the proposals made by the
Purchasers were the highest and best proposals, and were in the best interests
of the Debtors and their respective estates.
The sales of the Purchased Assets closed on the following dates:
REDO, L.L.C., March 31, 1997; Reunion Home Services, Inc., April 4, 1997; U.S.
Remodelers, Inc., April 3, 1987; and ReVive Remodeling, Inc., April 8, 1997.
ITEM 5. OTHER EVENTS.
The Registrant has filed with the Commission a no action
letter requesting relief from those reports the Registrant is or would be
required to file with the Commission under Sections 13 or 15(d) of the
Securities Exchange Act of 1934, including the Registrant's Form 10-K for the
year ended December 31, 1996. This no action letter was filed stamped as
received by the Commission on March 12, 1997. For the reasons outlined in the
Registrant's no action letter request, the Registrant believes that it should
be granted relief from filing its Form 10-K for the year ended December 31,
1996, as well as all future required reports, and that the preparation and
filing of the Form 10-K would constitute an unreasonable effort and expense for
the Registrant in its present circumstances. To date, the Registrant has
received no word from the Commission regarding the status of the no action
letter request, other than that the no action letter request is being
processed. Until the Registrant receives word from the Commission regarding
its no action letter request, the Registrant does not believe that the
preparation of its Form 10-K for the year ended December 31, 1996 is in the
best interests of the estate.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
(b) PRO FORMA FINANCIAL INFORMATION
(1) Financial information pertaining to these transactions
will be filed as an amendment to this filing.
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(c) EXHIBITS
*2.1 Bankruptcy Court Order (i) Pursuant to Sections 105
and 363 of the Bankruptcy Code Authorizing the
Emergency Sale of Certain Assets of the Debtors Free
and Clear of Liens, Claims, and Encumbrances, Subject
to the Terms of an Asset Purchase Agreement and (ii)
Pursuant to Sections 105 and 363 of the Bankruptcy
Code Approving Asset Purchase Agreement (filed
without schedules).
*2.2 Asset Purchase Agreement by and between certain of
the Debtors, REDO, L.L.C., and Steven Bedowitz dated
as of February 27, 1997 (filed without schedules).
*2.3 Closing Proration Agreement by and between certain of
the Debtors and REDO, L.L.C. dated as of March 31,
1997.
*2.4 Asset Purchase Agreement by and between certain of
the Debtors and U.S. Remodelers, Inc. dated as of
February 12, 1997 (filed without schedules).
*2.5 First Amendment to Asset Purchase Agreement by and
between certain of the Debtors and U.S. Remodelers,
Inc. dated as of April 3, 1997 (filed without
schedules).
*2.6 Asset Purchase Agreement by and between certain of
the Debtors, Reunion Home Services, Inc. and Ronald
I. Wagner dated as of February 12, 1997 (filed
without schedules).
*2.7 First Amendment to Asset Purchase Agreement by and
between certain of the Debtors, Reunion Home
Services, Inc. and Ronald I. Wagner dated as of March
18, 1997 (filed without schedules).
*2.8 Second Amendment to Asset Purchase Agreement by and
between certain of the Debtors, Reunion Home
Services, Inc. and Ronald I. Wagner dated as of April
4, 1997.
*2.9 Asset Purchase Agreement by and between certain of
the Debtors and ReVive Remodeling, Inc. dated as of
March 21, 1997 (filed without schedules).
*2.10 Asset Purchase Agreement by and between certain of
the Debtors and Steve Belnap dated as of April 11,
1997 (filed without schedules).
* Filed herewith.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto.
AMRE, INC.
Date: April 14, 1997 By: /s/ J. Gregg Pritchard.
-----------------------------------
J. Gregg Pritchard
President
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EXHIBIT INDEX
EXHIBIT
NO. DESCRIPTION
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*2.1 Bankruptcy Court Order (i) Pursuant to Sections 105 and 363 of
the Bankruptcy Code Authorizing the Emergency Sale of Certain
Assets of the Debtors Free and Clear of Liens, Claims, and
Encumbrances, Subject to the Terms of an Asset Purchase
Agreement and (ii) Pursuant to Sections 105 and 363 of the
Bankruptcy Code Approving Asset Purchase Agreement (filed
without schedules).
*2.2 Asset Purchase Agreement by and between certain of the
Debtors, REDO, L.L.C., and Steven Bedowitz dated as of
February 27, 1997 (filed without schedules).
*2.3 Closing Proration Agreement by and between certain of the
Debtors and REDO, L.L.C. dated as of March 31, 1997.
*2.4 Asset Purchase Agreement by and between certain of the Debtors
and U.S. Remodelers, Inc. dated as of February 12, 1997 (filed
without schedules).
*2.5 First Amendment to Asset Purchase Agreement by and between
certain of the Debtors and U.S. Remodelers, Inc. dated as of
April 3, 1997 (filed without schedules).
*2.6 Asset Purchase Agreement by and between certain of the
Debtors, Reunion Home Services, Inc. and Ronald I. Wagner
dated as of February 12, 1997 (filed without schedules).
*2.7 First Amendment to Asset Purchase Agreement by and between
certain of the Debtors, Reunion Home Services, Inc. and Ronald
I. Wagner dated as of March 18, 1997 (filed without
schedules).
*2.8 Second Amendment to Asset Purchase Agreement by and between
certain of the Debtors, Reunion Home Services, Inc. and Ronald
I. Wagner dated as of April 4, 1997.
*2.9 Asset Purchase Agreement by and between certain of the Debtors
and ReVive Remodeling, Inc. dated as of March 21, 1997 (filed
without schedules).
*2.10 Asset Purchase Agreement by and between certain of the Debtors
and Steve Belnap dated as of April 11, 1997 (filed without
schedules).
* Filed herewith.
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EXHIBIT 2.1
UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
IN RE: ) CHAPTER 11
)
AMRE, INC., ) Case Nos. 397-30567-SAF-11
AMERICAN REMODELING, INC., ) 397-30656-SAF-11
FACELIFTERS HOME SYSTEMS, INC., ) 397-30657-SAF-11
CENTURY 21 HOME IMPROVEMENTS, ) 397-30658-SAF-11
INC. and CONGRESSIONAL ) 397-30659-SAF-11
CONSTRUCTION CORPORATION )
) JOINTLY ADMINISTERED UNDER
Debtors ) Case No. 397-30567-SAF-11
ORDER (i) PURSUANT TO SECTIONS 105 AND 363 OF THE BANKRUPTCY CODE
AUTHORIZING THE EMERGENCY SALE OF CERTAIN ASSETS OF THE
DEBTORS FREE AND CLEAR OF LIENS, CLAIMS AND ENCUMBRANCES,
SUBJECT TO THE TERMS OF AN ASSET PURCHASE AGREEMENT AND (ii)
PURSUANT TO SECTIONS 105 AND 363 OF THE BANKRUPTCY CODE
APPROVING ASSET PURCHASE AGREEMENT
On March 19, 1997, the Court held a hearing (the "Hearing") on the
First Amended Motion of AMRE, Inc., American Remodeling, Inc., Facelifters Home
Systems, Inc., Century 21 Home Improvements, Inc., and Congressional
Construction Corporation (the "Debtors") for an Order (i) Pursuant to Sections
105 and 363 of the Bankruptcy Code Authorizing the Emergency Sale of the Assets
of the Debtors Free and Clear of Liens, Claims and Encumbrances Subject to the
Terms of an Asset Purchase Agreement and (ii) Pursuant to Sections 105 and 363
of the Bankruptcy Code Approving Asset Purchase Agreement (the "Sale Motion").
The Court having considered the Sale Motion, the statements of counsel, the
evidence presented, the pleadings and the record in this case, and otherwise
being fully advised, makes the following Findings of Fact and Conclusions of
Law:
ORDER (i) PURSUANT TO SECTIONS 105 AND 363 OF THE BANKRUPTCY
CODE AUTHORIZING THE EMERGENCY SALE OF CERTAIN ASSETS OF THE
DEBTORS FREE AND CLEAR OF LIENS, CLAIMS AND ENCUMBRANCES, SUBJECT TO
THE TERMS OF AN ASSET PURCHASE AGREEMENT AND (ii) PURSUANT TO SECTIONS 105
AND 363 OF THE BANKRUPTCY CODE APPROVING ASSET PURCHASE AGREEMENT - PAGE 1
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FINDINGS OF FACT
1. On January 20, 1997, (the "AMRE Petition Date") an involuntary
petition under Chapter 11 of Title 11 of the United States Code (the
"Bankruptcy Code") was filed against AMRE, Inc. ("AMRE"). AMRE consented to
the entry of an order for relief which was entered on January 23, 1997. On
January 22, 1997, the Debtors other than AMRE filed their respective voluntary
petitions for relief under Chapter 11 of the Code. The Court has ordered that
the Chapter 11 cases of the Debtors (the "Cases") be jointly administered.
2. Since the Petition Date, the Debtors have continued to operate
and manage their businesses as Debtors in Possession pursuant to Section
1107(a) and 1108 of the Bankruptcy Code.
3. The Debtors have continued to complete work in progress and
have used interim operating agreements with third parties to complete customer
contracts, but have otherwise ceased sales operations.
4. On February 12, 1997, the Debtors entered into that certain
Asset Purchase Agreement, as amended (the "Reunion Asset Purchase Agreement"),
with Reunion Home Services, Inc. ("Reunion") pursuant to which the Debtors have
agreed to sell a substantial portion of their assets as set forth in the
Reunion Asset Purchase Agreement and as bid upon at the hearing on the Sale
Motion and as specifically itemized in Exhibit "A" attached hereto (the
"Reunion Assets") for the sum of $838,967.00 and other consideration.
5. On or about February 12, 1997, the Debtors entered into that
certain Asset Purchase Agreement, as amended (the "U.S. Remodelers Asset
Purchase Agreement"), with
ORDER (i) PURSUANT TO SECTIONS 105 AND 363 OF THE BANKRUPTCY
CODE AUTHORIZING THE EMERGENCY SALE OF CERTAIN ASSETS OF THE
DEBTORS FREE AND CLEAR OF LIENS, CLAIMS AND ENCUMBRANCES, SUBJECT TO
THE TERMS OF AN ASSET PURCHASE AGREEMENT AND (ii) PURSUANT TO SECTIONS 105
AND 363 OF THE BANKRUPTCY CODE APPROVING ASSET PURCHASE AGREEMENT - PAGE 2
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U.S. Remodelers, Inc. ("U.S. Remodelers") pursuant to which the Debtors have
agreed to sell a substantial portion of their assets as set forth in the U.S.
Remodelers Asset Purchase Agreement and as specifically itemized in Exhibit "B"
attached hereto (the "U.S. Remodelers Assets") for the sum of $352,377.60 and
other consideration, including the assumption of certain liabilities associated
with the Debtors' facilities located at Charles City, Virginia, provided that
the Debtors shall pay all amounts which have become due prior to the closing of
the U.S. Remodelers Asset Purchase Agreement under the indebtedness assumed by
U.S. Remodelers hereunder and shall pay the overdue property taxes owed to
Charles City County.
6. On or about February 12, 1997, the Debtors entered into that
certain Asset Purchase Agreement, as amended (the "REDO Asset Purchase
Agreement"), with REDO, L.L.C. ("REDO") and Steve Bedowitz pursuant to which
the Debtors have agreed to sell a substantial portion of their assets as set
forth in the REDO Asset Purchase Agreement and as bid upon at the hearing on
the Sale Motion and as specifically itemized in Exhibit "C" attached hereto
(the "REDO Assets") for the sum of $1,160,632.00 and other consideration.
7. The Debtors entered into that certain Asset Purchase Agreement
(the "Revive Asset Purchase Agreement") with Revive Remodeling, Inc. ("Revive")
pursuant to which the Debtors have agreed to sell a substantial portion of
their assets as set forth in the Revive Asset Purchase Agreement and as
specifically itemized in Exhibit "D" attached hereto (the "Revive Assets") for
the sum of $5,000.00 and other consideration.
8. The Debtors entered into that certain Asset Purchase Agreement
(the "Bellnap Asset Purchase Agreement") with Steve Bellnap ("Bellnap")
pursuant to which the Debtors have
ORDER (i) PURSUANT TO SECTIONS 105 AND 363 OF THE BANKRUPTCY
CODE AUTHORIZING THE EMERGENCY SALE OF CERTAIN ASSETS OF THE
DEBTORS FREE AND CLEAR OF LIENS, CLAIMS AND ENCUMBRANCES, SUBJECT TO
THE TERMS OF AN ASSET PURCHASE AGREEMENT AND (ii) PURSUANT TO SECTIONS 105
AND 363 OF THE BANKRUPTCY CODE APPROVING ASSET PURCHASE AGREEMENT - PAGE 3
<PAGE> 4
agreed to sell a substantial portion of their assets as set forth in the
Bellnap Asset Purchase Agreement and as specifically itemized in Exhibit "E"
attached hereto (the "Bellnap Assets") for the sum of $7,000.00 and other
consideration.
9. Reunion, U.S. Remodelers, REDO, Revive and Bellnap
(collectively the "Purchasers") have completed their due diligence and all
conditions precedent to closing of their respective asset purchase agreements
(collectively, the "Asset Purchase Agreements") except for the express closing
conditions precedent set forth in the respective Asset Purchase Agreements in
accordance with their respective terms, and except for the entry of the Order
Approving Assumption and Assignment of Executory Contracts in Connection with
Sale of Assets (the "365 Order") which is to be entered contemporaneously with
the instant Order.
10. Upon the filing of the Sale Motion, the Debtors requested and the
Court granted relief in the form of an Order Establishing Bid Procedures (the
"Bid Procedures Order"). In the Bid Procedures Order, the Court approved a
notice of sale (the "Notice of Sale"), set March 19, 1997 at 9:30 a.m. as the
date for a hearing on the Sale Motion and established procedures for the
service by mail and publications of the Notice of Sale. Further, the Notice of
the Sale Hearing was also published in the national editions of the WALL STREET
JOURNAL and LOS ANGELES TIMES, as required by the Bid Procedures Order. The
Debtors were not successful in publishing the notice of sale in the DALLAS
MORNING NEWS. The Sale Motion and the Notice of Sale adequately state the
facts and circumstances supporting the relief requested, including the releases
sought under Bankruptcy Rule 9019 and gave all creditors and affected
ORDER (i) PURSUANT TO SECTIONS 105 AND 363 OF THE BANKRUPTCY
CODE AUTHORIZING THE EMERGENCY SALE OF CERTAIN ASSETS OF THE
DEBTORS FREE AND CLEAR OF LIENS, CLAIMS AND ENCUMBRANCES, SUBJECT TO
THE TERMS OF AN ASSET PURCHASE AGREEMENT AND (ii) PURSUANT TO SECTIONS 105
AND 363 OF THE BANKRUPTCY CODE APPROVING ASSET PURCHASE AGREEMENT - PAGE 4
<PAGE> 5
parties which might be affected or impacted by the Sale Motion an opportunity
to appear and protect their interests.
7. The Debtors have substantially complied with the Bid
Procedures Order and such order is hereby modified to excuse the Debtors from
publication of the Notice of Sale in the DALLAS MORNING NEWS. Notice of the
Sale Motion and the Hearing was proper, reasonable, adequate under the facts
and circumstances of the Cases, and constitutionally sufficient.
8. The Debtors have conducted a comprehensive marketing process
to sell all of their assets. As a result of this process, the Debtors have
received proposals to purchase substantially all of their assets in several
packages, including the Reunion Assets, the U.S. Remodelers Assets, the REDO
Assets, the Revive Assets, and the Bellnap Assets (collectively, the "Sale
Assets"), but no other offers from persons other than the Purchasers. Based
upon comprehensive analyses of the terms and economics of each offer, the
Boards of Directors of the Debtors exercised reasonable business judgment and
concluded that the proposals made by Purchasers were the highest and best
proposals, and were in the best interests of the Debtors and their respective
estates.
9. Several of the principals of the Purchasers have previously
served as officers, directors, or employees of certain of the Debtors;
nevertheless, the Debtors are good faith sellers and the Purchasers are good
faith purchasers within the meaning of Section 363(m) of the Bankruptcy Code,
and the Debtors and the Purchasers are entitled to the protection of Section
363(m) of the Bankruptcy Code. The Asset Purchase Agreements are the product
of substantial and good faith negotiations that were conducted at arm's length
and without collusion so that the
ORDER (i) PURSUANT TO SECTIONS 105 AND 363 OF THE BANKRUPTCY
CODE AUTHORIZING THE EMERGENCY SALE OF CERTAIN ASSETS OF THE
DEBTORS FREE AND CLEAR OF LIENS, CLAIMS AND ENCUMBRANCES, SUBJECT TO
THE TERMS OF AN ASSET PURCHASE AGREEMENT AND (ii) PURSUANT TO SECTIONS 105
AND 363 OF THE BANKRUPTCY CODE APPROVING ASSET PURCHASE AGREEMENT - PAGE 5
<PAGE> 6
Purchasers are entitled to the protections from Section 363(n) of the
Bankruptcy Code, including an opportunity for an auction among prospective
bidders.
10. The Purchasers' offers were the highest and best offers for
the Sale Assets covered by the respective Asset Purchase Agreements or auctions
finalized at the hearing on the Sale Motion and as attached as Exhibits to this
Order.
11. Approval of the Asset Purchase Agreements and consummation of
the sales of substantially all the assets of the Debtors' estates is in the
best interest of the Debtors' respective estates, creditors, and other parties
in interest. The Court finds the Debtors have articulated a good and
sufficient business reason to justify an emergency sale of substantially all of
their estate property and that an emergency situation exists for authorizing
such a sale prior to confirmation of a plan of reorganization, including the
deteriorating financial situation of the Debtors and a substantial cost
detriment in administrative expenses which may be occasioned by any delay.
Further, good reasons exist to justify the assumption and assignment of certain
executory contracts and unexpired leases as a condition precedent to the
closing of the transactions in the Asset Purchase Agreements.
12. The consideration to be paid by the Purchasers to the Debtors
pursuant to the Asset Purchase Agreements is fair and constitutes fair and
reasonable value under the Bankruptcy Code and the laws of the State of Texas.
The terms of the release provided in the Reunion Asset Purchase Agreement are
fair and reasonable.
13. All Findings of Fact made herein and announced to the Court in
connection with the Bid Procedures Order are incorporated herein as modified by
this order.
ORDER (i) PURSUANT TO SECTIONS 105 AND 363 OF THE BANKRUPTCY
CODE AUTHORIZING THE EMERGENCY SALE OF CERTAIN ASSETS OF THE
DEBTORS FREE AND CLEAR OF LIENS, CLAIMS AND ENCUMBRANCES, SUBJECT TO
THE TERMS OF AN ASSET PURCHASE AGREEMENT AND (ii) PURSUANT TO SECTIONS 105
AND 363 OF THE BANKRUPTCY CODE APPROVING ASSET PURCHASE AGREEMENT - PAGE 6
<PAGE> 7
14. All Findings of Fact which are Conclusions of Law shall be
deemed to be Conclusions of Law.
CONCLUSIONS OF LAW
15. The Court has jurisdiction over the Cases and the property of
the Debtors and their respective bankruptcy estates under 28 U.S.C. Sections
1334 and 157. The Sale Motion concerns the administration the Debtors'
estates, approval of the sale of property of the Debtors' estates, and the
assumption and assignment of unexpired leases and executory contracts and
therefore is a core proceeding under 28 U.S.C. Sections 157(b)(2)(A),(M),(N),
and (O).
16. Good and constitutionally sufficient notice of the sale, the
sale hearing, and the auction proceedings has been given in accordance with the
Bankruptcy Code, the Federal Rules of Bankruptcy Procedure, and the Bid
Procedures Order as modified by this order.
17. All requirements of Sections 363(b) and 363(f) of the
Bankruptcy Code and any other applicable law relating to the sale of the estate
property contemplated by the Asset Purchase Agreements have been satisfied.
The transactions contemplated by the Asset Purchase Agreements between the
Debtors and the Purchasers are at arm's length, without collusion, and in good
faith within the meaning of Section 363(m) of the Bankruptcy Code, and such
parties are entitled to the protections afforded by Section 363(m) of the
Bankruptcy Code. None of the Debtors or the Purchasers has engaged in any
conduct that would cause or permit the Asset Purchase Agreements to be avoided
pursuant to Section 363(n) of the Bankruptcy Code. The transfers of the Sale
Assets by the Debtors to the respective Purchasers (i) are or will be legal,
valid and effective transfers of the estate property to the respective
Purchasers, (ii) vest or will
ORDER (i) PURSUANT TO SECTIONS 105 AND 363 OF THE BANKRUPTCY
CODE AUTHORIZING THE EMERGENCY SALE OF CERTAIN ASSETS OF THE
DEBTORS FREE AND CLEAR OF LIENS, CLAIMS AND ENCUMBRANCES, SUBJECT TO
THE TERMS OF AN ASSET PURCHASE AGREEMENT AND (ii) PURSUANT TO SECTIONS 105
AND 363 OF THE BANKRUPTCY CODE APPROVING ASSET PURCHASE AGREEMENT - PAGE 7
<PAGE> 8
vest the respective Purchasers with title in and to the Sale Assets as
described in the exhibits to this Order free and clear of all liens, claims and
Encumbrances (as hereinafter defined) pursuant to Section 363 of the Bankruptcy
Code except for those liabilities assumed by the Purchasers as provided in
accordance with the Asset Purchase Agreements as expressly stated at the
hearing and (iii) constitute transfers for reasonable and equivalent value and
fair consideration under the Bankruptcy Code and the laws of the state of
Texas. The release contained in the Reunion Purchase Agreement is approved
under the standards set forth in Protective Committee for Independent
Stockholders of TMT Trailor Ferry, Inc. v. Anderson, 390 U.S. 414 (1968).
18. The sale of the Sale Assets and assumption and assignment of
unexpired leases and executory contracts pursuant to the Asset Purchase
Agreement is not a "sub rosa" plan of reorganization.
19. The Conclusions of Law made herein or announced by the Court
in connection with the Bid Procedures Order are incorporated herein.
20. All Conclusions of Law which are Findings of Fact are deemed
to be Findings of Fact. In accordance with and based upon the foregoing
Findings of Fact and Conclusions of Law, it is hereby
ORDERED that (i) the relief requested in the Sale Motion is granted in
all respects; (ii) all objections to the Sales Motion not withdrawn or
overruled are denied; (iii) the Asset Purchase Agreements, all amendments
thereto, and related documents are approved in all respects; (iv) the Debtors
are authorized to consummate the sale of Sale Assets to the Purchasers pursuant
to the terms of the respective Asset Purchase Agreements and to perform the
related transactions
ORDER (i) PURSUANT TO SECTIONS 105 AND 363 OF THE BANKRUPTCY
CODE AUTHORIZING THE EMERGENCY SALE OF CERTAIN ASSETS OF THE
DEBTORS FREE AND CLEAR OF LIENS, CLAIMS AND ENCUMBRANCES, SUBJECT TO
THE TERMS OF AN ASSET PURCHASE AGREEMENT AND (ii) PURSUANT TO SECTIONS 105
AND 363 OF THE BANKRUPTCY CODE APPROVING ASSET PURCHASE AGREEMENT - PAGE 8
<PAGE> 9
in connection therewith and the form and content of the Asset Purchase
Agreements, as amended, and their respective Exhibits as submitted to the Court
and received into evidence on March 19, 1997 are approved. It is further,
ORDERED that the Debtors are authorized to perform their respective
obligations under the Asset Purchase Agreements and otherwise consummate the
transactions contemplated therein. It is further,
ORDERED that the Debtors and all other persons having duties and
responsibilities under the Asset Purchase Agreements or this Order or any
related agreements and their respective directors, officers, general partners,
agents, representatives, and attorneys are authorized and empowered to carry
out all of the provisions in the Asset Purchase Agreements and related
transaction documents and to take any action contemplated by the Asset Purchase
Agreements, and to perform such other acts and execute and deliver such other
documents as are consistent with, necessary and appropriate to implement,
effectuate, and consummate the Asset Purchase Agreements and related
agreements, this Order and the transactions contemplated thereby without
further application or order of the Court. Without limiting the generality of
the foregoing, this Order shall constitute all approvals and consents, if any,
that are required by the General Corporation Law of the States of Delaware or
Texas and all other applicable business corporations, trusts, and other laws of
applicable governmental units with respect to the implementation, consummation
and closing of the Asset Purchase Agreements in accordance with their
respective terms and related documents and this Order and the transactions
contemplated thereby. It is further,
ORDER (i) PURSUANT TO SECTIONS 105 AND 363 OF THE BANKRUPTCY
CODE AUTHORIZING THE EMERGENCY SALE OF CERTAIN ASSETS OF THE
DEBTORS FREE AND CLEAR OF LIENS, CLAIMS AND ENCUMBRANCES, SUBJECT TO
THE TERMS OF AN ASSET PURCHASE AGREEMENT AND (ii) PURSUANT TO SECTIONS 105
AND 363 OF THE BANKRUPTCY CODE APPROVING ASSET PURCHASE AGREEMENT - PAGE 9
<PAGE> 10
ORDERED that all title to the Sale Assets described in the respective
Asset Purchase Agreements shall be transferred free and clear of all liens,
claims, mortgages, pledges, security interests, restrictions, prior
assignments, liabilities, encumbrances, obligations, charges, and interests
(including "trust fund claims") of any and every kind, nature and description
whatever ("Encumbrances") except as expressly provided in the Asset Purchase
Agreements, pursuant to Section 363 of the Bankruptcy Code to the respective
Purchasers in accordance with the respective Asset Purchase Agreements and any
liens, claims or Encumbrances on the Assets shall attach to the proceeds of the
sale of the Assets to the same extent with the same priority as if such
property had not been sold. It is further,
ORDERED that pursuant to the immediately preceding paragraph, the
Debtors shall establish a segregated account and hold $270,000 of the proceeds
from the sale of the Reunion Assets in such segregated account which shall be
subject only to the alleged security interest of Sterling Bank and Trust
("Sterling") pending a determination of the value of the collateral (and
nothing in this Order shall be construed as a finding as to valuation) and
corresponding amount of the secured claim of Sterling and a further order of
the Court with respect thereto. It is further
ORDERED that the Amendment to the U.S. Remodeling Asset Purchase
Agreement providing for the transfer of the real property and the personal
property at the Charles City, Virginia location subject to the obligations to
Industrial Development Authority of Charles City, Virginia, and the lien of
Central Fidelity National Bank is hereby approved. It is further
ORDER (i) PURSUANT TO SECTIONS 105 AND 363 OF THE BANKRUPTCY
CODE AUTHORIZING THE EMERGENCY SALE OF CERTAIN ASSETS OF THE
DEBTORS FREE AND CLEAR OF LIENS, CLAIMS AND ENCUMBRANCES, SUBJECT TO
THE TERMS OF AN ASSET PURCHASE AGREEMENT AND (ii) PURSUANT TO SECTIONS 105
AND 363 OF THE BANKRUPTCY CODE APPROVING ASSET PURCHASE AGREEMENT - PAGE 10
<PAGE> 11
ORDERED that the Reunion Asset Purchase Agreement is also approved as
a compromise and settlement pursuant to Rule 9019, Fed. R. Bankr. Proc. All
persons are enjoined in any way from pursuing any of the Purchasers to recover
any claim which such person has against the Debtors except with respect to (i)
Assumed Liabilities (as that term is defined in the Asset Purchase Agreements);
(ii) any claim which is independently (as opposed to derivatively) assertable
against any of the Purchasers or (iii) not part of the Debtors' bankruptcy
estate prior to the entry of this order. It is further,
ORDERED that the Asset Purchase Agreements and related documents may
be modified, amended, or supplemented by the parties thereto in accordance with
the terms of thereof including closing prorations and adjustments without
further order of the Court (provided any such modification, amendment or
supplement is not material) upon notice to counsel to the Creditors' Committee
or as announced on the record at the Hearing. It is further,
ORDERED that the transfers of the Sale Assets from the Debtors to the
Purchasers are not subject to taxation or any state or local tax imposed in or
as a stamp, transfer or similar tax in accordance with Section 1146(c) of the
Bankruptcy Code. It is further
ORDERED that the proposed sale of any of the assets of Congressional
Construction Corporation ("Congressional") are hereby severed from the Sale
Motion (which shall be deemed only to have sought the sale of assets of the
Debtors other than Congressional) as a separate contested matter set for
hearing without further notice on March 27, 1997 at 10:30 a.m. with such
severance being without prejudice the Debtors' right to remove those assets
from the proposed sales, but such severance shall have no effect upon the other
terms of this Order, it
ORDER (i) PURSUANT TO SECTIONS 105 AND 363 OF THE BANKRUPTCY
CODE AUTHORIZING THE EMERGENCY SALE OF CERTAIN ASSETS OF THE
DEBTORS FREE AND CLEAR OF LIENS, CLAIMS AND ENCUMBRANCES, SUBJECT TO
THE TERMS OF AN ASSET PURCHASE AGREEMENT AND (ii) PURSUANT TO SECTIONS 105
AND 363 OF THE BANKRUPTCY CODE APPROVING ASSET PURCHASE AGREEMENT - PAGE 11
<PAGE> 12
being the express intention of the Court that the Sale Assets are sold free and
clear of all liens, claims and encumbrances by all Debtors. It is further
ORDERED that the Debtors may conduct a public auction of their
remaining tangible furniture, fixtures, equipment and inventory free and clear
of all liens, claims and encumbrances on or about April 12, 1997, without
further motion, notice or order of the Court. It is further
ORDERED that notwithstanding anything contained herein to the
contrary, the Debtor is not selling pursuant to the terms of this Order or
otherwise any equipment that the Debtor has leased from Sharp Electronics
Corporation, Sharp Electronics Credit Company or Cable and Wireless, Inc. It
is further
ORDERED that the Debtors may serve copies of this Order without the
attached exhibits.
DATED: March 21, 1997.
/s/ STEVEN A. FELSENTHAL
-----------------------------------
STEVEN A. FELSENTHAL
UNITED STATES BANKRUPTCY JUDGE
ORDER (i) PURSUANT TO SECTIONS 105 AND 363 OF THE BANKRUPTCY
CODE AUTHORIZING THE EMERGENCY SALE OF CERTAIN ASSETS OF THE
DEBTORS FREE AND CLEAR OF LIENS, CLAIMS AND ENCUMBRANCES, SUBJECT TO
THE TERMS OF AN ASSET PURCHASE AGREEMENT AND (ii) PURSUANT TO SECTIONS 105
AND 363 OF THE BANKRUPTCY CODE APPROVING ASSET PURCHASE AGREEMENT - PAGE 12
<PAGE> 13
OMITTED SCHEDULES
BANKRUPTCY COURT ORDER
SCHEDULE CONTENTS
Exhibit A Furniture, fixtures, equipment and inventory
purchased pursuant to the Order by Reunion
Home Services, Inc.
Exhibit B Furniture, fixtures, equipment and
inventory purchased pursuant to the Order by
U.S. Remodelers, Inc.
Exhibit C Furniture, fixtures, equipment and
inventory purchased pursuant to the Order by
REDO, L.L.C.
Exhibit D Furniture, fixtures, equipment and
inventory purchased pursuant to the Order by
ReVive Remodeling, Inc.
Exhibit E Furniture, fixtures, equipment and inventory
purchased pursuant to the Order by Steve Belnap.
The Registrant hereby agrees to provide supplemental copies of any and all of
the above omitted schedules should the Commission so request.
<PAGE> 1
EXHIBIT 2.2
ASSET PURCHASE AGREEMENT
BY AND AMONG
AMRE, INC.,
AMERICAN REMODELING, INC.,
AND
FACELIFTERS HOME SYSTEMS, INC.,
AS SELLERS,
AND
REDO, L.L.C.,
AS PURCHASER,
AND
STEVEN BEDOWITZ
<PAGE> 2
Schedules and Exhibits
Schedule 1.1 - Sales Offices
Schedule 2.1(a) - Leases
Schedule 2.1(b) - Furniture, Fixtures and Equipment
Schedule 2.1(d) - Computer Leases
Schedule 2.1(e) - Equipment Leases
Schedule 2.2(g) - Liabilities and Obligations
<PAGE> 3
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (the "Agreement") is dated as of the 27th
day of February, 1997, by and among AMRE, Inc., a Delaware corporation
("AMRE"), American Remodeling, Inc., a Texas corporation ("ARI"), Facelifters
Home Systems, Inc., a Delaware corporation ("Facelifters"), REDO, L.L.C., a
Texas limited liability company ("Purchaser"), and Steven Bedowitz, a former
officer and director of AMRE ("Bedowitz"). AMRE, ARI and Facelifters are
sometimes referred to herein individually as a "Seller" and collectively as
"Sellers."
RECITALS
WHEREAS, Sellers are in the vinyl siding and window remodeling and
products business; and
WHEREAS, each Seller is currently a debtor in possession in those 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, the group that has formed Purchaser, with Bedowitz as its
representative, and AMRE have previously entered into the Interim Period Letter
Agreement (as hereinafter defined); and
WHEREAS, Purchaser desires to buy and Sellers desire to sell certain
assets more particularly described in Section 2.1 used in the vinyl siding and
window remodeling and products business of Sellers conducted primarily at the
Sales Offices (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, Bedowitz 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.
<PAGE> 4
"Amelia Computer" means that certain IBM AS400 Model 320-2050 computer
located at AMRE's headquarters.
"AMRE" has the meaning specified in the opening paragraph hereof.
"AMRE Released Parties" has the meaning specified in Section 9.1 hereof.
"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 Code" means 11 U.S.C. Section 101, et seq.
"Bankruptcy Court" has the meaning specified in the Recitals.
"Bedowitz" has the meaning specified in the opening paragraph hereof.
"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) and
(b) of Section 2.2 hereof, as adjusted to reflect any prorations to be made
pursuant to Section 6.1 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.
"Computer Leases" means those computer leases set forth on Schedule 2.1(d)
hereto.
"Equipment Leases" means those leases for furniture, fixtures and
equipment set forth on Schedule 2.1(e) hereto.
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<PAGE> 5
"Encumbrances" means liens, charges, pledges, options, mortgages, security
interest, 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.
"Excluded Assets" means all assets, whether real or personal, tangible or
intangible, used or held for use by any of the Sellers or their affiliates
either primarily or exclusively in the cabinet business of such person.
"Facelifters" has the meaning specified in the opening paragraph hereof.
"FF&E" means the furniture, fixtures and equipment set forth on Schedule
2.1(b).
"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 February 10, 1997, by and among AMRE and the group that has formed
Purchaser, with Bedowitz as its representative.
"Inventory" means all inventory (including raw materials, work-in-progress
and finished goods) and related spare parts and supplies with respect to the
Business described on Schedule 2.1(c) that is owned by a Seller, located at
the Sales Offices, on hand at the Closing and determined to be usable by
Purchaser, 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 and properly noticed 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.
"Other Assets" means all assets, whether real or personal, tangible or
intangible, used or held for use in connection with the Business, including,
without limitation, all Consumer Contracts (as defined in the Interim Period
Letter Agreement); all books, records, manuals and other materials (in any form
or medium, including, without limitation, all records and materials, wherever
located, advertising matter, catalogs, price lists, correspondence, mailing
lists, lists of customers, distribution lists, photographs, sales and
promotional materials and records, purchasing materials and records, personnel
records, manufacturing and quality control records and procedures, media
materials, accounting records, manufacturing and quality control records and
procedures, media materials, accounting records, and sales order files); all
rights to television, radio and other advertising materials or production (in
any form or medium), excluding any television commercials and master tapes for
such commercials and all intellectual property rights associated therewith; all
general and intangible assets and contractual rights associated with the
Business; all computer software and data bases, including without limitation,
3
<PAGE> 6
the computer software and data bases used or stored in the Remis Computer (as
defined in the Interim Period Letter Agreement) and Amelia Computer; and all
rights to use any toll-free or other phone numbers associated with the Sales
Offices or the Business; and the related goodwill of the Business associated
therewith.
"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.
"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.
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, other than the
Excluded Assets (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 FF&E listed on Schedule 2.1(b) hereto;
(c) the Inventory described in Schedule 2.1(c);
4
<PAGE> 7
(d) all rights of each of the Sellers in, under and to each of the
Computer Leases listed on Schedule 2.1(d) hereto;
(e) all rights of each of the Sellers in, under and to each of the
Equipment Leases listed on Schedule 2.1(e) hereto;
(f) all rights of each of the Sellers in, under and to the Other Assets.
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 125% of the liquidation value of the FF&E, net
of all liabilities assumed by Purchaser that are related to the FF&E
(but in no event shall such amount exceed the value of the asset
securing the debt), as determined by a qualified appraiser selected by
Sellers and reasonably acceptable to Purchaser; provided that if
Purchaser reasonably objects to the valuation set forth by the
appraiser, Purchaser may, at Purchaser's sole cost and expense, retain
a qualified appraiser reasonably acceptable to Sellers and the
Bankruptcy Court, and the liquidation value shall be the average of
the values determined by the two appraisers;
(b) cash in an amount equal to 35% of the cost of Inventory;
(c) the release provided for in Section 9.1; and
(d) assumption of the Assumed Liabilities.
Section 2.3 Limitations of Liabilities Assumed. Except for the
obligations expressly assumed by Purchaser and/or Bedowitz under the Interim
Period Letter Agreement and/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 Seller's 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."
5
<PAGE> 8
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, Hauer & Feld, L.L.P., 1700
Pacific Avenue, Suite 4100, Dallas, Texas 75201, 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 bill of sale conveying the Business Assets, other than the
Leases, the Computer Leases and the Equipment Leases, to
Purchaser, signed by each applicable Seller;
(ii) an assignment and assumption agreement with respect to each of
the Leases, the Computer Leases and the Equipment Leases; and
(iii) the certificate contemplated by Section 7.3.
(b) Purchaser 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, Computer Leases and the Equipment Leases;
(iii) the certificates contemplated by Section 7.2.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLERS
Each Seller represents and warrants to Purchaser 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.
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
6
<PAGE> 9
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 Accuracy of Schedules. The initial Schedule 2.1(a) delivered
by Sellers for Purchaser's review shall contain a true and correct list of all
real property leases used in connection with the Business; the initial Schedule
2.1(b) delivered by Sellers for Purchaser's review shall contain a true and
correct list of all furniture, fixtures and equipment used at any Sales Office
and on the fourth and eighth floors of AMRE's corporate headquarters in
connection with the Business; the initial Schedule 2.1(d) delivered by Sellers
for Purchaser's review shall contain a true and correct list of all computer
leases used in connection with the Business; and the initial Schedule 21.(e)
delivered by Sellers for Purchaser's review shall contain a true and correct
list of all equipment leases used in connection with the Business.
ARTICLE V
COVENANTS, REPRESENTATIONS AND WARRANTIES
OF PURCHASER
Purchaser represents and warrants to Sellers as follows:
Section 5.1 Organization, Articles of Organization and Regulations.
Purchaser is a limited liability company duly organized, validly existing and
in good standing under the laws of the State of Texas. Purchaser has made
available to Sellers accurate and complete copies of its articles of
organization and regulations, each as currently in effect.
Section 5.2 Authority Relative to This Agreement. Purchaser has full
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 Manager of Purchaser,
and no other limited liability company proceedings on the part of Purchaser are
necessary to authorize the execution and delivery 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.
Section 5.3 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 articles of organization or regulations 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
7
<PAGE> 10
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 5.3, 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 5.4 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 5.5 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 5.6 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 5.7 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, consideration due upon completion of
all contracts and/or sales entered into by Purchaser as contemplated by
paragraph I.2. of the Interim Period Letter Agreement, and Purchaser shall pay
all amounts owed to Sellers under paragraph I.2. of the Interim Period Letter
Agreement.
Section 5.8 Brokerage Agreements. Neither Purchaser nor Bedowitz has,
directly or indirectly, retained any financial advisor, broker, agent, or
finder or paid or agreed to pay any financial advisor, broker, agent, or finder
on account of this Agreement, the Interim Period Letter Agreement or any
transaction contemplated by this Agreement or the Interim Period Letter
Agreement.
Section 5.9 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 5.10 Hiring of Former Employees and Current Employees. Prior to
the Closing Date, Purchaser may only hire any employee of any Seller for time
in excess of the normal forty (40) hour work week worked by such employee for
such Seller. With respect to hiring decisions
8
<PAGE> 11
for employment subsequent to the Closing Date, 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 any Seller or in any manner whatsoever be responsible for the
payment of any compensation, severance and/or termination pay relating to any
former employee of any Seller or due to any union or other labor organization.
In the event that Purchaser elects to employ 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 any Seller 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 Seller. All other Taxes with respect to the Business Assets shall be
prorated as of the Closing Date, based upon the assessment for the previous
year if current tax information is not available.
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 Purchaser 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 Purchaser 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.
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<PAGE> 12
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 unreasonably 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. 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 Competition Waiver. Sellers hereby agree that, in
undertaking and performing the actions contemplated by this Agreement,
Purchaser and/or Bedowitz shall not be deemed to have violated or breached any
provision of any agreement between or among the parties hereto prohibiting or
restricting Purchaser and/or Bedowitz from hiring any former employee or
independent contractor of any Seller.
Section 6.7 Amelia Computer. As long as AMRE continues to lease the
Amelia Computer AMRE may use the software thereon, and AMRE shall provide
Purchaser with access to the Amelia Computer hardware and the software in
connection with Purchaser's operations following the Closing Date at a cost
equal to the pro-rata portion of the computer time used by Sellers. At such
time as AMRE decides it no longer requires the use of the Amelia Computer it
will give Purchaser notice it intends to discontinue the lease for such
computer, and upon receipt of such notice, Purchaser shall have ten (10)
business days to assume such lease. Following such ten (10) business day
period, Seller shall have no further obligation to make the Amelia Computer
available to Purchaser.
Section 6.8 Storage, Protection and Availability of Records. Purchaser
agrees to safeguard, protect and store, and provide Sellers with notice as to
the location of, all of the contracts, books, records, customer lists, purchase
orders and customer information relating to the Business that is located at the
Sales Offices for a minimum of one hundred twenty (120) days from the Closing
Date; provided that such records are currently located at the Sales Offices and
in the possession, custody and control of Purchaser. Purchaser agrees to grant
Sellers access to, and allow Sellers to copy, all such contracts, books,
records, customer lists, purchaser orders and customer information for a
minimum of two (2) years from the Closing Date.
Section 6.9 Payment of Expenses. Sellers covenant that they will apply
amounts received from Purchaser pursuant to paragraph 6 of the Interim
Agreement to the rent, utilities, insurance and property taxes related to the
Managed Business (as defined by the Interim Period Letter Agreement).
Section 6.10 Submission of Schedules. On or before March 10, 1997 Sellers
shall complete and submit to Purchaser for its review all the schedules to be
attached hereto other than
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<PAGE> 13
Schedule 2.1(c) (Inventory). Purchaser shall have until March 17, 1997 to
accept or reject the items disclosed in such schedules in writing, and
Purchaser's failure to accept or reject any item disclosed in such schedule by
such date shall be deemed to be an acceptance of such item disclosed in such
schedule. Purchaser shall deliver Schedule 2.1(c) (Inventory) of the day
preceding the Closing Date, and such schedule shall be used to calculate the
Cash Purchase Price attributable to the Inventory.
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 Bankruptcy Court requesting approval of:
(i) the assumption and assignment by Sellers to Purchaser of each
of the Leases;
(ii) the assumption and assignment by Sellers to Purchaser of each
of the Computer Leases;
(iii) the sale by Sellers to Purchaser, free and clear of all
liens, claims and encumbrances, of the Business Assets other
than the Leases, the Equipment Leases and Computer Leases;
(iv) the assumption and assignment by Sellers to Purchaser of each
of the Equipment Leases;
(v) releases provided for in Article IX; and
(vi) a breakup fee to be paid to Purchaser if the Bankruptcy Court
fails to approve this Agreement because another offer for the
Business or any part thereof has been approved by the
Bankruptcy Court, to be paid immediately upon the closing of
the transaction resulting from such offer, with such breakup
fee to be in the amount of $2,500.00 for reimbursement of
Purchaser's costs and expenses in connection with the
negotiation of and activities incident to this Agreement.
(b) Findings. The Sale and Assignment Motion shall have
requested a finding that:
(i) with respect to each Lease, Computer Lease and Equipment
Lease to be assumed and assigned to Purchaser pursuant to
this Agreement, the
11
<PAGE> 14
applicable Seller 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
such Seller to cure such default prior to assumption or
assignment of such Seller lease shall be as set forth in the
Sale and Assignment Motion;
(ii) with respect to each Lease, Computer Lease and Equipment
Lease to be assumed and assigned to Purchaser pursuant to
this Agreement, assignment of such lease to Purchaser does
not violate or constitute a breach of such lease;
(iii) with respect to each Lease, Computer Lease and Equipment
Lease to be assumed and assigned to Purchaser pursuant to
this Agreement, assumption and assignment of such lease is
authorized pursuant to Section 365 of the Bankruptcy Code and
that all requirements imposed by Section 365 of the
Bankruptcy Code for the assumption and assignment of
executory contracts and leases free and clear of liens
outside the scope of each Sellers' ordinary course of
business have been satisfied;
(iv) all requirements imposed by Section 363 of the Bankruptcy
Code for the sale of assets free and clear of liens, outside
of the scope of each Seller's ordinary course of business
have been satisfied;
(v) none of Purchaser, Bedowitz or any Seller has engaged in
conduct which would allow this Agreement to be set aside
pursuant to Section 363(n) of the Bankruptcy Code; and
(vi) any other provisions of the Bankruptcy Code governing the
sale of assets free and clear of liens outside the scope of
each Seller's ordinary course of business have been
satisfied.
(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 that this Agreement constitutes
an arms-length transaction between Sellers, Bedowitz and Purchaser.
(d) Hearing. The Sale and Assignment Motion shall have been
brought on for the Sale and Assignment Hearing on or before March
31, 1997.
(e) Order. The Sale and Assignment Order by the Bankruptcy Court
in form satisfactory to Purchaser shall have been entered granting
the relief requested pursuant to the Sale and Assignment Motion
(which order shall provide, without limitation, for the payment of
any amounts required to cure any defaults under any of Sellers'
leases as set forth in the Sale and Assignment Motion), and the Sale
and Assignment Order shall have been entered by March 31, 1997 and
not stayed.
12
<PAGE> 15
(f) No Proceedings. 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
or any Seller, or any of their respective affiliates, associates,
managers, members, 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
any Seller, or any of their respective affiliates, associates,
managers, members, officers or directors, seeking to prevent or
challenging the transactions contemplated hereby and seeking
material damages in connection therewith.
(g) Schedule Delivery. Sellers shall have delivered the schedules
referred to in Section 6.10 hereof in a timely manner.
(h) 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 $5,000.00 more in total consideration than the total
consideration offered by Purchaser under this Agreement.
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 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.
(b) Purchaser shall have performed each obligation to be performed by
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.
13
<PAGE> 16
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 Sellers
of this Agreement.
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 Applicable Law
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 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, and provided that Seller deliver to Purchaser
written notice of such offer within two (2) business days after
receipt thereof along with a copy of such offer:
(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); and
(ii) the third party is reasonable certain to pay the purchase price
under such offer in cash upon closing of such transaction; or
14
<PAGE> 17
(d) by either Purchaser or Sellers if the Closing has not occurred on or
before April 30, 1997.
Section 8.2 Effect of Termination. 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 no 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 5.9, 6.5 and 6.9 shall
survive the termination hereof. Nothing contained in this Section 8.2 shall
relieve any party from liability for any breach of this Agreement.
ARTICLE IX.
WAIVER, RELEASES AND INDEMNIFICATION
Section 9.1 Release of AMRE. Purchaser and Bedowitz, on behalf of
themselves and, as applicable, their respective successors, assigns, employees,
agents, officers, directors, members, managers, 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; provided,
however, that nothing contained in this release shall effect any obligation or
liability of any Seller for the express representations, warranties or
covenants contained herein. In addition, Purchaser 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 of the representations
and warranties of Purchaser contained herein.
Section 9.2 Release of Purchaser and Bedowitz. 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 Purchaser and Bedowitz and, as applicable,
its and his respective agents, heirs, employees, officers, directors, members,
managers, attorneys, representatives, 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 any acts, events, facts or
circumstances associated with or relating to prior relationships or business
dealings of Bedowitz or Purchaser with Sellers or the transactions contemplated
hereby or by the Interim Period Letter Agreement; provided, however, that
nothing contained in this release shall affect any obligation or liability of
Purchaser or Bedowitz for the express representations, warranties or covenants
contained herein.
15
<PAGE> 18
Section 9.3 No Prior Assignment. Each of Bedowitz, Purchaser and the AMRE
Parties represent and warrant to the other that it has not transferred,
assigned or encumbered any claims subject to the release granted hereby.
Section 9.3 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:
REDO, L.L.C.
______________________________________
______________________________________
Attention: Mr. Steven Bedowitz
Telephone No.: _______________________
Facsimile No.: _______________________
with a copy to:
Arter & Hadden
1717 Main Street, Suite 4100
Dallas, Texas 75201
Attention: Joel Held, Esq.
Telephone No.: (214) 761-2100
Facsimile No.: (214) 741-7139
If to Bedowitz:
Mr. Steven Bedowitz
______________________________________
______________________________________
Telephone No.: _______________________
Facsimile No.: _______________________
16
<PAGE> 19
If to Sellers:
AMRE, Inc.
8585 North Stemmons Freeway, Fifth Floor
Dallas, Texas 75247
Attention: Mr. J. Gregg Pritchard
Telephone No.: (214) 658-6300
Facsimile No.: (214) 658-6101
with a copy to:
Akin, Gump, Strauss, Hauer & Feld, L.L.P.
1700 Pacific Avenue, Suite 4100
Dallas, Texas 75201
Attention: G. Michael Curran, Esq.
Telephone No.: (214) 969-2800
Facsimile No.: (214) 969-4343
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
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; provided further,
however, that Purchaser may assign, without the prior written consent of
Sellers, any and/or all of Purchaser's rights, interests and obligations
hereunder to any affiliate of Purchaser that has net assets of at least
$2,000,000. 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, Bedowitz 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
17
<PAGE> 20
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.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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<PAGE> 21
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.
By: /s/ J. GREGG PRITCHARD
-------------------------------------
Name: J. Gregg Pritchard
Title: President
AMERICAN REMODELING, INC.
By: /s/ J. GREGG PRITCHARD
-------------------------------------
Name: J. Gregg Pritchard
Title: President
FACELIFTERS HOME SYSTEMS, INC.
By: /s/ J. GREGG PRITCHARD
-------------------------------------
Name: J. Gregg Pritchard
Title: President
REDO, L.L.C.
By: AMERICAN XTERIORS, INC., Manager
By: /s/ STEVEN BEDOWITZ
-------------------------------------
Name: Steven Bedowitz
Title: President
/s/ STEVEN BEDOWITZ
----------------------------------------
STEVEN BEDOWITZ
19
<PAGE> 22
OMITTED SCHEDULES
REDO, L.L.C.
ASSET PURCHASE AGREEMENT
SCHEDULE CONTENTS
Schedule 1.1 Sales Offices of the Debtors from which REDO,
L.L.C. purchased assets.
Schedule 2.1(a) Real property leases to be assumed by
REDO, L.L.C.
Schedule 2.1(b) Furniture, fixtures, and equipment purchased by
REDO, L.L.C. pursuant to the Asset Purchase
Agreement.
Schedule 2.1(c) Inventory purchased by REDO, L.L.C. pursuant to
the Asset Purchase Agreement.
Schedule 2.1(d) Computer leases to be assumed by REDO, L.L.C.
Schedule 2.1(e) Equipment leases to be assumed by REDO, L.L.C.
Schedule 2.2(g) Liabilities assumed by REDO, L.L.C. pursuant to
the Asset Purchase Agreement (those liabilities
in connection with the computer and equipment
leases).
The Registrant hereby agrees to provide supplemental copies of any and all of
the above omitted schedules should the Commission so request.
<PAGE> 1
EX. 2.3
CLOSING PRORATION AGREEMENT
THIS CLOSING PRORATION AGREEMENT ("Agreement") is made and entered
into by and among AMRE, INC., AMERICAN REMODELING, INC., and FACELIFTERS HOME
SYSTEMS, INC. (collectively, "Sellers") and REDO, L.L.C. ("Purchaser") on the
31st day of March, 1997, upon the following terms, provisions and conditions:
WHEREAS, Sellers and Purchaser entered into that certain Asset
Purchase Agreement dated February 27, 1997 (the "Asset Purchase Agreement")
among Amre, Inc., American Remodeling, Inc. and Facelifters Home Systems, Inc.,
as sellers, and Redo, L.L.C., as purchaser, and Steven Bedowitz;
WHEREAS, Sellers are Debtors under the jurisdiction of the United
States Bankruptcy Court for the Northern District of Texas, Dallas Division,
jointly administered under Case No. 397-30567-SAF-11 (the "Court");
WHEREAS, the Court entered an Order Approving Assumption and
Assignment of Executory Contracts in Connection With the Sale of Assets on
March 21, 1997 and further entered an Order (i) Pursuant to Sections 105 and
363 of the Bankruptcy Code Authorizing the Emergency Sale of Certain Assets of
the Debtors Free and Clear of Liens, Claims, and Encumbrances Subject to the
Terms of an Asset Purchase Agreement and (ii) Pursuant to Sections 105 and 363
of the Bankruptcy Code Approving Asset Purchase Agreement (collectively, the
"Orders");
WHEREAS, prior to the entry of the Orders and the formation of
Purchaser, Steven Bedowitz and Sellers entered into that certain letter
agreement dated February 10, 1997 creating an Interim Period Subcontract
Arrangement (the "Interim Operating Agreement") which was approved by the Court
by Order Approving Out-of-the Ordinary Course of Business Interim Operating
Procedures and Agreements and Steven D. Bedowitz and Affiliates entered
February 19, 1997 (the "Interim Order"), and Steven D. Bedowitz has delegated
his performance thereunder to Redo, L.L.C.;
WHEREAS, Section 6.1 of the Asset Purchase Agreement provides that
certain taxes shall be prorated as of the Closing Date;
WHEREAS, Section 2 of the Interim Operating Agreement provides that
Purchaser shall be responsible for all costs and expenses incurred from the
commencement of the Interim Period (as defined in the Interim Operating
Agreement) in connection with the Managed Business (as defined in the Interim
Operating Agreement); and
WHEREAS, the Orders authorize closing of the transaction contemplated
by the Asset Purchase Agreement, and the parties hereto desire to memorialize
certain closing prorations and agreements concerning those prorations and
agreements;
<PAGE> 2
NOW, THEREFORE, for and in consideration of the premises, the parties
hereby agree as follows:
1. Within five (5) days of the date hereof, Sellers shall provide
to Purchaser a tax proration schedule (the "Schedule") setting forth the amount
of total estimated taxes (the "Estimated Tax Amount") on the property
transferred to Purchaser by Sellers pursuant to the Asset Purchase Agreement,
based upon (a) current tax information, in the case of property for which such
current information is available as of the date of the Schedule, and (b) last
year's actual tax rates and taxes, in the case of property for which no such
current information was available as of the date of the Schedule.
2. Seller's share of the taxes, and the adjustment to the Cash
Purchase Price (as defined in the Asset Purchase Agreement) pursuant to Section
6.1 of the Asset Purchase Agreement, shall be equal to the fraction 41/365
multiplied by the Estimated Tax Amount (the "Proration Amount").
3. Purchaser shall be allowed to hold back on the date hereof
$50,000 of the Cash Purchase Price due to Sellers under the Asset Purchase
Agreement.
4. If the Proration Amount is less than $50,000, within three (3)
days of receipt of the Schedule, Purchaser shall pay to Sellers in immediately
available funds the difference between (a) $50,000 less (b) the Proration
Amount. If the Proration Amount is greater than $50,000, within three (3) days
of delivering the Schedule to Purchaser, Sellers shall pay to Purchaser in
immediately available funds the difference between (a) the Proration Amount
less (b) $50,000.
5. This Agreement and the other writings referred to herein 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.
6. This Agreement may be amended, superseded, canceled, renewed
or extended only by a written instrument signed by the parties.
7. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND FORCED
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 LATTER OF (a) THE
CLOSING AND (b) THE PAYMENT OF ALL FUNDS DUE HEREUNDER.
2
<PAGE> 3
8. 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.
3
<PAGE> 4
EXECUTED this 31st day of March, 1997.
AMRE, INC.
By: /s/ J. GREGG PRITCHARD
---------------------------------
J. Gregg Pritchard, President
AMERICAN REMODELING, INC.
By: /s/ J. GREGG PRITCHARD
---------------------------------
J. Gregg Pritchard, President
FACELIFTERS HOME SYSTEMS, INC.
By: /s/ J. GREGG PRITCHARD
---------------------------------
J. Gregg Pritchard, President
REDO, L.L.C.
By: AMERICAN INTERIORS, INC.,
MANAGER
By: /s/ STEVEN BEDOWITZ
-----------------------------
Its: President
-----------------------------
4
<PAGE> 5
OMITTED SCHEDULES
REDO, L.L.C.
PRORATION AGREEMENT
There are no schedules to this Agreement.
<PAGE> 1
EXHIBIT 2.4
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (the "Agreement") is entered into as of
February __, 1997 among AMRE, Inc. ("AMRE"), Facelifters Home Systems, Inc.
("Facelifters") American Remodeling, Inc. ("ARI") (collectively, AMRE,
Facelifters and ARI are sometimes referred to herein as "Seller"), and U.S.
Remodelers, Inc. ("Purchaser").
W I T N E S S E T H:
WHEREAS, Sellers are the subject of Chapter 11 bankruptcy proceedings
jointly administered with other affiliate cases under Case No.
397-30567-SAF-11, pending before the United States Bankruptcy Court for the
Northern District of Texas, Dallas Division (the "Court"); and
WHEREAS, AMRE, Facelifters and Purchaser previously entered into an
agreement, evidenced by the Letter Agreement dated January 27, 1997 (the
"Interim Agreement"), providing for the interim operation by Purchaser of a
portion of the cabinet refacing business of AMRE conducted through Facelifters
and such terms were approved by the Court on January 27, 1997; and
WHEREAS, Sellers desire to sell, subject to Court approval, and
Purchaser desires to acquire certain assets utilized in and related to the
Business as more particularly described herein, such assets to be sold to
Purchaser free and clear of all liens, claims and encumbrances;
NOW, THEREFORE, in consideration of the representations and promises
contained herein and such other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties agree as follows:
SECTION 1 DEFINITIONS.
The following capitalized terms used in this Agreement shall have the
following definitions:
1.1 "Application" shall have the meaning set forth in Section
2.1(a).
1.2 "Assets" shall have the meaning set forth in Section 3.1.
1.3 "Business" shall mean the kitchen remodeling and cabinet
refacing business of Seller conducted through Seller at the Sale Offices, the
Telemarketing Centers and the Chas City Factory.
1.4 "Chas City Factory" shall mean the factory leased and operated
by Facelifters located at 125 Roxsbury Industrial Center, Charles City,
Virginia.
1.5 "Court" shall have the meaning set forth in the first recital
paragraph.
1.6 "FF&E" shall have the meaning set forth in Section 3.1(a).
1.7 "Inventory" shall have the meaning set forth in Section
3.1(b).
<PAGE> 2
1.8 "Las Colinas Offices" shall mean the sales office of
Facelifters located at 3105 Skyway Circle North, Irving, Texas, 75038.
1.9 "Leases" shall have the meaning set forth in Section 3.3(b).
1.10 "Order" shall have the meaning set forth in Section 2.1(f).
1.11 "Purchase Price" shall have the meaning set forth in Section
3.2.
1.12 "Sales Offices" shall have the meaning set forth in Section
3.1(a).
1.13 "Telemarketing Center" shall mean the telemarketing centers
located at 7650 Southgate Blvd., North Lauderdale, Florida and 1601 Clint Moore
Road, Boca Raton, Florida.
1.14 "Trademarks" shall have the meaning set forth in Section
3.1(c).
SECTION 2 CONDITIONS PRECEDENT
2.1 Bankruptcy Court Approval. The obligations of Seller and
Purchaser to close the transactions and sale of assets contemplated by this
Agreement are subject to the following conditions precedent:
(a) Application. An Application (the "Application")
shall have been filed with the Court requesting approval of:
(1) the assumption by AMRE and Facelifters and
assignment by Seller to the Purchaser, free and clear of all
liens, claims and encumbrances (except for those, if any,
which Purchaser may agree to assume pursuant to Section
3.2(a)), of each of the Leases and cure by the Seller of all
defaults under the Leases up through the date of the Closing;
(2) the sale by Seller to the Purchaser, free and
clear of all liens, claims and encumbrances (except for those,
if any, which Purchaser may agree to assume pursuant to
Section 3.2(a)), of the Assets (defined herein); and
(3) 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 as a higher and better offer, 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 $30,000
for reimbursement of Purchaser's costs and expenses in
connection with the negotiation of and activities incident to
this Agreement.
(b) Findings. The Application shall have requested a
finding that, with respect to each of the Leases:
2
<PAGE> 3
(1) AMRE, Facelifters or ARI, which ever is
lessee, is not in default under the Lease, or if a default
exists under such Lease, the Application shall set forth the
amount required to be paid by AMRE, Facelifters or ARI to cure
such default prior to assumption or assignment of such Lease;
and
(2) assignment of such Lease to Purchaser does
not violate or constitute a breach of such lease.
(d) Good Faith. The Application shall request a finding
that Purchaser is a good faith purchaser pursuant to Section 363(m) of
the United States Bankruptcy Code, and that this Agreement constitutes
an arms-length transaction between the Seller and the Purchaser.
(d) Overbids. The Application 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 cash 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.
(e) Hearing. The Application shall have been brought on
for hearing on March 19, 1997, at which time the Application shall
have been subject to higher and better bids.
(f) Order. An order by the Court in form satisfactory to
counsel to Purchaser shall have been entered granting the relief
requested pursuant to the Application, including assignment of all of
the Leases (the "Order"), ten days shall have passed from the entry of
the Order, and no stay of such Order shall be in effect.
2.2 Defaults Under Leases. Provided Purchaser has paid all
reimbursement of operating expenses required under the Interim Agreement,
Seller shall have cured all defaults under each of the Leases up through the
date of the Closing.
SECTION 3 ASSET PURCHASE
3.1 Conveyance of Assets. Subject to and upon the terms and
conditions contained herein, on the Closing Date, Seller shall sell, convey,
transfer and assign to Purchaser, free and clear of liens, claims and
encumbrances (except for those, if any, Purchaser agrees to assume pursuant to
Section 3.2(a)), and Purchaser shall purchase all of Seller's right, title and
interest in and to all items of personal property used exclusively in
connection with the Business (collectively, the "Assets"). Without limitation,
the Assets include:
(a) FF&E. All of the personal property located at the
sales offices listed on Exhibit A hereto (the "Sales Offices"), the
Telemarketing Centers, the Chas City Factory, and the Las Colinas
Sales Office, including but not limited to the items listed on Exhibit
B attached hereto and incorporated herein by reference (collectively,
the "FF&E").
3
<PAGE> 4
(b) Inventory. All of Sellers' inventory for use in
connection with the Business remaining as of the Closing Date located
at the Sales Offices and the Chas City Factory, other than obsolete,
damaged and scrap inventory or inventory subject to a valid claim for
reclamation (the "Inventory").
(c) Trademark and Trade Name. All right, title and
interest in the trademarks, service marks and trade names
"Facelifters," "Facelifters Home Systems" and all related trademarks
and trade names, and any goodwill of the business associated therewith
(collectively, "Trademarks").
(d) Contracts and Leads. All right, title and interest of
the Seller in any kitchen remodeling or cabinet refacing contracts
which Purchaser has undertaken performance of pursuant to the Interim
Agreement, and any leads generated by the Seller from any of the Sales
Offices. All work performed under such contracts shall be performed
in the name of Purchaser and not on behalf of Seller, and Purchaser
shall obtain an acknowledgement from each customer that Purchaser is
responsible for the work to be performed and warranties to be given
and Seller shall not be liable for any of the work performed by
Purchaser.
(e) Books and Records. All books and records, customer
lists and customer telephone numbers, marketing data and materials
(including without limitation television commercials and promotional
videos), of AMRE and Facelifters relating to the Assets, all of which
shall be delivered to Purchaser.
3.2 Purchase Price. Purchaser shall pay the following amounts to
AMRE on the Closing Date (the "Purchase Price"):
(a) An amount equal to 125% of the liquidation value of
the FF&E as determined by a qualified appraiser selected by AMRE and
reasonably acceptable to Purchaser. If Purchaser agrees to assume or
take any of the FF&E subject to any indebtedness or other liability
secured by any of the FF&E, the consideration to be paid by Purchaser
for the FF&E shall be reduced by the amount of that indebtedness, not
to exceed the value of the assets securing the indebtedness or other
liability assumed. Costs and expenses of the appraiser shall be the
sole responsibility of and shall be paid by AMRE. If Purchaser
reasonably objects to the valuation set forth by the appraiser, the
Purchaser may, at Purchaser's sole cost and expense, retain a
qualified appraiser reasonably acceptable to AMRE and the Court, and
the liquidation in value shall be the average of the values determined
by the two appraisers; and
(b) An amount equal to 30% of AMRE's actual cost of raw
materials for the Inventory.
3.3 Additional Consideration. In addition to the Purchase Price,
Purchaser shall provide addition consideration to AMRE and Facelifters as
follows:
(a) Payment on Certain Contracts. With respect to
contracts and purchase orders originated in the name of AMRE or
Facelifters prior to the bankruptcy filing by
4
<PAGE> 5
AMRE and Facelifters but assigned to Purchaser, Purchaser shall pay to
AMRE on the last day of each week a cash amount equal to four percent
(4%) of the total amount actually collected by Purchaser on such
contracts (excluding applicable sales taxes) during the preceding
week. Purchaser shall also pay to AMRE, on the last day of each week,
three percent (3%) of amounts actually collected during the preceding
week from contracts resulting from leads provided to Purchaser by AMRE
during the Interim Agreement.
(b) Assumption of Leases and Certain Liabilities.
Purchaser will take assignment of and will assume the obligations
arising from the Closing Date forward under the real property leases
listed on Exhibit C for each of the Sales Offices, the Telemarketing
Centers and the Chas City Factory, and will take assignment of and
will assume the obligations arising from the Closing Date forward
under the equipment leases listed on Exhibit C (collectively, the
"Leases"). Provided that Purchaser has satisfied its obligations to
reimburse Seller for certain operating expenses under the Interim
Agreement, all obligations due and unpaid prior to the Closing Date
arising under the Leases, or those obligations which have accrued but
are not yet due and payable thereunder, including without limitation
any taxes or tax escrow payments, common area assessments or rental
payments, shall be paid by AMRE, Facelifters or ARI prior to the
closing. The Application shall set forth all due and unpaid
obligations relating to the Leases to be paid by AMRE or Facelifters
prior to closing. Prior to the closing of the transactions
contemplated by this Agreement, Purchaser may negotiate with lessors
regarding real estate and equipment leases on an ongoing basis.
3.4 Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall occur in Dallas, Texas, on the fifth business
day following the later of (a) the date on which the Order becomes final and is
no longer subject to possibility of stay, appeal or reconsideration, (b) the
date on which the value of the FF&E is finally determined pursuant to Section
3.2(a), or (c) such other date agreed upon by Seller and Purchaser (the
"Closing Date").
3.5 Utilities. Subject to Purchaser's obligations under the
Interim Agreement to reimburse AMRE and Facelifters for certain operating
expenses, AMRE and Facelifters shall remain responsible for payment for utility
service related to the Leases up to the Closing Date.
3.6 Liability Under Interim Agreement. Purchaser shall remain
liable for any and all amounts due and unpaid to AMRE or Facelifters under the
Interim Agreement.
3.7 Retained Liabilities. Except for the obligations
expressly assumed pursuant to the Interim Agreement and this Agreement,
Purchaser shall not assume or agree to pay, perform or discharge any other
liabilities or obligations of Seller, and Seller shall retain such liabilities
and obligations, 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 AMRE, Facelifters or ARI, (b) any implied
or express warranties relating to such work on, or (c) any pension, benefit or
other liability relating to AMRE's, Facelifters' or ARI's employees.
5
<PAGE> 6
3.8 Competition Waiver. AMRE and Facelifters acknowledge and
agree that Murray Gross is not bound by any covenant against competition with
AMRE or Facelifters and Purchaser may perform and undertake all actions
contemplated by this Agreement.
3.9 No Warranty/As Is-Where Is. Any and all Assets of the
Business purchased by Purchaser shall be, without exception, without warranty
of any kind, express or implied, and shall be in all respects in "as is-where
is" condition.
3.10 Purchaser's Option to Terminate. In the event (a) the Closing
Date has not occurred by April 10, 1997, or (b) the Court has ruled that any of
the Leases underlying the Telemarketing Centers or the Chas City Factory cannot
be assigned to Purchaser or (c) less than seven of the leases underlying the
nine Sales Offices can be assigned to Purchaser, then Purchaser, at its sole
option, may elect to terminate this Agreement with no further obligation
hereunder.
SECTION 4 REPRESENTATIONS AND WARRANTIES OF AMRE AND FACELIFTERS
AMRE, Facelifters and ARI, jointly and severally, hereby represent and
warrant to Purchaser as follows:
4.1 Corporate Existence and Good Standing. Each of AMRE,
Facelifters and ARI is a corporation duly organized, validly existing and in
good standing under the laws of the state of Delaware, and each of AMRE and
Facelifters has all necessary corporate power and authority to execute, deliver
and perform this Agreement and all other documents executed and delivered or to
be executed and delivered by it pursuant to this Agreement.
4.2 Title. Either AMRE, Facelifters or ARI, as the case may be,
owns good and marketable title to the FF&E and the Inventory.
4.3 Intellectual Property. Neither AMRE, Facelifters nor ARI has
transferred or conveyed any interest in or to the Trademarks, and has not
granted any right of use to the Trademarks, to any party other than Purchaser
pursuant to the Interim Agreement, since the merger of Facelifters and AMRE
Acquisition, Inc. on April 26, 1996.
SECTION 5 REPRESENTATIONS AND WARRANTIES OF PURCHASER
5.1 Corporate Existence and Good Standing. Purchaser is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware, and that it has all necessary corporate power
and authority to execute, deliver and perform this Agreement and all other
documents executed and delivered or to be executed and delivered by it pursuant
to this Agreement.
5.2 Authority. 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
6
<PAGE> 7
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.
5.3 Financing. Purchaser has, and at the Closing Date will have,
such funds as are necessary for the consummation by Purchaser of the
transactions contemplated hereby.
SECTION 6 CLOSING DELIVERIES
6.1 Deliveries by AMRE and Facelifters to Purchaser. At Closing,
AMRE and Facelifters shall deliver to Purchaser the following, all of which
shall be in a form satisfactory to counsel to Purchaser:
(a) Bill of Sale. A bill of sale conveying the Assets to
Purchaser, signed by AMRE, Facelifters, and each of their affiliates.
(b) Assignment of Leases. An assignment and assumption
agreement with respect to each of the Leases.
(c) Assignment of Trademarks. Assignment of the
Trademarks and any additional notifications and documentation required
by each jurisdiction in which the Trademarks are registered to
evidence such assignment.
(d) Other Instruments of Transfer. Such other
instruments and documents as are reasonably requested by Purchaser to
carry out and effect the purpose and intent of this Agreement.
6.2 Deliveries by Purchaser to AMRE. At Closing, Purchaser shall
deliver to AMRE the following, all of which shall be in a form satisfactory to
counsel to AMRE:
(a) Purchaser Price. The Purchase Price in immediately
available funds.
(b) Assignment of Leases. An assignment and assumption
agreement with respect to each of the Leases.
(c) Other Instruments of Transfer. Such other
instruments and documents as are reasonably requested by AMRE to carry
out and effect the purpose and intent of this Agreement.
SECTION 7 GENERAL PROVISIONS.
7.1 Notices. Any communications required or desired to be given
hereunder shall be deemed to have been properly given if sent by hand delivery,
or by facsimile and overnight courier, to the parties hereto at the following
addresses, or at such other address as either party may advise the other in
writing from time to time:
if to AMRE or Facelifters, to
7
<PAGE> 8
AMRE or Facelifters
8585 N. Stemmons Freeway
8th Floor
Dallas,Texas, 75247
Attention: President
Telecopy: (214) 658-6101
with a copy to
Akin, Gump, Strauss, Hauer and Feld, L.L.P.
1700 Pacific Ave.
Suite 4100
Dallas, Texas 75201-4618
Attention: Michael Curran
Telecopy: (214) 969-4343
if to Purchaser
U.S. Remodelers, Inc.
3105 Skyway Circle North
Irving, Texas 75038
Attention: Murray Gross, President
Telecopy: (972) 258-7715
with a copy to
Jackson & Walker, L.L.P.
901 Main St.
Suite 6000
Dallas, Texas 75202
Attention: Charles D. Maguire, Jr.
Telecopy: (214) 953-5822
All such communications shall be deemed to have been delivered on the
date of hand delivery or on the next business day following the deposit of such
communications, properly addressed and postage prepaid with the overnight
courier.
8
<PAGE> 9
7.2 Invalidity of Provisions. Each of the Provisions contained in
this Agreement is distinctive and severable and a declaration of invalidity or
unenforceability of any such provision by a court of competent jurisdiction
shall not affect the validity or enforceability of any other provision hereof.
7.3 Storage and Protection of Records. Purchaser agrees to store
and retain all books and records of Seller relating to the Assets and conveyed
to Purchaser and shall make such records available to Seller for inspection and
copying for eighteen months from the Closing Date.
7.4 Additional Documentation. Each of the parties hereto agrees
to execute such additional documents as may be necessary or appropriate to
consummate the transactions contemplated herein.
7.5 Entire Agreement. This Agreement and the Interim Agreement
constitute the entire understanding among the parties pertaining to the subject
matter hereof. There are no warranties, representations or agreements among
the parties in connection with such subject matter except as specifically set
forth or referred to in this Agreement.
7.6 No Release. Other than those releases expressly contained in
the Interim Agreement or this Agreement, the parties have, by execution of this
Agreement, not released any claims that they may assert against each other.
7.7 GOVERNING LAW. THIS AGREEMENT AND THE OBLIGATIONS OF THE
PARTIES WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF TEXAS, WITHOUT REGARD TO ANY CONFLICTS-OF-LAWS PROVISION THEREOF THAT
WOULD OTHERWISE REQUIRE THE APPLICATION OF THE LAW OF ANY OTHER JURISDICTION.
7.8 Multiple Counterparts. This Agreement may be executed by
facsimile signature and in counterparts, each counterpart constituting an
original, but with all counterparts together constituting a single contract.
AMRE, INC.
By: /s/ J. GREGG PRITCHARD
---------------------------------
Name: J. Gregg Pritchard
-------------------------------
Title: President
------------------------------
FACELIFTERS HOME SYSTEMS, INC.
By: /s/ J. GREGG PRITCHARD
---------------------------------
Name: J. Gregg Pritchard
-------------------------------
Title: President
------------------------------
AMERICAN REMODELING, INC.
By: /s/ J. GREGG PRITCHARD
---------------------------------
Name: J. Gregg Pritchard
-------------------------------
Title: President
------------------------------
U.S. REMODELERS, INC.
By: /s/ MURRAY H. GROSS
---------------------------------
Name: Murray H. Gross
Title: President
9
<PAGE> 10
OMITTED SCHEDULES
U.S. REMODELERS, INC.
ASSET PURCHASE AGREEMENT
SCHEDULE CONTENTS
Exhibit A Sales Offices of the Debtors from which
U.S. Remodelers, Inc. purchased assets.
Exhibit B Furniture, fixtures, and equipment purchased by
U.S. Remodelers, Inc. pursuant to the Asset
Purchase Agreement.
Exhibit C Real property and equipment leases to be
assumed by U.S. Remodelers, Inc.
The Registrant hereby agrees to provide supplemental copies of any and all of
the above omitted schedules should the Commission so request.
<PAGE> 1
EXHIBIT 2.5
FIRST AMENDMENT
TO
ASSET PURCHASE AGREEMENT
This First Amendment (the "Amendment") to the Asset Purchase Agreement
(the "Agreement") dated February 12, 1997, by and among AMRE, Inc., Facelifters
Home Systems, Inc., American Remodeling, Inc. and U.S. Remodelers, Inc., is
made as of April 3, 1997.
WHEREAS, the parties entered into the Agreement whereby Purchaser would
acquire certain assets of Sellers; and
WHEREAS, in preparation for the Closing certain determinations have been
made with respect to the Business Assets which the parties desire to
acknowledge;
AGREEMENTS
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 and Sellers, intending to be legally
bound hereby, agree as follows:
1. Capitalized terms used herein and not otherwise defined shall have the
meanings ascribed to such terms in the Agreement.
2. A new Section 1.9A shall be added to the Agreement, to read in its
entirety as follows:
"1.9A "Loan Documents" shall mean (a) the Economic Development
Revolving Loan Fund Agreement dated as of February 12, 1995, by and
between the Department of Housing and Community Development and the
Industrial Development Authority of the County of Charles City, Virginia,
(b) the Economic Development Revolving Loan Fund Loan Agreement dated as
of April 1, 1995, by and between Facelifters and the Industrial
Development Authority of the County of Charles City, Virginia, (c) the
Security Agreement dated as of April 1, 1995, by and between Facelifters
and the Industrial Development Authority of the County of Charles City,
Virginia, (d) a Promissory Note dated as of April 7, 1995, by Facelifters
in favor of the Industrial Development Authority of the County of Charles
City, Virginia, (e) an Amendment to Financing Statement (950407-7743)
filed on April 7, 1995, executed by Central Fidelity National Bank and
Facelifters, and amending an Original Financing Statement (941109-7147)
filed on November 9, 1994 and executed by Central Fidelity National Bank
and Facelifters, (f) an Original Financing Statement (950407-7742) filed
on April 7, 1995 and executed by Facelifters, (g) Loan Agreement dated as
of September 23, 1994, by and between Facelifters and Central Fidelity
National Bank, (h) Commercial Note dated as of October 20, 1994, by
Facelifters in favor of Central Fidelity National Bank, (i) Original
Financing Statement (941109-7147) filed on November 9, 1994 and executed
by Central Fidelity National Bank and Facelifters, (j) Security Agreement
dated July 28, 1994 by and
<PAGE> 2
between Facelifters Home Systems, Inc., a New York corporation, and
Central Fidelity National Bank, (k) the Lease-Purchase Agreement dated as
of February 16, 1994, by and between Charles City County, Virginia, and
Facelifters, and (l) Letter Agreement dated effective as of May 18, 1995,
between Facelifters and Charles City County relating to Reconstruction of
Parking/Loading Areas, Contract with Brooks & Company General Contractors,
Inc., as modified by the letter dated February 23, 1996, and accompanying
payment schedule, to Facelifters from Randolph, Boyd, Cherry and Vaughan.
3. Section 3.1(c) of the Agreement is amended to read in its entirety as
follows:
"(c) Trademark and Trade Name. All right, title and interest of the
Sellers or any of their subsidiaries in the trademarks, service marks and
trade names "Facelifters," "Facelifters Home Systems" and all related
trademarks and trade names and any goodwill of the business associated
therewith (collectively, "Trademarks")."
4. A new Section 3.3(c) is added to the Agreement, to read in its entirety
as follows:
"(c) Assumption of Certain Debt and/or Lease Obligations. Purchaser
will assume any and all obligations of any and all Sellers under or
related to the Loan Documents. Purchaser shall use its reasonable best
efforts to obtain releases from all parties (other than Sellers) to the
Loan Documents and any related guaranties in favor of Sellers in
connection with Purchaser's assumption of the obligations under and
related to the Loan Documents."
5. A new Section 3.11 is added to the Agreement, to read in its entirety
as follows:
"3.11 Sellers' Release of Preferences. Sellers shall release any and
all preference claims against the parties to the Loan Documents (other
than Sellers and Purchaser) with respect to the obligations that Purchaser
assumes pursuant to Section 3.3(c)."
6. Section 4.1 to the Agreement is hereby amended to read in its entirety
as follows:
"4.1 Corporate Existence and Good Standing. Each of AMRE and
Facelifters is a corporation duly organized, validly existing and in good
standing under the laws of the state of Delaware, and ARI is a corporation
duly organized, validly existing and in good standing under the laws of
the state of Texas, and each of AMRE, ARI and Facelifters has all
necessary corporate power and authority to execute, deliver and perform
this Agreement and all other documents executed and delivered or to be
executed and delivered by it pursuant to this Agreement."
7. A new Section 6.3 is added to the Agreement, to read in its entirety as
follows:
"6.3 Additional Undertakings of Sellers at Closing. As of the Closing
Date, Sellers will (a) pay any and all overdue personal property taxes and
real estate taxes owed to any taxing authority in Charles City County and
(b) pay all amounts due through the Closing Date on the agreements
specified in subsections (a) and (b) of Section 1.9A."
2
<PAGE> 3
8. The Exhibits to the Agreement are replaced in their entirety by the
Exhibits attached to this Amendment.
9. The Agreement, as amended by this Amendment, is hereby ratified and
confirmed to be in full force and effect as of the date hereof.
10. This Amendment may be executed in any number of counterparts, each of
which shall be deemed an original, but all of which shall constitute one and
the same agreement.
IN WITNESS WHEREOF, each of the parties has caused this Amendment to be
executed on its behalf by its representative thereunto duly authorized, all as
of the 3rd day of April, 1997.
AMRE, INC.
By: /s/ J. GREGG PRITCHARD
----------------------------------
Name: J. Gregg Pritchard
-----------------------------
Title: President
----------------------------
FACELIFTERS HOME SYSTEMS, INC.
By: /s/ J. GREGG PRITCHARD
----------------------------------
Name: J. Gregg Pritchard
-----------------------------
Title: President
----------------------------
AMERICAN REMODELING, INC.
By: /s/ J. GREGG PRITCHARD
----------------------------------
Name: J. Gregg Pritchard
-----------------------------
Title: President
----------------------------
U.S. REMODELERS, INC.
By: /s/ MURRAY H. GROSS
----------------------------------
Name: Murray H. Gross
-----------------------------
Title: President
----------------------------
3
<PAGE> 4
OMITTED SCHEDULES
U.S. REMODELERS, INC.
FIRST AMENDMENT
TO
ASSET PURCHASE AGREEMENT
SCHEDULE CONTENTS
Exhibit A Sales Offices of the Debtors from which
U.S. Remodelers, Inc. purchased assets.
Exhibit B Furniture, fixtures, and equipment purchased by
U.S. Remodelers, Inc. pursuant to the Asset
Purchase Agreement.
Exhibit C Real property and equipment leases to be
assumed by U.S. Remodelers, Inc.
The Registrant hereby agrees to provide supplemental copies of any and all of
the above omitted schedules should the Commission so request.
<PAGE> 1
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
RONALD W. WAGNER
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
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 WAGNER ............................................................... 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
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
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 Wagner .......................................... 15
Section 9.3 Prior Releases to be Given Effect .......................... 15
Section 9.4 No Waiver of Certain Rights of Wagner ...................... 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
</TABLE>
<PAGE> 4
Schedules and Exhibits
<TABLE>
<S> <C>
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
</TABLE>
<PAGE> 5
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 Ronald W. Wagner, formerly an
officer and director of AMRE ("Wagner"). 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, Wagner, AMRE and ARI 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, Wagner 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 1625 E.
Algonquin Road, Arlington Heights, Illinois 60005, that is subject to the
Algonquin Lease.
<PAGE> 6
"Algonquin Lease" means that certain lease by and between ARI and Wagner
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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<PAGE> 7
"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 Wagner.
"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 Wagner 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 1591 Robert J. Conlan Blvd., Palm Bay, Florida 32905.
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<PAGE> 8
"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.
"Wagner" 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 Wagner 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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<PAGE> 9
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 Wagner 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 Wagner by
Sellers and any and all claims of Purchaser and Wagner under the
Separation Agreement (claims of approximately $500,000);
(f) release of any and all other claims of Purchaser and Wagner 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 Wagner 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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<PAGE> 10
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, Hauer & Feld, L.L.P., 1700
Pacific Avenue, Suite 4100, Dallas, Texas 75201, 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 bill 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 Wagner, 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 Wagner 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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<PAGE> 11
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 Wagner. 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 WAGNER
Purchaser and Wagner 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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<PAGE> 12
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 Wagner shall hold Sellers
harmless against any broker, finder, consultant or other intermediary retained
directly or indirectly by Purchaser and/or Wagner 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.
8
<PAGE> 13
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 Wagner 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 Wagner, and Purchaser and Wagner 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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<PAGE> 14
Purchaser, Wagner 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 Wagner 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 Wagner 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 Wagner 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 grant Sellers 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 Wagner.
(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 Wagner 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 Wagner 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 Wagner 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 Klein & Associates or
Hughes & Luce, 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.
13
<PAGE> 18
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
14
<PAGE> 19
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 Wagner, 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 Wagner 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 Wagner, as applicable,
of the representations and warranties of Purchaser and Wagner contained herein.
Without limiting the generality of the foregoing, Purchaser and Wagner 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, Wagner 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 Wagner $250,000 on each of December 1, 1997 and December 1,
1999.
Section 9.2 Release of Wagner. 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 Wagner, 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 Wagner's 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 Wagner 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 Wagner 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
15
<PAGE> 20
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 Wagner. Notwithstanding
Section 9.1 hereof, nothing herein shall be construed as a waiver or release by
Wagner 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.
8585 North Stemmons Freeway, First Floor
Dallas, Texas 75247
Attention: Mr. Ronald W. Wagner
Telephone No.: (972) 702-0999
Facsimile No.: (972) 702-9986
with a copy to:
Hughes & Luce
1717 Main Street, Suite 2800
Dallas, Texas 75201
Attention: William B. Finkelstein, Esq.
Telephone No.: (214) 939-5757
Facsimile No.: (214) 939-6100
If to Wagner:
Mr. Ronald W. Wagner
45 Masland Circle
Dallas, Texas 75230
16
<PAGE> 21
Telephone No.: (972) 702-0999
Facsimile No.: (972) 702-9986
If to Sellers:
AMRE, Inc.
8585 North Stemmons Freeway, Eighth Floor
Dallas, Texas 75247
Attention: Mr. J. Gregg Pritchard
Telephone No.: (214) 658-6300
Facsimile No.: (214) 658-6101
with a copy to:
Akin, Gump, Strauss, Hauer & Feld, L.L.P.
1700 Pacific Avenue, Suite 4100
Dallas, Texas 75201
Attention: G. Michael Curran, Esq.
Telephone No.: (214) 969-2800
Facsimile No.: (214) 969-4343
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, Wagner 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
17
<PAGE> 22
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.
18
<PAGE> 23
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
19
<PAGE> 24
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. GREGG PRITCHARD
--------------------------------------------
Name: J. Gregg Pritchard
------------------------------------
Title: President
-----------------------------------
AMERICAN REMODELING, INC.
By: /s/ J. GREGG PRITCHARD
--------------------------------------------
Name: J. Gregg Pritchard
------------------------------------
Title: President
-----------------------------------
FACELIFTERS HOME SYSTEMS, INC.
By: /s/ J. GREGG PRITCHARD
--------------------------------------------
Name: J. Gregg Pritchard
------------------------------------
Title: President
-----------------------------------
REUNION HOME SERVICES, INC.
By: /s/ EDWARD SEDALLA
--------------------------------------------
Name: Edward Sedalla
------------------------------------
Title: Secretary
-----------------------------------
/s/ RONALD I. WAGNER
-----------------------------------------------
RONALD I. WAGNER
20
<PAGE> 25
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.
<PAGE> 1
EXHIBIT 2.7
FIRST AMENDMENT
TO
ASSET PURCHASE AGREEMENT
This First Amendment (this "Amendment") to the Asset Purchase
Agreement (the "Agreement") dated as of February 12, 1997, by and among AMRE,
Inc., a Delaware corporation ("AMRE"), American Remodeling, Inc., a Texas
corporation, Facelifters Home Systems, Inc., a Delaware corporation, Reunion
Home Services, Inc., a Texas corporation, and Ronald I. Wagner, is made as of
the 18th day of March, 1997.
RECITALS
WHEREAS, the parties entered into the Agreement whereby Purchaser
would acquire certain assets of Sellers; and
WHEREAS, in preparation for the Closing certain determinations have
been made with respect to the Business Assets which the parties desire to
acknowledge;
AGREEMENTS
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, Wagner and Sellers,
intending to be legally bound hereby, agree as follows:
1. Capitalized terms used herein and not otherwise defined shall
have the meanings ascribed to such terms in the Agreement.
2. The reference to "Facelifters Home Services, Inc." in the
opening paragraph of the Agreement is hereby amended to read "Facelifters Home
Systems, Inc."
3. All references to "Ronald W. Wagner" in the Agreement are
hereby amended to read "Ronald I. Wagner."
4. Section 3.2(a)(iv) of the Agreement is hereby amended to read
in its entirety as follows:
(iv) the books, records and customer lists owned and used by
each of the Sellers in connection with the Business;
5. Section 4.3 of the Agreement is hereby amended to read in its
entirety as follows:
"Section 4.3 Title. Either AMRE, ARI or Facelifters owns
good and marketable title to the FF&E and the Inventory,
except with respect to (a) those assets marked with one
asterisk (*), two asterisks (**) or three
<PAGE> 2
asterisks (***) on the Schedules hereto and (b) those assets
that are listed on Exhibit A to Schedule 2.1(b), 2.1(c) or
2.1(d) hereto."
6. Section 4.4 of the Agreement is hereby amended to change the
second sentence of such section to read in its entirety as follows:
"After the Closing (a) no person or business entity other than
Purchaser will be authorized by Sellers, 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."
7. The Schedules to the Agreement are replaced in their entirety
by the Schedules attached to this Amendment.
8. The Agreement, as amended by this Amendment, is hereby
ratified and confirmed to be in full force and effect as of the date hereof.
9. This Amendment may be executed in any number of counterparts,
each of which shall be deemed an original, but all of which shall constitute
one and the same agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 3
IN WITNESS WHEREOF, each of the parties has caused this Amendment to
be executed on its behalf by its representative thereunto duly authorized, all
as of the 18th day of March, 1997.
AMRE, INC., individually and on behalf of
its affiliates, Century 21 Home Improvements,
Inc. and Congressional Construction
Corporation
By: /s/ J. Gregg Pritchard
-----------------------------------------
Name: J. Gregg Pritchard
-----------------------------------
Title: President
----------------------------------
AMERICAN REMODELING, INC.
By: /s/ J. Gregg Pritchard
-----------------------------------------
Name: J. Gregg Pritchard
-----------------------------------
Title: President
----------------------------------
FACELIFTERS HOME SYSTEMS, INC.
By: /s/ J. Gregg Pritchard
-----------------------------------------
Name: J. Gregg Pritchard
-----------------------------------
Title: President
----------------------------------
REUNION HOME SERVICES, INC.
By: /s/ Ronald Wagner
-----------------------------------------
Name: Ronald Wagner
----------------------------------
Title: CEO
----------------------------------
/s/ Ronald I. Wagner
--------------------------------------------
RONALD I. WAGNER
<PAGE> 4
OMITTED SCHEDULES
REUNION HOME SERVICES, INC.
FIRST AMENDMENT
TO
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
Service, Inc.
The Registrant hereby agrees to provide supplemental copies of any and all of
the above omitted schedules should the Commission so request.
<PAGE> 1
EXHIBIT 2.8
SECOND AMENDMENT
TO
ASSET PURCHASE AGREEMENT
This Second Amendment (this "Amendment") to the Asset Purchase Agreement
dated as of February 12, 1997, by and among AMRE, Inc., a Delaware corporation,
American Remodeling, Inc., a Texas corporation, Facelifters Home Systems, Inc.,
a Delaware corporation, Reunion Home Services, Inc., a Texas corporation, and
Ronald I. Wagner, as amended by the First Amendment thereto dated March 18,
1997 (the "Agreement"), is made as of the 4th day of April, 1997.
RECITALS
WHEREAS, the parties entered into the Agreement whereby Purchaser would
acquire certain assets of Sellers; and
WHEREAS, in preparation for the Closing certain determinations have been
made with respect to the Business Assets which the parties desire to
acknowledge;
AGREEMENTS
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, Wagner and Sellers, intending to be
legally bound hereby, agree as follows:
1. Capitalized terms used herein and not otherwise defined shall
have the meanings ascribed to such terms in the Agreement.
2. Section 2.1(g) of the Agreement is hereby amended to read in
its entirety as follows:
"(g) all right, title and interest of each Seller, if any, in
the trademarks, service marks and trade name "Cabinet Magic"
and all related goodwill of the Business associated therewith
(collectively, the "Trademark");".
3. The Agreement, as amended by this Amendment, is hereby
ratified and confirmed to be in full force and effect as of the date
hereof.
4. This Amendment may be executed in any number of counterparts,
each of which shall be deemed an original, but all of which shall
constitute one and the same agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 2
IN WITNESS WHEREOF, each of the parties has caused this Amendment to be
executed on its behalf by its representative thereunto duly authorized, all as
of the 4th day of April, 1997.
AMRE, INC., individually and on behalf of
its affiliates, Century 21 Home
Improvements, Inc. and Congressional
Construction Corporation
By: /s/ J. GREGG PRITCHARD
----------------------------------------
Name: J. Gregg Pritchard
-----------------------------------
Title: President
-----------------------------------
AMERICAN REMODELING, INC.
By: /s/ J. GREGG PRITCHARD
----------------------------------------
Name: J. Gregg Pritchard
-----------------------------------
Title: President
-----------------------------------
FACELIFTERS HOME SYSTEMS, INC.
By: /s/ J. GREGG PRITCHARD
----------------------------------------
Name: J. Gregg Pritchard
-----------------------------------
Title: President
-----------------------------------
REUNION HOME SERVICES, INC.
By: /s/ RONALD I. WAGNER
----------------------------------------
Name: Ronald I. Wagner
-----------------------------------
Title: CEO
-----------------------------------
/s/ RONALD I. WAGNER
-------------------------------------------
RONALD I. WAGNER
2
<PAGE> 3
OMITTED SCHEDULES
REUNION HOME SERVICES, INC.
SECOND AMENDMENT
TO
ASSET PURCHASE AGREEMENT
There are no schedules to this Agreement.
<PAGE> 1
EXHIBIT 2.9
ASSET PURCHASE AGREEMENT
BY AND AMONG
AMRE, INC.,
AMERICAN REMODELING, INC.
AND
FACELIFTERS HOME SYSTEMS, INC.,
AS SELLERS,
AND
REVIVE REMODELING, INC.,
AS PURCHASER
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I CERTAIN DEFINITIONS .......................................... 1
ARTICLE II PURCHASE AND SALE ........................................... 3
Section 2.1 Contracts and Leads. ..................................... 3
Section 2.2 Assets. .................................................. 3
Section 2.3 Consideration. ........................................... 3
Section 2.4 Limitations of Liabilities Assumed. ...................... 4
SECTION 2.5 NO WARRANTIES. ........................................... 4
ARTICLE III. CLOSING .................................................. 4
Section 3.1 Time and Place. .......................................... 4
Section 3.2 Transactions at Closing. ................................. 4
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF SELLERS ................. 5
Section 4.1 Corporate Organization. .................................. 5
Section 4.2 Authority Relative to This Agreement. .................... 5
Section 4.3 No Transfer of Intellectual Property. .................... 5
ARTICLE V. COVENANTS, REPRESENTATIONS AND WARRANTIES
OF PURCHASER ............................................... 5
Section 5.1 Corporate Organization. .................................. 5
Section 5.2 Authority Relative to This Agreement. .................... 5
Section 5.3 Noncontravention. ........................................ 6
Section 5.4 Governmental Approvals. .................................. 6
Section 5.5 Litigation, etc. ......................................... 6
Section 5.6 Financing and Capital. ................................... 6
Section 5.7 Brokerage Agreements. .................................... 6
ARTICLE VI. ADDITIONAL AGREEMENTS ...................................... 6
Section 6.1 Payment on Contracts. .................................... 6
Section 6.2 Payment on Leads. ........................................ 6
Section 6.3 Customer Acknowledgment. ................................. 7
Section 6.4 Certain Tax Matters. ..................................... 7
Section 6.5 Bankruptcy Court Approval. ............................... 7
Section 6.6 Notification of Certain Matters. ......................... 7
Section 6.7 Announcement. ............................................ 7
Section 6.8 Fees and Expenses. ....................................... 8
Section 6.9 Bulk Sales Waiver. ....................................... 8
Section 6.10 Storage, Protection and Availability of Records. ........ 8
ARTICLE VII. CONDITIONS TO CLOSING ..................................... 8
Section 7.1 Conditions to the Obligation of Each Party to Consummate
the Transactions Contemplated Hereby. .................... 8
Section 7.2 Additional Conditions to the Obligation of Sellers. ...... 9
Section 7.3 Additional Conditions to the Obligation of Purchaser. .... 9
ARTICLE VIII. TERMINATION .............................................. 10
Section 8.1 Termination. ............................................. 10
Section 8.2 Effect of Termination. ................................... 10
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
ARTICLE IX. WAIVER, RELEASES AND INDEMNIFICATION ....................... 11
Section 9.1 Release of AMRE. ......................................... 11
Section 9.2 Survival of This Article IX. ............................. 11
ARTICLE X. MISCELLANEOUS ............................................... 11
Section 10.1 Notices. ................................................ 11
Section 10.2 Survival of Representations and Warranties. ............. 12
Section 10.3 Entire Agreement. ....................................... 12
Section 10.4 Binding Effect; Assignment. ............................. 12
Section 10.5 Amendment and Waiver; Rights and Remedies. .............. 13
Section 10.6 Severability. ........................................... 13
SECTION 10.7 GOVERNING LAW. .......................................... 13
Section 10.8 Descriptive Headings. ................................... 13
Section 10.9 Gender. ................................................. 13
Section 10.10 References. ............................................ 13
Section 10.11 Counterparts. .......................................... 14
</TABLE>
Exhibit A: Form of Amendment to Customer Contract
ii
<PAGE> 4
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (the "Agreement") is dated as of the 21st
day of March, 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"), and Revive Remodeling,
Inc., an Alabama corporation ("Purchaser"). AMRE, ARI and Facelifters are
sometimes referred to herein individually as a "Seller" and collectively as
"Sellers".
RECITALS
WHEREAS, Sellers are in the cabinet refacing and products business; and
WHEREAS, each Seller is currently a debtor in possession in those 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 desires to buy and Sellers desire to sell those
portions of the cabinet refacing and products business of Sellers conducted at
the Sales Office (as hereinafter defined), and to finally, irrevocably,
absolutely and unconditionally terminate all rights and obligations of Sellers,
and to the extent applicable, the bankruptcy estates of Sellers, in the 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 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.
"AMRE" has the meaning specified in the opening paragraph hereof.
"AMRE Released Parties" has the meaning specified in Section 9.1 hereof.
"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.
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"ARI" has the meaning specified in the opening paragraph hereof.
"Assets" has the meaning specified in Section 2.2 hereof.
"Bankruptcy Code" means 11 U.S.C. Section 101, et seq.
"Bankruptcy Court" has the meaning specified in the Recitals.
"Cash Purchase Price" means the amount specified in Section 2.2(a) 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.
"Contracts" means all purchase orders and consumer sales contracts entered
into by a Seller and emanating from the Sales Office for which the goods have
not been delivered or construction has not begun.
"Encumbrances" means liens, charges, pledges, options, mortgages, security
interest, claims, restrictions and other encumbrances of every type and
description, whether imposed by law, agreement, understanding or otherwise.
"Facelifters" has the meaning specified in the opening paragraph hereof.
"FF&E" means the furniture, fixtures and equipment that is owned by a
Seller and located at the Sales Office.
"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).
"Inventory" means all inventory (including raw materials, work-in-progress
and finished goods) and related spare parts and supplies that is owned by a
Seller and located at the Sales Office, but does not include (a) any inventory
(including raw materials, work-in-progress and finished goods) and related
spare parts and supplies that is subject to a valid claim for reclamation or
(b) any inventory that is specified by Sellers for use in connection with
work-in-progress on consumer contracts emanating from the Sales Office.
"Leads" means all customer leads emanating from the Sales Office.
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"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 6.5
hereof.
"Sale and Assignment Motion" has the meaning specified in Section 6.5
hereof.
"Sale and Assignment Order" has the meaning specified in Section 6.5
hereof.
"Sales Office" means the sales office leased by ARI and located at 3730
4th Terrace North, Birmingham, Alabama 35222.
"Seller" and "Sellers" have the meanings specified in the opening
paragraph hereof.
"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.
"Trademark" means the trademark and/or tradename "Century 21."
ARTICLE II
PURCHASE AND SALE
Section 2.1 Contracts and Leads. Subject to the terms and conditions
set forth in this Agreement, on the Closing Date Sellers shall sell, assign,
transfer, convey and deliver to Purchaser, and Purchaser will purchase, acquire
and receive the Contracts and the Leads.
Section 2.2 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 2.2 are herein collectively referred to as the "Assets"):
(a) all FF&E; and
(b) all Inventory.
Section 2.3 Consideration. The aggregate consideration given by
Purchaser for the Contracts, Leads and Assets shall consist of:
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(a) cash in the amount of FIVE THOUSAND DOLLARS ($5,000) for FF&E
and Inventory;
(b) cash in an amount equal to four percent (4%) of the total
amount (excluding only applicable sales Taxes) collected by
Purchaser on the Contracts; and
(c) cash in an amount equal to three percent (3%) of the total
amount (excluding only applicable sales Taxes) collected by
Purchaser on sales resulting from the Leads.
Section 2.4 Limitations of Liabilities Assumed. Except for the
obligations expressly assumed by Purchaser under 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.
SECTION 2.5 NO WARRANTIES. 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 ASSETS, AND THE ASSETS ARE
TRANSFERRED "AS IS-WHERE IS."
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, Hauer & Feld, L.L.P., 1700
Pacific Avenue, Suite 4100, Dallas, Texas 75201, 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.
(i) Sellers shall deliver to Purchaser at the Closing:
(ii) the Contracts;
(iii) the Leads;
(iv) a bill of sale conveying the Assets, signed by each Seller; and
(v) the certificate contemplated by Section 7.3.
(a) Purchaser shall deliver to Sellers at the Closing:
(i) a wire transfer in the amount of the Cash Purchase Price; and
(ii) the certificate contemplated by Section 7.2.
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ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF SELLERS
Each Seller represents and warrants to Purchaser 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.
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 No Transfer of Intellectual Property. No Seller grants,
conveys or sublicenses any right such Seller may have or may retain with
respect to the use of the Trademark. In order to use the Trademark, Purchaser
must enter into a direct arrangement with the owner of the Trademark.
ARTICLE V.
COVENANTS, REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser covenants, represents and warrants 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
Alabama.
Section 5.2 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 5.3 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 5.3, 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 5.4 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 5.5 Litigation, etc. No Proceeding is pending or, to the knowledge
of Purchaser, threatened, against Purchaser (a) relating to or affecting any of
the 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 5.6 Financing and Capital. 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 5.7 Brokerage Agreements. Purchaser shall hold Sellers
harmless against any broker, finder, consultant or other intermediary retained
directly or indirectly by Purchaser 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.
ARTICLE VI.
ADDITIONAL AGREEMENTS
Section 6.1 Payment on Contracts. Purchaser shall remit to Sellers the
four percent (4%) fee due on each Contract within ten (10) days of collection
by Purchaser on such Contract.
Section 6.2 Payment on Leads. Purchaser shall remit to Sellers the
three percent (3%) fee due on each sales contract resulting from a Lead within
ten (10) days of collection by Purchaser on such contract.
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Section 6.3 Customer Acknowledgment. All work performed by Purchaser
shall be performed in the name of Purchaser and not on behalf of any Sellers,
and each customer (whether pursuant to a Contract or resulting from a Lead)
shall acknowledge, in writing, that it is the Purchaser that shall be the party
responsible for the performance of the work and for all warranties given, and
that the Sellers and their affiliates shall not be liable in any manner for any
of the work performed by Purchaser. With respect to each Contract, Purchaser
and the applicable customer(s) shall enter into an amendment to such Contract
in the form of Exhibit A attached hereto.
Section 6.4 Certain Tax Matters. Any sales Tax or transfer Tax or
similar Tax upon the transfer of the Assets to Purchaser shall be borne by
Sellers. All other taxes with respect to the Assets shall be borne by
Purchaser.
Section 6.5 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 Assets free and clear of all Encumbrances. Sellers shall prepare the
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 6.6 Notification of Certain Matters. Sellers shall give prompt
notice to Purchaser, and Purchaser 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 Purchaser, 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 6.8
shall limit or otherwise affect the remedies available hereunder to the party
receiving such notice.
Section 6.7 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.
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Section 6.8 Fees and Expenses. 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 6.9 Bulk Sales Waiver. Purchaser and Sellers 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 Assets contemplated by this Agreement.
Section 6.10 Storage, Protection and Availability of Records. Purchaser
agrees to safeguard, protect and store all of the contracts, books, records,
customer lists, purchase orders and customer information that is located at the
Sales Office for a minimum of one hundred twenty (120) days from the Closing
Date. Purchaser agrees to grant Sellers 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.
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 Bankruptcy Court requesting approval of:
(i) the sale by Sellers to the Purchaser, free and clear of all
Encumbrances, of the Assets; and
(ii) the releases provided for in Article IX.
(b) 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 that this Agreement constitutes an
arms-length transaction between Sellers and the Purchaser.
(c) Hearing. The Sale and Assignment Motion shall have been brought on
for the Sale and Assignment Hearing on or before March 31, 1997.
(d) Order. The Sale and Assignment Order by the Bankruptcy Court in form
satisfactory to counsel to Purchaser 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.
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(e) No Proceedings. 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 or
any of its 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 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.
(b) Purchaser shall have performed each obligation to be performed by him
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 this Section 7.2 as may
be reasonably requested by Sellers.
(d) Sellers shall have received a copy of the resolutions of the Board of
Directors of Purchaser authorizing the execution, delivery and
performance by Purchaser of the transactions contemplated hereby,
certified by a secretary or an assistant secretary of Purchaser.
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.
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(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 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.
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 Applicable Law
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 Bankruptcy Court approves, a
bona fide third-party offer to acquire all or substantially all of
the Assets on terms and conditions determined in good faith by
Sellers which 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).
Section 8.2 Effect of Termination. 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, as applicable, except
that the agreements contained in this Section 8.2 and in Sections 6.8 and 9.1
shall survive the termination hereof. Nothing contained in this Section 8.2
shall relieve any party from liability for any breach of this Agreement.
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ARTICLE IX.
WAIVER, RELEASES AND INDEMNIFICATION
Section 9.1 Release of AMRE. Purchaser, on behalf of itself and its
successors, assigns, employees, agents, officers, directors, attorneys and
representatives, hereby releases and discharges 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 or the transactions contemplated hereby.
Purchaser shall indemnify the AMRE Released Parties against any and all Claims
relating to Purchaser's work and operations in connection with the Contracts.
In addition, Purchaser 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 of the representations and warranties of Purchaser contained herein.
Section 9.2 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:
Revive Remodeling, Inc.
The Bessemer Business Center
1020 9th Avenue Southwest
Bessemer, Alabama 35023
Attention: Steve Medori
Telephone No.: (205) 595-9218
Facsimile No.: (205) 595-9412
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with a copy to:
Sirote & Permutt
2222 Arlington Avenue South
Birmingham, Alabama 35205
Attention: Brad Sklar
Telephone No.: (205) 930-5152
Facsimile No.: (205) 930-5301
If to Sellers:
AMRE, Inc.
8585 North Stemmons Freeway, Fifth Floor
Dallas, Texas 75247
Attention: Mr. J. Gregg Pritchard
Telephone No.: (214) 658-6300
Facsimile No.: (214) 658-6101
with a copy to:
Akin, Gump, Strauss, Hauer & Feld, L.L.P.
1700 Pacific Avenue, Suite 4100
Dallas, Texas 75201
Attention: G. Michael Curran, Esq.
Telephone No.: (214) 969-2800
Facsimile No.: (214) 969-4343
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 and
other writings referred to herein 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 and Sellers any rights, benefits or remedies of any nature
whatsoever under or by reason of this Agreement.
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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 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.
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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.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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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.
By: /s/ J. GREGG PRITCHARD
----------------------------------
Name: J. Gregg Pritchard
Title: President
AMERICAN REMODELING, INC.
By: /s/ J. GREGG PRITCHARD
----------------------------------
Name: J. Gregg Pritchard
Title: President
FACELIFTERS HOME SYSTEMS, INC.
By: /s/ J. GREGG PRITCHARD
----------------------------------
Name: J. Gregg Pritchard
Title: President
REVIVE REMODELING, INC.
By: /s/ STEVEN M. MEDORI
----------------------------------
Name: Steven M. Medori
Title: President
15
<PAGE> 19
OMITTED SCHEDULES
REVIVE REMODELING, INC.
ASSET PURCHASE AGREEMENT
SCHEDULE CONTENTS
Exhibit A Form of Contract Amendment between ReVive
Remodeling, Inc. and customers indicating that
all work and warranties are the responsibility
of ReVive Remodeling, Inc.
The Registrant hereby agrees to provide supplemental copies of any and all of
the above omitted schedules should the Commission so request.
<PAGE> 1
EXHIBIT 2.10
ASSET PURCHASE AGREEMENT
BY AND AMONG
AMRE, INC.,
AMERICAN REMODELING, INC.
AND
FACELIFTERS HOME SYSTEMS, INC.,
AS SELLERS,
AND
STEVE BELNAP,
AS PURCHASER
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE I CERTAIN DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II PURCHASE AND SALE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 2.1 CONTRACTS AND LEADS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 2.2 ASSETS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 2.3 CONSIDERATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.4 LIMITATIONS OF LIABILITIES ASSUMED. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.5 NO WARRANTIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE III CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 3.1 TIME AND PLACE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 3.2 TRANSACTIONS AT CLOSING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SELLERS . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 4.1 CORPORATE ORGANIZATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 4.2 AUTHORITY RELATIVE TO THIS AGREEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 4.3 NO TRANSFER OF INTELLECTUAL PROPERTY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE V COVENANTS, REPRESENTATIONS AND WARRANTIES
OF PURCHASER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 5.1 AUTHORITY RELATIVE TO THIS AGREEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 5.2 NONCONTRAVENTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 5.3 GOVERNMENTAL APPROVALS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 5.4 LITIGATION, ETC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 5.5 FINANCING AND CAPITAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 5.6 BROKERAGE AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE VI ADDITIONAL AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 6.1 PAYMENT ON CONTRACTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 6.2 PAYMENT ON LEADS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 6.3 AMOUNTS RECEIVED FROM WORK-IN-PROGRESS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 6.4 CERTAIN WARRANTIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 6.5 CUSTOMER ACKNOWLEDGMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 6.6 CERTAIN TAX MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 6.7 BANKRUPTCY COURT APPROVAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 6.8 NOTIFICATION OF CERTAIN MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 6.9 ANNOUNCEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 6.10 FEES AND EXPENSES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 6.11 BULK SALES WAIVER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 6.12 STORAGE, PROTECTION AND AVAILABILITY OF RECORDS. . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE VII CONDITIONS TO CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 7.1 CONDITIONS TO THE OBLIGATION OF EACH PARTY TO
CONSUMMATE THE TRANSACTIONS CONTEMPLATED HEREBY. . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 7.2 ADDITIONAL CONDITIONS TO THE OBLIGATION OF SELLERS. . . . . . . . . . . . . . . . . . . . . . 9
SECTION 7.3 ADDITIONAL CONDITIONS TO THE OBLIGATION OF PURCHASER. . . . . . . . . . . . . . . . . . . . . 10
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
ARTICLE VIII TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 8.1 TERMINATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 8.2 EFFECT OF TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE IX WAIVER, RELEASES AND INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 9.1 RELEASE OF AMRE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 9.2 SURVIVAL OF THIS ARTICLE IX. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE X MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 10.1 NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 10.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 10.3 ENTIRE AGREEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 10.4 BINDING EFFECT; ASSIGNMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 10.5 AMENDMENT AND WAIVER; RIGHTS AND REMEDIES. . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 10.6 SEVERABILITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 10.7 GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 10.8 DESCRIPTIVE HEADINGS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 10.9 GENDER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 10.10 REFERENCES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 10.11 COUNTERPARTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
</TABLE>
SCHEDULES AND EXHIBITS
SCHEDULE 2.2(a) - Furniture, Fixtures and Equipment of the Sales
Office
ii
<PAGE> 4
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (the "Agreement") is dated as of the 11th day
of April, 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"), and Steve Belnap
("Purchaser"). AMRE, ARI and Facelifters are sometimes referred to herein
individually as a "Seller" and collectively as "Sellers".
RECITALS
WHEREAS, Sellers are in the cabinet refacing, vinyl siding and window
remodeling and products business; and
WHEREAS, each Seller is currently a debtor in possession in those 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 desires to buy and Sellers desire to sell those portions
of the cabinet refacing, vinyl siding and window remodeling and products
business of Sellers conducted at the Sales Office (as hereinafter defined), and
to finally, irrevocably, absolutely and unconditionally terminate all rights
and obligations of Sellers, and to the extent applicable, the bankruptcy
estates of Sellers, in the 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 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.
"AMRE" has the meaning specified in the opening paragraph hereof.
"AMRE Released Parties" has the meaning specified in Section 9.1 hereof.
"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.
<PAGE> 5
"ARI" has the meaning specified in the opening paragraph hereof.
"Assets" has the meaning specified in Section 2.2 hereof.
"Assumed Liabilities" means the completion of all Work-In-Progress.
"Bankruptcy Code" means 11 U.S.C. Section 101, et seq.
"Bankruptcy Court" has the meaning specified in the Recitals.
"Cabinet Inventory" means all inventory (including raw materials,
work-in-progress and finished goods) and related spare parts and supplies that
is owned by a Seller, used in connection with a Seller's cabinet refacing and
products business, and located at the Sales Office at the Closing, but does not
include any inventory (including raw materials, work-in-progress and finished
foods) and related spare parts and supplies subject to a valid claim for
reclamation.
"Cash Purchase Price" means the amount specified in Section 2.2(a) 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.
"Contracts" means all purchase orders and consumer sales contracts entered
into by a Seller and emanating from the Sales Office for which the goods have
not been delivered or construction has not begun.
"Encumbrances" means liens, charges, pledges, options, mortgages, security
interest, claims, restrictions and other encumbrances of every type and
description, whether imposed by law, agreement, understanding or otherwise.
"Facelifters" has the meaning specified in the opening paragraph hereof.
"FF&E" means the furniture, fixtures and equipment set forth on Schedule
2.2(a) hereto.
"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).
"Leads" means all customer leads emanating from the Sales Office.
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<PAGE> 6
"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 6.7
hereof.
"Sale and Assignment Motion" has the meaning specified in Section 6.7
hereof.
"Sale and Assignment Order" has the meaning specified in Section 6.7
hereof.
"Sales Office" means the sales office leased by ARI and located at 2500
South 2300 West, Suites 13 & 14, West Valley City, Utah (with a business
address of 2500 S. Decker Lane Blvd., #13 and #14, Salt Lake City, Utah 84119).
"Seller" and "Sellers" have the meanings specified in the opening paragraph
hereof.
"Siding Inventory" means all inventory (including raw materials,
work-in-progress and finished goods) and related spare parts and supplies that
is owned by a Seller, used in connection with a Seller's vinyl siding and
window remodeling and products business, and located at the Sales Office at the
Closing.
"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.
"Trademark" means the trademark and/or tradename "Century 21."
"Work-In-Progress" means all consumer contracts entered into by a Seller
and emanating from the Sales Office for which a Seller has begun construction.
ARTICLE II
PURCHASE AND SALE
Section 2.1 Contracts and Leads. Subject to the terms and conditions set forth
in this Agreement, on the Closing Date, Sellers shall sell, assign, transfer,
convey and deliver to Purchaser, and Purchaser will purchase, acquire and
receive the Contracts and the Leads.
Section 2.2 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,
3
<PAGE> 7
a conveyance and the delivery of the following assets of each of the Sellers
(all such assets included in this Section 2.2 are herein collectively referred
to as the "Assets"):
(a) all FF&E; and
(b) all Cabinet Inventory.
Section 2.3 Consideration. The aggregate consideration given by
Purchaser for the Contracts, Leads and Assets shall consist of:
(a) cash in the amount of SEVEN THOUSAND DOLLARS ($7,000) for FF&E
and Cabinet Inventory;
(b) payment for all amounts outstanding as of the date hereof and
as of the Closing Date for all utilities for the Sales Office,
including, without limitation, all charges for water, heat,
gas and electricity;
(c) cash in an amount equal to four percent (4%) of the total
amount (excluding only applicable sales Taxes) collected by
Purchaser on the Contracts;
(d) cash in an amount equal to three percent (3%) of the total
amount (excluding only applicable sales Taxes) collected by
Purchaser on sales resulting from the Leads;
(e) storage at the Sales Office, at no charge to Sellers, of all
Siding Inventory for thirty (30) days from the date of this
Agreement; and
(f) assumption of the Assumed Liabilities.
Section 2.4 Limitations of Liabilities Assumed. Except for the
obligations expressly assumed by Purchaser under 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.
SECTION 2.5 NO WARRANTIES. 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 ASSETS, AND THE ASSETS ARE
TRANSFERRED "AS IS-WHERE IS."
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, Hauer & Feld, L.L.P., 1700
Pacific Avenue, Suite 4100, Dallas, Texas 75201, on the fifth business day
following the date on which the Sale and Assignment
4
<PAGE> 8
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) the Contracts;
(ii) the Leads;
(iii) a bill of sale conveying the Assets to Purchaser,
signed by each Seller; and
(iv) the certificate contemplated by Section 7.3.
(b) Purchaser shall deliver to Sellers at the Closing:
(i) a wire transfer in the amount of the Cash
Purchase Price; and
(ii) the certificate contemplated by Section 7.2.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLERS
Each Seller represents and warrants to Purchaser 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.
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 No Transfer of Intellectual Property. No Seller grants,
conveys or sublicenses any right such Seller may have or may retain with
respect to the use of the Trademark. In order to use the Trademark, Purchaser
must enter into a direct arrangement with the owner of the Trademark.
5
<PAGE> 9
ARTICLE V
COVENANTS, REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser covenants, represents and warrants to Sellers as follows:
Section 5.1 Authority Relative to This Agreement. 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.
Section 5.2 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, 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, (b) result in the creation or imposition of any Encumbrance upon the
properties of Purchaser, or (c) violate any Applicable Law (other than any
applicable "bulk sales" laws) binding upon Purchaser, except, in the cases of
clauses (c) and (d) of this Section 5.2, 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 5.3 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 5.4 Litigation, etc. No Proceeding is pending or, to the
knowledge of Purchaser, threatened, against Purchaser (a) relating to or
affecting any of the 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 5.5 Financing and Capital. 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 5.6 Brokerage Agreements. Purchaser shall hold Sellers harmless
against any broker, finder, consultant or other intermediary retained directly
or indirectly by Purchaser 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.
6
<PAGE> 10
ARTICLE VI
ADDITIONAL AGREEMENTS
Section 6.1 Payment on Contracts. Purchaser shall remit to Sellers the
four percent (4%) fee due on each Contract within ten (10) days of collection
by Purchaser on such Contract.
Section 6.2 Payment on Leads. Purchaser shall remit to Sellers the three
percent (3%) fee due on each sales contract resulting from a Lead within ten
(10) days of collection by Purchaser on such contract.
Section 6.3 Amounts Received from Work-In-Progress. Purchaser shall
invoice and collect all amounts due upon completion of Work-In-Progress.
Purchaser shall remit such amounts to Sellers within ten (10) days of
collection by Purchaser.
Section 6.4 Certain Warranties. All work performed in whole or in party
by Purchaser with respect to the Work-In- Progress and the Contracts shall be
warranted by Purchaser to the same extent as if such work had been performed by
Sellers under their prebankruptcy warranty policies.
Section 6.5 Customer Acknowledgment. All work performed by Purchaser
shall be performed in the name of Purchaser and not on behalf of any Sellers,
and each customer (whether pursuant to Work-In-Progress or a Contract or
resulting from a Lead) shall acknowledge, in writing, that it is the Purchaser
that shall be the party responsible for the performance of the work and for all
warranties given, and that the Sellers and their affiliates shall not be liable
in any manner for any of the work performed by Purchaser.
Section 6.6 Certain Tax Matters. Any sales Tax or transfer Tax or similar
Tax upon the transfer of the Assets to Purchaser shall be borne by Sellers.
All other taxes with respect to the Assets shall be borne by Purchaser.
Section 6.7 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
Assets free and clear of all Encumbrances. Sellers shall prepare the 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 6.8 Notification of Certain Matters. Sellers shall give prompt
notice to Purchaser, and Purchaser shall give prompt notice to Sellers, of (a)
the occurrence or
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<PAGE> 11
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 Purchaser, 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 6.8 shall limit
or otherwise affect the remedies available hereunder to the party receiving
such notice.
Section 6.9 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 6.10 Fees and Expenses. 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 6.11 Bulk Sales Waiver. Purchaser and Sellers 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 Assets contemplated by this Agreement.
Section 6.12 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 that is located at the Sales Office for a minimum of one hundred
twenty (120) days from the Closing Date. Purchaser agrees to grant Sellers
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.
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 Bankruptcy Court requesting approval of:
(i) the sale by Sellers to the Purchaser, free and clear
of all Encumbrances, of the Assets; and
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(ii) the releases provided for in Article IX.
(b) 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 that this Agreement
constitutes an arms-length transaction between Sellers and the
Purchaser.
(c) Hearing. The Sale and Assignment Motion shall have been
brought on for the Sale and Assignment Hearing on or before
March 31, 1997.
(d) Order. The Sale and Assignment Order by the Bankruptcy Court
in form satisfactory to counsel to Purchaser 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.
(e) No Proceedings. 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 or any of
his affiliates 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, as applicable, 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 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.
(b) Purchaser shall have performed each obligation to be performed by
him hereunder on or prior to the Closing Date.
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(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.
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.
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 Applicable
Law 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 Bankruptcy Court approves,
a bona fide third-party offer to acquire all or substantially all
of the Assets on terms and conditions determined in good faith by
Sellers which 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).
Section 8.2 Effect of Termination 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
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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, as
applicable, except that the agreements contained in this Section 8.2 and in
Sections 6.10 and 9.1 shall survive the termination hereof. Nothing contained
in this Section 8.2 shall relieve any party from liability for any breach of
this Agreement.
ARTICLE IX
WAIVER, RELEASES AND INDEMNIFICATION
Section 9.1 Release of AMRE. Purchaser, on behalf of himself and his
respective successors, assigns, employees, agents, heirs, attorneys and
representatives, hereby releases and discharges 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 or the transactions contemplated hereby.
Purchaser shall indemnify the AMRE Released Parties against any and all Claims
relating to Purchaser's work and operations in connection with the Contracts
and Work-In-Progress. In addition, Purchaser 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 of the representations and warranties of
Purchaser contained herein.
Section 9.2 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):
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If to Purchaser:
Steve Belnap
------------------------------------
------------------------------------
Telephone No.:
----------------------
Facsimile No.:
----------------------
with a copy to:
------------------------------------
------------------------------------
------------------------------------
Telephone No.:
----------------------
Facsimile No.:
----------------------
If to Sellers:
AMRE, Inc.
8585 North Stemmons Freeway, Fifth Floor
Dallas, Texas 75247
Attention: Mr. J. Gregg Pritchard
Telephone No.: (214) 658-6300
Facsimile No.: (214) 658-6101
with a copy to:
Akin, Gump, Strauss, Hauer & Feld, L.L.P.
1700 Pacific Avenue, Suite 4100
Dallas, Texas 75201
Attention G. Michael Curran, Esq.
Telephone No.: (214) 969-2800
Facsimile No.: (214) 969-4343
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
and other writings referred to herein 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.
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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 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 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.
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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.
By: /s/ J. GREGG PRITCHARD
----------------------------------
Name: J. Gregg Pritchard
----------------------------
Title: President
---------------------------
AMERICAN REMODELING, INC.
By: /s/ J. GREGG PRITCHARD
----------------------------------
Name: J. Gregg Pritchard
----------------------------
Title: President
---------------------------
FACELIFTERS HOME SYSTEMS, INC.
By: /s/ J. GREGG PRITCHARD
----------------------------------
Name: J. Gregg Pritchard
----------------------------
Title: President
---------------------------
/s/ STEVE BELNAP
-------------------------------------
STEVE BELNAP
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OMITTED SCHEDULES
STEVE BELNAP, AS PURCHASER
ASSET PURCHASE AGREEMENT
SCHEDULE CONTENTS
- -------- --------
Schedule 2.2(a) Assets purchased by Steve Belnap pursuant to the
Asset Purchase Agreement
The Registrant hereby agrees to provided supplemental copies of any and all of
the above omitted schedules should the Commission so request.
