SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): July 30, 1999
WINSLOEW FURNITURE, INC.
(Exact name of registrant as specified in its charter)
Florida 0-25246 63-1127982
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
160 Village Street, Birmingham, Alabama 35242
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (205) 408-7600
(Not Applicable)
(Former name or former address, if changed since last report)
Item 2. Acquisition or Disposition of Assets.
On July 30, 1999, the Registrant, through its wholly owned subsidiary
Winston Furniture Company of Alabama, Inc. ("Winston"), completed its
acquisition of all of the capital stock of Miami Metal Products, Inc.
d/b/a Pompeii Furniture Industries, and its affiliate, Industrial
Mueblera Pompeii de Mexico, S.A. de C.V. The following summary of the
transaction is qualified in its entirety by the more detailed
information contained in the Stock Purchase Agreement ("Agreement")
dated as of November 23, 1998, among Winston, Miami Metal Products,
Inc., Industrial Mueblera Pompeii de Mexico, S.A. de C.V. and the
"Sellers" as defined therein, filed as Exhibit 10.25 to the Registrant's
Annual Report on Form 10-K for the fiscal year ended December 31, 1998,
as amended by the first and second amendments to the Agreement, which
are attached as Exhibits 10.27 and 10.28 to this Report. As used in
this Report, the term "Registrant" refers to WinsLoew Furniture, Inc.
and its subsidiaries.
The assets acquired consist of the capital stock of each of Miami Metal
Products, Inc. and Industrial Mueblera Pompeii de Mexico S.A. de C.V.,
which are engaged in the design, manufacture and distribution of casual
furniture.
The Registrant paid a total of $18.3 million in cash from its working
capital in connection with the acquisition, consisting of the $17.4
million purchase price and $0.9 million in fees and expenses. Of the
$17.4 million purchase price, $12.4 million was paid to the Sellers, and
$5 million was paid into an escrow account, which amount will be
released to the Sellers after certain conditions have been met. The
amount of consideration paid by the Registrant for the stock was
determined through arms' length negotiations between representatives of
the Registrant and the Sellers.
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits.
(a) Financial Statements of Business Acquired.
Financial statements are not included in this Report, but will be filed
by amendment not later than 60 after the date that this Report is
required to be filed, in accordance with Item 7 of Form 8-K.
(b) Pro Forma Financial Information.
Pro forma financial statements are not included in this Report, but will
be filed by amendment not later than 60 days after the date that this
Report is required to be filed, in accordance with Item 7 of Form 8-K.
(c) Exhibits.
Exhibit 10.25 - Stock Purchase Agreement dated as of November 23, 1998,
among Winston Furniture Company of Alabama, Inc., Miami Metal Products,
Inc., Industrial Mueblera Pompeii de Mexico, S.A. de C.V. and the
Sellers named therein, filed as Exhibit 10.25 to the Registrant's Annual
Report on Form 10-K for the fiscal year ended December 31, 1998.
Exhibit 10.27 - First Amendment to Stock Purchase Agreement dated as of
July 1, 1999, among Winston Furniture Company of Alabama, Inc., Miami Metal
Products, Inc., Industrial Mueblera Pompeii de Mexico, S.A. de C.V. and the
Sellers named therein.*
Exhibit 10.28 - Second Amendment to Stock Purchase Agreement dated as of
July 30, 1999, among Winston Furniture Company of Alabama, Inc., Miami
Metal Products, Inc., Industrial Mueblera Pompeii de Mexico, S.A. de
C.V. and the Sellers named therein.*
Exhibit 99.1 - Press Release of the Registrant dated August 2, 1999
announcing the Registrant's completion of acquisition of Pompeii
Furniture.*
* Filed herewith
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 duly authorized.
WINSLOEW FURNITURE, INC.
Date: August 9, 1999 By:/s/ Vincent A. Tortorici, Jr.
Vincent A. Tortorici, Jr.,
Vice President and Chief
Financial Officer
EXHIBIT INDEX
Exhibit No. 10.27
First Amendment to Stock Purchase Agreement dated as of July 1, 1999,
among Winston Furniture Company of Alabama, Inc., Miami Metal Products,
Inc., Industrial Mueblera Pompeii de Mexico, S.A. de C.V. and the
Sellers named therein.
Exhibit No. 10.28
Second Amendment to Stock Purchase Agreement dated as of July 30, 1999,
among Winston Furniture Company of Alabama, Inc., Miami Metal Products,
Inc., Industrial Mueblera Pompeii de Mexico, S.A. de C.V. and the
Sellers named therein.
Exhibit No. 99.1
Press Release of the Registrant dated August 2, 1999 announcing the
Registrant's completion of acquisition of Pompeii Furniture.
EXHIBIT 10.27
FIRST AMENDMENT TO
STOCK PURCHASE AGREEMENT
This First Amendment to Stock Purchase Agreement is made and entered
into as of the 1st day of July, 1999, by and among WINSTON FURNITURE
COMPANY OF ALABAMA, INC., an Alabama corporation (the "Purchaser"),
MIAMI METAL PRODUCTS, INC., d/b/a POMPEII FURNITURE INDUSTRIES, a
Florida corporation (the "Company"), INDUSTRIAL MUEBLERA POMPEII DE
MEXICO, S.A. DE C.V., a Mexican corporation ("IMP") and the following
selling shareholders, LEO MARTIN ("L. Martin"), GLORIA MARTIN ("G.
Martin"), DONALD R. TESCHER, TRUSTEE AND NOT INDIVIDUALLY OF THE LEO
MARTIN RETAINED ANNUITY TRUST AGREEMENT I, DONALD R. TESCHER, TRUSTEE
AND NOT INDIVIDUALLY OF THE LEO MARTIN RETAINED ANNUITY TRUST AGREEMENT
II, DONALD R. TESCHER, TRUSTEE AND NOT INDIVIDUALLY OF THE LEO MARTIN
RETAINED ANNUITY TRUST AGREEMENT III, DONALD R. TESCHER, TRUSTEE AND NOT
INDIVIDUALLY OF THE GLORIA MARTIN RETAINED ANNUITY TRUST AGREEMENT I,
DONALD R. TESCHER, TRUSTEE AND NOT INDIVIDUALLY OF THE GLORIA MARTIN
RETAINED ANNUITY TRUST AGREEMENT II, and DONALD R. TESCHER, TRUSTEE AND
NOT INDIVIDUALLY OF THE GLORIA MARTIN RETAINED ANNUITY TRUST AGREEMENT
III (collectively, the "Sellers" and individually, a "Seller").
Preliminary Statements:
A. Purchaser, the Company, IMP and Sellers entered into a Stock Purchase
Agreement dated November 23, 1998 (the "Stock Purchase Agreement").
B. Purchaser, the Company, IMP and Sellers desire to amend the Stock
Purchase Agreement in accordance with the terms and provisions contained
in this First Amendment.
C. Capitalized terms not otherwise defined herein shall have the same
meaning as set forth in the Stock Purchase Agreement.
Agreement:
In consideration of the premises and the mutual promises and conditions
contained herein, the parties hereto agree as follows:
1. Amendment to Section 2(g). The Closing Date is hereby amended to
such date as the Sellers' Representative and the Purchaser may mutually
determine, but no later than August 17, 1999.
2. Amendment to Section 11. The date for the Purchaser to submit a
claim for payment pursuant to 11(b) and 11(c) of the Stock Purchase
Agreement is hereby amended to change the date from June 30, 1999 to 90
days following the Closing Date.
3. Amendment to Sections 12(a)(iii) and (iv). The right of each of the
Purchaser and the Sellers' Representative to terminate the Stock
Purchase Agreement if the Closing shall not have occurred on or before
June 30, 1999 is hereby amended to change the date from June 30, 1999 to
October 31, 1999.
4. Lease Amendment. Exhibit D attached hereto is hereby substituted for
Exhibit D attached to the Stock Purchase Agreement.
5. Execution in Counterparts; Fax Signatures. For the convenience of
the parties hereto, this Amendment may be executed simultaneously in one
or more counterparts, each of which shall be deemed to be an original,
but all of which together shall constitute one and the same instrument,
without necessity of production of the others. Signatures may be
exchanged by facsimile transmission, with original signatures to follow.
Each party to this Amendment agrees that he/she/it will be bound by
his/her/its own facsimile signature and that he/she/it accepts the
facsimile signature of the other parties to this Amendment.
6. Ratification. The remaining provisions of the Stock Purchase
Agreement are hereby ratified and affirmed.
IN WITNESS WHEREOF, the parties have executed this First Amendment as of
the date first above written.
WINSTON FURNITURE COMPANY OF
ALABAMA, INC.
By: /s/ Stephen C. Hess
Stephen C. Hess, President
MIAMI METAL PRODUCTS, INC.
By: /s/ Leo Martin - Chairman
Leo Martin, Chairman
INDUSTRIAL MUEBLERA POMPEII de
MEXICO, S.A. de C.V.
By: /s/Leo Martin - Chairman
Leo Martin, Chairman
SELLERS:
/s/ Leo Martin
Leo Martin
/s/ Gloria Martin
Gloria Martin
/s/ Donald R. Tescher
Donald R. Tescher, Trustee and
not individually of the Leo
Martin Retained Annuity Trust
Agreement I
/s/ Donald R. Tescher
Donald R. Tescher, Trustee and
not individually of the Leo
Martin Retained Annuity Trust
Agreement II
/s/ Donald R. Tescher
Donald R. Tescher, Trustee and
not individually of the Leo
Martin Retained Annuity Trust
Agreement III
/s/ Donald R. Tescher
Donald R. Tescher, Trustee and
not individually of the Gloria
Martin Retained Annuity Trust
Agreement I
/s/ Donald R. Tescher
Donald R. Tescher, Trustee and
not individually of the Gloria
Martin Retained Annuity Trust
Agreement II
/s/ Donald R. Tescher
Donald R. Tescher, Trustee and
not individually of the Gloria
Martin Retained Annuity Trust
Agreement III
EXHIBIT 10.28
SECOND AMENDMENT TO
STOCK PURCHASE AGREEMENT
This Second Amendment to Stock Purchase Agreement is made and entered
into as of the 30th day of July, 1999, by and among WINSTON FURNITURE
COMPANY OF ALABAMA, INC., an Alabama corporation (the "Purchaser"),
MIAMI METAL PRODUCTS, INC., d/b/a POMPEII FURNITURE INDUSTRIES, a
Florida corporation (the "Company"), INDUSTRIAL MUEBLERA POMPEII DE
MEXICO, S.A. DE C.V., a Mexican corporation ("IMP") and the following
selling shareholders, LEO MARTIN ("L. Martin"), GLORIA MARTIN ("G.
Martin"), DONALD R. TESCHER, TRUSTEE AND NOT INDIVIDUALLY OF THE LEO
MARTIN RETAINED ANNUITY TRUST AGREEMENT I, DONALD R. TESCHER, TRUSTEE
AND NOT INDIVIDUALLY OF THE LEO MARTIN RETAINED ANNUITY TRUST AGREEMENT
II, DONALD R. TESCHER, TRUSTEE AND NOT INDIVIDUALLY OF THE LEO MARTIN
RETAINED ANNUITY TRUST AGREEMENT III, DONALD R. TESCHER, TRUSTEE AND NOT
INDIVIDUALLY OF THE GLORIA MARTIN RETAINED ANNUITY TRUST AGREEMENT I,
DONALD R. TESCHER, TRUSTEE AND NOT INDIVIDUALLY OF THE GLORIA MARTIN
RETAINED ANNUITY TRUST AGREEMENT II, and DONALD R. TESCHER, TRUSTEE AND
NOT INDIVIDUALLY OF THE GLORIA MARTIN RETAINED ANNUITY TRUST AGREEMENT
III (collectively, the "Sellers" and individually, a "Seller").
Preliminary Statements:
A. Purchaser, the Company, IMP and Sellers entered into a Stock Purchase
Agreement dated November 23, 1998, as amended by First Amendment to
Stock Purchase Agreement dated July 1, 1999 (collectively, the "Stock
Purchase Agreement").
B. Purchaser, the Company, IMP and Sellers desire to amend the Stock
Purchase Agreement in accordance with the terms and provisions contained
in this Second Amendment.
C. Capitalized terms not otherwise defined herein shall have the same
meaning as set forth in the Stock Purchase Agreement.
Agreement:
In consideration of the premises and the mutual promises and conditions
contained herein, the parties hereto agree as follows:
7. Amendment to 1.
7.1. Additional Defined Terms. The following defined terms are added to
1 of the Stock Purchase Agreement:
"Architect" has the meaning set forth in 2(g) (v) below.
"Building Improvements" has the meaning set forth in 2(g)(i) below.
"Building Improvements Escrow Account" has the meaning set forth in
2(c)(ii) below.
"Disbursement Actual Amount" has the meaning set forth in
2(g)(v)(C)below.
"Disbursement High Amount" has the meaning set forth in 2(g)(v)(B) below.
"Disbursement Low Amount" has the meaning set forth in 2(g)(v)(A)
below.
"Environmental Indemnification" has the meaning set forth in 9(a)
below.
"Foreign Qualification Indemnification" has the meaning set forth in
9(a) below.
"IRS Audit Indemnification" has the meaning set forth in 9(a) below.
"Litigation Indemnification" has the meaning set forth in 9(a) below.
"Notice of Disagreement With Disbursement Request" has the meaning set
forth in 2(g)(v) below.
"Unrestricted Representations, Warranties and Covenants" has the meaning
set forth in 9(b)(ii) below.
7.2. Amendment of Defined Terms. The following defined terms are
hereby amended in their entirety and restated as follows:
"Accounting Firm" has the meaning set forth in 2(f)(ii) below.
"Closing" has the meaning set forth in 2(h) below.
"Closing Date" has the meaning set forth in 2(h) below.
Deletion of Defined Terms. The following defined terms are deleted from
Section 1 of the Stock Purchase Agreement: "Adjusted EBITAM", "Adjusted
EBITAM Statement", "Determination Notice", "Earnout", "Earnout Actual
Amount", "Earnout High Amount", "Earnout Low Amount", "Final Adjusted
EBITAM Determination Date" and "Notice of Disagreement With Adjusted
EBITAM Statement".
8. Amendment to 2(b) and (c). 2(b) and (c) of the Stock Purchase
Agreement are hereby amended in their entirety and restated as follows:
"(b) Purchase Price.
(i) The aggregate purchase price to be paid by the Purchaser for the all
of the Company Shares (the "Company Purchase Price") shall be
$17,400,000, minus (A) the amount of Funded Indebtedness as of the
Closing Date (after giving effect to any reduction of such Funded
Indebtedness on the Closing Date by application of Available Cash) and
minus (B) any Company Purchase Price Adjustment made pursuant to 2(f)
below. The amount of the Company Purchase Price to be received by each
Seller shall be the Seller's Company Pro Rata Share thereof.
(ii) The aggregate purchase price to be paid by the Purchaser for the
all of the IMP Shares (the "IMP Purchase Price") shall be $50,000. The
amount of the IMP Purchase Price to be received by each of L. Martin and
G. Martin shall be such Person's IMP Pro Rata Share thereof.
(c) Payment of Company Purchase Price and IMP Purchase Price. On the
Closing Date, the Purchaser shall make payment of the Company Purchase
Price and the IMP Purchase Price as follows:
(i) To the Sellers, by wire transfer of immediately available funds, the
sum of $12,400,000 [$17,400,000 minus (A) the amount of Funded
Indebtedness as of the Closing Date (after giving effect to any
reduction of such Funded Indebtedness on the Closing Date by application
of Available Cash) and (B) $5,000,000 to be deposited as the Escrow Fund
pursuant to 2(c)(ii) below] (the "Initial Payment"), to the account
designated in writing by the Sellers' Representative at least two
business days prior to the Closing Date.
(ii) To SunTrust Bank, Atlanta, as escrow agent (the "Escrow Agent")
pursuant to the terms of the Escrow Agreement, the sum of $5,000,000
(the "Escrow Fund"). As provided in the Escrow Agreement, the Escrow
Fund shall be divided into three accounts as follows: (A) $50,000
thereof shall be held in an account (the "Company Purchase Price
Adjustment Escrow Account") to be utilized to fund the Company Purchase
Price Adjustment as described in 2(f) hereof, (B) $2,450,000 thereof
shall be held in an account (the "General Indemnification Escrow
Account") to provide indemnification to the Purchaser as provided in
9(b) hereof and (C) $2,500,000 thereof (required to be deposited by L.
Martin pursuant to the provisions of 2(g)) shall be held in an account
(the "Building Improvements Escrow Account") to provide for the costs to
make the improvements to the Real Property required by the City of Miami
to correct certain building code violations as provided in 2(g) hereof.
(iii) To L. Martin and G. Martin, by wire transfer of immediately
available funds, the sum of $50,000 to the account designated in
writing by the Sellers' Representative at least two business days prior
to the Closing Date."
9. Amendment of 2(e). 2(e) of the Stock Purchase Agreement is hereby
amended in its entirety and restated as follows:
"(e) 2(e) is intentionally omitted from the Agreement."
10. Amendment to 2(f)(ii). The eighth sentence of 2(f)(ii) of the
Stock Purchase Agreement is hereby amended in its entirety and restated
as follows:
"At the end of such 30-day period, the Seller's Representative and the
Purchaser shall submit to an independent "Big 6" public accounting firm
(the "Accounting Firm") for review and resolution any and all matters
which remain in dispute and which were included in any Notice of
Disagreement With Closing Balance Sheet (it being understood that the
Accounting Firm shall act as an arbitrator to determine, based solely on
presentations by the Purchaser and the Seller's Representative (and not
by independent review), only those matters which remain in dispute), and
the Accounting Firm shall reach a final, binding resolution of all
matters which remain in dispute, which final resolution shall be (w) in
writing, (x) furnished to the Purchaser and the Seller's Representative
as soon as practicable after the items in dispute have been referred to
the Accounting Firm, (y) made in accordance with this Agreement, and (z)
conclusive and binding upon the Parties and not subject to collateral
attack for any reason."
11. Amendment to 2(g). The following new provision is hereby added
to the Stock Purchase Agreement and designated as 2(g) and 2(g), (h),
(i) and (j) to the Stock Purchase Agreement are hereby redesignated as
2(h), (i), (j) and (k).
"(g) Building Improvements.
(i) L. Martin on behalf of Nitram Partners, Ltd. agrees to be
responsible for and to pay all costs associated with the improvements to
the Real Property required by the City of Miami to correct certain
building code violations, currently estimated to cost $2,500,000 (the
"Building Improvements") and, pursuant to the provisions of 2(c)(ii),
will deposit $2,500,000 with the Escrow Agent to be held in the
Building Improvements Escrow Account and disbursed in accordance with
the provisions of this 2(g); provided, however, in the event the amount
of the Building Improvements set forth in the final quotations and/or
construction contract therefor exceeds $2,500,000, L. Martin agrees to
deposit the difference in the Building Improvements Escrow Account
within five business days of his receipt of the final quotations and/or
construction contract; provided, further, in the event the amount of the
Building Improvements set forth in the final quotations and/or
construction contract therefor is less than $2,500,000, the Purchaser
agrees to instruct the Escrow Agent, jointly with L. Martin, to make a
disbursement of an amount equal to the difference between $2,500,000 and
the amount of the Building Improvements set forth in the final
quotations and/or construction contract.
(ii) L. Martin warrants that the Building Improvements to be made and
the operations of the Company thereunder as currently conducted will be
in compliance with all applicable statutes, laws, ordinances, rules,
orders and regulations of federal, state, local and foreign governments
(and all agencies thereof), including, but not limited to, all
Environmental, Health and Safety Requirements.
(iii) The agreements and warranties of L. Martin set forth in this 2(g)
shall survive the Closing and continue in full force and effect for the
statute of limitations applicable thereto.
(iv) Funds in the Building Improvements Escrow Account shall be
disbursed as follows. Within five business days after the receipt by
the Purchaser of a disbursement request from L. Martin to disburse funds
from the Building Improvements Escrow Account, accompanied by the
written approval of the disbursement request by the project's
construction manager, engineer or architect certifying that the work to
be paid for has been satisfactorily completed, the Sellers'
Representative and the Purchaser shall jointly instruct the Escrow Agent
to make a disbursement of the applicable portion of Building
Improvements Escrow Account with respect to any undisputed amounts of
the disbursement request. With respect to any items that are the
subject of a Notice of Disagreement With Disbursement Request, joint
disbursement instructions shall be given to the Escrow Agent within
three business days after the resolution thereof in accordance with the
provisions of 2(g)(v) below.
(v) Each disbursement request shall become final and binding upon the
Purchaser on the 5th business day following delivery thereof unless the
Purchaser gives written notice to the Sellers' Representative of its
disagreement with a disbursement request (a "Notice of Disagreement With
Disbursement Request") prior to such date. Any Notice of Disagreement
With Disbursement Request shall specify in reasonable detail the nature
of any disagreement so asserted. If a timely Notice of Disagreement
With Disbursement Request is received by the Sellers' Representative
with respect to a disbursement request, then such Disbursement Request
(as revised in accordance with clause (A) or (B) below), shall become
final and binding upon the Parties on the earlier of (A) the date the
Purchaser and the Sellers' Representative resolve in writing any
differences they have with respect to any matter specified in a Notice
of Disagreement With Disbursement Request, or (B) the date any matters
in dispute are finally resolved in writing by the Architect in the
manner described below. During the 15 days immediately following the
delivery of any Notice of Disagreement With Disbursement Request, the
Purchaser and the Sellers' Representative shall seek in good faith to
resolve in writing any differences which they may have with respect to
any matter specified in such Notice of Disagreement With Disbursement
Request. At the end of such 15-day period, the Sellers' Representative
and the Purchaser shall submit to an independent architect mutually
selected by the Sellers' Representative and the Purchaser (the
"Architect") for review and resolution any and all matters which remain
in dispute and which were included in any Notice of Disagreement With
Disbursement Request (it being understood that the Architect shall act
as an arbitrator to determine, based solely on presentations by the
Purchaser and the Sellers' Representative (and not by independent
review), only those matters which remain in dispute), and the Architect
shall reach a final, binding resolution of all matters which remain in
dispute, which final resolution shall be (w) in writing, (x) furnished
to the Purchaser and the Sellers' Representative as soon as practicable
after the items in dispute have been referred to the Architect, (y) made
in accordance with this Agreement, and (z) conclusive and binding upon
the Parties and not subject to collateral attack for any reason. Each
of Purchaser and L. Martin shall pay its/his own costs and expenses
incurred in connection with such arbitration, provided that the fees and
expenses of the Architect shall be borne as follows:
(A) if the Architect resolves all of the remaining objections in favor
of the Purchaser, L. Martin (the amount of the disbursement so
determined is referred to herein as the "Disbursement Low Amount") will
be responsible for all of the fees and expenses of the Architect;
(B) if the Architect resolves all of the remaining objections in favor
of L. Martin (the amount of the disbursement so determined is referred
to herein as the "Disbursement High Amount"), the Purchaser will be
responsible for all of the fees and expenses of the Architect; and
(C) if the Architect resolves some of the remaining objections in
favor of the Purchaser and the rest of the remaining objections in favor
of L. Martin (the amount of the disbursement so determined is referred
to herein as the "Disbursement Actual Amount"), L. Martin will be
responsible for that fraction of the fees and expenses of the Accounting
Firm equal to (i) the difference between the Disbursement High Amount
and the Disbursement Actual Amount over (ii) the difference between the
Disbursement High Amount and the Disbursement Low Amount, and the
Purchaser will be responsible for the remainder of the fees and
expenses.
12. Amendment to 3B(f). 3B(f) of the Stock Purchase Agreement is
hereby amended in its entirety and restated as follows:
"(f) Financial Statements . Set forth in 3B(f) of the Disclosure
Schedule are the following financial statements (collectively the
"Financial Statements"):
(i) audited balance sheets and statements of income and statements of
shareholders equity and cash flows as of and for the fiscal year ended
December 31, 1998 (the "Most Recent Fiscal Year End") for the Company;
and (ii) unaudited balance sheet and statement of income and statement
of cash flows (the "Most Recent Financial Statements") as of and for
the five months ended May 31, 1999 (the "Most Recent Fiscal Month End")
for the Company, with all operations of IMP reflected in the Most Recent
Financial Statements. Except as set forth in 3B(f) of the Disclosure
Schedule, the Financial Statements (including the notes thereto) have
been prepared in accordance with GAAP applied on a consistent basis
throughout the periods covered thereby and present fairly the financial
condition of the Company and IMP as of such dates and the results of
operations of the Company and IMP for such periods; provided, however,
that the Most Recent Financial Statements are subject to normal year-end
adjustments (which will not be material, individually or in the
aggregate) and lack footnotes and other presentation items."
13. Amendment to 9(a). 9(a) of the Stock Purchase Agreement is
hereby amended in its entirety and restated as follows:
"(a) Survival of Representations and Warranties. The following
representations and warranties of the Sellers and the Purchaser and the
following indemnification matters shall survive the Closing and continue
in full force and effect for the statute of limitations applicable
thereto:
(i) the representations and warranties of the Sellers contained in 3A
and contained in 3B(b), (d) and (e) (collectively, the "Transaction
Representations and Warranties");
(ii) the representations and warranties of the Sellers contained in
3B(k) (the "Tax Representations and Warranties");
(iii) the representations and warranties of the Sellers contained in
3B(u) (the "Employee Benefit Plan Representations and Warranties");
(iv) the representations and warranties of the Sellers contained in
3B(v) (the "Environmental Representations and Warranties");
(v) the representations and warranties of the Sellers contained in
3B(aa) (the "Products Liability Representations and Warranties");
(vi) the representations and warranties of the Purchaser contained in
4;
(vii) (A) the failure of the Company, prior to Closing, to comply with
the reporting requirements of EPCRA and any other similar or identical
state or local reporting requirements prior to Closing and (B) the
existence, prior to Closing, of hazardous waste at the Real Property and
the disposal by the Company, prior to Closing, of hazardous waste
without a hazardous waste identification number (the "Environmental
Indemnification");
(viii) the failure of the Company to qualify as a foreign
corporation in Nevada and North Carolina, including, but not limited to,
the costs of making all requisite filings to qualify the Company and pay
Taxes in such states (the "Foreign Qualification Indemnification");
(ix) the IRS audit of the Company's tax return for the year ended
December 31, 1997 disclosed on 3B(i) of the Disclosure Schedule (the
"IRS Audit Indemnification"); and
(x) the litigation disclosed on 3B(s) of the Disclosure Schedule (the
"Litigation Indemnification").
The remaining representations and warranties of the Sellers contained in
3B (other than the Transaction Representations and Warranties, the Tax
representations and Warranties, the Employee Benefit Plan
representations and Warranties, the Environmental Representations and
Warranties and the Products Liability Representations and Warranties)
shall survive the Closing and continue in full force and effect until
the two year anniversary of the Closing Date. Any claim for which any
Party shall have given proper notice in accordance with the terms of
this Agreement (and the Escrow Agreement) on or prior to the expiration
of the applicable survival period shall survive until such claim is
resolved pursuant to the terms of this Agreement or the Escrow
Agreement. To preserve any claim for breach of any such representation
or warranty or indemnification matter, the Party claiming a breach shall
be obligated to notify the Party claimed to be in breach (except that
where the Party claimed to be in breach is the Company or IMP, notice
shall be given to the Sellers' Representative) in writing of any such
breach, or facts that can reasonably be expected to give rise to such
breach, before termination of the applicable survival period in respect
of such representation or warranty; otherwise, such Party's claim for
breach shall be forever barred."
14. Amendment to 9(b)(i) and (ii). 9(b)(i) and (ii) of the Stock
Purchase Agreement are hereby amended in their entirety and restated as
follows:
"(i) Pursuant to the terms of the Escrow Agreement and subject to 9(a)
above and the conditions set forth in this 9(b), subsequent to the
Closing Date the Sellers shall indemnify, defend and hold harmless the
Company and IMP (as assignee of the Purchaser pursuant to 9(e) hereof)
from, against and in respect of any Losses which the Purchaser, the
Company or IMP shall suffer, sustain or become subject to by virtue of
or which arise out of, or result from, any breach of the covenants,
representations and warranties of the Sellers set forth in this
Agreement (other than the Transaction Representations and Warranties,
the Tax Representations and Warranties, the Employee Benefit Plan
Representations and Warranties, the Environmental Representations and
Warranties, the Products Liability Representations and Warranties, the
Environmental Indemnification, the Foreign Qualification
Indemnification, the IRS Audit Indemnification and the Litigation
Indemnification, all of which shall be governed by the provisions of
9(b)(ii)); provided, however, that: (A) the Company's and IMP's right
to indemnification with respect to such breaches under this 9(b)(i)
shall be satisfied only by recourse to the funds deposited and remaining
in the General Indemnification Escrow Account, and none of the Sellers
shall have any personal liability to the Company or IMP with respect to
any such breach, and (B) the Company and IMP shall not be entitled to
indemnification with respect to any Losses under this 9(b)(i) until all
such Losses exceed, in the aggregate, $150,000 (the "Deductible"), in
which case the Company and IMP shall be entitled to indemnification
only to the extent such Losses exceed $150,000. Notwithstanding
anything to the contrary contained in this 9(b)(i), any breach of the
representations and warranties of the Sellers contained in 3B(x) shall
not be subject to the Deductible.
(ii) Subject to 9(a) above and the conditions set forth in this 9(b),
subsequent to the Closing Date the Sellers shall indemnify, defend and
hold harmless the Company and IMP (as assignee of the Purchaser pursuant
to 9(e) hereof) from, against and in respect of any Losses which
Purchaser, the Company or IMP shall suffer, sustain or become subject to
by virtue of or which arise out of, or result from the following
(sometimes hereinafter collectively referred to as the "Unrestricted
Representations, Warranties and Covenants"):
(A) any breach of any of the Transaction Representations and
Warranties, the Tax Representations and Warranties, the Employee Benefit
Plan Representations and Warranties, the Environmental Representations
and Warranties or the Products Liability Representations and Warranties;
and
(B) the Environmental Indemnification, the Foreign Qualification
Indemnification, the IRS Audit Indemnification and the Litigation
Indemnification.
provided, however, that no Seller shall be obligated to indemnify the
Purchaser for an amount in excess of its, his or her Company Pro Rata
Share or IMP Pro Rata Share, whichever is applicable, of any Losses
arising from the Unrestricted Representations, Warranties and Covenants.
The Company's and IMP's right to indemnification with respect to
breaches of the Unrestricted Representations, Warranties and Covenants
under this 9(b)(ii) shall not be subject to the Deductible and shall be
satisfied first by recourse to the funds deposited and remaining in the
General Indemnification Escrow Account; provided, further, that to the
extent Losses for which the Purchaser is entitled to indemnification
under 9(b)(i), together with amounts paid from the General
Indemnification Escrow Account pursuant to this 9(b)(ii) exceed
$2,450,000, the Sellers shall pay the Purchaser the deficiency within 10
days of the Purchaser's request. The Parties agree that the following
limits shall apply with respect to the Sellers indemnification
obligations under this 9(b)(ii):
(X) In no event shall the Company or IMP be entitled to indemnification for
any Losses with respect to the breach of any Employee Benefit Plan
Representations and Warranties and the Products Liability Representations and
Warranties and the Foreign Qualification Indemnification to the extent that
the sum of (x) all such Losses, and (y) the amount of all disbursements made
to the Company and IMP from the General Indemnification Escrow Account
exceeds, in the aggregate, $5,000,000;
(Y) In no event shall the Company or IMP be entitled to indemnification for
any Losses with respect to the breach of any Tax Representations and
Warranties, Environmental Representations and Warranties, the Environmental
Indemnification, the IRS Audit Indemnification and the Litigation
Indemnification to the extent that the sum of (1) all such Losses, (2) the
amount of all disbursements made to the Company and IMP from the General
Indemnification Escrow Account and (3) the amount of any Losses paid for a b
Benefit Plan Representations and Warranties, the Products Liability
Representations and Warranties and the Foreign Qualification
Indemnification, exceeds in the aggregate, the Company Purchase Price
and the IMP Purchase Price; and
(Z) There shall be no limit on the amount of any Losses for which the
Company or IMP is entitled to indemnification for the breach of any
Transaction Representations and Warranties."
15. Amendment to Section 10(a). Section 10(a) of the Stock Purchase
Agreement is hereby amended in its entirety and restated as follows:
"(a) Dispute Defined. As used in this Agreement, "Dispute" shall (i)
mean any dispute or disagreement among the Parties concerning the
interpretation of this Agreement, the validity of this Agreement, any
breach or alleged breach by any party under this Agreement or any other
matter relating in any way to this Agreement, and (ii) exclude any
dispute or disagreement between the Company and the Sellers concerning
the determination of the Net Working Capital which shall be resolved
pursuant to the provisions of Section 2(f)(ii) of this Agreement."
16. Escrow Agreement. Exhibit A attached hereto is hereby
substituted for Exhibit A attached to the Stock Purchase Agreement.
17. Amendment to Disclosure Schedules. The following Disclosure
Schedules attached hereto are hereby substituted for the Disclosure
Schedules attached to the Stock Purchase Agreement:
3B(a) of the Disclosure Schedule
3B(f) of the Disclosure Schedule
3B(g) of the Disclosure Schedule
3B(i) of the Disclosure Schedule
3B(j) of the Disclosure Schedule
3B(l) of the Disclosure Schedule
3B(m) of the Disclosure Schedule
3B(n) of the Disclosure Schedule
3B(o)(i) of the Disclosure Schedule
3B(p) of the Disclosure Schedule
3B(r) of the Disclosure Schedule
3B(s) of the Disclosure Schedule
3B(u) of the Disclosure Schedule
3B(v) of the Disclosure Schedule
3B(z) of the Disclosure Schedule
3B(aa) of the Disclosure Schedule
6(b)(iii) of the Disclosure Schedule
18. Execution in Counterparts; Fax Signatures. For the convenience of
the parties hereto, this Amendment may be executed simultaneously in one
or more counterparts, each of which shall be deemed to be an original,
but all of which together shall constitute one and the same instrument,
without necessity of production of the others. Signatures may be
exchanged by facsimile transmission, with original signatures to follow.
Each party to this Amendment agrees that he/she/it will be bound by
his/her/its own facsimile signature and that he/she/it accepts the
facsimile signature of the other parties to this Amendment.
19. Ratification. The remaining provisions of the Stock Purchase
Agreement are hereby ratified and affirmed.
IN WITNESS WHEREOF, the parties have executed this Second Amendment as
of the date first above written.
WINSTON FURNITURE COMPANY OF
ALABAMA, INC.
By: /s/ Stephen C. Hess
Stephen C. Hess, President
MIAMI METAL PRODUCTS, INC.
By: /s/ Leo Martin
Leo Martin, Chairman
INDUSTRIAL MUEBLERA POMPEII de
MEXICO, S.A. de C.V.
By: /s/ Leo Martin
Leo Martin, Chairman
SELLERS:
/s/ Leo Martin
Leo Martin
/s/ Gloria Martin
Gloria Martin
/s/ Donald R. Tescher
Donald R. Tescher, Trustee and
not individually of the Leo
Martin Retained Annuity Trust
Agreement I
/s/ Donald R. Tescher
Donald R. Tescher, Trustee and
not individually of the Leo
Martin Retained Annuity Trust
Agreement II
/s/ Donald R. Tescher
Donald R. Tescher, Trustee and
not individually of the Leo
Martin Retained Annuity Trust
Agreement III
/s/ Donald R. Tescher
Donald R. Tescher, Trustee and
not individually of the Gloria
Martin Retained Annuity Trust
Agreement I
/s/ Donald R. Tescher
Donald R. Tescher, Trustee and
not individually of the Gloria
Martin Retained Annuity Trust
Agreement II
/s/ Donald R. Tescher
Donald R. Tescher, Trustee and
not individually of the Gloria
Martin Retained Annuity Trust
Agreement III
EXHIBIT 99.1
FOR IMMEDIATE RELEASE CONTACT:
Bill Brown, V.P. Sales
& Marketing
160 Village Street
Birmingham, Alabama 35242
Telephone: (205) 980-4333
Fax: (205) 980-6161
WINSLOEW FURNITURE ACQUIRES
POMPEII FURNITURE
BIRMINGHAM, AL - (August 2, 1999) Winston Furniture Company of Alabama, Inc.,
a subsidiary of WinsLoew Furniture, Inc. (NASDAQ/NM:WLFI), has acquired Miami
Metal Products, Inc., DBA, Pompeii Furniture, located in Miami, Florida,
through a stock transaction. The management of Pompeii will remain intact.
All retail/specialty store accounts will be handled by Winston Furniture's
sales representatives.
"We are very excited about the purchase of Pompeii Furniture," said Steve
Hess, President and CEO of Winston. "We feel that there is a huge
opportunity to increase Pompeii's market share at the retail/specialty store
level, where it has very little presence."
Bobby Tesney, President and CEO of WinsLoew Furniture, Inc., commented, "The
acquisition of Pompeii Furniture Industries is part of our growth strategy to
add complementary product lines and companies to our casual furniture and
contract seating segments."
Pompeii Furniture is a leading producer of fine aluminum casual outdoor
furniture and a major supplier to the hospitality industry. Pompeii was
established in 1955.
Winston Furniture Company of Alabama, Inc. is a leading manufacturer of fine
aluminum casual furniture. Winston casual furniture is sold through
specialty retail and fine furniture stores. Additional product information
can be obtained from Winston's website at www.winstonfurniture.com.
WinsLoew Furniture, Inc. designs, manufacturers, and distributes aluminum
casual (porch and patio) furniture and contract seating for the hospitality
and office furniture markets. Additional information is available on the
Internet World Wide Web at this address: http://www.cfonews.com/wlfi.
