-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, AvbaKF5NXK5II1Yq5QmqfFw7JgBeY9VTdYTGFyEeIpSVO/Jiesbp3OEb5dQFZIoN OkSnuEAlqgKKx2ZiRLQIuw== 0000950134-97-002897.txt : 19970415 0000950134-97-002897.hdr.sgml : 19970415 ACCESSION NUMBER: 0000950134-97-002897 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 11 CONFORMED PERIOD OF REPORT: 19970331 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19970414 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMRE INC CENTRAL INDEX KEY: 0000809572 STANDARD INDUSTRIAL CLASSIFICATION: CONSTRUCTION SPECIAL TRADE CONTRACTORS [1700] IRS NUMBER: 752041737 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-09632 FILM NUMBER: 97580044 BUSINESS ADDRESS: STREET 1: 8585 N STEMMONS FRWY STREET 2: SOUTH TOWER CITY: DALLAS STATE: TX ZIP: 75247 BUSINESS PHONE: 2148197000 8-K 1 FORM 8-K 1 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 -------------------------------- AMRE, INC. - -------------------------------------------------------------------------------- (Exact Name of Registrant as Specified in Charter) DELAWARE 1-9632 75-2041737 - -------------------------------------------------------------------------------- (State or Other Jurisdiction (Commission (IRS Employer of Incorporation) File Number) Identification No.) 8585 N. STEMMONS FREEWAY, SOUTH TOWER, DALLAS, TX 75247 - -------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including are code: (214) 658-6300 ------------------------------ N/A - -------------------------------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report) 2 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." 3 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. 4 (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. 5 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 6 EXHIBIT INDEX EXHIBIT NO. DESCRIPTION - -------------------------------------------------------------------------------- *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. EX-2.1 2 BANKRUPTCY COURT ORDER 1 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 2 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 3 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 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 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 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 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 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 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 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 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 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 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. EX-2.2 3 ASSET PURCHASE AGREEMENT 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 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 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. 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. 2 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 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 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 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 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 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 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. 9 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 10 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 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 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 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 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 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 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 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] 18 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 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. EX-2.3 4 CLOSING PRORATION AGREEMENT 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; 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 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 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 5 OMITTED SCHEDULES REDO, L.L.C. PRORATION AGREEMENT There are no schedules to this Agreement. EX-2.4 5 ASSET PURCHASE AGREEMENT 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). 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 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 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 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 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 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 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 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 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. EX-2.5 6 1ST AMENDMENT TO ASSET PURCHASE AGREEMENT 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 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 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 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. EX-2.6 7 ASSET PURCHASE AGREEMENT 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 2 TABLE OF CONTENTS
Page ---- 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
3 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
4 Schedules and Exhibits Schedule 1.1 - Sales Offices Schedule 2.1(a) - Leases Schedule 2.1(b) - Furniture, Fixtures and Equipment of the Sales Offices Schedule 2.1(c) - Furniture, Fixtures and Equipment of the Algonquin Building Schedule 2.1(d) - Furniture, Fixtures and Equipment of the Telemarketing Center Schedule 2.1(f) - Equipment Leases Schedule 2.1(i) - Telephone Numbers Schedule 2.2(g) - Liabilities and Obligations
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. 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. 2 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. 3 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. 4 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." 5 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. 6 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. 7 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 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 9 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. 10 15 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 11 16 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. 12 17 (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 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 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 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 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 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 23 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 19 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 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. EX-2.7 8 1ST AMENDMENT TO ASSET PURCHASE AGREEMENT 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 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] 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 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. EX-2.8 9 2ND AMENDMENT TO ASSET PURCHASE AGREEMENT 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] 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 3 OMITTED SCHEDULES REUNION HOME SERVICES, INC. SECOND AMENDMENT TO ASSET PURCHASE AGREEMENT There are no schedules to this Agreement. EX-2.9 10 ASSET PURCHASE AGREEMENT 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 2 TABLE OF CONTENTS
Page ---- 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
3 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
Exhibit A: Form of Amendment to Customer Contract ii 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. 5 "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. 2 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 6.5 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: 3 7 (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. 4 8 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. 5 9 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. 6 10 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. 7 11 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. 8 12 (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. 9 13 (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. 10 14 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 11 15 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. 12 16 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. 13 17 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] 14 18 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 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. EX-2.10 11 ASSET PURCHASE AGREEMENT 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 2 TABLE OF CONTENTS
PAGE ---- 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
3 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
SCHEDULES AND EXHIBITS SCHEDULE 2.2(a) - Furniture, Fixtures and Equipment of the Sales Office ii 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. 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. 2 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 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 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 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 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 7 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 8 12 (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. 9 13 (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 10 14 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): 11 15 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. 12 16 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. 13 17 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 THIS PAGE INTENTIONALLY LEFT BLANK] 14 18 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 15 19 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. -----END PRIVACY-ENHANCED MESSAGE-----