Exhibit 10.1
AMERICAN PALLET LEASING, INC.
000 X. XXXXXXXXX XXX, XXXXX 000
XXXXXXXX, XXXXXXXX 00000
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Phone (000) 000-0000 FLORIDA: 0000 00XX XXX XX; XX XXXXXXXXXX XX 00000 PHONE:
(000) 000-0000 FAX: (000) 000-0000
Fax (000) 000-0000
cellular: (000) 000-0000
Email: xxxxxx@xxx.xxx
November 28, 2005
L&L Lumber Products, Inc.
0000 Xxxx 0xx Xxxxxx
Xxxxx Xxxx, XX 00000
Attn: Xxxxxxx Xxxxxxx
Xxxxx Xxxxxxx
Re: Purchase of L&L Lumber Products, Inc. (the "Company")
Dear Mr. & Xxx. Xxxxxxx:
This letter confirms our understanding of the mutual present
intentions of American Pallet Leasing, Inc. or its affiliate (the "Purchaser")
and Xxxxxxx and Xxxxx Xxxxxxx (the "Sellers") with respect to the principal
terms and conditions under which the Purchaser will acquire from Sellers their
interest in the following identified real and personal property (the "Company"
or the "Property").
REAL ESTATE
Xxxx 0, 0, 0, xxx 0, Xxxxxx'x Addition to the City of North Bend, Dodge
County, Nebraska.
And,
Xxxx 0, 0, 0, 0, 0, xxx 0 xx Xxxxx 69 of the Original Town, now City of
North Bend, Dodge County, Nebraska and that portion of the alley in Block
69 of the Original Town abutting Xxxx 0, 0, 0, 0, 0, xxx 0 xx xxxx Xxxxx;
that portion of Fourth Street abutting Xxxx 0, 0, xxx 0 xx xxxx Xxxxx 69
on the South and West half of Mulberry Street from the intersecting South
boundary line of Fifth Street on the North extending South to the South
city limits boundary line in Fourth Street. Property will be taken subject
to rights of ingress and egress, reservations for utility lines of every
nature, and encroachment of record (the "Demised Property").
PERSONAL PROPERTY(1)
A. All Equipment and Rolling Stock as specifically described on the
attached Exhibit A (the "Demised Assets").
B. With the exception of cash or cash equivalent on deposit in any
institution and accounts receivable, all assets of the Company. Purchaser
shall also purchase by separate agreement the inventory of logs, lumber,
bark, sawdust, wood chips, and pre-built product on purchase date at a
cost plus freight basis.
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(1) Equipment, leasehold improvements and trade fixtures will be in working
order and/or essentially the same condition as there were at the time of initial
inspection, ordinary wear and tear excepted. All property being sold hereunder
shall be free and clear of any liens or encumbrances.
L&L Lumber
November 28, 2005
Page 2 of 5
C. All copyrights and patents, customer deposits, customer lists, vendor
lists and catalogs, trade fixtures and equipment, fictitious business
name, trade name(s) and logo(s), sign(s), leasehold improvements,
goodwill, telephone number(s), distributor rights, and all transferable
licenses and permits.
Such transaction is hereinafter referred to as the "Acquisition." The Sellers
and the Purchaser may hereafter be referred to individually as a "Party" or
collectively as the "Parties."
The Parties acknowledge that this letter does not contain all
matters upon which an agreement must be reached in order for the Acquisition to
be consummated. Further, among other conditions specified herein or otherwise
agreed to by the Parties, the obligations of the Parties to consummate the
Acquisition are subject to the negotiation and execution of a definitive
agreement relating to the Acquisition (the "Acquisition Agreement"), the
completion of satisfactory due diligence by the Parties, securing the necessary
approvals from each Party's board of directors or shareholders, as appropriate,
and the Purchaser's providing Sellers with a commitment letter from Purchaser's
bank or lending institution, within fourteen (14) days of the signing of this
Letter of Intent by Sellers, which commitment letter shall be in a form and
contain such terms consistent with a transaction of this size and nature. In the
event such commitment letter is not submitted to the sellers by 5:00 p.m.
Central Standard Time on the 14th day after the signing of this Letter of
Intent, then this Letter of Intent shall be null and void and of no force or
effect whatsoever. For purposes of counting the 14 days, the first day shall
begin on the day after the signing of this Letter of Intent.
Within ten (10) business days after the 14-day period's expiration,
Purchaser shall submit to Sellers a proposed Acquisition Agreement. Such
Acquisition Agreement shall be of a form and contain such terms as appropriate
for a transaction of a nature and size contemplated herein and shall be
reasonably satisfactory to the Purchaser's lender. In the event that such
Acquisition Agreement is not submitted by 5:00 p.m. Central Standard Time on the
10th business day as provided herein, then this Letter of Intent shall be null
and void and of no force or effect whatsoever. For purposes of counting the 10
business days, the first day shall begin on the day after the signing of this
Letter of Intent. A business day shall not include Saturdays, Sundays, or any
day that the banks in either Illinois or Nebraska are closed or required to be
closed by operation of law or custom.
Upon receipt of the proposed Acquisition Agreement, the parties
shall forthwith negotiate in good faith to reach an agreement to its terms that
an Acquisition Agreement is signed as soon as practicable, both parties
understanding and agreement that time is of the essence.
1. PURCHASE AND SALE. At the closing of the transaction contemplated
hereby (the "Closing"), subject to the satisfaction of all conditions precedent
contained in the Acquisition Agreement, the Purchaser, or a subsidiary or
designated affiliated party of the Purchaser, will acquire 100% of the Sellers'
interest in the Demised Property and the Demised Assets of the Company, which
are identified above and on Exhibit A.
2. STRUCTURE. The Acquisition shall be structured as an asset sale. At
Closing, the Sellers shall retain their accounts receivable and shall be
responsible for their accounts payable. The Sellers shall also be responsible
for any encumbrance on the Demised Property or Demised assets prior to Closing.
3. PURCHASE PRICE. The purchase price to be paid at closing shall be
$1,650,000. Of the total Purchase Price, $1,500,000 shall be paid in cash, and
the Sellers shall take a note back for $150,000, the terms of which note shall
be standard for a transaction of this nature and size and shall be determined in
good faith by negotiation between the Parties.
L&L Lumber
November 28, 2005
Page 3 of 5
4. CLOSING. Subject to the satisfaction of all conditions precedent and
the continued accuracy of the representations contained in the Acquisition
Agreement, the Closing will take place within thirty-five (35) days from the
date that the Acquisition Agreement is signed by the later of the required
signatures. Upon execution of the Acquisition Agreement, the title insurance
shall be ordered and one-half of the cost thereof shall be a binding obligation
of each party as otherwise stated herein.
5. UNDERTAKINGS PRIOR TO CLOSING.
(a) During the period from the date this letter is signed by the
Sellers (the "Signing Date") until the date on which either Party provides the
other Party with written notice that negotiations toward a Definitive Agreement
are terminated (the "Termination Date"), the Sellers and the Company will afford
the Purchaser, its representatives, or its lenders, full and free access to the
Company, its personnel, properties, contracts, books and records, and all other
documents and data.
(b) During the period from the Signing Date until the Termination
Date, the Sellers and the Company shall cause the Company to operate its
business in the ordinary course and to refrain from any extraordinary
transactions.
6. EXCLUSIVE DEALING. Upon later of the signing of this Letter of Intent
or the receipt of the Purchaser's commitment letter for financing, the Sellers
shall not solicit, encourage or accept proposals from or enter into negotiations
with or furnish any nonpublic information to any other person or entity
regarding a business combination or the possible sale of the Sellers' interest
in the Company, until (a) the earlier of the Signing Date or the termination of
this letter, or (b) the Closing Date if the Acquisition Agreement is executed by
the Parties. The Sellers shall notify the Purchaser promptly of any unsolicited
proposals by third parties and furnish the Purchaser the material terms thereof.
7. TERMINATION. This letter may be terminated at any time:
(a) by the mutual written consent of the Parties;
(b) by either Party if the Acquisition Agreement has not been entered
into by the Parties by the Closing Date;
(c) by the Sellers if the Purchaser is unable to secure financing;
(d) by the Purchaser if the Company's bank forecloses on the property
prior to Closing.
(e) by either Party if the other Party has failed to proceed in good
faith under this letter.
(f) by the Sellers if the commitment letter for the Purchaser's
financing is not provided within the 14-day period as provided
herein.
(g) by the Sellers if the Purchasers do not submit a proposed
Acquisition Agreement as provided herein.
8. ALL PROPERTY IN PRESENT CONDITION.
L&L Lumber
November 28, 2005
Page 4 of 5
This sale/purchase is based upon the inspection of the property by the
purchaser and not upon any representations or warranties of condition by
the Sellers or Sellers' agent. Purchaser is purchasing this property in
its present condition and with all its faults. It is agreed by the Parties
that the Explorer Block Pallet Machine is not in working order.
Sellers make no representations or warranties of any kind or nature other
than as set forth in the deed in connection with the sale of the property,
and other than that the Sellers have the authority to execute the
Agreement. Purchaser hereby acknowledges that they have examined the
property and conducted such investigations with relation thereto as they
deem advisable and have satisfied themselves as to the nature and
condition of the property and all pertinent factors with relation thereto.
Purchaser agrees that it will accept the property in the condition in
which it now exists without warranties or representations of any type
whatsoever, express or implied, in fact or by law, and without recourse
against the Sellers as to the nature, condition or usability of the
property or the uses to which it may be put.
9. DISCLOSURE. Except as and to the extent required by law, without the
prior written consent of the other Party, neither the Purchaser nor either
Seller will, and each will direct its representatives not to make, directly or
indirectly, any public comment, statement, or communication with respect to, or
otherwise to disclose or to permit the disclosure of the existence of
discussions regarding, a possible transaction between the Parties or any of the
terms, conditions, or other aspects of the transaction proposed in this letter.
If a Party is required by law to make any such disclosure, it must first provide
to the other Party the content of the proposed disclosure, the reasons that such
disclosure is required by law and the time and place that the disclosure will be
made. Sellers understand that Purchaser is a public company and has certain
disclosure requirements that it may be required to undertake upon the signing of
this letter of intent.
10. COSTS. The Purchaser and each Seller will be responsible for and bear
all of its own costs and expenses (including any broker's or finder's fees and
the expenses of its representatives) incurred at any time in connection with
pursuing or consummating the Acquisition. Notwithstanding the preceding
sentence, the cost of an owner and mortgagee's title policy shall be divided
equally between the Purchaser and the Sellers.
11. CONSENT TO DUAL AGENCY. The Parties acknowledge and consent to the use
of Xxxxxxx Xxxxxx as dual agent as provided at Exhibit B.
12. ENTIRE AGREEMENT. The Binding Provisions constitute the entire
agreement between the parties, and supersede all prior oral or written
agreements, understandings, representations and warranties, and courses of
conduct and dealing between the parties on the subject matter hereof. Except as
otherwise provided herein, the Binding Provisions may be amended or modified
only by a writing executed by all of the parties or by the negotiation and
execution of a definitive agreement. For purposes of this Agreement, the
following shall be considered Binding Provisions: Sections 4, 5, 6, 7, 8, 9, 10,
11, 12 and 13.
The paragraphs and provisions of this letter not identified immediately
above do not constitute and will not give rise to any legally binding obligation
on the part of any of the Parties or of the Company. Moreover, except as
expressly provided in the Binding Provisions (or as expressly provided in any
binding written agreement that the Parties may enter into in the future), no
past or future action, course of conduct, or failure to act relating to the
Acquisition, or relating to the negotiation of the terms of the Acquisition or
any Definitive Agreement, will give rise to or serve as a basis for any
obligation or other liability on the part of the Parties or the Company.
L&L Lumber
November 28, 2005
Page 5 of 5
13. GOVERNING LAW. This letter and the definitive agreements shall be
governed by and construed in accordance with the law of the State of Nebraska,
without regard to the principles or policies thereof with respect to conflicts
of laws.
14. COUNTERPARTS. This letter may be executed in one or more counterparts,
each of which shall be deemed an original, and all of which together shall
constitute one and the same instrument.
If the foregoing correctly sets forth our mutual understanding,
please so indicate by signing two copies of this letter in the spaces provided
below and returning one copy to us no later than 5:00 p.m. local on November 28,
2005.
Very truly yours,
/s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx
President & CEO
ACCEPTED AND AGREED:
L&L
By:
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/s/ Xxxxxxx Xxxxxxx 50%
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Name Shares Owned
/s/ Xxxxx Xxxxxxx 50%
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Name Shares Owned
