AGREEMENT made this 1st day of November, 1996, between
COLUMBINE HOME SALES, LLC, a Colorado Limited Liability
Company with its principal place of business at 0000 Xxxxx
Xxxxxx, Xxxxxxxx Xxxxxxx, Xxxxxxxx ("Seller"), and ECLIPSE
CORPORATION, a Colorado corporation, with its principal
place of business at 0 Xxxxx Xxxxxxx, Xxxxx 000, Xxxxxxxx
Xxxxxxx, Xxxxxxxx ("Purchaser"), a Colorado Corporation.
Recitals
WHEREAS, Seller is engaged in the business of a dealer
and distributorship of modular homes in Colorado Springs,
Colorado, and elsewhere; and
WHEREAS, Seller desires to sell the business together
with a portion of its related assets, and
WHEREAS, Seller's Board of Managers, and the owners and
holders of one hundred (100%) percent of the interests of
the limited liability company, have duly authorized and
approved the sale of Seller's assets subject to this
Agreement, and
WHEREAS, Purchaser has been managing Seller's business
pursuant to Mangement Contract dated August 1, 1996, and
WHEREAS, Purchaser has the authority to acquire all or
any part of the business and property of any company
conducting any business which Purchaser is authorized to
conduct, including the distribution and sale of manufactured
homes, and
WHEREAS, Purchaser's Board of Directors determined that
the purchase of a portion of Seller's assets on the terms
set forth below is desirable and is consistent with the
Purchaser's objectives.
IT IS THEREFORE AGREED:
1. Sale of business. Seller shall sell to Purchaser,
and Purchaser shall purchase and acquire, all Seller's
assets shown on Exhibit 1, a copy of which is attached
hereto and incorporated herein by reference, together with
the going concern value, and other intangible assets of the
manufactured housing dealership owned and operated by Seller
in Colorado Springs, Colorado, under the name of Columbine
Homes Sales, LLC, subject to such changes as have occurred
and shall occur in the ordinary course of its business
between November 1, 1996, and the date of closing, and
subject also to the liabilities to be assumed by the
Purchaser as set forth in Exhibit 2, a copy of which is
attached hereto and incorporated herein by reference.
Included in said sale as more fully described in Exhibit 1
are the following assets:
(a) Sales proceeds in progress commenced on or after
November 1, 1996, as provided hereinbelow;
(b) Assignment of subdealership agreements with
Xxxxxxxx Realty, Ordway, Colorado, and Outpost
Homes Company, Walsenburg, Colorado.
(c) Assignment of contracts and agreements with the
following manufacturers: Silver Crest, Western
Homes Corporation, Palm Harbor Homes, Masterpiece
Homes, Xxxxxx Homes, Inc., Cavco Xxxxxxxxxx,
Xxxxxxx, Oak Creek Homes, American Homestar
Corporation, Silver Creek Homes, ShowCase Homes
and other manufacturrs, if any.
(d) Assignment of agreement regarding steel buildings
with Perfect Steel Systems dated April 23, 1996.
(e) Leases (3) of retail lot facility located at 0000
X. Xxxxxx, Xxxxxxxx Xxxxxxx, Xxxxxxxx.
(f) Office building located at retail lot facility at
0000 X. Xxxxxx, Xxxxxxxx Xxxxxxx, Xxxxxxxx.
(g) Assignment and assumption of GreenTree Financial
Servicing Corporation and Deutsche Financial
Services Corporation floorlines.
(h) Various manufactured homes either for sale or as
models.
(i) Various furniture, fixtures and equipment.
(j) Superior Home construction contract.
2. Purchase price.
(a) Stock. In consideration for such sale, Purchaser
shall issue to Seller or its nominee(s) shares of
common stock restricted pursuant to Rule 144,
fully paid and non-assessable, more fully
described in paragraph 5, valued at market value
on October 31, 1996 in the amount of thirteen
million five hundred thousand (13,500,000) shares
in exchange for the agreed value of the purchase
price of Seller's sales contracts, furniture,
fixtures, equipment, lot improvements, sales model
and good will, One Hundred Fifty Thousand and
No/100 ($150,000.00) Dollars. Additionally,
Purchaser shall issue options to purchase common
stock in Purchaser, exercisable within a term of
three (3) years, of thirteen million five hundred
thousand (13,500,000) additional shares at the
current price as of October 31, 1996, based upon
the last previous trade on October 28, 1996 of
$.035 per share.
(b) Adjustable Cash. In conjunction with the
assumption of the Green Tree Financial Servicing
Corporation and Deutsche Financial Services
floorlines of credit as provided hereinbelow, the
parties agree that as of October 31, 1996, the
effective date of said assumptions, there is
principal owed by Seller through curtailment
payments, of which every payment of original
invoices received is Ninety-Five Thousand Eight
Hundred Seventy-Three and 38/100 ($95,873.38)
Dollars, in accordance with exhibit attached
hereto and incorporated herein by reference. The
parties further agree that, when each model
subject to said floorlines have been sold, the
actual amount of principal above will be
determined and adjusted in the event Purchaser did
not receive full payment of original invoice and
Seller shall have the payment of the adjusted
$95,873.38 in cash at closing of each home if
original invoice is received, the minimum of which
is shown on Exhibit 3.
(c) Execution of Sub-Dealer contract between the
parties as shown on Exhibit 4, a copy of which is
attached hereto and incorporated herein by
reference.
(d) Credit for approximately Twenty-Nine and No/100
($29,000.00) Dollars heretofore assumed or paid by
Purchaser to Sub-Dealers and Sierra-Rockies
Development Corporation on behalf of Seller
pursuant to Management Contract dated August 1,
1996.
(e) Forgiveness and waiver of management's fees due
Purchaser under Management Agreement dated August
1, 1996 or _____________________________________
($_______________) Dollars.
3. Assumption of liabilities and contracts.
(a) Liabilities. In further consideration for such
sale, Purchaser shall assume and discharge, and
indemnify Seller against, all debts, liabilities, and
obligations of Seller as shown on the schedule as shown
on Exhibit 2, which obligations shall be certified by
Seller to be true and correct as of November 1, 1996.
Seller shall pay, be responsible for, and hold
Purchaser harmless from all its liabiities,
obligations, accounts payable, claims, demands and
debts in existence prior to November 1, 1996.
(b) Ordinary business liabilities. In addition,
Purchaser shall assume and discharge, and indemnify
Seller against, all debts, obligations, and liabilities
of Seller which have arisen or will arise in the
ordinary course of its business between November 1,
1996, and the date of closing, and all income,
franchise, sales, and other tax liabilities incurred
for all taxable periods up to the date of closing,
including all income, franchise, sales, and other tax
liabilities arising out of this transaction.
(c) Tax returns. All income, franchise, sales, and
other tax returns and reports of the Seller for the
period from November 1,1996, to the date of closing
shall be prepared jointly by the parties accountants,
but all such returns shall be executed by Seller's
officers or directors as required by law.
(d) Indemnity. Purchaser shall have the benefit of and
perform all contracts and commitments listed on Exhibit
2 made in the ordinary course of Seller's business
which are outstanding on the date of closing, and shall
indemnify Seller against all liabilities under such
contracts and commitments, except that Purchaser shall
not be responsible for the breach of any such contract
or commitment which occurs before the date of closing.
4. Approval of interest holders. This agreement is
subject to the approval of Purchaser's Board of Directors.
Purchaser shall call a meeting of its Board of Directors for
November 20, 1996, for the purpose of considering and
approving this agreement and taking all other action
required by Purchaser to consummate this contract.
5. Shares.
(a) New shares. If Purchaser's Board of Directors
approves this agreement, upon closing Purchaser shall
forthwith execute and file all documents and take all
steps necessary to permit the issuance of the
appropriate shares of common stock in Purchaser to
Seller or its designees immediately following closing.
(b) Limited transfer restriction. The preferences,
privileges, and voting power of the shares and the
restrictions thereon are to be as follows: voting
preference shares may be originally issued only to
Seller, or its nominees, and shall not, for a period of
one year from the date of issuance, be sold, assigned,
or otherwise transferred, except to Purchaser's or
Seller's interest holders.
(c) Treatment of Stock. In order that Seller may
distribute such shares readily to its interest
holders, the share certificates issued by Purchaser
shall be in the denominations, amounts, and names
requested by Seller prior to closing. If Purchaser
effects a stock split, stock dividend, reverse stock
split, spin-off, or similar change in its capital
structure between the date of this agreement and the
date set for closing, there shall be an equitable
adjustment to the number of shares to be issued in
accordance with the terms of this paragraph to reflect
such change or changes. Purchaser shall bear all
necessary and reasonable expenses incurred by Seller in
the distribution of such shares to Seller's interest
holders, except that Seller shall bear those expenses
referred to in paragraph 6 of this agreement.
(d) Piggy Back Registration Rights and SEC
registration. If Purchaser's Board of Directors
approves and closes this agreement, Purchaser shall, in
its next public offering include stock issued pursuant
hereto, file with the Securities and Exchange
Commission and appropriate state agencies, if
necessary, a registration statement covering the
shares, and take all other necessary action to validate
the issuance of such shares. Seller shall cooperate
with Purchaser and its counsel in preparing and filing
any such registration, and Seller shall furnish
information and execute all documents that are
reasonably requested in connection with such
registration. Purchaser shall pay all fees and expenses
incurred by its counsel and accountants in preparing
the registration statements. Upon registration, the
parties agree to enter into a lock-up agreement of
standard form restricting sale of shares issued Seller
hereunder to twenty (20%) percent of total shares so
issued for a period of one year.
6. Sublease Agreement. Seller shall sublet to
Purchaser its retail sales lot located at 0000 X. Xxxxxx
Xxxxxx, Xxxxxxxx Xxxxxxx, XX, 00000, at the same rental and
under the same terms and conditions as set forth in Seller's
existing three (3) leases upon said lot.
7. Representations of Seller. Seller warrants and
represents the following are now true and will be true at
closing:
(a) Assets and liabilities. The assets and liabilities
set forth in this Agreement and the exhibits attached
hereto are certified to be true and complete statments
as of that date, and Seller shall hold Purchaser
harmless from any and all liens, claims and
encumbrances pertaining to said assets and
liabililities.
(b) Seller shall deed lots owned by Seller upon which
Purchaser is to sell model homes as purchased
hereinabove or to be sold pursuant to the terms of this
Agreement at the closing of said manufactured home at a
price specified on Exhibit 1.
(b) No change. There will be no changes in its
financial conditions following November 1, 1996, except
those that have taken place in the ordinary course of
business.
(c) Authority. Its Board of Managers and interest
holders have duly authorized and approved the execution
of this agreement and the sale of a portion of its
assets. Copies of the minutes of the managers' and
interest holders' meetings at which such authorization
and approval were granted, duly certified by Seller's
Secretary, are annexed as Exhibit 3.
(d) Taxes. Its federal income tax returns have been
filed with the Internal Revenue Service for all years
through the fiscal year ended December 31, 1995 and
(1) It has filed all required federal, state, and
local tax returns and reports
(2) Such returns are correct, true
and complete
(3) All such taxes, including
sales, corporate franchise,
property, excise and use taxes,
have been paid or are otherwise
adequately provided for on latest
corporate financial statements and
(4) The company is not presently
involved in any dispute with any
taxing authority and has not
received notice of any deficiency,
audit, or other indication of
deficiency from any tax authority,
not otherwise disclosed to
Purchaser.
(e) Inventory and Equipment. As of the date of
closing, Purchaser is familiar with inventory, if any,
and equipment purchased and accepts same "as is."
8. Conduct of business. Seller covenants with Purchaser
that pending the closing:
(a) Its business will be conducted only in the ordinary
course.
(b) No dividend or other distribution or payment will
be declared or paid with respect to its outstanding
shares, and it will not redeem, purchase, or otherwise
acquire such shares.
(c) It will make no changes in any of its contracts or
commitments, except those that occur in the ordinary
course of business.
(d) It will make no new contracts or commitments,
except contracts in the ordinary course of business for
the purchase of merchandise, materials, and supplies.
(e) It will make no expenditures for any alterations,
additions, or improvements to any of its property.
(f) It will fully comply with the provisions of the
Uniform Commercial Code in force in the State of
Colorado relating to the bulk transfer of assets.
9. Representations of purchaser. Purchaser warrants and
represents the following are now true and will be true at
closing:
(a) Duly organized corporation. It is a corporation
duly organized and existing under the laws of the State
of Colorado, a publicly traded corporation with
sufficient authorized and unissued shares to close this
agreement.
(b) Authority. Its Board of Directors have duly
authorized the execution of this agreement
(c) Balance sheet. The balance sheet of Eclipse
Corporation as shown on its 1996 second quarter 10Q
dated and certified June 30, 1996, is a true and
complete statement, as of that date, of its financial
condition and of its assets and liabilities, and there
have been no changes in its financial condition since
June 30, 1996, except those that have occurred in the
ordinary course of its business.
10. Purchaser's covenants. Purchaser covenants with
Seller that pending the closing:
(a) Its business will be conducted only in the ordinary
course.
(b) No dividend or other distribution or payment will
be declared or paid with respect to its outstanding
shares except the regular quarter-annual dividends at
no greater rates than those declared during the
calendar year 1989, and it will not redeem, purchase,
or otherwise acquire such shares.
(c) No change will be made in its authorized and
outstanding shares, except when required to comply with
the terms of this agreement.
11. Management Contract of August 1, 1996. The
parties hereto agree that the Management Contract of August
1, 1996 shall be terminated effective with the closing of
this Agreement, and that any obligation either party has to
the other shall be merged in said closing.
12. Closing. The closing shall take place at the office
of Eclipse Corporation, 0 Xxxxx Xxxxxxx, Xxxxx 000, Xxxxxxxx
Xxxxxxx, Xxxxxxxx, upon five days' notice from Purchaser to
Seller, but in no event later than November 15, 1996. Time
is of the essence. At the closing, upon the delivery to
Seller, or its nominees, of certified copies of its request
to its transfer agent to issue certificates for shares in
Eclipse Corporation, the indemnity agreements referred to in
paragraph 3, a certified copy of the resolution of approval
referred to in paragraph 4, Seller shall execute and deliver
all deeds, bills of sale, conveyances, and other
instruments, are necessary to vest title in Purchaser to a
portion of Seller's assets. All representations and
covenants shall survive the closing.
13. No violation or breach. The parties represent to
each other that their performance of this agreement,
including any conditions or surviving warranties or
representations, is not in violation of any law, statute,
local ordinance, state or federal regulation, court order,
or administrative order or ruling, and that such performance
is not in violation of any agreement by which either of them
are bound.
14. Governing law. This agreement shall be construed
and interpreted under the laws of the State of Colorado.
15. Binding effect. This agreement shall inure to the
benefit of and be binding upon the parties and their
respective successors and assigns.
16. Counterparts. This agreement may be executed
simultaneously in any number of counterparts, each of which
shall be deemed an original, but all of which together shall
constitute one and the same instrument.
17. Notices. All notices, requests, demands, and other
communications hereunder shall be in writing, and be deemed
to have been duly given if delivered or mailed, first class
postage prepaid, to the address of the appropriate party as
shown on the first page of this agreement.
18. Non-waiver. No delay or failure by either party to
exercise any right hereunder, and no partial or single
exercise of any such right, shall constitute a waiver of
that or any other right, unless otherwise expressly provided
herein.
19. Headings. Headings in this agreement are for
reference and convenience only and shall not be used to
interpret or construe its provisions.
20. Time of essence. Time is of the essence of this
agreement.
21. Entire agreement modification. This agreement
supersedes all prior agreements and constitutes the entire
agreement between the parties hereto with respect to the
subject matter hereof. It may not be amended or modified
except by an instrument executed by the parties.
In witness whereof the parties have signed this
instrument the day and year first above written.
COLUMBINE HOME SALES LLC ECLIPSE CORPORATION
By: _______________________________ By:____________________________________
Its President Its President
Attest: Attest:
_______________________________ _______________________________________
Secretary Secretary
EXHIBIT 1
TO
PURCHASE AGREEMENT
DATED NOVEMBER 1, 0000
XXXXXXX
XXXXXXXXX HOME SALES LLC and ECLIPSE CORPORATION
1. Manufactured Homes Located at Retail Manufactured Housing
Lot, 0000 X. Xxxxxx Xxxxxx, Xxxxxxxx Xxxxxxx, XX, 00000.
(a) Manufactured home serving as office on sales lot
(b) Palm Harbor Model "Santa Xxxx," Serial No. 22379
(c) Silver Creek Model "501," Serial No. 1398
(d) Silver Creek Model "201," Serial No. 1374
(e) Masterpiece Model "ValueMaster 3080," Serial No.
3531
(f) Cavco Model "Screamer," Serial No. 1481
(g) Cavco Model "260-28P," Serial No. 3718
(h) Xxxxxx Model "Silvercrest," Serial No. 4714
(i) Silver Creek Model "101," Serial No. 1382
(j) Palm Harbor Model "Picaso", Serial No. 2461
(k) Homestar Model "824," Serial No. 746
Premises is currently being leased pursuant to various Lease
Agreements (3), copies of which attached hereto as Exhibit "1-A"
and incorporated herein by reference, and Purchaser assumes same.
2. Xxx 00, Xxxx Xxxxx Xxxxxx Xx. 0, Xx Xxxx Xxxxxx, Colorado,
together with Model Home located thereon.
Palm Harbor Model "Pikes Peak," Serial No. 22497
3. Lot 11, Bear Creek Filing Xx. 0, Xx Xxxx Xxxxxx, Xxxxxxxx.
0. Modular Home Located on Lots Not Belonging to Seller:
(a) Cavco Model "21024E," Serial No. 4122
5. Modular Homes Located at Various Sub-Dealers:
(a) Silver Creek Xxxxx 000, Xxxxxx Xx. 00000
(b) Silver Creek Model 501, Serial No. 71370
(c) Palm Harbor Model "Santa Xxxx," Serial No. 22388
6. All manufactured homes listed hereinabove are subject to
floorlines of Green Tree Financial Servicing Corporation and
Deutsche Financial Services, but assumed by Purchaser, as set
forth in the Agreement, excluding manufactured home set forth in
Paragraph 1(a).
7. Model Home Furniture and Office Equipment.
(a) Fixtures and equipment located at manufactured home
sales lot, 0000 X. Xxxxxx Xxxxxx, Xxxxxxxx Xxxxxxx,
Xxxxxxxx:
5 Desks
5 Office Chairs
1 Couch and Matching Loveseat
2 End Tables
1 Lamp
9 Chrome Padded Chairs
3 Book Shelves
7 File Cabinets
1 Computer and Stand
1 Typewriter
1 Fax/Printer Machine
1 Konica 2203 Copier
6 Telephones
1 Two-Door Cabinet
(b) Model Home Furniture -
(i) Model "Santa Xxxx": 1 Couch and Matching
Loveseat
7 Matching Pillows
1 Wood Coffee Table
1 Wood Trunk
1 Wood Two-Door Cabinet
2 Wood Decor Ladders
4 Pictures
2 Large and 2 Small Wool
Covers
1 Artificial Plant
1 Small Wall Cabinet
1 Small Lantern and 1 Large
Lantern
2 Old Sewing Machines
21 Accessories
1 Round Dining Room Table with
4 Matching Chairs
1 Wood and Leather Chair
1 Wood Chest
2 Wood Tables
1 Saddle and 2 Ropes
(ii) Model "501": 1 Couch
9 Pillows
2 Leather and Wood Chairs
1 Large Wool Cover and 2 Small
Covers
1 Two-Piece Painted Wood Hutch
2 Wood Benches
1 Glass Top Table with Metal
Stand
1 Small Glass Top Table with
Metal Stand
4 Wood Kitchen Chairs
31 Accessories
1 Small Wood Table
2 Artificial Plants
1 Xxxx Wolfelder Picture
(iii) Model "201": 1 Painted End Table
1 Wood Painted Table and 5
Chairs
1 Square Painted Table
1 Blue and Yellow Cabinet with
Glass Doors
3 Artificial Plants
1 Floor Fan
9 Accessories
2 Mirrors
1 Painted Blue Stand
4 Assorted Pictures
1 Picasso Painting
1 Blue Drop-Leaf Table
4 Xxxxxxxxx
0 Xxxxxxxxxxx
0 Xxxx Xxxxx
(xx) Model "ValueMaster 3080": 2 Bamboo Multi-
colored Loveseats
1 Round Table with Glass Top
1 Blue Trunk
1 Black Stand
1 Artificial Palm Tree
17 Accessories
1 Aluminum Bird
1 Black Tiered Table with
Multi-colored Dots
3 Wood and Leather Chairs
1 Wool Blanket
2 Small Bamboo Stands
1 Round Bamboo Base
NOTE: Original Lease Agreement is attached here.
EXHIBIT 2
TO
PURCHASE AGREEMENT
DATED NOVEMBER 1, 0000
XXXXXXX
XXXXXXXXX HOME SALES LLC and ECLIPSE CORPORATION
1. Floorline of Green Tree Financial Servicing Corporation at
the October 31, 1996 amount of Six Hundred Twenty-Nine Thousand,
Nine Hundred Ninety-Eight and 40/100 ($629,998.40) Dollars.
2. Floorline of Deutsche Financial Services at the October 31,
1996 amount of Three Hundred Thirty-Five Thousand, Six Hundred
Fifty-Nine and No/100 ($335,659.00) Dollars.
3. Sub-Dealer contracts with Outpost Homes Company and Xxxxxxxx
Realty.
4. Manufacturing/Dealership/Franchise Contracts or Agreements
with:
(a) Silver Crest Western Homes Corporation
(b) Palm Harbor Homes
(c) Masterpiece Homes
(d) Xxxxxx Homes
(e) Cavco Litchfield
(f) Guerdon
(g) Oak Creek Homes
(h) American Homestar Corporation
(i) Any other manufacturers with whom Seller has an
agreement.
5. Steel Building Franchise Agreement with:
(a) Perfect Steel Systems dated April 23, 1996.
6. Manufactured House Installation Agreement dated January 1,
1996 between Seller and Superior Homes, Inc.
EXHIBIT 3
TO
PURCHASE AGREEMENT
DATED NOVEMBER 1, 0000
XXXXXXX
XXXXXXXXX HOME SALES LLC and ECLIPSE CORPORATION
See attached.
NOTE: Original Table is attached here.
ADDENDUM NO. 1
TO
AGREEMENT DATED NOVEMBER 1, 1996
BY AND BETWEEN
COLUMBINE HOME SALES llc and ECLIPSE CORPORATION
The parties hereto agree that the number of shares of stock
issued pursuant to Paragraph 2(a) of the Agreement dated November
1, 1996 between Columbine Home Sales llc, a Colorado Limited
Liability Company ("Seller"), and Eclipse Corporation, a Colorado
corporation ("Purchaser") shall be adjusted upon mutual
agreement, if necessary, following final analysis of the
transaction and stock valuation from tax and accounting
viewpoints.
The parties further agree that Purchaser's transfer agent
will not be requested to issue shares of stock provided in said
Paragraph 2(a) until final analysis has occurred and has been
approved by both parties.
Dated, this 1st day of November, 1996.
COLUMBINE HOME SALES llc ECLIPSE CORPORATION
By:_____________________ By:__________________________
Xxxxx X. Xxxxx Xxxxx X. Xxxxxx
Its: Manager Its: Treasurer
By:__________________________
J. Xxxxx Xxxxxxx
Its: Corp. Secretary / Gen. Counsel
