EXHIBIT 10.09
AMENDMENT NO.1 TO ASSET PURCHASE AGREEMENT
This Amendment No.1 to that certain Asset Purchase Agreement (this
"Amendment"), dated as of September 10, 1996, by and among Artisan Acquisition
Co., a Delaware corporation (the "Purchaser"), Decor Group, Inc., a Delaware
corporation ("Decor"), Artisan House, Inc., a California corporation (the
"Seller"), and Henry Goldman (the "Shareholder").
W I T N E S E T H :
WHEREAS, the Purchaser, Decor, the Seller and the Shareholder are parties
to that certain Asset Purchase Agreement dated as of March 25, 1996 (the
"Existing Agreement"); and
WHEREAS, the Purchaser, Decor, the Seller and the Shareholder desire to
amend the Existing Agreement to effect the changes provided for herein.
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, the receipt and sufficiency of which is hereby acknowledged,
the parties hereto agree as follows:
1. Concurrently with the execution of this Amendment, in consideration of
the extension of time to close set forth in section 2(B) hereof (amending
section 2.1(a) of the Existing Agreement), and as a condition precedent to the
effectiveness of this Amendment, the Purchaser shall pay the Seller the sum of
$40,000, which shall be treated as an additional Extension Payment, as that term
is used in the Existing Agreement.
2. Effective as of the date hereof, the Existing Agreement is hereby
amended as follows:
(A) Section 1.7 shall be amended by deleting the last sentence in its
entirety and in lieu thereof the following shall be inserted:
The Employment Agreement shall provide for the payment to the
Shareholder as follows: (i) an annual salary of $75,000; (ii) a
signing bonus of $70,000, $30,000 of which is to be paid at Closing
and $40,000 of which is to be paid in equal monthly installments of
$3,333.33 during the first year of the employment agreement, (iii)
reimbursement of expenses incurred by the Shareholder for lease and
insurance payments with respect to Shareholder's Jeep Cherokee, (iv)
an annual performance bonus equal to 1% of the Purchaser's sales in
excess of Seller's sales for the twelve (12) months ended June 30,
1996, payable within 60 days after
the end of each of the Purchaser's fiscal years (or within 60 days
after the expiration of the Employment Agreement) with the first and
last such payments being calculated based on pro-rated sales figures,
(v) 2.5% of the consideration paid by the Purchaser, Decor, Interiors
or any affiliate of them, in connection with an acquisition by the
Purchaser, Decor, Interiors or any affiliate of them, of an unrelated
third party introduced to the Purchaser, Decor, Interiors, or any
affiliate of them, by the Shareholder, and (vi) 1% of the
consideration paid by the Purchaser, Decor, Interiors, or any
affiliate of them in connection with the acquisition by the Purchaser,
Decor, Interiors, or any affiliate of any of them of an unrelated
third party not introduced to the Purchaser, Decor, Interiors, or any
affiliate of any of them by the Shareholder, but which the Purchaser,
Decor, Interiors, or any affiliate of any of them asks the Shareholder
to take a material and substantial part in analyzing, negotiating,
documenting, or closing. In addition, the Shareholder shall be given
the title of President and Chief Executive Officer of the Purchaser.
(B) Section 2.1 shall be deleted in its entirety and in lieu thereof
the following shall be inserted:
(a) Upon satisfaction of the conditions contained in Article VII of this
Agreement, the consummation of the transactions contemplated by this Agreement
(the "Closing") shall be held at 10:00 a.m. (New York City time) by no later
than October 31, 1996 (such date and time being referred to herein as the
"Closing Date") at the offices of Bernstein & Wasserman, LLP, 950 Third Avenue,
New York, NY 10022 or, at the agreement of the parties, at such other place as
the parties may agree or by facsimile transmission, with the original signature
pages to be held in escrow by the Seller's counsel, subject to written release
by the Purchaser of the Purchaser's signature pages. The parties acknowledge
that the Purchaser has previously paid to the Seller an aggregate of $85,000
(the "Extension Payments") to extend the closing of the transaction contemplated
hereby from May 31, 1996 which Extension Payments shall be deducted from the
Purchase Price set forth in Section 1.5(a)(iii)(z) above and due hereunder.
(b) At the Closing, the Seller and/or the Shareholder shall execute and
deliver or cause to be executed and delivered to the Purchaser, all documents
and instruments necessary to transfer to the Purchaser, all of the right, title
and interest of the Seller in and to the Assets, including, without limitation:
(i) the Assignment and Assumption Agreement, signed by the
Seller;
(ii) a Bill of Sale, signed by the Seller;
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(iii) the Lease Agreement, signed by the Shareholder and Shirley
Goldman; and
(iv) a legal opinion of the Seller's and the Shareholder's
counsel as set forth in Section 2.2(d) hereof.
(c) At the Closing, the Purchaser shall:
(i) execute and deliver to the Seller the Assignment and
Assumption Agreement;
(ii) assume the Assumed Liabilities and pay the outstanding
principal amount and all accrued and unpaid interest due in respect of
the Seller's bank debt referred to in Schedule 1.1(b) hereto;
(iii) execute and deliver to the Shareholder and Shirley Goldman
the Lease Agreement; and
(iv) deliver to the Seller (x)the Note and (y) the Shares;
(v) deliver to the Seller in the form of a cashier's check or by
wire transfer the sum of $2,250,000 as set forth in Section 1.5(a)(ii)
hereof (less the Extension Payments); and
(vi) cause the delivery to the Seller and the Shareholder of a
legal opinion of the Purchaser's counsel as set forth in Section 7.5
hereof.
(d) At the Closing, Interiors shall execute and deliver to the Seller the
Guaranty.
(e) The parties hereto agree that upon the reasonable belief of the
Purchaser that a registration statement with respect to an initial public
offering of the securities of Decor will be declared effective by the Securities
and Exchange Commission in the near future and at the request of the Purchaser,
the parties hereto shall execute and deliver all documents necessary to
consummate the transactions contemplated hereby (the "Closing Documents"). The
Closing Documents are to be held in escrow by Purchaser's attorney (the "Escrow
Agent") pending evidence of receipt of the Purchase Price by Seller. The Escrow
Agent shall then deliver the Closing Documents to the appropriate parties.
(C) Section 2.2(f) shall be deleted in its entirety and the following
shall be inserted in lieu thereof:
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The parties agree to waive compliance with the Bulk Transfer Division of
the California Uniform Commercial Code. In light of such waiver, the
Shareholder agrees to indemnify and hold harmless the Purchaser, Decor, its
officers, directors and affiliates for any of the Seller's liabilities
(other than Assumed Liabilities, as of the closing date) that the Purchaser
is required to pay. In the event of a Loss incurred by the Purchaser, the
Purchaser may set off the amount of such Loss against amounts owed by
Purchaser under this Agreement and the agreements contemplated hereby.
(D) Section 3.25 shall be amended by adding the following after the
last word in such section:
;provided however, notwithstanding the foregoing, in no event shall any of
the representations and warranties of Seller and the Shareholder contained
herein (other than Sections 3.13, and 3.17) survive the Closing Date for a
period of more than two (2) years following the Closing Date.
(E) A new Section 8.2(d) shall be added to the end of Section 8.2(d)
as follows:
Notwithstanding the foregoing, the Indemnified Party may not make a
claim against the Indemnifying Party unless the aggregate of all claims
brought by the Indemnified Party is not less than $50,000 (the "Threshold
Amount"). The Threshold Amount shall be deducted from amounts paid by the
Indemnifying Party; it being understood and agreed that in no event shall
an aggregate of more than the Threshold Amount be deducted from all claims
brought by the Indemnified Party.
(F) A new Section 9.7 shall be added as follows:
Prior to bringing a legal action against the Seller, the Purchaser agrees
to deposit an amount of not less than $25,000 with Seller's attorney for
payment of reasonable, bona fide legal expenses incurred by Seller in
connection with such action. In the event that the funds held by the
Seller's attorney are properly disbursed and the remaining balance falls
below $10,000, Seller shall immediately send by facsimile transmission and
overnight courier to Purchaser a copy of Seller's attorney's records fully
disclosing the disbursement of the funds, and within ten (10) days of
Purchaser receiving said records, Purchaser shall deposit with Seller's
attorney, an amount so that the existing balance and the amount deposited
equals $25,000. If the Purchaser fails to forward such funds in a timely
manner, Purchaser's claim against Seller shall be dismissed with prejudice.
The parties acknowledge and agree that the remedy of dismissal of the
Purchaser's claim with prejudice, as provided for herein, is reasonable and
does not constitute a forfeiture, in light of the fact that it would be
extremely difficult and
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impracticable, if not impossible to ascertain, with any degree of
certainty before a breach of the Purchaser's obligations under this
Section 9.7, the amount of damages which would be suffered by the Seller
and/or the shareholder as a result of any such breach. Unused funds held
by the Seller's attorney shall be returned to Purchaser. If the Purchaser
prevails in the legal action against Seller, the Seller shall pay to
Purchaser the amount paid by Purchaser for Seller's legal expenses plus
interest at a rate of 8% per annum.
(G) Following the Closing, the Purchaser agrees to pay accounts
payable in a timely manner in accordance with the practices followed before the
closing by Seller.
3. This Amendment shall be governed by and construed in accordance with the
laws of the State of New York, without regard to principles of conflicts of law.
4. Except as otherwise specifically set forth herein, all of the terms and
provisions of the Existing Agreement shall remain in full force and effect.
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IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the
day first above written.
DECOR GROUP, INC. ARTISAN HOUSE, INC.
By:_____________________ By:______________________
Name: Donald Feldman Name: Henry Goldman
Title: President Title: President
ARTISAN ACQUISITION CO.
_________________________
HENRY GOLDMAN
By:_____________________
Name: Donald Feldman
Title: President
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