EXHIBIT 2.1
MEMORANDUM OF AGREEMENT
THIS AGREEMENT is entered into as of October 30, 2002, by and between
CHAMPION TRAILER, INC. ("Champion"), on the one hand, and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, on the other hand.
RECITALS
1. OBSIDIAN ENTERPRISES, INC., a Delaware corporation ("Obsidian") is the
parent of Champion.
2. Champion and Obsidian are parties to litigation brought by Markpoint Equity
Growth Fund IV ("Markpoint") on April 29, 2002 (the "Pending Litigation")
pursuant to which Markpoint seeks to collect subordinated debt which
Markpoint asserts is owed to it by Champion and guaranteed by Obsidian.
3. Markpoint, Champion and Obsidian have agreed to settle the Pending
Litigation: (i) by Champion paying Markpoint $675,000 in cash and Obsidian
issuing to Markpoint 32,143 shares of Obsidian Series D Preferred Stock
(the "Settlement Shares") and agreeing to repurchase the Settlement Shares
for $675,000 if the Settlement Shares do not have an aggregate trading
value of at least $675,000 during a specified period; and (ii) by Markpoint
releasing all claims against Obsidian and all claims against, or interest
in, Champion.
4. Messrs. Durham and ▇▇▇▇▇▇▇▇▇ have agreed to cause an entity to be
designated by them (the "Purchaser") to purchase all of the assets of
Champion and assume all its liabilities (other than those to Markpoint)
subject to the closing of the settlement described in Recital 3.
AGREEMENT
NOW, THEREFORE, for and in consideration of these mutual promises and
undertakings of the parties, and for other good and valuable consideration,
receipt of which is hereby acknowledged, the parties agree as follows:
Agreement to Purchase Assets and Assume Liabilities. Subject to the terms
and conditions of this Agreement:
Purchaser agrees to purchase and Champion agrees to sell, transfer and
assign to Purchaser all of the assets of Champion (the "Assets"); and
Purchaser agrees to assume all the liabilities of Champion other than the
liabilities to Markpoint (with that exclusion, the "Liabilities").
Excluded Liabilities. Notwithstanding any other provision of this
Agreement, the Purchaser shall not assume any liabilities of any sort to
Markpoint.
Closing. The purchase and sale of the Shares pursuant to this Agreement
shall take place on the business day following final settlement of the Pending
Litigation, or at such other time and place as Champion and Purchaser mutually
agree upon (which time and place shall be designated the "Closing"). At the
Closing, Champion shall deliver to Purchaser instruments conveying the Assets,
Champion and Purchaser shall execute an agreement whereby Purchaser agrees to
assume the Liabilities and the Purchaser shall pay to Champion the purchase
price of One Dollar ($1.00).
Representations and Warranties of Seller. As of the Closing date, Champion
hereby represents and warrants to the Purchaser that:
Authorization. This Agreement has been duly executed and delivered by
Champion and is a valid and binding obligation of Champion, enforceable in
accordance with its terms, subject to the effect, if any, of applicable federal
and state bankruptcy, reorganization, insolvency, liquidation, readjustment of
debt, moratorium or other similar laws generally affecting the enforcement of
creditors' rights or remedies and limitations on the availability of certain
equitable remedies and the application of usual equitable principles when
equitable remedies are sought.
Powers. Champion has all requisite power and authority to enter into this
Agreement, to sell, transfer, assign and deliver the Shares and to carry out and
perform his obligations under the terms of this Agreement.
Validity of Agreement. There are no actions, proceedings or investigations
pending nor, to the best of Seller's knowledge, is any such action, proceeding
or investigation threatened, which would challenge the validity of this
Agreement or the validity of the transfer of the Assets.
Consents. As of the Closing all consents necessary to transfer the Assets
to the Purchaser and for the Purchaser to assume the Liabilities shall have been
obtained.
Changes. Except as set forth in Schedule 3(e) previously furnished to
Purchaser, since July 31, 2002, and until the Closing there will not be (except
with the prior written consent of the Purchaser):
Any damage, destruction or loss, whether or not covered by insurance,
materially and adversely affecting the business, operations, financial
conditions, properties or assets of Champion;
Any waiver or compromise by Champion of a valuable right or of a material
debt owed to it;
Any loans made by Champion to any officer, director or employee other than
travel advances made in the ordinary course of business;
Any increases in the compensation of any of Champion's officers, directors
or employees;
Any declaration or payment of any dividend or other distribution by
Champion in respect of, or any direct or indirect retirement, redemption,
repurchase or other acquisition by Champion of, any shares except as provided
for and contemplated by this Agreement; and
Any agreement or commitment by Champion to do any of the things described
in this Section 4.
Representations and Warranties of Purchaser. As of the Closing date,
Purchaser represents and warrants to Champion that:
Authorization. This Agreement has been duly executed and delivered by
Messrs. Durham and ▇▇▇▇▇▇▇▇▇ and is a valid and binding obligation of Purchaser,
enforceable in accordance with its terms, subject to the effect, if any, of
applicable federal and state bankruptcy, reorganization, insolvency,
liquidation, readjustment of debt, moratorium or other similar laws generally
affecting the enforcement of creditors' rights or remedies and limitations on
the availability of certain equitable remedies and the application of usual
equitable principles when equitable remedies are sought.
Conditions of Purchaser's Obligation to Close. The obligations of Purchaser
under this Agreement are subject to the fulfillment, at or before the Closing,
of each of the following conditions:
Pending Litigation. The Pending Litigation shall have been finally settled
and all obligations of Champion to Markpoint shall have been released.
Representations and Warranties. The representations and warranties
contained in Section 4 hereof shall be true on and as of the Closing.
Performance. Champion shall have performed and complied with all agreements
and conditions contained herein required to be performed or complied with by it
on or before the Closing.
Corporate Action, etc. All corporate action and other proceedings
contemplated by this Agreement shall be completed in a manner satisfactory to
Purchaser's counsel.
Preservation of Business. Until the Closing, Champion will use its best
efforts to keep the business and properties of Champion substantially intact,
including its present operations, physical facilities, working conditions and
relationships with lessors, licensors, suppliers, customers and employees.
Champion agrees not to engage in any practice, take any action, or enter into
any transaction except in the ordinary course of business consistent with past
custom and practice (including with respect to quantity and frequency). Without
limiting the generality of the foregoing, Champion will not borrow any funds
except with the prior written consent of Purchaser.
Termination. The Purchaser shall have the right to terminate this Agreement
if the conditions set forth in Section 6 are not satisfied on or before December
31, 2002.
Entire Agreement. This Agreement and the other documents delivered pursuant
hereto constitute the entire agreement between the parties hereto relating to
the subject matter hereof, and no party shall be liable or bound to the other in
any manner by any warranties, representations or covenants except as
specifically set forth herein and therein. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties hereto. Nothing in this Agreement, express
or implied, is intended to confer upon any party, other than the parties hereto
and their respective successors and assigns, any rights, remedies, obligations
or liabilities under or by reason of this Agreement, except as expressly
provided herein.
Fees, Costs and Expenses. The parties recognize and agree that each shall
be solely and exclusively responsible for all costs, fees and expenses
(including attorneys' fees) incurred by him or on his behalf, in connection with
the sale and purchase of the Shares pursuant to this Agreement.
Governing Law; Construction of Agreement. This Agreement shall be governed
by and construed under the laws of State of Indiana.
Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
Titles and Subtitles. The titles and subtitles in this Agreement are for
convenience only and are not to be considered in construing this Agreement.
Survival of Warranties. The warranties and representations of Champion and
the Purchaser contained in this Agreement shall survive the Closing.
Severability. If one or more provisions of this Agreement are held to be
unenforceable under applicable law, such provision shall be construed to the
extent necessary to comply with applicable law, and this Agreement shall then be
enforced in accordance with its terms.
Amendment of Agreement. Any provision of this Agreement may be amended or
waived by a written instrument signed by the parties hereto.
IN WITNESS WHEREOF the parties have executed this Agreement as of the date
set forth above.
CHAMPION TRAILER, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------- --------------------------
Tite: President and CEO ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇