EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
between
BIRCH BRANCH, INC.
as Seller
and
MICHAEL L. SCHUMACHER
as Purchaser
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TABLE OF CONTENTS
1. Purchase and Sale of
Assets.............................................1
1.1.
Purchased
Assets................................................1
1.2.
Excluded
Assets.................................................1
1.3.
Purchase
Price for Assets: Allocations..........................1
1.4.
Payment of
Aggregate Price......................................1
2.
Liabilities of Birch Branch Relating to the Purchased
Assets............1
3.
Creditor
Matters........................................................2
4.
Brokerage
Commissions...................................................2
5.
Representations and
Warranties..........................................2
5.1.
Representations and Warranties of Birch
Branch..................2
5.1.1. Ownership of
Birch Branch...............................2
5.1.2. Due
Organization; Name and Address; Good Standing,
Authority of Birch Branch...............................2
5.1.3. Authorization
and Validity of Agreements................2
5.1.4. Agreement Not
in Conflict with Other Instruments;
Required Approvals Obtained.............................2
5.1.5.
Disclaimer of
Fraudulent Intent.........................3
5.2.
Representations and Warranties of the
Purchaser.................3
5.2.1. Due
Organization; Good Standing; Power..................3
5.2.2. Authorization
and Validity of Documents.................3
5.2.3. Accepting
Purchased Assets "as is" with No Warranties...3
6.
Closing.................................................................4
6.1.
Time, Date
and Place............................................4
6.2.
Birch
Branch's Conditions to Close..............................4
6.3.
Purchaser's Conditions to
Close.................................4
6.4.
Actions to
Be Taken at the Closing..............................4
6.5.
Contemporaneous
Transfer........................................5
7.
Indemnification by Purchaser to Birch
Branch............................5
7.1.
Indemnification by the
Purchaser................................5
7.2.
Survival
of Obligation to Indemnify.............................5
7.3.
Notice and
Procedure............................................5
8.
Expenses of
Transactions................................................6
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9.
Miscellaneous...........................................................6
9.1.
Survival
of Representations, Warranties and Agreements..........6
9.2.
Notices.........................................................6
9.3.
Entire
Agreement................................................7
9.4.
Assignability...................................................7
9.5.
Binding
Effect; Benefit.........................................7
9.6.
Severability....................................................7
9.7.
Amendment;
Waiver...............................................7
9.8.
Section
Headings................................................7
9.9.
Counterparts and Facsimile
Signatures...........................7
9.10.
Applicable Law;
Jurisdiction and Venue; Service of Process......8
9.11.
Legal
Expenses..................................................8
9.12.
Remedies........................................................8
9.13.
Further
Assurances..............................................8
9.14.
Use of
Genders..................................................8
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ASSET PURCHASE AGREEMENT
THIS
ASSET PURCHASE AGREEMENT (the "Agreement") is made and entered
into
and effective as of December 6, 2006, by and among BIRCH BRANCH,
INC., a
Colorado corporation ("Birch Branch") and MICHAEL L. SCHUMACHER
AND/OR ASSIGNS
("Purchaser").
EXPLANATORY STATEMENT
A.
Birch Branch owns five lots in Nebraska (the "Business") and
has
constructed a studio and bed and breakfast on one of the lots with
all the real
property subject to a first lien in the original principal amount
of $430,000
payable to Michael L. Schumacher, the Purchaser, pursuant to this
Agreement.
B.
The Purchaser owns or controls shares of no par value common stock
of
Birch Branch and is an officer and director of Birch Branch.
C.
Purchaser desires to purchase and Birch Branch desires to sell
and
transfer to Purchaser, substantially all of the assets of Birch
Branch used in
connection with the Business on the terms and conditions stated
herein.
NOW
THEREFORE, for and in consideration of the Explanatory Statement
that
shall be deemed a substantive part of this Agreement, and the
mutual covenants,
promises, agreements, representations and warranties contained
herein, and other
good and valuable consideration the receipt and sufficiency of
which is hereby
acknowledged by the parties, the parties hereto agree, represent
and warrant as
follows:
1.
Purchase and
Sale of Assets.
1.1. Purchased Assets. Except as and to the extent otherwise
provided
in Section 1.2 below, Purchaser agrees to purchase from Birch
Branch, and Birch
Branch agrees to sell, transfer and assign to Purchaser, the real
property set
forth in attached Exhibit A that is made a part hereof (the
"Purchased Assets").
1.2. Excluded Assets. All other assets owned by Birch Branch
other
than the Business shall not be sold, but shall be retained by Birch
Branch (the
"Excluded Assets"). Notwithstanding anything to the contrary set
forth in
Section 1.1, the Purchased Assets shall not include any of the
Excluded Assets.
1.3. Purchase Price for Assets: Allocations. The purchase price
for
the Purchased Assets shall be the transfer to Birch Branch of
12,500 shares of
no par value common stock of Birch Branch that is owned by
Purchaser together
with the cancellation of the Balloon Note dated October 1, 2005 in
the original
principal amount of $430,000 ("Note") secured by a Deed of Trust
encumbering the
Purchased Assets and a release by the Purchaser of any and all
other liability
owed by Birch Branch to the Purchaser (the "Purchase Price").
1.4. Payment of Aggregate Price. On the terms and subject to
the
conditions of this Agreement, at Closing the Purchaser shall pay
the Purchase
Price to Birch Branch by stock assignment, cancellation of the Note
and
executing a release releasing Birch Branch from any and all
liability to
Purchaser for any monies loaned by Purchaser to Birch Branch.
2.
Liabilities of Birch Branch Relating to the Purchased Assets.
Purchaser
assumes and shall be solely liable and responsible for all debts,
obligations,
duties, and liabilities of Birch Branch relating in any manner to
the Purchased
Assets incurred prior to Closing and shall indemnify and hold Birch
Branch
harmless therefrom.
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3.
Creditor Matters. The transactions contemplated by this Agreement
are
intended by the parties to be a contemporaneous exchange between
Birch Branch
and the Purchaser and will be accomplished at Closing. The
transactions
contemplated by this Agreement represent a regularly conducted,
noncollusive
sale, and have been negotiated by the parties in an arm's length
manner with due
regard for the respective obligations of the parties and value of
the assets
transferred.
4.
Brokerage Commissions. Each party hereto represents to the other
party
that it, he or she, as applicable, has not incurred any obligation
or liability,
contingent or otherwise, for brokerage fees, finder's fees, agent's
commissions,
or the like in connection with this Agreement or the transactions
reflected
hereby.
5.
Representations and Warranties.
5.1. Representations and Warranties of Birch Branch. Birch
Branch
represents and warrants to the Purchaser as of the date hereof and
as of the
Closing on the Closing Date that:
5.1.1. Ownership of Birch Branch. Birch Branch has the power
and
authority to sell, assign, transfer and deliver the Purchased
Assets to the
Purchaser in accordance with the terms of this Agreement, to
consummate the
transactions contemplated hereby and to enter into the
Agreement.
5.1.2. Due Organization; Name and Address; Good Standing, Authority
of
Birch Branch. Birch Branch is a corporation duly organized, validly
existing and
in good standing under the laws of the State of Colorado. Birch
Branch has full
right, power and authority to own, lease and operate its properties
and assets,
and to carry on its Business. Birch Branch is duly licensed,
qualified and
authorized to do business in each jurisdiction in which the
properties and
assets owned by it or the nature of the business conducted by it
make such
licensing, qualification and authorization legally necessary. Birch
Branch is
not in breach or violation of, and the execution, delivery and
performance of
this Agreement will not result in a breach or violation of, any of
the
provisions of Birch Branch's Articles of Incorporation, Bylaws,
shareholder
agreements or any other corporation documents or agreements,
amended to the date
of this Agreement ("Birch Branch's Corporate Documents").
5.1.3. Authorization and Validity of Agreements. Birch Branch has
the
full right, power and authority to execute, acknowledge and deliver
this
Agreement and to perform the transactions contemplated by this
Agreement. The
execution, acknowledgment and delivery of this Agreement by Birch
Branch and the
performance by Birch Branch of the transactions contemplated hereby
have been
duly and validly authorized by all necessary corporate action. This
Agreement
has been duly executed, acknowledged and delivered by Birch Branch
and is the
legal, valid and binding obligation of Birch Branch, enforceable
against Birch
Branch in accordance with its terms, except in each case as such
enforceability
may be limited by general principles of equity, bankruptcy,
insolvency,
moratorium and similar laws relating to creditors rights
generally.
5.1.4. Agreement Not in Conflict with Other Instruments;
Required
Approvals Obtained. The execution, acknowledgment, delivery, and
performance of
this Agreement, and the consummation of the transactions
contemplated by this
Agreement will not (a) violate or require any consent, approval, or
filing
under, (i) any common law, law, statute, ordinance, rule or
regulation
(collectively referred to throughout this Agreement as "Laws") of
any federal,
state or local government (collectively referred to throughout this
Agreement as
"Governments") or any agency, bureau, commission, instrumentality
or judicial
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body of any Governments (collectively referred to throughout this
Agreement as
"Governmental Agencies"), or (ii) any judgment, injunction, order,
writ or
decree of any court, arbitrator, Government or Governmental Agency
by which
Birch Branch (b) conflict with, require any consent, approval, or
filing under,
result in the breach or termination of any provision of, constitute
a default
under, or result in the creation of any claim, security interest,
lien, charge,
or encumbrance upon any of the Purchased Assets pursuant to, (i)
Birch Branch's
Corporate Documents, (ii) any indenture, mortgage, deed of trust,
license,
permit, approval, consent, franchise, lease, contract, or other
instrument,
document or agreement to which Birch Branch is a party or by which
Birch Branch
or any of the Purchased Assets is bound, or (iii) any judgment,
injunction,
order, writ or decree of any court, arbitrator, Government or
Governmental
Agency by which Birch Branch or any of the Purchased Assets is
bound; and all
permits, licenses and authorizations of any Government or
Governmental Agency
required to be obtained prior to the Closing, shall have been
obtained and shall
be in full force and effect as of the Closing Date.
5.1.5. Disclaimer of Fraudulent Intent. The transactions described
in
this Agreement have been undertaken by Birch Branch in good faith,
considering
their obligations to any person or entity to whom Birch Branch owes
a right to
payment, whether or not the right is reduced to judgment,
liquidated,
unliquidated, fixed, contingent, matured, unmatured, claims are
called
"Creditors" under this paragraph), and have undertaken these
transactions
without any intent to hinder, delay or defraud any such Creditors,
and either
have disclosed in the ordinary course of business or will undertake
to disclose
to all such Creditors the existence of this transaction, and have
not and will
not conceal this transaction or the proceeds of this transaction
from any such
Creditors. Birch Branch further represents and warrants that: (i)
it will not
retain possession or control of any of the property transferred
under this
Agreement following the Closing; (ii) Birch Branch has not been
sued or
threatened with suit by any Creditor prior to the execution of this
Agreement;
(iii) Birch Branch has not removed or concealed any assets from any
Creditors;
(iv) Birch Branch has
