Exhibit 10.1
Duckwall-ALCO Stores, Inc.
MEMORANDUM OF UNDERSTANDING
(Stock Purchase Transaction)
THIS MEMORANDUM OF UNDERSTANDING (Stock Purchase Transaction) (the
"Agreement") is made as of April 19, 2005,
by and among
Duckwall-ALCO
Stores,
Inc., a Kansas corporation ("Buyer"), and Kathleen O. Macke,
trustee of the
Kenneth A. Macke Revocable Trust
("Seller").
RECITAL
WHEREAS,
Seller owns 399,362 shares of common stock, $.0001 par value,
of
the Company (the "Shares"); and
WHEREAS,
in accordance with the terms of this Agreement Seller desire to
sell, and Buyer desires to purchase, the
Shares for the consideration and on the
terms and conditions set forth in this
Agreement.
1. Purchase of
Shares. Buyer hereby agrees to pay to Seller on or before
April 22, 2005 in cash $7.2 million
pursuant to the wire transfer instructions
attached hereto on Exhibit A in exchange
for transfer on or before April 22,
2005 by Seller to Buyer of the Shares free
and clear of all liabilities, liens
or encumbrances.
2. Closing
Procedures
On or
before April 22, 2005, Seller shall send by fax or email a letter
of
instruction substantially in the form
attached hereto as Exhibit B instructing
Fidelity Investments to mark the Shares
"DWAC withdrawal from Broker."
On or
before April 22, 2005, Buyer shall send by fax or email a letter
of
instruction substantially in the form
attached hereto as Exhibit C instructing
and authorizing UMB Bank, n.a., Securities
Transfer Division ("UMB"), to:
a. immediately upon receipt of the notice of the DWAC, accept the
DWAC
of the Shares and to retire the Shares;
and
b. inform Buyer once UMB has accepted the DWAC of the Shares
and
retired the Shares by sending an email to
Dick Mansfield, the Chief Financial
Officer of the Company at
dmansfield@duckwall.com.
3. Seller's
Representations and Warranties
4
<PAGE>
Seller
represents and warrants to Buyer that the matters set forth in
this
Article 3.
a. Organization and Good Standing. Seller is a trust duly
organized,
validly existing, and in good standing
under the laws of California, with full
power and authority to conduct the
transactions contemplated hereby.
b. Authority. Seller has full power and authority to execute
and
deliver this Agreement and to perform
Seller's obligations under this Agreement
and to consummate the transactions
contemplated hereby. The execution and
delivery by Seller of this Agreement and
the performance by Seller of Seller's
obligations under this Agreement and the
consummation of the transactions
contemplated hereby by Seller have been
duly and validly authorized by any and
all necessary action on Seller's part. This
Agreement has been duly executed and
delivered by Seller and constitutes the
legal, valid and binding obligation of
Seller, enforceable against Seller in
accordance with its terms.
c. Consents and Approvals. Except for filing promptly after
closing
filing an amended Schedule 13D with the
Securities and Exchange Commission
("SEC"), there is no requirement applicable
to Seller to make any filing with,
or to obtain any permit, authorization,
consent or approval of, any governmental
authority as a condition to the lawful
consummation of the transactions
contemplated hereby.
d.
Shares. Seller owns the Shares free and clear of any and all
liabilities, liens or encumbrances.
4. Buyer's
Representations and Warranties
Buyer
represents and warrants to Seller the matters set forth in this
Article 4.
a. Organization and Good Standing. Buyer is a corporation duly
organized, validly existing, and in good
standing under the laws of Kansas, with
full corporate power and authority to
conduct the transactions contemplated
hereby.
b. Authority. Buyer has full power and authority to execute and
deliver this Agreement and to perform
Buyer's obligations under this Agreement
and to consummate the transactions
contemplated hereby. The execution and
delivery by Buyer of this Agreement and the
performance by Buyer of Buyer's
obligations under this Agreement and the
consummation of the transactions
contemplated hereby by Buyer have been duly
and validly authorized by any and
all necessary action on Buyer's part. This
Agreement has been duly executed and
delivered by Buyer and constitutes the
legal, valid and binding obligation of
Buyer, enforceable against Buyer in
accordance with its terms.
c. Consents and Approvals. Other than filing with the SEC a
Current
Report on Form 8-K and reporting this
transaction publicly and to the SEC, there
is no requirement applicable to Buyer to
make any filing with, or to obtain any
permit, authorization, consent or approval
of, any governmental authority as a
condition to the lawful consummation of the
transactions contemplated hereby.
5. Conditions to
Obligation of Seller. Seller's obligation to consummate
the transactions contemplated by this
Agreement is subject to the following
conditions:
a. The representations and warranties set forth in Section 4 shall
be
true and correct in all material respects
at and as of the Closing Date.
5
<PAGE>
b. Buyer shall have performed all obligations and complied with
all
covenants hereunder required to be
performed or complied with by Buyer at or
prior to the Closing.
c. There shall not be any injunction, judgment, order, decree,
ruling
or change in effect preventing or
prohibiting consummation of any of the
transactions contemplated by this
Agreement.
Sellers may
wai
