ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT is made and entered this 17th day of July
1997 (the "Contract Date"), by and among FirstAmerica Automotive, Inc., a
Delaware corporation or nominee ("Purchaser"), Golden Sierra Auto Group, a
California corporation, dba Capitol Nissan ("Seller"), and, as limited by
Section 15 hereof, CAPMAN, Inc., a California corporation ("Capman"), and is
made with reference to the following facts:
R E C I T A L S
WHEREAS, Seller owns and operates a Nissan automobile dealership (the
"Dealership") commonly known as Capitol Nissan, located at ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Premises").
WHEREAS, Seller desires to sell to Purchaser and Purchaser desires to
purchase from Seller certain of the assets, properties and business of Seller
utilized in connection with the Dealership.
NOW, THEREFORE, in recognition of the foregoing representations, and in
consideration of the covenants set forth herein, the parties hereto agree as
follows:
A G R E E M E N T
1. DEFINITIONS. The capitalized terms as used in this Agreement shall be
defined as hereinafter set forth in this Section 1, or as otherwise provided in
this Agreement.
1.1 ACQUIRED ASSETS. The term "Acquired Assets" shall be defined as
all of the assets and property to be acquired by Purchaser hereunder, as
described in Section 2.1 hereof.
1.2 CLOSING. The term "Closing" shall be defined as the consummation
of all of the transactions provided for in this Agreement, including the
exchange of the Acquired Assets for the consideration provided for herein. The
Closing shall occur at the offices of ▇▇▇ & ▇▇▇▇▇▇, ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, on the Closing Date commencing at 10:00
a.m.
1.3 CLOSING DATE. The "Closing Date" shall be defined as the date
which falls 5 business days following the earliest date on which the conditions
specified in Sections 7 and 8 hereof are satisfied; subject, however, to the
provisions of Section 18 below.
1.4 FRANCHISE. The term "Franchise" shall be defined as the Nissan
Franchise currently held by Seller.
1.5 FRANCHISER. The term "Franchiser" shall be defined as Nissan
Motor Corporation.
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1.6 OBSOLETE PARTS. The term "Obsolete Parts" shall be, defined as
all (i) factory parts which are not listed in the most current manufacturer's
wholesale price book or, if listed therein, are valued at ZERO DOLLARS ($0),
(ii) parts which are not returnable to the manufacturer (as defined by the
Franchiser, (iii) factory and non-factory parts which have been in stock more
than one (1) year and/or parts which are in excess of a one (1) year supply,
(iv) parts indicated as discontinued, and (v) parts which are broken or damaged,
regardless of whether listed in the most current manufacturer's wholesale price
book.
2. PURCHASE AND SALE OF ASSETS.
2.1 ACQUIRED ASSETS. The assets subject to this Agreement shall
consist of all the assets located at the Premises and related to or used in
connection with the Franchise, including but not limited to those assets to be
listed on Schedule 2.1 to be prepared prior to the Closing Date and attached
hereto, Nissan special tools, furniture, fixtures and equipment, which special
tools, furniture, fixtures and equipment shall be in substantially the same
condition at Closing as at the expiration of the Due Diligence Period, and
leasehold improvements located at the Premises and used by Seller in operation
of the Nissan Franchise, motor vehicles (new and used) (subject to exclusion of
certain used vehicles in accordance with Section 3.2(c)), parts and accessories
(subject to exclusion of Obsolete Parts in accordance with Section 3.2(d) and
excess non-factory parts in accordance with Section 3.2(c)), tires, work-in-
progress, advertising literature, forms and supplies for the Dealership, parts
return privileges from the Franchiser, rights under new car purchase orders and
deposits relating thereto, goodwill, telephone number of Seller, the name
"Capitol Nissan" or any derivative thereof, the right of occupancy of the
Premises and all contracts, agreements or commitments which have been approved
by Purchaser as the same shall exist on the Closing Date. The parties agree that
Schedule 2.1 shall be prepared in conjunction with the physical inventory
described in Section 3.2(j) hereinbelow.
2.2 PURCHASE. Seller hereby agrees to sell, convey, transfer, assign
and deliver to Purchaser, and Purchaser hereby agrees to purchase and acquire,
on the Closing Date, all of the Acquired Assets. Any assets which are not
Acquired Assets, shall be retained by Seller.
3. CONSIDERATION FOR ACQUIRED ASSETS.
3.1 PURCHASE PRICE. Subject to the terms and conditions of this
Agreement, the purchase price to be paid by Purchaser for the Acquired Assets
shall be that amount which is equal to the aggregate value of the Acquired
Assets as of the Closing Date determined in accordance with Section 3.2.
3.2 VALUATION OF ACQUIRED ASSETS. Those Acquired Assets which are
listed below shall be valued as provided below in this Section 3.2.
(a) The price for each 1997 new unregistered and undamaged
Nissan model vehicle with not more than three hundred (300) miles shall be the
sum of the following:
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(i) The wholesale cost of each such vehicle determined in
accordance with the factory invoice, including advertising charges; plus
(ii) The wholesale cost of all optional parts and
accessories installed in such vehicle plus the cost of labor (determined at the
internal rate pursuant to the standard factory formula) for installation of the
same; less
(iii) The sum of all distributor's allowances ("Allowances")
as of the Closing Date including, but not limited to, inventory carry-over
allowances, discounts, holdbacks, rebates, contests, model change incentives and
similar distributor's allowances related to such vehicle. Purchaser shall also
receive a credit against the Purchase Price equal to the number of days of
unexpired Floor Plan Assistance, if any, as of the Closing for each vehicle
purchased.
(b) The price for each 1997 unregistered and undamaged Nissan
demonstrator vehicle with not more than seven thousand five hundred (7,500)
miles purchased hereunder shall be the value determined in accordance with
subsections (a)(i) through (a)(iii) hereinabove, less the sum of 20c per mile
for each said vehicle;
(c) Notwithstanding paragraphs (a) and (b) hereinabove,
Purchaser shall have no obligation to purchase new vehicles in inventory with a
supply of each line of automobiles (i.e. Maxima) in excess of a 60 day supply
based on the average monthly sales for those three months immediately preceding
the Closing Date, provided that this paragraph (c) shall apply only in the event
and to the extent Seller is able to return any vehicle in excess of the sixty
(60) day supply without (i) having to repay to the Franchiser any Allowances or
Floor Plan Assistance; (ii) receiving a debit against Allowances owing or future
Allowances upon such return, (iii) losing credit for such vehicle in the 1997
Dealer Challenge, as hereinafter defined, or (iv) suffering any other financial
detriment (other than the loss of the sale to Purchaser) upon such return
(collectively "Return Loss").
(d) Notwithstanding paragraphs (a), (b) and (c) hereinabove,
Seller shall have all 1997 Quests in rental service as of March 31, 1997.
Purchaser shall have no obligation to purchase any 1997 Quests that not have
been placed in rental service prior to March 31, 1997, with the exception of
1997 Quests delivered and invoiced by Nissan Corporation after March 31, 1997.
The purchase price for all 1997 Quests in rental service with not more than 300
miles shall be valued in accordance with paragraph 3.2(a)(i) through 3.2(a)(iii)
provided, however, that Purchaser shall have the right to all incentives
including market share funds related to such vehicles.
(e) All vehicles not described in subsections (a), (b), (c) and
(d) above which are to be purchased hereunder shall be valued at a price
mutually agreed upon by Seller and Purchaser; provided, however, that if Seller
and Purchaser are unable to agree on a price with respect to any individual
vehicle prior to the Closing Date, then such vehicle shall be excluded from the
Acquired Assets and not purchased hereunder.
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(f) All new undamaged returnable genuine Nissan factory parts
and accessories which are in possession of Seller as of the Closing Date and
which are listed in the manufacturer's most current wholesale parts and
accessories price book shall be valued at dealer cost in accordance with the
manufacturer's most current wholesale parts and accessories price book as of the
Closing Date; provided, however, that Obsolete Parts shall be valued at ZERO
DOLLARS ($0) and shall be retained by Seller, and removed by Seller from the
Premises not later than ten (10) days following the Closing Date.
(g) All non-factory parts, accessories and miscellaneous
inventory which are in the possession of Seller as of the Closing Date, shall be
valued at dealer cost, provided, however, that Purchaser shall have no
obligation to purchase in excess of TWENTY THOUSAND DOLLARS ($20,000) of such
items.
(h) All work-in-progress shall be valued at retail.
(i) All furniture, fixtures, equipment, leasehold improvements
and special tools shall be valued at $500,000 provided, however, that in the
event that any item of furniture, fixtures, equipment, special tools or
leasehold improvement is materially damaged, destroyed or removed from the
Dealership between the date of execution of this Agreement and the Closing Date,
the value of said item damaged, destroyed or removed from the Dealership shall
be credited against the Purchase Price.
(j) As of the close of business on the day immediately preceding
the Closing Date or on such other date as mutually agreed upon by Purchaser and
Seller, a physical inventory to determine the value of the new, used and
demonstrator vehicles, and work-in-progress shall be taken jointly by the
parties. Each party shall bear the expenses associated with its own personnel in
connection with the valuation of the assets. The parties shall jointly employ an
independent inventory service to take a parts and accessories inventory
immediately prior to the Closing. The cost of such inventory shall be paid one-
half by Purchaser and one-half by Seller.
3.3 PAYMENT OF PURCHASE PRICE. The purchase price determined in
accordance with Section 3.2 above to be paid by Purchaser pursuant to this
Agreement shall be paid as follows:
(a) Upon execution hereof, Purchaser shall cause the sum of
FIFTY THOUSAND DOLLARS ($50,000) (the "Deposit") to be delivered to Escrow
Holder as hereinafter defined. The Deposit shall be held by the Escrow Holder as
an ▇▇▇▇▇▇▇ money deposit toward the purchase price of the Dealership. The
Deposit shall be held by Escrow Holder in an interest bearing account. At the
Closing, the Deposit, including accrued interest, shall be applied and credited
toward the payment of the Purchase Price. If escrow does not close, and this
Agreement is terminated in a manner governed by Section 7, the Deposit,
including accrued interest, will be disbursed to Purchaser. If the escrow does
not close and Section 7 does not apply, the Deposit together with the interest
accrued thereon shall be promptly returned to Purchaser unless the provisions of
Section 22.9 are applicable, in which case the disposition of
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the Deposit together with the interest accrued thereon shall be governed by the
provisions of Section 22.9.
(b) The balance of the purchase price shall be paid in cash on
the Closing Date.
(c) In addition to the cash payment as provided for hereinabove,
Purchaser shall grant to Capman, Inc., a California corporation, an option to
acquire 20,000 shares of the capital stock of FirstAmerica Automotive, Inc., a
Nevada corporation, pursuant to the Stock Option Plan described in Section 8.7
hereof.
3.4 CLOSING AND POST-CLOSING ADJUSTMENTS. All expenses of a nature
which are customarily subject to proration in a transaction involving the
purchase and sale of assets of an ongoing business shall be apportioned between
Seller and Purchaser according to the number of days in the period covered
thereby which occurred prior to and including the Closing Date, and the number
of such days subsequent to the Closing Date. Those items subject to proration
hereunder shall include, without limitation, personal property taxes, and
customer prepayments. The aggregate amount of any adjustment shall be determined
and paid as of the Closing Date. In addition to Purchase Price, Purchaser shall
pay to Seller the sum of ONE HUNDRED FIFTY DOLLARS ($150) per automobile sold by
Seller, which automobiles qualify for the 1997 Dealer Challenge described on
Schedule 3.4 hereof (the "1997 Dealer Challenge"), provided that Purchaser
qualifies for such program and actually receives such funds from Franchiser. The
parties acknowledge and agree that such sums shall not be due and owing until
such time as such funds are received by Purchaser from Franchiser. Purchaser
shall exercise reasonable good faith efforts to qualify for the 1997 Dealer
Challenge.
3.5 LIABILITIES. Purchaser shall have no obligation for any
liabilities of any kind whatsoever of Seller other than those liabilities which
Purchaser specifically agrees to assume all of which shall be set forth on
Schedule 3.5 to be attached hereto ten (10) days prior to the expiration of the
Due Diligence Period, including without limitation all contracts, agreements and
commitments of Seller, which Purchaser agrees to assume. Purchaser shall be
responsible solely for that portion of any such obligations, which first accrue
on or subsequent to the Closing Date. Purchaser shall have no obligation with
respect to any liability arising under any such contract, agreement or
commitment prior to the Closing Date, all of which liability shall remain the
responsibility of Seller. The parties acknowledge and agree that Purchaser is
not assuming any employment agreements, labor agreements, collective bargaining
agreements or other similar contracts.
3.6 TRANSFER TAXES. Purchaser agrees to pay any and all sales,
transfer or other similar taxes which may be imposed or payable on or in
connection with the transfer of the Acquired Assets.
3.7 ALLOCATION OF PURCHASE PRICE. The Purchase Price as provided for
herein shall be allocated as set forth on Schedule 3.7 attached hereto which
shall agreed upon and attached hereto at or prior to Closing.
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4. REPRESENTATIONS AND WARRANTIES OF SELLER. Except as set forth on the
schedules attached hereto (the "Disclosure Schedules"), Seller and Capman hereby
jointly and severally represent, warrant and agree with Purchaser as follows:
4.1 GOOD STANDING. Seller is a corporation duly organized, validly
existing and in good standing under the laws of the State of California and is
entitled to and has the corporate power and authority to own or lease its
property and to carry on its business in the manner and in the places where such
property are now owned, leased or operated and such business is now conducted.
4.2 TITLE TO ASSETS; LIENS AND ENCUMBRANCES. Seller will convey to
Purchaser good and marketable title to the Acquired Assets, free and clear of
all security interests, liens, claims, restrictions, equities and encumbrances
whatsoever, other than liens for taxes not yet due and payable. PURCHASER
SPECIFICALLY ACKNOWLEDGES AND AGREES THAT, EXCEPT AS EXPRESSLY PROVIDED IN THIS
SECTION 4, SELLER IS SELLING AND PURCHASER IS PURCHASING THE ACQUIRED ASSETS ON
AN "AS IS WITH ALL FAULTS" BASIS AND THAT PURCHASER IS NOT RELYING ON ANY
REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER, EXPRESS OR IMPLIED, FROM
SELLER, ITS AGENTS, OR BROKERS AS TO ANY MATTERS CONCERNING THE ACQUIRED ASSETS,
INCLUDING, WITHOUT LIMITATION: (1) the quality, nature, adequacy and physical
condition of the Acquired Assets, (2) except as otherwise provided in the Real
Property Agreement, as hereinafter defined, the presence of Hazardous Materials
on, under or about the Dealership or the adjoining or neighboring property, (3)
the contents, adequacy or completeness of the due diligence materials from third
parties delivered to Purchaser prior to the expiration of the Due Diligence
Period and listed on Schedule 4.2 to be attached prior to the expiration of the
------------
Due Diligence Period, and (4) the economics of the operation of the Dealership.
4.3 AUTHORIZATION. The execution and delivery of this Agreement and
each other document, agreement and instrument contemplated hereby, and the
consummation of the transactions contemplated hereby has been duly authorized by
the Board of Directors of the Seller and all other corporate action, including
all shareholders' approvals necessary to authorize the execution and delivery of
this Agreement and each other document, agreement and instrument contemplated
hereby, and the consummation of the transactions contemplated hereby, have also
been taken. Except for consent of the Franchiser, no consent of any lender,
trustee, security holder, lessor or any other person or entity is required to be
obtained by Seller in connection with the execution, delivery and performance of
this Agreement by Seller and the consummation of the transactions contemplated
hereby. This Agreement constitutes the valid and binding obligation of Seller
and Capman enforceable in accordance with its terms, except as may be limited as
applicable bankruptcy law and equity. Except as to the terms of the Franchise,
the execution, delivery and performance of this Agreement and the consummation
of the transactions contemplated hereby (a) do not violate or constitute a
breach of or default under any contract, agreement or commitment to which Seller
or Capman is a party, under which they are obligated or to which any of the
Acquired Assets are subject, (b) do not violate any judgment, order, statute,
rule or regulation to which Seller, Capman or any of the Acquired Assets are
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subject or the articles of incorporation or bylaws of the Seller, and (c) will
not result in the creation of any lien, charge or encumbrance on any of the
Acquired Assets.
4.4 REPRESENTATIONS AND WARRANTIES ON CLOSING DATE. The
representations and warranties of Seller and Capman contained in this Agreement
shall be true and correct in all material respects on and as of the Closing Date
with the same force and effect as though such representations and warranties
have been made on and as of the Closing Date.
4.5 LITIGATION. Seller has not received service of process for, and
to the best of Seller's knowledge there is no pending or threatened suit,
action, arbitration, or legal, administrative, or other proceeding, or
governmental investigation against or affecting any of the Acquired Assets. To
the best knowledge of Seller, Seller is not in default with respect to any
order, writ, injunction, or decree of any federal, state, or local court. To the
best knowledge of Seller, use of the name "Capitol Nissan" by Seller does not
infringe upon the rights of any other person and Seller is not aware of any
claim of any nature to the effect that any person other than Seller holds any
rights with respect to such names.
4.6 DEFAULTS. Seller is not in default, and to the best of Seller's
knowledge, no event has occurred which, with the passage of time will constitute
a default, with respect to any obligation or liability to be assumed by
Purchaser hereunder, which are listed on Schedule 3.5 attached hereto, To the
best knowledge of Seller, no other party to any obligation or liability set
forth in Schedule 3.5 is in default with respect to any provision thereof.
4.7 ENVIRONMENTAL COMPLIANCE NOTICES. Seller has received no written
notice advising Seller of any defects, defaults or non-compliance in connection
with the Acquired Assets or the Premises from any governmental agency dealing
with environmental laws, except notices which have been previously complied with
or waived by the governmental agency.
4.8 COMPLIANCE WITH LAW. To the best of Seller's knowledge, Seller
has complied with, and is not in violation of, applicable federal, state or
local statutes, laws or regulations the violation of which would have a material
adverse effect on the financial condition of the Dealership.
4.9 FINANCIAL REPORTS. Seller has delivered to Purchaser dealer
financial statements for Seller for the calendar years 1995 and 1996 ("Dealer
Financial Statement"). The income and expenses reflected in the Dealer Financial
Statement has been prepared in accordance with past practices of Seller and, to
the best of Seller's knowledge, are true and correct in all material respects.
4.10 UNIONS. Seller is not a party to any arrangement with any union,
and no employees of the Seller are represented by any labor union or covered by
any collective bargaining agreement or, to the best of Seller's knowledge of
Seller, is any effort to establish such representation in progress.
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When used herein the term "to the best of Seller's knowledge" shall
mean knowledge of ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, and ▇▇▇ ▇▇▇▇▇▇▇ without any
independent investigation. In the event Purchaser discovers a breach of
representation or warranty prior to Closing, Purchaser's sole remedy for such
breach shall be to terminate this Agreement and seek actual damages against
Seller in the amount of Purchaser's damages not to exceed the sum of FIFTY
THOUSAND DOLLARS ($50,000).
5. REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser represents,
warrants and agrees with Seller and Owner as follows:
5.1 GOOD STANDING. Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and is
entitled to and has the corporate power and authority to own or lease its
property and to carry on its business in the manner and in the places where such
property are now owned, leased or operated and such business is now conducted.
5.2 AUTHORIZATION. The execution and delivery of this Agreement and
the consummation of transactions contemplated hereby has been duly authorized by
the Board of Directors of the Purchaser and all other corporate action,
including all shareholders' approvals necessary to authorize the execution and
delivery of this Agreement and the transactions contemplated hereby, have also
been taken. This Agreement is a valid and binding obligation of Purchaser
enforceable against Purchaser in accordance with its terms. Except for consent
of the Franchiser, landlords under leases, and lenders, no consent of any
trustee, security holder or any other person or entity is required to be
obtained by Purchaser in connection with the execution, delivery and performance
of this Agreement by Purchaser and the consummation of the transactions
contemplated hereby. The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby (a) do not violate
or constitute a breach of or default under any contract, agreement or commitment
to which Purchaser is a party or under which it is obligated, and (b) do not
violate any judgment, order, statute, rule or regulation to which Purchaser is
subject.
5.3 REPRESENTATIONS AND WARRANTIES ON CLOSING DATE. The
representations and warranties of Purchaser contained in this Agreement shall be
true and correct in all material respects on and as of the Closing Date with the
same force and effect as though such representations and warranties had been
made on and as of the Closing Date.
6. SELLER'S COVENANTS.
6.1 ONGOING OPERATIONS. From the date hereof to the Closing, Seller
will use its best effort to preserve intact the Acquired Assets and to continue
to operate the Dealership as a going concern, including, but not limited to,
maintaining commercially reasonable inventories and receivables; provided,
however, Seller shall not be required to expend sums in excess of FIFTEEN
THOUSAND DOLLARS ($15,000) or institute litigation in exercising such best
efforts. Seller will not dispose of any of the Acquired Assets except in the
ordinary course of business consistent with past practices, and will not,
without limiting the foregoing, hold a "going-out-of-business" or "liquidation"
sale; provided that Seller shall have the right to exercise
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normal and customary selling and marketing activities consistent with customary
practices of an ongoing dealership.
6.2 APPROVAL. Each of Purchaser and Seller will use its best efforts
to obtain all permits, approvals, authorizations and consents of third parties
necessary or desirable for the consummation of the transactions contemplated by
this Agreement and for the ownership and operation by Purchaser of Acquired
Assets and the Dealership related thereto; provided, however, Seller shall not
be required to expend sums in excess of FIFTEEN THOUSAND DOLLARS ($15,000) or
institute litigation in exercising such best efforts, Purchaser and Seller shall
proceed as promptly as practicable after the date hereof to prepare all
materials necessary to obtain the consent of the Franchiser as is necessary for
Purchaser to acquire the Acquired Assets and for consummation of the
transactions contemplated hereby.
6.3 COVENANT TO COMPLY. Seller shall not take any action or fail to
take any action which will make any of their representations and warranties not
true and correct in all material respects on the Closing Date. Seller shall use
its best efforts to satisfy or cause to be satisfied all of the conditions
precedent to Purchaser's obligations hereunder; provided, however, Seller shall
not be required to expend sums in excess of FIFTEEN THOUSAND DOLLARS ($15,000)
or institute litigation in exercising such best efforts. Seller shall give
Purchaser prompt written notice of any material change in any of the information
contained in the representations and warranties made in Section 4 hereof or the
schedules referred to herein which occur prior to the Closing Date.
6.4 ENTRY AND INDEMNITY. In connection with any entry by Purchaser,
or its agents, employees or contractors onto the Property, Purchaser shall give
Seller reasonable advance notice of such entry and shall conduct such entry and
any inspections in connection therewith so as to minimize, to the greatest
extent possible, interference to Seller's Dealership operation. Without
limiting the foregoing, prior to any entry to perform any on-site testing,
Purchaser shall give Seller notice thereof, including the identity of the
company or persons who will perform such testing and the proposed scope of the
testing. Seller shall approve or disapprove the proposed testing within three
(3) business days after receipt of such notice. If Purchaser or its agents,
employees or contractors take any sample from the Property in connection with
any such approved testing, at Seller's request, Purchaser shall provide to
Seller a portion of such sample being tested to allow Seller, if it so chooses,
to perform its own testing. Seller or its representative may be present to
observe any testing or other inspection performed on the Property. Upon
Seller's request, Purchaser shall promptly deliver to Seller copies of any
reports relating to any testing or other inspection of the Property performed by
Purchaser or its agents, employees or
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contractors. Purchaser shall maintain, and shall assure that its contractors
maintain, public liability and property damage insurance in amounts and in form
and substance adequate to insure against all liability of Purchaser and its
agents, employees or contractors, arising out of any entry or inspections of the
Property pursuant to the provisions hereof, and Purchaser shall provide Seller
with evidence of such insurance coverage upon request by Seller. Purchaser shall
indemnify and hold Seller harmless from and against any costs, damages,
liabilities, losses, expenses, lions or claims (including, without limitations
reasonable attorneys' fees) arising out of or relating to any entry on the
Property by Purchaser, its agents, employees or contractors in the course of
performing the inspections, testings or inquiries provided for in this
Agreement. The foregoing indemnity shall survive beyond the Closing, or, if the
sale is not consummated, beyond the termination of this Agreement.
6.5 POST CLOSING ACCESS. Following the Closing, Purchaser shall, upon
forty-eight (48) hours prior written notice, be granted access during normal
business hours to Seller's books and records relating to customer files (e.g.,
deal jackets and service repair orders). Any copies of such materials shall be
provided at Purchaser's expense.
7. CONDITIONS TO PURCHASER'S OBLIGATIONS TO CLOSE. The obligations of
Purchaser under this Agreement are subject to fulfillment of the conditions set
forth below. Purchaser shall have the right to waive in writing all or part of
any one or more of the following conditions and upon such waiver may proceed
with the transactions contemplated by this Agreement, and hereby releases Seller
from any and all loss, damage, costs (including attorney's fees), causes of
action and/or claims with respect to such failure of condition unless such
failure of condition is caused by a breach of Seller, in which event the terms
of Section 22.9 shall govern Purchaser's right to damages for such breach.
7.1 AGREEMENTS AND CONDITIONS. On or before the Closing Date, Seller
shall have complied with and duly performed in all material respects all
agreements and conditions on their part to be complied with and performed
pursuant to or in connection with this Agreement on or before the Closing Date.
7.2 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Seller and Capman contained in this Agreement, of otherwise made
in writing in connection with the transactions contemplated hereby, shall be
true and correct in all material respects on and as of the Closing Date with the
same force and effect as though such representations and warranties had been
made on and as of the Closing Date and Purchaser shall have received a
certificate to that effect dated the Closing Date and executed by the Vice
President of Seller.
7.3 NO LEGAL PROCEEDINGS. No action or proceeding shall have been
instituted or threatened to restrain or prohibit the acquisition by Purchaser or
the conveyance by Seller of the Acquired Assets or which might result in any
material adverse change in the business, prospects or financial or other
condition of the Acquired Assets.
7.4 CONSENTS. Purchaser shall have received the written approval of
Franchiser designating Purchaser or its designee as a duly authorized dealer for
the sales and service of such Franchiser's automobiles at ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, free of any material condition
which is materially adverse to Purchaser and such Franchiser shall have entered
into a customary Dealer Sales and Service Agreement.
7.5 DUE DILIGENCE. Purchaser shall for a period of thirty (30) days
from the date of execution of this Agreement (the "Due Diligence Period") have
the right to review the books and records of the Dealership relating to the
Acquired Assets, the physical condition of the Dealership property and any other
items reasonably necessary or appropriate to evaluate the Dealership. Such
review shall be done at times and locations as mutually agreed between
10
Purchaser and Seller provided that Purchaser shall use all reasonable efforts to
have such review of books and records at locations away from the Dealership.
Seller shall cooperate and provide such information reasonably necessary for
Purchaser to conduct such due diligence review during such thirty (30) day
period. Purchaser's failure to approve of the physical condition of the
Dealership and the review of the books and records relating to the Acquired
Assets by written notice (the "Notice of Intent to Proceed") to Seller prior to
the expiration of the Due Diligence Period, which Notice of Intention to Proceed
shall unequivocally set forth Purchaser's approval of the physical condition of
the Acquired Assets, the review of the books and records relating to the
Acquired Assets, and Purchaser's election to proceed with the transaction
strictly in accordance with the terms of this Agreement, shall constitute
Purchaser's election to terminate this Agreement in which event neither party
shall have any right or liability to the other except as set forth herein. Upon
Purchaser's timely delivery of the Notice of Intent to Proceed, the Deposit
shall be non-refundable except as otherwise set forth herein.
7.6 ENVIRONMENTAL ASSESSMENT. During the thirty (30) day period after
the. execution of this Agreement (the "Testing Period"), Purchaser and Seller
shall conduct an environmental assessment (the "Environmental Assessment") of
the real property at the Dealership (the "Real Property"). Expenses of any
environmental consultant engaged by Purchaser and Seller to conduct the
Environmental Assessment shall be paid by Purchaser. Purchaser may terminate all
of its obligations under this Agreement by written notice to Seller on or before
the expiration of the Testing Period, if Purchaser determines that a release or
threatened release of a hazardous substance has occurred on the Real Property.
Failure to timely notify Seller under this Section 7.7 is deemed to constitute a
waiver of Purchaser's right to terminate this Agreement under this Section 7.7.
7.7 PHYSICAL AUDIT. On or before the Closing Date the valuation of
the Acquired Assets pursuant to the physical audit specified in Section 3.2
shall be completed and approved by Purchaser and Seller.
7.8 TAX CLEARANCE. Purchaser shall have obtained certificates from
the California Franchise Tax Board, the California Employment Development
Department, and the County of Santa ▇▇▇▇▇ that all taxes and contributions
payable by Seller have been paid in full. If such certificates are not available
on the Closing Date, Escrow Holder shall withhold in escrow the estimated amount
of maximum unpaid tax liability reasonably determined by Purchaser which sum
shall be held by Purchaser until such time as all certificates are presented.
7.9 LIST OF EMPLOYEES. Seller shall furnish to Purchaser a list of
all employees names and positions. Seller shall have terminated all employees as
of the Closing Date.
7.10 BULK SALE. Seller shall furnish, in an appropriate time to
comply, all affidavits and lists of creditors and such other instruments or
documents as Escrow Holder shall require for Seller and Purchaser to comply with
all applicable bulk sales laws.
11
7.11 PURCHASE OF REAL PROPERTY. Purchaser or nominee of Purchaser
shall have acquired the real property commonly known as ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
8. CONDITIONS OF SELLER'S OBLIGATIONS TO CLOSE. The obligations of Seller
under this Agreement are subject to fulfillment of the conditions set forth
below. Seller shall have the right to waive in writing all or part of any one or
more of the following conditions without, however, releasing Purchaser from any
liability for any loss or damage sustained by Seller by reason of the breach by
Purchaser of any covenant, obligation or agreement contained herein, or by
reason of any misrepresentation made by Purchaser and upon such waiver may
proceed with the transactions contemplated by this Agreement.
8.1 AGREEMENTS AND CONDITIONS. On or before the Closing Date,
Purchaser shall have complied with and duly performed in all material respects
all of the agreements and conditions on its part required to be complied with or
performed pursuant to this Agreement on or before the Closing Date.
8.2 REPRESENTATIONS AND WARRANTIES OF PURCHASER. The representations
and warranties of Purchaser contained in this Agreement shall be true and
correct in all material respects on and as of the Closing Date with the same
force and effect as though such representations and warranties had been made on
and as of the Closing Date and Seller shall have received a certificate to that
effect dated the Closing Date and executed by the President or a Vice President
of Purchaser.
8.3 PHYSICAL AUDIT. On or before the Closing Date the valuation of
the Acquired Assets pursuant to Section 3.2 shall be completed and approved by
Seller.
8.4 PURCHASE OF REAL PROPERTY. On or before the expiration of the Due
Diligence Period, Purchase and Seller shall have entered into the Real Property
Agreement and Purchaser or nominee shall acquire the real property commonly
known as ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ in
accordance therewith on or before Closing.
8.5 NO LEGAL PROCEEDINGS. No action or proceeding shall have been
instituted or threatened to restrain or prohibit the acquisition by Purchaser or
the conveyance by Seller of the Acquired Assets or which might result in any
material adverse change in the business, prospects or financial or other
condition of the Acquired Assets.
8.6 CONSENTS. Purchaser shall have received the written approval of
Franchiser designating Purchaser or its designee as a duly authorized dealer for
the sales and service of such Franchiser's automobiles at ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, free of any material condition
which is materially adverse to Purchaser and such Franchiser shall have entered
into a customary Dealer Sales and Service Agreement.
8.7 WARRANT TO PURCHASE COMMON STOCK. On or before expiration of the
Due Diligence Period, Seller and Purchaser shall have entered into a Warrant to
Purchase
12
Common Stock allowing Seller the option to purchase 20,000 share of Purchaser's
Common Stock.
9. DELIVERIES OF SELLER ON THE CLOSING DATE. Seller agrees on the Closing
Date to deliver to Purchaser:
9.1 TITLE TO ACQUIRED ASSETS. All conveyances, covenants, warranties,
deeds, assignments, bills of sale, motor vehicle titles, confirmations, powers
of attorney, approvals, consents and any and all further instruments as may be
reasonably necessary, expedient or proper in order to complete any and all
conveyances, transfers and assignments herein provided for and to convey to
Purchaser such title to the Acquired Assets as Seller is obligated hereunder to
convey.
9.2 CERTIFICATE OF SECRETARY. Certificate of the Secretary of the
Seller setting forth a copy of the resolutions adopted by Seller's Board of
Directors and shareholders authorizing and approving the execution and delivery
of this Agreement and the consummation of the transactions contemplated hereby.
9.3 CERTIFICATE. Certificate of the Vice President of Seller referred
to in Section 7.2.
10. DELIVERIES OF PURCHASER ON THE CLOSING DATE. Purchaser agrees on the
Closing Date to deliver or cause to be delivered.
10.1 CONSIDERATION. The amounts to be delivered pursuant to Section
3.3 hereof.
10.2 CERTIFICATE OF SECRETARY. Certificate of the Secretary of the
Purchaser setting forth a copy of the resolutions adopted by Purchaser's Board
of Directors and shareholders authorizing and approving the execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby.
10.3 CERTIFICATE. The Certificate of the President or a Vice President
of the Purchaser referred to in Section 8.2.
11. REAL PROPERTY. Purchaser or nominee of Purchaser shall enter into an
Agreement of Purchase and Sale (the "Real Property Agreement") with Amesbury
Group, a California Limited Partnership, for the property commonly known as ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Property"). The
purchase price for the Property shall be the sum of SIX MILLION TWO HUNDRED
FIFTY THOUSAND DOLLARS ($6,250,000) payable in cash at close of escrow. The
Closing of the purchase of the Property shall be simultaneous with the Closing
and acquisition of the Dealership pursuant to this Agreement. Such Agreement of
Purchase and Sale shall provide that Purchaser shall have 45 days from execution
of the Agreement to obtain a loan secured by a first Deed of Trust on the
Property for such acquisition with commercially reasonable rates and terms. Such
Agreement of Purchase and Sale shall further provide that all closing costs
shall be paid as is customary in Santa ▇▇▇▇▇
13
County, and shall contain a hazardous substances indemnity in favor of
Purchaser. The parties shall enter into a Purchase and Sale Agreement in the
form attached hereto as Schedule 11 and incorporated herein by this reference.
12. ESCROW. The parties, upon execution of this Agreement shall open an
escrow with a mutually acceptable escrow company ("Escrow Holder"). The parties
shall forthwith provide to Escrow Holder any and all documentation necessary for
Escrow Holder to publish such notices as may be required by the bulk sale laws
of the State of California. Any and all costs of such escrow shall be paid one-
half by Purchaser and one-half by Seller.
13. COVENANTS AFTER CLOSING DATE.
13.1 TRANSFER OF ACQUIRED ASSETS. Seller agrees from and after the
Closing Date, upon the request of Purchaser, to do, execute, acknowledge and
deliver, or to cause to be done, executed, acknowledged and delivered, all such
further acts, deeds, assignments, transfers, conveyances, powers of attorney and
assurances as may be required for the assigning, transferring, conveying, and
confirming to Purchaser, or to its successors and assigns, or for the aiding,
assisting, collecting and reducing to possession of, any or all of the Acquired
Assets as provided herein.
13.2 COOPERATION. Seller will cooperate and use its reasonable efforts
to have its officers and employees cooperate with Purchaser at Purchaser's
request, on and after the Closing Date, in furnishing information, evidence,
testimony and other assistance in connection with any actions, proceedings,
arrangements or disputes involving Purchaser and based upon contracts,
arrangements, commitments or acts of Seller which were in effect or occurred on
or prior to the Closing Date. From and after the Closing Date, Seller will
permit Purchaser and its representatives to have access to Setter's books and
records relating to the Acquired Assets for periods prior to the Closing Date
upon notice and during normal business hours. Seller shall assist Purchaser
after the Closing related to audits required in connection with any public
offering contemplated by Purchaser, provided Seller shall not be required to
expend funds (including internal labor costs) or institute litigation. Purchaser
shall keep any information delivered to Purchaser hereunder confidential;
provided, however, Purchaser shall have the right as required by law to use such
final information in connection with financial reporting or filing of any
required documents with the Securities Exchange Commission or other similar or
necessary use.
14. INDEMNIFICATION.
14.1 INDEMNIFICATION BY SELLER AND CAPMAN. Seller and Capman agree to
indemnify and hold harmless Purchaser from and against any and all losses,
costs, damages, claims and expenses (including reasonable attorneys' fees) which
Purchaser may sustain at any time by reason of (a) any debt, liability or
obligation of Seller except obligations assumed by Purchaser, (b) any liability
or obligation of any kind relating to the operations of the Acquired Assets or
Dealership prior to the Closing Date, or (c) the breach or inaccuracy of or
failure to comply with, or the existence of any facts resulting in the
inaccuracy of, any of the warranties, representations, covenants or agreements
of Seller contained in this Agreement. The parties
14
acknowledge and agree that Purchaser shall have the right to repair automobiles
sold and/or serviced by Seller to correct miscellaneous customer complaints that
Purchaser determines in Purchaser's reasonable judgment are an obligation of
Seller, with Seller's prior written approval; provided, that the total of
repairs for any one automobile shall not exceed the sum of ONE THOUSAND DOLLARS
($1,000).
14.2 INDEMNIFICATION BY PURCHASER. Purchaser agrees to indemnify and
hold harmless Seller from and against any and all losses, cost, damages, claims
and expenses (including reasonable attorneys' fees) which Seller may sustain at
any time by reason of (a) any debt, liability or obligation of Purchaser, (b)
any liability or obligation of any kind relating to the operations of the
Acquired Assets or Dealership after the Closing Date, or (c) the breach or
inaccuracy of or failure to comply with, or the existence of any facts resulting
in the inaccuracy of, any of the warranties, representations, covenants or
agreements of Purchaser contained in this Agreement.
14.3 DEFENSE. Any party who receives notice of a claim for which it
will seek indemnification shall promptly notify the indemnifying party in
writing of such claim. The indemnifying party shall have the right to assume the
defense of such action at its cost with counsel reasonably satisfactory to the
indemnified party. The indemnified party shall have the right to participate in
such defense with its own counsel at its cost.
15. SURVIVAL OF REPRESENTATIONS. The parties hereto each agree that all
representations and warranties and indemnities contained herein shall survive
the execution and delivery of this Agreement for a period of twelve (12) months
following the Closing (the "Limitations Period"). Purchaser must provide Seller
written notice of any claims prior to the expiration of the Limitations Period.
Purchaser acknowledges and agrees that in executing this Agreement Capman's
liability shall be limited to claims made by Purchaser during the Limitations
Period for a breach of a representation and warranty set forth in Section 4
hereof or for Purchaser's right to indemnity pursuant to Section 14.1 hereof.
16. NO BROKER. Purchaser on the one hand, and Seller on the other,
represent to the other that no broker or finder has been connected with the
transactions contemplated by this Agreement. In the event of a claim by any
broker or finder based upon his representing or being retained by Seller on the
one hand, or by Purchaser on the other, Seller or Purchaser, as the case may be,
agrees to indemnify and save harmless the other in respect of such claim.
17. USE OF THE NAME. Seller agrees that from and after the Closing Date,
Purchaser shall have the right to the name "Capitol Nissan" or any derivative
thereof or similar name in connection with the operation of the, Dealership
acquired hereunder, and that Seller shall not subsequent to the Closing, use
such name.
18. TERMINATION. If the Closing Date shall not have occurred on or prior
to September 15, 1997 (the "Termination Date") or if Purchaser shall receive
disapproval from the Franchiser prior thereto, any party that is not in default
in the performance of its obligations under this Agreement may, thereafter,
terminate this Agreement by giving written notice to the other party; provided,
however, Purchaser may extend the Termination Date for a period of thirty
15
(30) days from the Termination Date ("First Extension Period") by causing the
sum of Fifty Thousand Dollars and 00/100 ($50,000) to be delivered to Escrow
Holder prior to the Termination Date (the "First Extension Period Deposit"). The
First Extension Period Deposit shall follow the Deposit in accordance with and
pursuant to the terms of Section 3.3 hereof. Purchaser may extend the First
Extension Period an additional period of thirty (30) days ("Second Extension
Period") by causing the sum of Fifty Thousand Dollars and 00/100 ($50,000) to be
delivered to Escrow Holder prior to the expiration of the First Extension Period
(the "Second Extension Period Deposit"). The Second Extension Period Deposit
shall follow the Deposit in accordance with and pursuant to the terms of Section
3.3 hereof.
19. CONFIDENTIALITY. In the event this Agreement is terminated for any
reason other than the default of Seller, Purchaser shall deliver to the Seller,
at no expense to Purchaser, without representation or warranty of any kind, all
of the documents and papers which were supplied by the Seller to Purchaser or
its agents, including, without limitation, financial statements, tax returns,
appraisals, inspections, investigations, studies, tests, surveys, and reports
concerning the Assets, but excluding any documents or other papers which are
proprietary property or trade secrets of Purchaser. Unless and until the Closing
occurs, none of the parties to this Agreement shall disclose, publish or
communicate either directly or indirectly, any of the terms, conditions or the
subject or content of the parties' negotiations concerning purchase of the
Dealership, except (a) in response to any lawful process requiring disclosure of
the same as reasonably required by law or public reporting requirements, or (b)
to prospective sources of financing, to mortgage brokers, franchisers,
investment bankers, investors or purchasers, attorneys, accountants,
consultants, experts and professionals engaged by Purchaser in connection with
its due diligence investigation. The parties each agree that it shall at all
times keep the contents of the negotiations confidential (subject to the
exceptions stated in the preceding sentence) and that no publicity or press
release with respect to any proposed transaction shall be made by either party
without the prior written consent of either party.
20. RISK OF LOSS AND INSURANCE PROCEEDS. Seller shall give Purchaser
notice of the occurrence of damage or destruction of, or the commencement of
condemnati on proceedings affecting any portion of the Premises. In the event
that all or any material portion of the Premises is condemned, or destroyed or
damaged by fire or other casualty prior to the Closing and the cost to repair or
restore any loss or damage caused thereby is greater than FIVE HUNDRED THOUSAND
DOLLARS ($500,000), then Purchaser may, at its option to be exercised within
fifteen (15) days of Seller's notice of the occurrence of the damage or
destruction or the commencement of the condemnation proceedings, either
terminate this Agreement or consummate the purchase for the full consideration
as required by the terms hereof. If Purchaser elects to terminate this
Agreement or fails to give Seller notice within such fifteen (15) day period
that Purchaser will proceed with the purchase, then this Agreement shall
terminate at the end of such fifteen (15) day period and the Deposit shall be
returned to Purchaser and neither party shall any have further rights or
obligations hereunder. If (a) a portion of the Premises is condemned or
destroyed or damaged by fire or other casualty prior to the Closing and the cost
to repair or restore any loss or damage caused thereby is equal to or less than
FIVE HUNDRED THOUSAND DOLLARS ($500,000); or (b) Purchaser elects within the
aforesaid fifteen (15) day period to proceed with the purchase, then this
Agreement shall not terminate and
16
upon the Closing, there shall be a credit against the Purchase Price due
hereunder equal to the amount of any insurance proceeds or condemnation awards
collected by Seller as a result of any such damage or destruction or
condemnation, plus the amount of any insurance deductible, less any sums
expended by Seller toward the restoration or repair of the Premises (but in no
event shall the amount of such credit exceed the Purchase Price); provided,
however, in the event the insurance or condemnation proceeds are less dm the
actual amount necessary to replace such damage, Purchaser shall receive a credit
against the Purchase Price on the Closing in the amount of such difference. If
the proceeds or awards have not been collected as of the Closing, then such
proceeds or awards shall be assigned to Purchaser, except to the extent needed
to reimburse Seller for sums expended to collect such proceeds or repair or
restore the Premises, and Purchaser shall not receive any credit against the
Purchase Price with respect to such proceeds or awards; provided, that if the
amount of proceeds or awards subsequently received by Purchaser exceeds the
Purchase Price, then Purchaser shall pay to Seller any such excess within ten
(10) days after Purchaser's receipt of such proceeds or awards. The provisions
of this Section 20 shall survive the Closing.
21. NOTICES. All notices, requests or demands to a party hereunder shall
be in writing and shall be given or served upon the other party by personal
service, by certified return receipt requested or registered mail, postage
prepaid, or by Federal Express or other nationally recognized commercial
courier, charges prepaid, addressed as set forth below. Any such notice, demand,
request or other communication shall be deemed to have been given upon the
earlier of personal delivery thereof, three (3) business days after having been
mailed as provided above, or one (1) business day after delivery through a
commercial courier, as the case may be. Notices may be given by facsimile and
shall be effective upon the transmission of such facsimile notice provided that
the facsimile notice is transmitted on a business day and a copy of the
facsimile notice together with evidence of its successful transmission
indicating the date and time of transmission is sent on the day of transmission
by recognized overnight carrier for delivery on the immediately succeeding
business day. Each party shall be entitled to modify its address by notice given
in accordance with this Section 19.
To Purchaser: FirstAmerica Automotive, Inc.
c/o Kay & ▇▇▇▇▇▇
▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
With a copy to: W. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
▇▇▇ & ▇▇▇▇▇▇
▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
To Seller: Golden Sierra Auto Group, Inc.
dba Capitol Nissan
1120 Capital Expressway Auto Mall
17
▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
To Capman: Capitol Management Group, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
22. MISCELLANEOUS.
22.1 ENTIRE AGREEMENT. This Agreement, including the exhibits and
schedules hereto, sets forth the entire agreement and understanding between the
parties as to the subject matter hereof and merges and supersedes all prior
discussions, agreements and understandings of every kind and nature between them
and no party hereto shall be bound by any condition, definition, warranty or
representation other than as expressly provided for in this Agreement or as may
be on a date subsequent to the date hereof duly set forth in writing signed by
the party hereto which is to be bound thereby. This Agreement shall not be
changed, modified or amended except by a writing signed by the party to be
charged and this Agreement may not be discharged except by performance in
accordance with its terms or by a writing signed by the party to be charged.
22.2 GOVERNING LAW. This Agreement and its validity, construction and
performance shall be governed in all respects by the laws of the State of
California, without giving effect to principles of conflict of laws.
22.3 SEVERABILITY. If any provision of this Agreement or the
application of any provision hereof to any person or circumstance is held
invalid, the remainder of this Agreement and the application of such provision
to other persons or circumstances shall not be affected unless the provision
held invalid shall substantially impair the benefits of the remaining portions
of this Agreement.
22.4 BENEFIT OF PARTIES. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors,
heirs, legal representatives and assigns. Purchaser shall not assign this
Agreement to any unaffiliated entity which is not controlled by, in control of ,
or under common control with Purchaser.
18
22.5 NECESSARY DOCUMENTS. Each of the parties does hereby agree to do
any act and to execute any other or further documents reasonably necessary or
convenient to the carrying out of the provisions of this Agreement.
22.6 HEADINGS. The headings in the sections of this Agreement are
inserted for convenience of reference only and shall not constitute a part
hereof.
22.7 ATTORNEYS' FEES. In the event that any action or proceeding is
brought to enforce or interpret any provision, covenant or condition contained
in this Agreement on the part of Purchaser, Seller or Capman, the prevailing
party in such action or proceeding (whether after trial or appeal) shall be
entitled to recover from the party not prevailing its expenses therein,
including reasonable attorneys' fees and allowable costs.
22.8 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument. This
Agreement shall become effective upon the execution of a counterpart hereof by
each of the parties hereto.
22.9 TERMINATION AND REMEDIES.
(a) LIQUIDATED DAMAGES. If Purchaser breaches this Agreement,
and the transaction contemplated by this Agreement fails to close by reason
thereof, Seller shall be entitled to terminate this Agreement and retain
the amount of the Deposit plus any accrued interest thereon (the "Specified
Sum") as liquidated damages. SELLER AND PURCHASER ACKNOWLEDGE THAT SUM IS A
REASONABLE ESTIMATE OF SELLER'S DAMAGES. SELLER AND PURCHASER FURTHER AGREE
THAT THIS SECTION IS INTENDED TO AND DOES LIQUIDATE THE AMOUNT OF DAMAGES
DUE SELLER, AND SHALL BE SELLER'S EXCLUSIVE REMEDY AGAINST PURCHASER, BOTH
AT LAW AND IN EQUITY ARISING FROM OR RELATED TO A BREACH BY PURCHASER OF
ITS OBLIGATIONS TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT.
Buyer __________ Seller DRB
----------
22.10 BREACH BY SELLER. In the event that the Closing fails to occur
as a result of a default of Seller, Purchaser may, as its sole and exclusive
remedy, elect to either: (a) enforce the terms of this Agreement by action for
specific performance, but with no reduction in the Purchase Price; provided,
however, that no action for specific performance shall compel Seller to commence
litigation or cure or deal with any matters outside of its reasonable control or
expend funds except as provided for in the Agreement as to such matters; or (b)
terminate this Agreement in which event the Purchaser shall have the right to
immediate return of its deposit and damages from Seller or Capman in an amount
to the actual damage suffered by Purchaser but in no event in excess of the
amount of FIFTY THOUSAND DOLLARS ($50,000).
19
22.11 ACCEPTANCE OF AGREEMENT BY PURCHASER. This Agreement shall be
null and void unless it is accepted by Purchaser and two fully executed copies
hereof are returned to Seller on or before 5:00 p.m. (P.D.T.) on July 19, 1997.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the day and year first above written.
PURCHASER: SELLER:
FirstAmerica Automotive, Inc. Golden Sierra Auto Group,
a Nevada corporation a California corporation, dba Capitol Nissan
By: /s/ ▇▇▇▇▇▇ ▇. Price By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------ ------------------------
Name: ▇▇▇▇▇▇ ▇. Price Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------- Its: Vice- President
Its: President
--------------------------- CAPMAN:
CAPMAN, Inc.,
a California corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Its: President
20
LIST OF SCHEDULES
SCHEDULE 2.1 Acquired Assets
SCHEDULE 3.4 1997 Dealer Challenge
SCHEDULE 3.5 Liabilities
SCHEDULE 3.7 Allocation of Purchase Price
SCHEDULE 4.2 Due Diligence Materials
SCHEDULE 8.7 Warrant to Purchase Common Stock
SCHEDULE 11 Purchase and Sale Agreement
SCHEDULE 3.4
[LOGO OF NISSAN APPEARS HERE]
================================================================================
NORTHWEST REGION DEALER INCENTIVE PROGRAM
"1997 DEALER CHALLENGE"
OFFICIAL PROGRAM RULES
DISTRICTS: 1,3,4,5,6,7,8,9,10,11,12
PROGRAM PERIOD: JANUARY 1, 1997 - DECEMBER 31, 1997
================================================================================
ELIGIBLE PARTICIPANTS
---------------------
All authorized Nissan Dealers located within the above named Districts are
eligible to participate. ALL DEALERS MUST ATTAIN THEIR 1997
JANUARY/FEBRUARY/MARCH WHOLESALE OBJECTIVE TO PARTICIPATE IN THE "1997 DEALER
CHALLENGE" PROGRAM.
ENROLLMENT
----------
Each participating dealership will be required to enroll in the "1997 DEALER
CHALLENGE" by completing the attached Official "1997 DEALER CHALLENGE"
Enrollment Form. The attached enrollment form must be received by the
regional office no later than March 14, 1997.
ELIGIBLE MODELS
---------------
All new, unused, unregistered 1996, 1997, 1997.5 and 1998 models.
OBJECTIVES
----------
1997 JAN/FEB/MARCH WHOLESALE OBJECTIVE (January 1, 1997 - March 31, 1997)
Dealers will be assigned a 1997 January/February/March Wholesale Objective for
the period of January 1, 1997 - March 31, 1997. To participate in the "1997
DEALER CHALLENGE" dealers must achieve the 1997 January/February/March Wholesale
Objective.
1997 CALENDER YEAR OBJECTIVE (January 1, 1997 - December 31, 1997)
Dealers will be assigned a 1997 Calendar Year Retail Sales Objective for the
period of January 1, 1997 - December 31, 1997. Achievement of the 1997 Calendar
Year Retail Sales Objective and attainment of the 1997 January/February/March
Wholesale Objective will pay $50 retroactive on each eligible unit sold during
January 1, 1997 - December 31, 1997.
1997 Q1 "FAST START" OBJECTIVE (January 1, 1997 - April 1, 1997)
Dealers will be assigned a 1997 Q1 "Fast Start" Retail Sales Objective for the
period of January 1, 1997 - April 1, 1997. Achievement of the 1997 Q1 "Fast
Start" Objective and attainment of the 1997 January/February/March Wholesale
Objective will pay an additional $100 retroactive on each eligible unit sold
during January 1, 1997 - December 31, 1997. ONLY DEALERS WHO ATTAIN THEIR
"1997 CALENDER YEAR OBJECTIVE" WILL BE ELIGIBLE TO RECEIVE THE "1997 Q1 `FAST
START' AWARD".
[LOGO OF NISSAN APPEARS HERE]
================================================================================
OFFICIAL
"1997 DEALER CHALLENGE"
ENROLLMENT FORM
================================================================================
YES!
I accept the CHALLENGE and will participate in the "1997 DEALER CHALLENGE"
Program.
1997 JANUARY/FEBRUARY/MARCH WHOLESALE OBJECTIVE: 349 61
1997 CALENDER YEAR OBJECTIVE: 1311 107
1997 Q1 "FAST START" OBJECTIVE: 328
DEALER NAME: CAPITOL NISSAN
DEALER CODE: 2789
AUTHORIZED SIGNATURE:
_____________________________
(Dealer Principal/Executive Mgr)
NO!
I do not wish to participate in the "1997 DEALER CHALLENGE" Program.
DEALER NAME:
DEALER CODE:
AUTHORIZED SIGNATURE:
(Dealer Principal/Executive Mgr)
PLEASE COMPLETE THIS FORM BY MARCH 14, 1997 and fax it to:
(▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
SCHEDULE 8.7
THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR
OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT
OR PURSUANT TO RULE 144 OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
CORPORATION AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.
WARRANT TO PURCHASE COMMON STOCK
Warrant #_______
Corporation: FirstAmerica Automotive, Inc., a Delaware corporation
(the "Company")
Initial Exercise Price: $______________
Issue Date: _______________
Expiration Date: The ___________ anniversary of the date hereof
THIS WARRANT CERTIFIES THAT, for good and valuable consideration,
___________________ ("Holder") is entitled to purchase ____________________ paid
and nonassessable shares of the Common Stock (the "Shares") of the Company at
the initial exercise price of $__________ per Share (the "Warrant Price"), as
adjusted pursuant to Article 2 of this Warrant, subject to the provisions and
upon the terms and conditions set forth in this Warrant.
ARTICLE I.
EXERCISE
--------
1.1 Method of Exercise. Holder may exercise this Warrant by delivering a
------------------
duly executed Notice of Exercise in substantially the form attached as Appendix
1 to principal office of the Company. Unless Holder is exercising the conversion
right set forth in Section 1.2, Holder shall also deliver to the Company a check
for the aggregate Warrant Price for the Shares being purchase.
1.2 Conversion Right. In lieu of exercising this Warrant as specified in
----------------
Section 1.1, Holder may from time to time convert this Warrant, in whole or in
part, into a number of Shares determined by dividing (a) the aggregate Fair
Market Value of the Shares issuable upon exercise of this Warrant minus the
aggregate Warrant Price of such Shares by (b) the
1
Fair Market of one Share. The Fair Market Value of the Shares shall be
determined pursuant to Section 1.3.
1.3. Fair Market Value. If the Shares are traded in a public market, the
-----------------
Fair Market Value of the Shares shall be the closing price of the Shares
reported for the business day immediately before Holder delivers its Notice of
Exercise to the Company. If the Shares are not traded in a public market, the
Board of Directors of the Company shall determine Fair Market Value in its
reasonable good faith judgment. The foregoing notwithstanding, if Holder
advises the Board of Directors in writing that Holder disagrees with such
determination, then the Company and Holder shall promptly agree upon a reputable
investment banking firm to undertake such valuation. If the valuation of such
investment banking firm is greater than that determined by the Board of
Directors, then all fees and expenses of such investment banking firm shall be
paid by the Company. In all other circumstances, such fees and expenses shall
be paid by Holder.
1.4. Delivery of Certificate and New Warrant. Promptly after Holder
---------------------------------------
exercises or converts this Warrant, the Company shall deliver to Holder
certificates for the Shares acquired and, if this Warrant has not been fully
exercised or converted and has not expired, a new Warrant representing the
Shares not so acquired.
1.5. Replacement of Warrants. On receipt of evidence reasonable
-----------------------
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of loss, theft or destruction, on delivery of an
indemnity agreement reasonably satisfactory in form and amount to the Company,
and, in the case of mutilation, on surrender and cancellation of this Warrant,
the Company, at its expenses, shall execute and deliver, in lieu of this
Warrant, a new warrant of like tenor.
1.6. Merger or Consolidation of the Company.
--------------------------------------
1.6.1. "Acquisition." For the purpose of this Warrant, "Acquisition"
-----------
means any sale, license, or other disposition of all or substantially all of the
assets of the Company, or any reorganization, consolidation, or merger of the
Company where the holders of the Company's securities before the transaction
beneficially own less than 50% of the outstanding voting securities of the
surviving entity after the transaction.
1.6.2. Assumption of Warrant. Upon the closing of any Acquisition, the
---------------------
successor entity shall assume the obligations of this Warrant, and this Warrant
shall be exercisable for the same securities, cash, and property as would be
payable for the Shares issuable upon exercise of the unexercised portion of this
Warrant as if such Share were outstanding on the record date for the Acquisition
and subsequent closing. The Warrant price shall be adjusted accordingly.
1.6.3. Purchase Right. Notwithstanding the foregoing, at the election
--------------
of Holder, the Company shall purchase the unexercised portion of this Warrant
for cash upon the closing of any Acquisition for an amount equal to (a) the fair
market value of any consideration of the Shares had Holder exercised the
unexercised portion of this Warrant
2
the number of Shares issuable upon exercise of this Warrant shall be adjusted
upward in such a manner that the aggregate Warrant price of this Warrant is
unchanged.
2.5. Fractional Shares. No fractional shares shall be issuable upon
exercise or conversion of the Warrant and the number of Shares to be issued
shall be rounded down to the nearest whole Share. If a fractional share interest
arises upon any exercise or conversion of the Warrant, the Company shall
eliminate such fractional share interest by paying Holder an amount computed by
multiplying the fractional interest by the Fair Market Value of a full Share.
2.6. Certificate as to Adjustments. Upon each adjustment of the Warrant
Price, the Company, at its expense, shall promptly compute such adjustment and
furnish Holder with a certificate of its Chief Financial Officer setting forth
such adjustment and the facts upon which such adjustment is based. The Company
shall, upon written request, furnish Holder a certificate setting forth the
Warrant Price in effect upon the date thereof and the series of adjustments
leading to such Warrant Price.
ARTICLE III.
------------
REPRESENTATIONS AND COVENANTS OF THE COMPANY
--------------------------------------------
3.1. Representations and Warranties. The Company hereby represents and
------------------------------
warrants to the Holder that all Shares which may be issued upon the exercise of
the purchase right represented by this Warrant, shall, upon issuance, be duly
authorized, validly issued, fully paid and nonassessable, and free of any liens
and encumbrances except for restrictions on transfer provided for herein or
under applicable federal and state securities laws.
3.2. Notice of Certain Events. If the Company proposes at any time (a)
------------------------
to declare any dividend or distribution upon its common stock, whether in cash,
property, stock, or other securities and whether or not a regular cash dividend;
(b) to offer for subscription pro rata to the holders of any class or series or
its stock any additional shares of stock of any class or series or other rights;
(c) to effect any reclassification or recapitalization of common stock; (d) to
merger or consolidate with or into any other corporation, or sell, lease,
license, or convey all or substantially all of its assets or to liquidate,
dissolve or wind up, or (e) offer holders of registration rights the opportunity
to participate in an underwritten public offering of the Company's securities
for cash, then in connection with each such event, the Company shall give Holder
(1) prompt prior written notice of the date on which a record will be taken for
such dividend, distribution, or subscription rights (and specifying the date on
which the holders of common stock will be entitled thereto) or for determining
rights to vote, if any, in respect of the matters referred to in (c) and (d)
above; (2) in the case of the maters referred to in (c) and (d) above, prompt
prior written notice of the date when the same will take place (and specifying
the date on which the holders of common stock will be entitled to exchange their
common stock for securities or other property deliverable upon the occurrence of
such event); and (3) in the case of the matter referred to in (e) above, the
same notice as is given to the holders of such registration rights.
4
3.3. Information Rights. So long as the Holder holds this Warrant and/or
------------------
any of the Shares, the Company shall deliver to the Holder (a) promptly after
mailing, copies of all notice or other written communications to the
shareholders of the Company, (b) within ninety (90) days after the end of each
fiscal year of the Company, the annual audited financial statements of the
Company certified by independent public accountants of recognized standing and
(c) within sixty (60) days after the end of the first three quarters of each
fiscal year, the Company's quarterly, unaudited financial statements. The
Company's delivery obligations under this section shall terminate upon the
Company becoming subject to the periodic reporting requirements of Section 12(g)
or 15(d) of the Securities Exchange Act of 1934, as amended.
3.4. Automatic Exercise. If, as of the last day of the term hereof, this
------------------
Warrant has not been fully exercised, then as of such date this Warrant shall be
automatically converted, in full, in accordance with Section 1.2, without any
action or notice by the Holder.
3.5. Registration Under Securities Act of 1933, as amended. The Company
-----------------------------------------------------
agrees that the Shares shall be deemed "registrable securities" or otherwise
entitled to "piggy back" registration rights in accordance with the terms of the
following agreement between the Company and its investors (the "Agreement")
_____________________. The Company agrees that no amendments will be made to
the Agreement which would have an adverse impact on Holder's registration rights
thereunder without the consent of Holders. By acceptance of this Warrant,
Holder shall be deemed to be a party to the Agreement, unless Holder elects not
to become or to cease being a party thereto.
ARTICLE IV.
-----------
MISCELLANEOUS
-------------
4.1. Term; Notice of Expiration. This Warrant is exercisable, in whole or
--------------------------
in part, at any time and from time to time on or before the Expiration Date set
forth above.
4.2. Legends. This Warrant and the Shares (and the securities issuable,
-------
directly or indirectly, upon conversion of the Shares, if any) shall be
imprinted with a legend in substantially the following form:
THIS SECURITY HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE SOLD, PLEDGED OR
OTHERWISE TRANSFERRED WITHOUT AN
EFFECTIVE REGISTRATION THEREOF UNDER
SUCH ACT OR PURSUANT TO RULE 144 OR AN
OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE CORPORATION AND ITS
COUNSEL THAT SUCH REGISTRATION IS NOT
REQUIRED.
5
4.3 Compliance with Securities Laws on Transfer. This Warrant and the
-------------------------------------------
Shares issuable upon exercise of this Warrant may not be transferred or assigned
in whole or in part without compliance with applicable federal and state
securities laws by the transferor and the transferee (including, without
limitation, the delivery of investment representation letters and legal opinions
reasonably satisfactory to the Company, as reasonably requested by the Company).
The Company shall not require Holder to provide an opinion of counsel if the
transfer is to an affiliate of Holder or if there is no material question as to
the availability of current information as referenced in Rule 144(c), Holder
represents that it has complied with Rule 144(d) and (e) in reasonable detail,
the selling broker represents that it has complied with Rule 144(f), and the
Company is provided with a copy of Holder's notice of proposed sale.
4.4 Transfer Procedure. Subject to the provisions of Section 4.3, Holder
------------------
may transfer all or part of this Warrant or the Shares issuable upon exercise of
this Warrant by giving the Company notice of the portion of the Warrant being
transferred setting forth the name, address and taxpayer identification number
of the transferee(s) and surrendering this Warrant to the Company for reissuance
to the transferee(s) (and Holder, if applicable). Unless the Company is subject
to the periodic reporting requirements of Section 12(g) or 15(d) of the
Securities Exchange Act of 1934, as amended, the Company shall have the right to
refuse to transfer any portion of this Warrant or the Shares to any person who
directly competes with the Company and/or its subsidiaries.
4.5 Notices. All notices and other communications from the Company to the
-------
Holder, or vice versa, shall be deemed delivered and effective when given
personally or mailed by first-class registered or certified mail, postage
prepaid, at such address as may have been furnished by the Company or the
Holder, as the case may be, in writing by the Company or the Holder from time to
time.
4.6 Waiver. This Warrant and any term hereof may be changed, waived,
------
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought.
4.7 Attorneys' Fees. In the event of any dispute between the parties
---------------
concerning the terms and provisions of this Warrant, the party prevailing in
such dispute shall be entitled to collect from the other party all costs
incurred in such dispute, including reasonable attorneys' fees.
4.8 Governing Law. This Warrant shall be governed by and construed in
-------------
accordance with the laws of the State of California, without giving effect to
its principles regarding conflicts of law.
FIRSTAMERICA AUTOMOTIVE, INC.
By: _________________________
6
Name:
------------------------------
(Print)
Title:
------------------------------
7
APPENDIX 1
NOTICE OF EXERCISE
1. The undersigned hereby elects to purchase _______ Shares of the Common
Stock of FirstAmerica Automotive, Inc. pursuant to the terms of the attached
Warrant, and tenders herewith payment of the purchase price of such Shares in
full.
1. The undersigned hereby elects to convert the attached Warrant into
Shares in the manner specified in the Warrant. This conversion is exercised
with respect to ____________________ of the Shares covered by the Warrant.
[STRIKE PARAGRAPH 1 THAT DOES NOT APPLY.]
2. Please issue a certificate or certificates representing said Shares in
the name of the undersigned or in such other name as is specified below:
---------------------------
(Name)
---------------------------
---------------------------
(Address)
3. The undersigned represents it is acquiring the Shares solely for its
own account and not as a nominee for any other party and not with a view toward
the resale or distribution thereof except in compliance with applicable
securities laws.
---------------------------
(Signature)
Date:
-------------------
SCHEDULE 11
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT ("Agreement") dated as of July 17, 1997,
is by and between AMESBURY GROUP, a California general partnership ("Seller"),
and BAY AUTOMOTIVE PROPERTIES, a California limited liability company or nominee
("Buyer"), and is made with reference to the following facts:
RECITALS
A. Seller is the owner of that certain real property commonly known as
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Real
Property") which is more particularly described on Exhibit A attached hereto.
---------
B. Concurrently herewith, Seller and Buyer have entered into that certain
Asset Purchase Agreement dated as of July 17, 1997 in the form of Exhibit B
---------
hereto (the "Asset Purchase Agreement") whereby Golden Sierra Auto Group, a
California corporation, dba Capitol Nissan ("Golden Sierra"), is to sell to
Buyer certain of the assets, properties and business of Golden Sierra utilized
in connection with Golden Sierra's Nissan automobile dealership.
C. By this Agreement, Seller desires to sell Seller's rights, title and
interest in and to the Real Property and certain personal property and Buyer
desires to purchase all of Seller's rights, title and interest in and to the
Real Property and such personal property on the terms and conditions herein set
forth.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
AGREEMENT
---------
ARTICLE I
PURCHASE AND SALE OF PROPERTY
Section 1.1 SALE. Seller hereby agrees to sell to Buyer, and Buyer agrees
to purchase from Seller, subject to the terms, covenants and conditions set
forth herein, the Property, together with any and all easements and other
appurtenances thereto owned by Seller, located in the City of San ▇▇▇▇, together
with the personal property owned by Seller ("the "Personal Property"), if any,
located on the Real Property and used exclusively in the operation or
maintenance of the Real Property, as the same may be further described in any
list which is in Seller's possession and is furnished to Buyer within the Due
Diligence Period, as defined in Section 3.1 hereof. The Real Property and the
Personal Property are collectively referred to herein as the "Property." The
Real Property shall include, without limitation, the land described on Exhibit A
attached
1
EXHIBIT C
PRO-FORMA TITLE POLICY
[To Follow]
2
EXHIBIT D
GENERAL ASSIGNMENT
THIS GENERAL ASSIGNMENT (the "Assignment") dated as of ________________,
1997, is between AMESBURY GROUP, a California general partnership ("Assignor"),
and BAY AUTOMOTIVE PROPERTIES, a California limited liability company
("Assignee").
A. Assignor and Assignee have entered into that certain Purchase and Sale
Agreement dated as of July 17, 1997 (the "Agreement"), pursuant to which
Assignee agreed to purchase the Property from Assignor and Assignor agreed to
sell the Property to Assignee, on the terms and conditions contained therein.
Unless otherwise set forth herein, all initially capitalized terms shall have
the meaning set forth in the Agreement. Pursuant to the Agreement, Assignor has
agreed to assign to Assignee all of its right, title, and interest in and to all
current licenses, permits, certificates of occupancy, approvals and entitlements
issued or granted in connection with the Real Property as well as any and all
development rights and any other intangible rights, interests or privileges
relating to, or used in connection with the Real Property and all transferable
warranties or sureties relating to the Real Property or Personal Property
(collectively, the "Intangible Property").
B. Assignor has entered into the contracts listed on Exhibit D-1 hereto
relating to the Property (the "Contracts").
C. Assignor desires to assign to Assignee its interest in the Contracts and
the Intangible Property, and Assignee desires to accept the assignment thereof
and assume the obligations thereunder, on the terms and conditions below.
ACCORDINGLY, the parties hereby agree as follows:
1. Assignment. As of the date on which the Property is conveyed to
----------
Assignee pursuant to the Agreement (the "Closing Date"), Assignor hereby assigns
without recourse or warranty of enforceability all of its right, title and
interest in and to the Contracts and the Intangible Rights.
2. Assignor's Indemnity. Except as otherwise set forth herein, or in
--------------------
the Agreement, Assignor hereby agrees to indemnify Assignee against and hold
Assignee harmless from any and all liabilities, losses, damages, claims, costs
or expenses, including, without limitation, reasonable attorneys' fees and costs
(collectively, "Claims"), originating prior to the Closing Date and arising out
of Assignor's obligations under the Contracts.
3. Assumption. Concurrently with the conveyance of Assignor's interest
----------
in the Property to Assignee, Assignee hereby assumes all of Assignor's
obligations under the Contracts and the General Intangibles, and agrees to
indemnify Assignor against and hold Assignor harmless from any and all Claims
originating on or subsequent to the Closing Date and arising out of Assignee's
obligations under the Contracts.
4. Miscellaneous.
-------------
(a) In the event of any dispute between Assignor and Assignee
arising our of the obligations of Assignor under this Assignment or concerning
the meaning or interpretation of any provision contained herein, the losing
party shall pay the prevailing party's costs and expenses of such dispute,
including, without limitation, reasonable attorneys' fees and costs.
(b) This Assignment shall be binding on and inure to the benefit
of the parties hereto and their respective successors and assigns.
(c) This Assignment may be executed in any number of
counterparts, each of which shall be deemed an original but all of which taken
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, this Assignment is entered into as of the
date first above written.
ASSIGNOR: AMESBURY GROUP,
a California general partnership
By: ______________________________
Its: ______________________________
ASSIGNEE: BAY AUTOMOTIVE PROPERTIES,
a California limited liability company
By: ______________________________
Its: ______________________________
By: ______________________________
Its: ______________________________
EXHIBIT E
GRANT DEED
[To Follow]
EXHIBIT F
▇▇▇▇ OF SALE
For value received, the undersigned Vendor hereby sells, assigns and transfers
to BAY AUTOMOTIVE PROPERTIES, a California limited liability company, as Vendee,
all right, title, and interest of the Vendor in and to the following property:
that certain Personal Property, as that term is defined in that certain Purchase
and Sale Agreement between Vendor and Vendee dated as of July 17, 1997.
WITNESSETH the hand and seal of the Vendor this _______ of July, 1997
VENDOR:
AMESBURY GROUP,
a California general partnership
By: ________________________________
Its: ________________________________
By: ________________________________
Its: ________________________________
EXHIBIT G
ENVIRONMENTAL REPORT
[To Follow]
EXHIBIT H
▇▇▇▇▇▇▇▇▇ REPORT
[To Follow]
EXHIBIT I
ASSESSMENT LEIN
JULY 11, ▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇. ▇▇-▇▇▇▇▇ (▇▇▇▇▇▇▇ EXPRESSWAY AUTO MALL)
216AS ASSESSMENT SPREAD
CONSTRUCTION CONSTRUCTION CONSTRUCTION
AREA FRONTAGE CONTINGENCY TOTAL
ASSMT. NO. APN PROPERTY OWNER (Acres) (Feet) (By Area) (By Const.)
---------- ----------- ------------------------------------ --------- -------------- ------------- ------------ -------------
1 459-03-002 AMESBURY GROUP (NISSAN) 0.65 17,154.76 1,199.46 18,354.22
2 459-03-003 AMESBURY GROUP (NISSAN) 0.67 17,682.59 1,236.37 18,918.96
3 459-03-004 AMESBURY GROUP (NISSAN) 3,587 94,667.84 6,619.20 101,287.04
4 459-04-003 ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ (FORD) 4.5 118,783.67 8,303.98 127,087.65
5 459-04-004 ▇▇▇▇▇▇ ▇▇▇▇▇ (VOLKSWAGON) 4.62 121,930.70 8,525.42 130,456.12
6 459-04-006 ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ (FORD) 2,091 15,345.88 1,072.98 16,418.87
7 459-04-005 A. & ▇. ▇▇▇▇▇▇ (LINCOLN MERCURY) 3,287 86,222.43 6,028.69 92,251.12
8-a ▇▇▇-▇▇-▇▇▇ M. & E. CARL (CHEVROLET) 5,717 150,882.65 10,549.75 161,432.40
8-b ▇▇▇-▇▇-▇▇▇ M. & E. CARL (CHEVROLET) 3,746 27,491.94 1,922.24 29,414.18
9 459-05-019 TOYOTA MOTOR DISTRIBUTORS 4,662 123,039.17 8,602.93 131,642.09
10 459-05-018 ▇. ▇▇▇▇ (BUICK) 3,922 103,509.14 7,237.38 110,746.52
11 459-05-017 GMAC 2,928 77,275.56 5,403.12 82,678.68
12 459-05-016 ▇. ▇▇▇▇▇▇▇ (HONDA) 4,941 130,402.51 9,117.77 139,520.28
13 459-27-014 EASTSIDE UNION HIGH SCH. DIST. 6.6 249,186.72 17,423.19 266,609.91
14 459-27-010 ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (VACANT) 6,066 133,701.50 9,348.44 143,049.94
15 459-27-003 ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (MITSUBISHI) 3,785 99,893.45 6,864.57 106,678.02
16-a ▇▇▇-▇▇-▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (AUTO SERVICE) 1,181 31,168.87 2,179.33 33,348.20
16-b ▇▇▇-▇▇-▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (AUTO SERVICE) 2.67 19,595.16 1,370.10 20,965.26
17 459-27-002 TOYOTA MOTOR DISTRIBUTORS 0.67 17,682.59 1,236.37 18,918.96
18 459-06-015 ▇. ▇▇▇▇▇▇▇▇▇ (CHRYSLER PLYMOUTH) 5,796 152,967.61 10,696.53 163,663.14
19 459-06-044 ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (MAZDA) 2.65 69,938.61 4,890.12 74,828.73
20 459-06-043 ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (OLDSMOBILE) 5,325 140,537.01 9,826.38 150,363.39
21 459-06-038 ▇▇▇▇▇▇▇▇▇ ENTERPRISES LLC (DODGE) 5 131,959.64 9,226.65 141,195.29
--------- -------------- ------------- ------------ -------------
84,044 2,131,000.00 149,000.00 2,280,000.00
75,537 2,131,000.00 149,000.00
*50% of cost for new signal at ▇▇▇▇▇▇ Auto Mall Plaza assessed to parcel 13 only.
*70% of construction cost assessed to all parcels except parcels 6, 8b and 16b.
*30% of construction cost assessed to all parcels including parcels 6, 8b and 16b.
LAND & D&C D&C D&C DISTRICT
ACQUISITION MANAGEMENT MANAGEMENT MANAGEMENT FINANCING ASSESSMENT ANNUAL
CONTINGENCY TOTAL TOTAL ASSESSMENT
(By Const.) (By Const.) (By Const.) (25 YEARS)
----------------------------------------------------------------------------------------------------
6,143.03 450.81 6,593.83 8,057.34 33,005.39 2,832.21 NISSAN
6,332.04 464.68 6,796.72 8,305.26 34,020.94 2,819.35 NISSAN
33,900.06 2,487.75 36,307.01 44,464.12 182,138.98 15,629.44 NISSAN
42,528.65 3,120.96 45,649.61 55,701.59 228,498.85 19,607.60 FORD
43,662.75 3,204.18 46,668.94 57,269.10 234,592.16 20,130.47 VOLKSWAGON
5,495.28 403.27 6,698.65 7,207.74 29,525.15 2,533.57 FORD
30,875.80 2,285.62 33,141.62 40,497.43 165,690.17 14,235.12 LINCOLN MERCURY
54,030.29 3,965.01 57,995.30 70,867.41 290,295.10 24,910.37 CHEVROLET
9,844.72 722.45 10,567.18 12,912.57 52,893.93 4,538.86 CHEVROLET
44,059.68 3,233.31 47,293.00 57,789.72 236,724.81 20,313.48 TOYOTA
37,066.08 2,720.00 38,786.17 48,616.76 199,149.45 17,000.12 BUICK
27,871.98 2,030.70 29,702.66 36,295.22 148,676.59 12,758.01 VACANT
46,696.46 3,426.61 50,123.27 61,248.10 250,691.74 21,529.16 HONDA
89,232.47 8,648.31 95,780.78 117,039.41 479,430.11 41,140.15 NEW AUTO MALL PLAZA
47,877.61 3,513.51 51,391.32 62,787.67 257,236.83 22,073.81 VACANT
35,771.32 2,625.07 38,396.40 46,918.51 192,192.93 16,492.17 MITSUBISHI
11,161.41 819.08 11,980.49 14,639.57 59,966.26 5,145.91 AUTO SERVICE
7,016.93 514.94 7,531.86 9,203.57 37,700.69 3,235.12 AUTO SERVICE
8,332.04 464.68 6,796.72 8,305.26 34,020.94 2,919.35 TOYOTA
54,776.90 4,019.80 58,796.70 71,846.68 294,308.53 25,254.80 CHRYSLER PLYMOUTH
25,044.65 1,837.90 26,882.65 32,849.16 134,560.44 11,546.70 MAZDA
50,325.57 3,693.14 54,018.71 66,009.21 270,390.31 23,202.33 OLDSMOBILE
47,254.06 3,467.73 50,721.70 81,979.54 253,087.62 21,786.23 DODGE
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763,100.00 56,000.00 819,100.00 1,000,900.00 4,100,000.00
763,100.00 56,000.00 1,000,900.00
NOTICE TO TRANSFEREE (BUYER): You are required by law to retain this
certificate until the end of the fifth tax year following the tax year in which
the transfer takes place and make the Certificate available to the Internal
Revenue Service if requested to do so during that period.
LIST OF EXHIBITS
Schedule 1 Listing of Due Diligence Materials
Exhibit A Description of Property
Exhibit B Asset Purchase Agreement
Exhibit C Pro-Forma Title Policy
Exhibit D General Assignment
Exhibit E Grant Deed
Exhibit F Form of ▇▇▇▇ of Sale
Exhibit G Environmental Report
Exhibit H ▇▇▇▇▇▇▇▇▇ Report
Exhibit I Assessment Lien
Exhibit J Certificate of Transferor Other Than an Individual (FIRPTA
Affidavit)