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EXHIBIT 10.(1)
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ASSET PURCHASE AGREEMENT
BETWEEN
▇▇▇▇▇▇ AUTOMOTIVE GROUP, INC.
AND
SOUTHSIDE ACQUISITION COMPANY, INC.
DATED AS OF AUGUST 31, 2000
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TABLE OF CONTENTS
PAGE
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ARTICLE I. DEFINITIONS..........................................................................................8
1.1. Definitions...................................................................................8
1.2. Interpretation...............................................................................12
ARTICLE II. SALE AND PURCHASE OF ACQUIRED ASSETS; ASSUMPTION OF ASSUMED OBLIGATIONS.............................12
2.1. Acquired Assets..............................................................................12
2.2. Assignment of Contracts, Leases and Other Assets.............................................14
2.3. Excluded Assets..............................................................................14
2.4. Assumed Obligations..........................................................................14
2.5. No Other Liabilities or Obligations Assumed..................................................15
ARTICLE III. PURCHASE PRICE AND PAYMENT..........................................................................15
3.1. Consideration................................................................................15
3.2. Payment of the Consideration.................................................................16
3.3. Allocation of Consideration..................................................................16
3.4. Post-Closing Adjustment to Consideration Amount..............................................16
3.5. Proration of Expenses........................................................................17
3.6. Inventory and Personal Property Taxes........................................................17
3.7. Inspection of Real Property..................................................................18
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF SELLER............................................................18
4.1. Due Incorporation, etc.......................................................................18
4.2. Due Authorization............................................................................18
4.3. Consents and Approvals; No Conflicts, etc....................................................18
4.4. No Undisclosed Liabilities...................................................................19
4.5. Title to Properties..........................................................................19
4.6. Real Property................................................................................19
4.7. Employment and Labor Matters.................................................................19
4.8. No Defaults or Violations....................................................................20
4.9. Brokers......................................................................................20
4.10. Inventory Files..............................................................................20
ARTICLE V. REPRESENTATIONS AND WARRANTIES OF PURCHASER.........................................................20
5.1. Due Incorporation............................................................................20
5.2. Due Authorization............................................................................20
5.3. Consents and Approvals; No Conflicts, etc....................................................21
5.4. Brokers......................................................................................21
5.5. Knowledge of Breach..........................................................................21
ARTICLE VI. COVENANTS OF SELLER.................................................................................21
6.1. Fulfillment of Conditions....................................................................21
6.2. Implementing Agreement.......................................................................21
6.3. Conduct of Business Pending Closing..........................................................21
6.4. Access to Information, Premises..............................................................22
6.5. Confidential Information.....................................................................22
6.6. Tax Matters..................................................................................22
6.7. License of Name..............................................................................22
6.8. Non-Competition..............................................................................22
6.9. Credit Due to Customers......................................................................23
ARTICLE VII. COVENANTS OF PURCHASER..............................................................................23
7.1. Fulfillment of Conditions....................................................................23
7.2. Employee Benefits............................................................................23
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7.3. Tax Matters..................................................................................23
7.4. Employee Transfers...........................................................................24
7.5. Cooperation by Continuing Employees..........................................................24
7.6. Confidential Information.....................................................................24
7.7. Retained Receivables.........................................................................24
ARTICLE VIII. CONDITIONS PRECEDENT TO PURCHASER'S PERFORMANCES..................................................24
8.1. Representations, Warranties and Covenants of Seller..........................................24
8.2. ▇▇▇▇ of Sale.................................................................................24
8.3. Litigation...................................................................................24
8.4. Amendment of Assumed Contracts...............................................................24
8.5. Delivery and Form of Documents...............................................................25
ARTICLE IX. CONDITIONS PRECEDENT TO SELLER'S PERFORMANCE......................................................25
9.1. Representations, Warranties and Covenants of Purchaser.......................................25
9.2. ▇▇▇▇ of Sale.................................................................................25
9.3. Litigation...................................................................................25
9.4. Delivery and Form of Documents...............................................................25
ARTICLE X. CLOSING...........................................................................................25
10.1. Closing......................................................................................25
10.2. Deliveries by Seller.........................................................................25
10.3. Deliveries by Purchaser......................................................................26
ARTICLE XI. INDEMNIFICATION...................................................................................26
11.1. Survival.....................................................................................26
11.2. Indemnification by Seller....................................................................26
11.3. Indemnification by Purchaser.................................................................26
11.4. Claims.......................................................................................26
11.5. Notice of Third Party Claims; Assumption of Defense..........................................27
11.6. Settlement or Compromise.....................................................................27
11.7. Payment of Indemnification Obligations.......................................................27
11.8. Exclusive Remedy.............................................................................28
11.9. Insurance or Third Party Indemnification.....................................................28
ARTICLE XII. MISCELLANEOUS.....................................................................................28
12.1. Expenses.....................................................................................28
12.2. Amendment....................................................................................28
12.3. Notices......................................................................................28
12.4. Dispute Resolution...........................................................................29
12.5. Assignment...................................................................................29
12.6. No Third Party Beneficiaries.................................................................29
12.7. Publicity....................................................................................29
12.8. Further Assurances...........................................................................29
12.9. Severability.................................................................................29
12.10. Entire Understanding.........................................................................30
12.11. Applicable Law...............................................................................30
12.12. Counterparts.................................................................................30
EXHIBIT A Form of ▇▇▇▇ of Sale..................................................................................32
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ASSET PURCHASE AGREEMENT
THIS AGREEMENT is made as of the 31st day of August, 2000, by and
between Southside Acquisition Company, Inc., an Arkansas corporation
("Purchaser") and ▇▇▇▇▇▇ Automotive Group, Inc., a Louisiana corporation
("Seller"). Certain capitalized terms used herein are defined in Article I.
WITNESSETH:
WHEREAS, Purchaser wishes to purchase from Seller and Seller wishes to
sell to Purchaser all of the Acquired Assets (defined herein) of the Division
(defined herein), and Purchaser wishes to assume all of the Assumed Obligations
(also defined herein), all upon the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants, agreements and warranties herein contained, the parties agree as
follows:
ARTICLE I.
DEFINITIONS
1.1 Definitions. The following terms shall have the following meanings
for the purposes of this Agreement:
"Accounts Receivable" shall have the meaning provided in Section 2.1
summarized, and mutually agreed to, as set forth in Schedule 2.1.
"Acquired Assets" shall have the meaning provided in Sections 2.1 and
2.2, summarized, mutually agreed to, and as set forth in the appropriate
schedules.
"Affiliate" shall mean, with respect to any specified Person (i) any
other Person which, directly or indirectly, owns or controls, is under common
ownership or control with, or is owned or controlled by, such specified Person,
(ii) any other Person which is a director, officer or partner or is, directly or
indirectly, the beneficial owner of 10 percent or more of any class of equity
securities, of the specified Person or a Person described in clause (i) of this
paragraph, (iii) another Person of which the specified Person is a director,
officer or partner or is, directly or indirectly, the beneficial owner of 10
percent or more of any class of equity securities, or (iv) any relative or
spouse of the specified Person or any of the foregoing Persons, any relative of
such spouse or any spouse of any such relative.
"Agreement" shall mean this Asset Purchase Agreement, including all
exhibits and schedules hereto as it may be amended from time to time in
accordance with its terms.
"Assumed Obligations" shall have the meaning provided in Section 2.4
specifically listed, mutually agreed to, and as set forth in Schedule 4.6.
"Assumed Liabilities" shall be only those specifically listed and
agreed to as set forth in Schedule 4.5.
"▇▇▇▇ of Sale" shall have the meaning provided in Section 8.2.
"Business" shall mean the business of, directly or indirectly, selling
and distributing automotive replacement parts, accessories and supplies and the
operations of Seller's automotive parts stores and distribution centers in
Mississippi, and Louisiana at the locations set forth on Schedule 1.1.
"Business" shall include sales to independent jobbers in Eastern Texas served
out of the Monroe DC location.
"Business Day" shall mean any day of the year other than (i) any
Saturday or Sunday or (ii) any other day on which banks located in Houston,
Texas generally are closed for business.
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"Cash" shall mean all cash on the premise of the automotive parts
stores listed on Schedule 2.1 either in the cash registers or in the safes of
such stores on the Closing Date not to exceed that shown on Schedule 2.1.
"Closing" shall mean the consummation of the transactions contemplated
herein in accordance with Article X.
"Closing Date" shall have the meaning provided in Section 10.1.
"Code" shall mean the United States Internal Revenue Code of 1986, as
amended.
"Confidential Information" shall mean all secrets, confidential
information, customer lists, supplier information, and all other data of or
pertaining to the Division or the Seller, as applicable, or to its financial
affairs or products that is not and has not become ascertainable or obtainable
from public or published information.
"Consideration" shall have the meaning provided in Section 3.1.
"Continuing Employee" shall mean any employee of Seller who works at or
is employed in connection with the Division immediately prior to the Closing,
except those employees who do not accept employment with Purchaser.
"Contract" shall mean any contract, lease, letter agreement,
commitment, understanding, sales order, purchase order, agreement, indenture,
mortgage, note, bond, right, warrant, instrument, plan, permit or license,
whether written or verbal, which is intended or purports to be binding and
enforceable. It being clearly understood that any contracts or contractual
obligations assumed by the Purchaser on behalf of the Seller shall be
specifically listed and agreed to on Schedule(s) 2.2(a)(i)-(v).
"Current Price Sheet" or "Current Manufacturer Price Sheet" shall mean
the most current published price sheet, provided by vendors for the purpose of
establishing acquisition cost, typically referred to as "Blue Jobber" or "WD
Cost". Current in this context shall mean a published price sheet dated no
earlier than January 1, 1998, and generally referred to as "manufacturer blue"
or "WD cost".
"DC" shall mean Monroe distribution center.
"DC Inventory Data File" shall mean the file supplied by the Seller to
the Purchaser containing records of parts supplied by the Monroe Distribution
Center to the customers of the DC.
"Division" shall mean Seller's automotive replacement parts
distribution and sales division operated by Seller in Mississippi and Louisiana
at or through the distribution center and automotive parts stores listed on
Schedule 1.1. and specifically includes sales to all independent "three step"
customers located in Eastern Texas and serviced out of the Monroe Distribution
Center.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
"Excluded Assets" shall have the meaning provided in Section 2.3.
"Exclusive Territory Rights" shall be defined as all rights associated
with the trademarks, trade names, merchandising, marketing, identification, and
promotional rights of any kind or nature, associated with the Alliance
membership, in the Protected Territories.
"Furniture & Fixtures" shall have the meaning provided in Section 2.1
as summarized , mutually agreed to, and set forth in Schedule 2.1(a).
"GAAP" shall mean United States generally accepted accounting
principles at the time in effect.
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"Governmental Authority" shall mean the government of the United States
or any foreign country or any state or political subdivision thereof and any
entity, body or authority exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government.
"Indemnified Person" shall mean the Person or Persons entitled to, or
claiming a right to, indemnification under Article XI.
"Indemnifying Person" shall mean the Person or Persons claimed by the
Indemnified Person to be obligated to provide indemnification under Article XI.
"Information and Records" shall have the meaning provided in Section
2.1.
"Inventories" shall have the meaning provided in Section 2.1.
"Law" shall mean any law, statute, regulation, ordinance, rule, order,
decree, judgment, consent decree, settlement agreement or governmental
requirement enacted, promulgated, entered into, agreed or imposed by any
Governmental Authority.
"Leased Assets" shall mean all assets subject to any of the Real
Property Leases or Personal Property Leases, or otherwise leased by Seller on
behalf of, or used in connection with, the Division.
"Lien" shall mean any mortgage, lien (except for any lien for taxes not
yet due and payable), pledge, security interest, option, lease or sublease,
easement or encumbrance. All liens on Acquired Assets shall be specifically
listed on Schedule 2.1h.
"Loss" or "Losses" shall mean any and all liabilities, losses, costs,
claims, damages, penalties, deficiencies and expenses (including attorneys' fees
and expenses and costs of investigation and litigation). In the event any of the
foregoing are indemnifiable hereunder, the terms "Loss" and "Losses" shall
include any and all attorneys' fees and expenses and costs of investigation and
litigation incurred by the Indemnified Person in enforcing such indemnity.
"Material Adverse Effect" shall mean an effect on the business,
operations, assets, liabilities, results of operations, cash flows or condition
(financial or otherwise) of the Business or Division which is materially
adverse.
"Material Difference" with regard to inventory, shall mean that the
quantity of classified/ranked product in inventory, at either the store level or
DC level, either in aggregate or by individual part number shall not MATERIALLY
exceed that provided to the Purchaser in the DC Inventory Data File or the Store
Inventory Data File (s).
"Non-Qualified Inventory" shall mean those items not referenced in the
DC and Store Inventory Data Files and/or products "not in the current price
sheet". In general, Non-Qualified inventory is not part of the Returned
Inventory or the Retained Inventory, but may be purchased by the Purchaser at
its' discretion at a mutually agreed upon price. Non-Qualified Inventory not
purchased by the Purchaser shall be returned to Seller, and is not considered to
be part of Retained Inventory or Returned Inventory.
"Not in the current price sheet" shall be defined as any item that is
not listed in the current price sheet as provided by the vendor. Current price
sheet in this context shall mean a price sheet dated no earlier than January 1,
1998. Items found to be "not in the price sheet" are specifically included in
the Non-Qualified category.
"Obsolete Items" shall be defined as those items which are referenced
in the DC Inventory and Store Inventory Data File(s), listed in the Current
Price Sheet, and are identified as obsolete, non-returnable, factory only, etc.
These items may be referenced as class 66 in the ▇▇▇▇▇▇ system.
"Other Assets" shall have the meaning provided in Section 2.1.
"Other Contracts" shall have the meaning provided in Section 2.2.
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"Permits" shall have the meaning provided in Section 2.2.
"Person" shall mean any individual, corporation, proprietorship, firm,
partnership, limited partnership, trust, association or other entity.
"Personal Property Leases" shall have the meaning provided in Section
2.2. Personal property leases assumed by the Purchaser shall be specifically
listed, agreed to, and set forth in Schedule 2.2(a)(ii).
"Post-Audit Reserve" shall have the meaning provided in Section 3.4.
"Protected Territory" shall be defined as all of Louisiana and
Mississippi with the exception of Caddo, Bossier, Tangipahoa, Jefferson,
Livingston, and Orleans Parish(s).
"Purchaser" shall have the meaning provided in the preamble.
"Purchaser Indemnified Parties" shall mean Purchaser, its Affiliates
and its officers, directors, employees, and agents provided that in no event
shall Seller be deemed a Purchaser Indemnified Party.
"Qualified Inventory" shall be defined as those parts referenced in the
DC Inventory File and Store Inventory Data File(s), listed in current
manufacturer price sheets, in saleable condition, and returnable to the vendor
under normal business operating practices.
"Real Property Leases" shall have the meaning provided in Section 2.2.
"Related Agreement" shall mean any Contract which is or is to be
entered into at the Closing or otherwise pursuant to this Agreement.
"Required Consents" shall mean any consent, authorization or approval
of, filing or registration with, or cooperation from, any Governmental Authority
or any other Person not a party to this Agreement necessary in connection with
the execution, delivery and performance by Seller of this Agreement and the
Related Agreements or the consummation of the transactions contemplated hereby
or thereby, if any.
"Retained Inventory" shall have the meaning provided in Section 3.4. In
general, Retained Inventory shall be that inventory which remains with the
Purchaser after sending the Returned Inventory and Non-Qualified Inventory back
to Seller. Retained Inventory represents approximately 90% of the initial
Inventory Value.
"Retained Receivable" shall have the meaning provided in Section 2.1.
In general, Retained Receivables shall be those receivables that are rejected by
the Purchaser and retained by the Seller pursuant to Section 2.1.
"Returned Inventory" shall have the meaning provided in Section 3.4. In
general, Returned Inventory shall mean that inventory which will be returned to
Seller subject to the 10% return adjustment allowed by this agreement. Returned
Inventory represents approximately 10% of the initial Inventory Value.
"Seller" shall have the meaning provided in the preamble.
"Seller Indemnified Parties" shall mean Seller, it Affiliates and
officers, directors, employees, agents and representatives.
"Seller Purchase Orders" shall have the meaning provided in Section
2.2.
"Store Inventory Data File(s)" shall mean the file(s) supplied by the
Seller to the Purchaser containing records of parts inventoried and referenced
on the stores computer systems.
"Tax Return" shall mean any report, return or other information
required to be supplied to a Governmental Authority in connection with any
Taxes.
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1.2 Interpretation. The headings preceding the text of Articles
and Sections included in this Agreement and the headings to Schedules attached
to this Agreement are for convenience only and shall not be deemed part of this
Agreement or be given any effect in interpreting this Agreement. The use of the
masculine, feminine or neuter gender or the singular or plural form of words
herein shall not limit any provision of this Agreement. The use of the terms
"including" or "include" shall in all cases herein mean "including, without
limitation" or "include, without limitation," respectively. Reference to any
Person includes such Person's successors and assigns to the extent such
successors and assigns are permitted by the terms of any applicable agreement,
and reference to a Person in a particular capacity excludes such Person in any
other capacity or individually. Reference to any agreement (including this
Agreement), document or instrument means such agreement, document or instrument
as amended or modified and in effect from time to time in accordance with the
terms thereof and, if applicable, the terms hereof. Reference to any Law means
as amended, modified, codified, replaced or re-enacted, in whole or in part, and
in effect on the date hereof, including rules, regulations, enforcement
procedures and any interpretations promulgated thereunder. Underscored
references to Articles, Sections, clauses, Exhibits or Schedules shall refer to
those portions of this Agreement, and any underscored references to a clause
shall, unless otherwise identified, refer to the appropriate clause within the
same Schedule in which such reference occurs. The use of the terms "hereunder,"
"hereof," "hereto" and words of similar import shall refer to this Agreement as
a whole and not to any particular Article, Schedule or clause of or Exhibit or
Schedule to this Agreement.
ARTICLE II.
SALE AND PURCHASE OF ACQUIRED ASSETS;
ASSUMPTION OF ASSUMED OBLIGATIONS
2.1 Acquired Assets. Subject to the terms and conditions of this
Agreement, at the Closing Seller shall sell, assign, transfer and deliver to
Purchaser, and Purchaser shall purchase, acquire and take assignment and
delivery of, all of the assets owned by Seller which are exclusively used or
held for use in the Division, in Section 2.1 as specifically listed and/or
summarized, mutually agreed to, and set forth on the appropriate Schedules,
except for those assets specifically excluded pursuant to Section 2.3 (all of
the assets sold, assigned, transferred and delivered to Purchaser hereunder are
referred to collectively herein as the "Acquired Assets"). The Acquired Assets
include all of Seller's right, title and interest in and to the following
subject to the Assumed Liabilities:
(a) Furniture & Fixtures. All vehicles, machinery, fixtures,
equipment, furniture, supplies, maintenance equipment and supplies,
racks, computers, office equipment, materials and other items of
personal property used exclusively in the Business of every kind and
description (other than the Inventories, which are separately
referenced in Section 2.1 listed, summarized, mutually agreed to, and
as set forth on Schedule 2.1(a) (the "Furniture & Fixtures") excluding
the Alexandria Division Office and Warehouse. Furniture and fixtures
includes but is not necessarily limited to that shown in Schedule 2.1a
and is considered to be all of the fixtures and furniture currently
used by the Division for the sale, storage, display, and distribution
of product sold in the normal course of business.
(b) Inventories. All Qualified Inventories of automotive
replacement parts, accessories and supplies related to the Division
held for resale or return to the manufacturer located in the
distribution center or the automotive parts stores listed on Schedule
1.1 hereto (the "Inventories") and specifically listed and/or
summarized, mutually agreed to, and set forth on Schedules 2.1(c).
Seller shall specifically identify all consignments of
products located in the Division. Consignments shall be considered
Non-Qualified Inventory and specifically excluded from Retained
Inventory and Returned Inventory.
Material Differences. Seller will not enter into or cause any
transaction to occur that would cause a material difference in the
inventory assets of the Business prior to closing. More specifically, a
material difference in the amounts, quality, composition, or
classification of the Acquired Assets as represented in the DC Data
Files and Store Data Files. Material difference with regard to
inventory shall mean that the quantity of classified/ranked product in
inventory, at either the store level or DC level, either in aggregate
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or by individual part number shall not MATERIALLY exceed that provided
to the Purchaser in the DC Inventory Data File or the Store Inventory
Data File(s).
(c) Accounts Receivable. Any and all accounts receivable,
trade receivables, notes receivable and other receivables related to
the Division, mutually agreed, described below, and summarized on
Schedule 2.1c hereto (the "Accounts Receivable");
All Accounts Receivable at stores and warehouse by account,
each on it's own merit. All accounts purchased must be accepted by
local management as a valid account with no significant dispute.
Accounts with the oldest balance in the current month
(September Sales) and/or current status (August Sales) will be
purchased at 100%. Accounts with the oldest balance in the 30 day
column (July Sales) will be purchased at 100%. Accounts with the oldest
balance in the 60 day column (June Sales) or earlier will be purchased
at 100% subject to specific acceptance by Purchaser. Those accounts
rejected by the Purchaser shall be referred to as Retained Receivables.
Accounts commonly referred to as "pay by invoice" will be
purchased with a mutually agreed upon reserve for invoices in dispute.
Purchaser will remit to Seller any amounts collected, on accounts not
accepted by Purchaser or the reserve referenced in this paragraph, and
facilitate collection by Seller. Purchaser agrees to refrain from
opening normal charge accounts with rejected accounts for a period of
180 days.
Notes Receivable assumed by the Purchaser must be agreed to,
secured in a manner acceptable to the Purchaser, and accepted by local
management as a valid account with no significant dispute.
(d) Information and Records. All price lists, marketing
information, sales records, customer lists and files (including
customer credit and collection information), related to the operation
of the Division and all personnel and labor relations records, all
employee benefits and compensation plans and records, which exclusively
relate to the operation of the Division (the "Information and Records")
at the specific request of the Purchaser within thirty (30) days of
closing or if currently stored in an acquired location;
Purchaser agrees to use its best commercially reasonable
efforts to maintain and store information provided under this Section
that may be required by the Seller at a later time. Storage period
shall not exceed legal requirements.
(e) Cash. All Cash of the Division located in the automotive
parts stores listed on Schedule 2.1(e) hereto;
(f) Other Assets. All other assets of Seller related to the
Division (except for Excluded Assets and other than those assets
previously described in this Section 2.1), as mutually agreed and as
set forth on Schedule 2.1f or other appropriate schedules hereto (the
"Other Assets");
(g) Goodwill. All goodwill of the Division; and
(h) All Exclusive Territory Rights related to the Seller's
Alliance Membership in the Protected Territories. All rights of any
kind or nature associated with the Seller's membership interest in the
Alliance as described in Joint Alliance Membership Agreement, including
all rights to the trademark or trade name "Auto Value" including all
merchandising, marketing, promotional and similar rights thereto in the
Protected Territories except as it relates to the sale of automotive
equipment through the existing Alexandria, LA location.
All of such Acquired Assets shall be delivered free and clear of any
Liens, debts, obligations or liabilities and/or legal claims or causes of action
of any kind or nature except (i) Liens specifically listed and set forth on
Schedule 2.1h, (ii) Liens for current taxes not yet delinquent, and (iii) minor
defects in title, none of which materially interferes with the use or sale of
the Acquired Assets.
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2.2 Assignment of Contracts, Leases and Other Assets.
(a) Subject to the terms and conditions of this Agreement and
to the extent the following are assignable, Seller will, as
specifically agreed and accepted by Purchaser, assign and transfer to
Purchaser, effective as of the Closing Date upon execution of the ▇▇▇▇
of Sale (to the extent such Contract or agreement is assignable without
the consent of any third party) or as otherwise provided in Section
2.2, all of Seller's right, title and interest in and to, and Purchaser
will take assignment of the following, specifically listed and agreed
to as set forth in the appropriate schedules:
(i) Real Property Leases. Specific leases of real
property related to the operation of the Division as agreed
to, listed, and specifically set forth on Schedule
2.2(a)(i)(1) (the "Real Property Leases");
(ii) Personal Property Leases. Specific leases of
equipment, machinery, vehicles and other personal property
used in the operation of the Division specifically listed, as
mutually agreed, and set forth on Schedule 2.2(a)(ii) (the
"Personal Property Leases");
(iii) Seller Purchase Orders. All purchase orders and
other Contracts for the purchase by Seller of goods, materials
and/or services (the "Seller Purchase Orders" for goods,
materials or services that are delivered to the Monroe DC or
stores of the Division or services provided at the Monroe DC
or stores of the Division after the Closing Date and accepted
by the Purchaser. Payments for the above shall be specific by
invoice and be forwarded to the same vendor for which the
product was received.
(iv) Other Contracts. other Contracts of the Division
mutually agreed to, specifically listed and set forth on
Schedule 2.2(a)(iv).
(v) Permits. All licenses, certificates, permits,
variances, interim permits, permit applications, approvals,
franchises, rights, code approvals and private product
approvals under any Law applicable to the Business or
otherwise required by any Governmental Authority in connection
with the Business or Division (the "Permits") operating in the
normal course of business and required by the Purchaser to do
business as listed, summarized, and agreed to on Schedule
2.2b.
(i) Anything in this Agreement to the contrary
notwithstanding, this Agreement shall not constitute an agreement to
assign any Contract or Permit or any claim or right or any benefit or
obligation thereunder or resulting therefrom if an assignment thereof,
without the consent of a third party thereto, would constitute a breach
or violation thereof.
If such consent is required for an assignment accepted by the
Purchaser, Seller and Purchaser shall use reasonable efforts to obtain
the consent of any party necessary or advisable for the assignment of
such Contract and other agreement listed in this Section 4.3. In the
event that such consent cannot reasonably be obtained by the parties
and to the extent permitted by the applicable agreement, Purchaser will
perform some or all of Seller's obligation as a subcontractor under
such agreement or Contract or as otherwise agreed prior to closing.
2.3 Excluded Assets. Anything in Sections 2.1 or 2.2 to the
contrary not withstanding, there shall be excluded from the Acquired Assets,
Retained Receivables, Non-Qualified Inventory not purchased by the Purchaser,
all Furniture & Fixtures specifically associated with the Alexandria, LA.
Division Office and warehouse space, (all such assets hereinafter referred to
collectively as the "Excluded Assets").
2.4 Assumed Obligations. At the Closing, to the extent assigned
pursuant to Section 2.2, specifically listed, mutually agreed to, and set forth
on Schedule 4.6, or upon the assignment of such Contract or agreement pursuant
to Section 2.2, Purchaser shall assume, and agree to pay, perform, fulfill and
discharge, the following obligations of Seller (the "Assumed Obligations"):
(a) the obligations of Seller which are required to be
performed, and which accrue, after the Closing Date under the following
Contracts, as specifically listed, mutually agreed to,
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and set forth in the appropriate Schedules: (i) the Real Property
Leases; (ii) the Personal Property Leases; (iii) the Seller Purchase
Orders; (iv) the Other Contracts; and (v) the Permits.
(b) at the Closing and subject to Section 7.4 hereof,
Purchaser shall assume the obligations to pay the salaries of
Continuing Employees during periods after the Closing Date in which
Continuing Employees use vacation accrued prior to the Closing. Seller
shall provide vacation accruals and allow a deduction at closing for
amounts due to employees for time accrued and not used prior to
closing. Unused accrued time shall be listed and set forth in Schedule
4.6a.
2.5 No Other Liabilities or Obligations Assumed. Anything in this
Agreement to the contrary notwithstanding, except as specifically set forth in
Section 2.4, specifically listed, mutually agreed to, and set forth in Schedule
4.5, Purchaser does not assume and shall not be liable in respect of, any debt,
claim, obligation, legal action, claims or causes for action, or other liability
of Seller whatsoever. Obligations or liabilities of the Seller, not specifically
listed and mutually agreed to, are not assumed.
ARTICLE III.
PURCHASE PRICE AND PAYMENT
3.1 Consideration.
(a) Subject to Section(s) 3.2, 3.3, and 3.4,hereof, Purchaser
shall deliver to Seller the following amounts (the "Consideration
(i) the purchase price of the Accounts Receivable at
the end of business on the day immediately preceding the
Closing Date as determined by the books and records of the
Seller and valued as indicated in Section 2.1, for those
accounts listed, agreed to, and set forth in Schedule 2.1c
(ii) the value of the Inventory determined as set
forth in Section 3.1 and Section 3.3 and Section 3.4 (the
"Inventory Value");
(iii) the net book value, as mutually agreed, and set
forth in Schedule 2.1a, of all Furniture & Fixtures and other
fixed assets as determined and mutually agreed to by the
Purchaser and by the Seller, in accordance with their books
and records as of the end of business on the day immediately
preceding the Closing Date and set forth on Schedule 2.1a less
any reserves established for such assets in accordance with
GAAP and mutually agreed to by the parties.
(iv) the amount of any Cash at the end of business on
the day immediately preceding the Closing Date, specifically
listed and set forth on Schedule 2.1e;
(v) the value of any prepaid rent, prepaid expenses
and deposits as determined by Seller in accordance with their
books and records as of the end of the business on the day
immediately preceding the Closing Date, specifically listed in
the appropriate schedules and mutually agreed to by the
parties, net of the prorations and adjustments for vacation
pay, utilities, taxes, and other items described in Section
3.5 and 3.6 below; and
(vi) $1,000.00 (consideration for the goodwill of the
Division and the non-compete covenant set forth in Section
6.8).
(b) (blank)
(c) Seller and Purchaser agree that the Inventory Value shall
reflect the results of a physical inventory count and pricing conducted
and agreed to by the Purchaser and Seller, in their reasonable
discretion, prior to the Closing Date.
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The Inventory Value shall be based on the actual cost of the
Inventory as determined in accordance with GAAP and/or mutually agreed
to by the parties and set forth on the spreadsheet attached hereto as
Schedule 2.1(b)(i); provided, however, that in no event will the cost
of any item in the Inventory be greater than the AutoValue Net Base
Price for such item as determined and published by AutoValue inclusive
of any or all discounts, rebates, or allowances that are available to
the Seller or Purchaser. Items not covered by AutoValue Net Pricing
shall be valued at the lower of the acquisition cost of either Seller
or Purchaser or mutually agreed as indicated in the attached Schedules
2.1(b)(i) The inventory values determined in Schedule 2.1b are based on
the assumption of a valid current jobber price sheet less appropriate
and mutually agreed upon discounts.
3.2 Payment of the Consideration. At Closing, Purchaser will assume the
Assumed Obligations as mutually agreed and specifically set forth on Schedule
4.6 and will deliver by wire transfer of immediately available funds to a bank
account designated in written instructions delivered by Seller to Purchaser at
least 24 hours prior to the Closing an amount equal to the sum of the amounts
described in and determined pursuant to Section 3.1; provided, however, that
Purchaser may elect to retain ten percent (10%) of the Inventory Value. (the
"Holdback Amount") and deliver ninety percent (90%) of the Inventory Value (plus
items (i), (iii), (iv), (v) and (vi)) by wire transfer less Post-Audit Reserve
of an additional 5% of initial inventory value. The Holdback Amount and
Post-Audit Reserve must be fully secured by a Letter of Credit the form and
substance of which is acceptable to Seller. The Holdback Amount shall be paid to
Seller pursuant to the terms of Section 3.4 and the Post-Audit Reserve Amount
shall be paid to the Seller pursuant to the terms of Section 3.4.
Purchaser will deduct at closing, good faith payment advance of fifty
thousand dollars ($50,000), and all other monies owed by Seller to Purchaser as
of closing for product purchases or other obligations as mutually agreed and set
forth on Schedule 3.2.
3.3 Allocation of Consideration. For federal income tax purposes, the
Consideration shall be allocated among the Acquired Assets in accordance with
Schedule 3.3. Seller and Purchaser shall each make all required filings under
Section 1060 of the Code consistent with such allocation and shall not take any
position inconsistent with such allocation in any other of their respective Tax
Returns.
3.4 Post-Closing Adjustment to Consideration Amount.
(a) Inventory Value Errors. In the event the Purchaser or
Seller identifies any errors in the physical inventory conducted
pursuant to Section 3.1, as a result of errors in the package
quantities or size, price sheet errors, corrections for parts on file
but "not in the current price sheet", extension errors, or other
similar calculations or corrections, ("Inventory Value Errors"),
Purchaser or Seller, as applicable, shall notify the other party hereto
as soon as practicable, but no more than eight (8) days after the
Closing Date of such error. The Seller and Purchaser will use
reasonable efforts to agree on the value of the error and a revised
Inventory Value based upon the cost of such Inventory determined
consistent with Section 3.1, Sections 3.4 and Schedules
2.1b(i)(ii)(iii)(iv). If the Inventory Value is greater than the
Inventory Value calculated at Closing, Purchaser shall deliver such
difference to Seller by wire transfer the next business day after the
parties agree on the difference. If the Inventory Value determined by
the parties after correcting the error is less than the Inventory Value
calculated at Closing, then Seller will deduct adjustment from
Post-Audit Reserve. Payment of difference(s) shall not be limited to
the amount of the Post Audit Reserve. Eight days after closing,
Purchaser will release all amounts of the Post-Audit Reserve not in
dispute due to Inventory Value Errors by wire transfer.
Should dispute arise concerning Inventory Value Errors during
the Post Audit period of eight days, Purchaser and/or Seller may extend
the review process for specific issues by line or category by notifying
the other party prior to Post Audit settlement for an additional period
of 22 days. During this period, Purchaser and Seller may continue to
review the issues in dispute at their convenience, under the same
conditions, with all payments for differences being handled by wire
transfer at the end of the review period provided Purchaser has
released and paid the Post Audit reserves due to Seller. Unless
specifically notified during the Post Audit period, neither party shall
have the right to review or adjust the Inventory Value after the Post
Audit period. Notwithstanding the above, Seller agrees to allow a
minimum of 48 hours after computer conversions for the Purchasers
review of potential Non-Qualified products or Inventory Errors. The
adjustments pursuant to this Section 3.4 shall constitute the sole and
exclusive
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recourse and remedy (whether through indemnification or otherwise)
available to the parties hereto with respect to Inventory Value Errors.
(b) Return of Inventory. For a period of 120 days after the
Closing Date, Purchaser may at its expense, return to the Seller up to
10% of the total Inventory Value, hereafter known as Returned
Inventory. Returned Inventory shall be in substantially the same
condition as when purchased by the Purchaser, subject to normal
business practices. The Returned Inventory shall consist of a minimum
of 80% in application parts not normally stocked in the customer
self-service area of a retail parts store. The remaining 20% of the
Returned Inventory shall consist of parts chosen at the discretion of
the Purchaser.
For a period of 120 days, parts inventoried and found to be
"not in the current price sheet" shall be separated, and returned to
the Seller, at its discretion or purchased by the Purchaser at its
discretion. Parts found to be "not in the current price sheet" are not
considered part of the Inventory Value, Returned Inventory, or Retained
Inventory. Notwithstanding this Section, Seller agrees to pay Purchaser
for such product purchased that was included in the Inventory Value and
returned pursuant to this paragraph and Purchaser agrees to pay Seller
for such product retained by the Purchaser pursuant to this paragraph
and not included in the Inventory Value.
Further, approximately 50% of the Returned Inventory shall be
returned to the Sellers Houston location or mutually acceptable
location, within 60 days of closing, subject to normal business
practices, and the remaining amount shall be returned to the Sellers
Houston location or mutually acceptable location, within 120 days of
closing. Purchaser must provide Seller ten (10) Business Days prior
written notice of the items being returned and all information
regarding the delivery thereof. Purchaser will convey to Seller all of
the Returned Inventory and will execute and deliver such instruments of
conveyance, assignment and transfer and take such actions necessary to
convey and transfer to the Seller such Returned Inventory.
On the 120th day after the Closing Date, Purchaser will
deliver to Seller by wire transfer the Holdback Amount less the value
of the Returned Inventory calculated using the same cost amounts
determined by Purchaser and Seller pursuant to Section 3.1. In the
event Purchaser fails to deliver to Seller the adjusted Holdback
Amount, Seller may immediately exercise its rights under and collect on
the Letter of Credit delivered to Seller at Closing.
(c) Post-Audit Reserve. The Post Audit Reserve shall be an
amount equal to 5% of the total Inventory Value. The reserve is for the
sole purpose of reconciling value adjustments as indicated in Section
3.4 and to facilitate the acceptance and handling of, "not in price
sheet" items, Non-Qualified Inventory, and miscellaneous inventory
issues during the inventory and closing process.
3.5 Proration of Expenses. Expenses of the Business (including without
limitation, rents, utilities, employee compensation, accrued vacation pay and
property taxes) shall be prorated and allocated between the parties as of the
close of business on the Closing Date with regard to any of the Assumed
Obligations of the Purchaser. To the extent practical, a reconciliation and
payment shall take place at closing, if required. To the extent, not practical,
reconciliation and payment shall be made within thirty days of closing, if
required.
3.6 Inventory and Personal Property Taxes. All inventory and personal
property taxes for the year in which the Closing occurs will be prorated as of
the Closing Date, with Sellers being charged and credited for all of the same up
to such date and for prior years during Sellers' ownership and the Purchaser
being charged and credited for all of the same on and after such date for the
inventory and personal property allocated to the Business. If the actual amounts
to be prorated are not known as of the Closing Date, the prorations shall be
made on the basis of taxes assessed for the prior calendar year. Purchasers
expressly agree to pay all inventory and personal property taxes and assessments
with regard to the inventory allocated to the Division, and provide Sellers with
evidence of such payment prior to delinquency. In the case of Louisiana
Inventory taxes, proration shall occur as indicated in a related letter of
agreement, based on equity as of the Closing Date.
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3.7 Inspection of Real Property. Seller agrees to allow 90 days for
inspection of premises and agrees to use commercially reasonable best efforts to
remedy any conditions discovered during this period that are materially
different from the condition in which the Seller took possession the property,
normal wear and tear excepted. Purchaser may, at its option and expense, contact
and arrange for an inspection and report on any property described in the Real
Property Leases by an independent heating, ventilation and air conditioning
("HVAC") specialist and/or professional building inspector. Such inspection and
report shall verify that the HVAC at each of the locations is in good working
condition. In the event the inspection and report discloses any defects in the
HVAC or other material building or maintenance issues at any location covered by
the Real Property Leases that would be the tenant's responsibility to repair
under the terms of such Real Property Leases, Seller will use commercially
reasonable best efforts to repair or cause to be repaired any such defect at its
expense. Should Seller fail to use commercially reasonable best efforts to make
requested repairs, Seller shall document pre-existing conditions and defend
Purchaser against unreasonable claims of the Landlord. The provisions of this
section shall survive the Closing for a period of thirty (30) days after the
expiration of the current term of the lease in effect on the Closing Date.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Purchaser as of the date of
this Agreement as follows:
4.1 Due Incorporation, etc. Seller is duly organized, validly
existing and in good standing under the laws of the State of Louisiana, with all
requisite corporate power and authority to own, lease and operate its properties
and to carry on the Business and operate the Division as it is now being owned,
leased, operated and conducted.
4.2 Due Authorization. Seller has full power and authority to
enter into this Agreement and the Related Agreements and to consummate the
transactions contemplated hereby and thereby. The execution, delivery and
performance by Seller of this Agreement and the Related Agreements have been
duly and validly approved by Seller's board of directors, if necessary, and no
other actions or proceedings on the part of Seller are necessary to authorize
this Agreement, the Related Agreements and the transactions contemplated hereby
and thereby. Seller has duly and validly executed and delivered this Agreement.
This Agreement constitutes legal, valid and binding obligations of Seller and
the Related Agreements, upon execution and delivery by Seller, will constitute
legal, valid and binding obligations of Seller in each case enforceable in
accordance with their respective terms except as such enforceability may be
limited by applicable bankruptcy, insolvency, moratorium, reorganization or
similar laws in effect which affect the enforcement of creditors' rights
generally and by equitable limitations on the availability of specific remedies.
4.3 Consents and Approvals; No Conflicts, etc.
(a) Except for the Required Consents set forth on Schedule
4.3, to the Seller's knowledge, no consent, authorization or approval
of, filing or registration with, or cooperation from, any Governmental
Authority or any other Person not a party to this Agreement is
necessary in connection with the execution, delivery and performance by
Seller of this Agreement and the Related Agreements or the consummation
of the transactions contemplated hereby or thereby.
(b) The execution, delivery and performance by Seller of this
Agreement and the Related Agreements do not and will not (i) to the
Seller's knowledge, violate any Law applicable to Seller, any of the
Acquired Assets, the Division or the Business; (ii) to the Seller's
knowledge, violate or conflict with, result in a breach or termination
or constitute a default or give any third party any additional right
(including a termination right) under, permit cancellation or result in
the creation of any Lien upon any of the Acquired Assets under, or
result in or constitute a circumstance which, with or without notice or
lapse of time or both, would constitute any of the foregoing under, any
Contract to which Seller is a party or by
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which Seller or any of its assets or properties related to the Division
are bound; or (iii) violate or conflict with any provision of the
articles of incorporation, bylaws or similar organizational instruments
of Seller.
4.4 No Undisclosed Liabilities. Seller does not have any existing
liability relating to the operation of the Division, and, to the best of
Seller's knowledge, there is no basis for any present or future action, suit,
proceeding, hearing, investigation, charge, complaint, claim or demand against
Seller giving rise to any liability relating to the operation of the Division or
the Business, except (i) the Assumed Liabilities as set forth on the appropriate
schedules, (ii) liabilities set forth on Schedule 4.4 and (iii) liabilities
incurred in the ordinary course of business.
4.5 Title to Properties. Seller has good and valid record and
marketable title to and is the lawful owner of or has a valid leasehold interest
in, the Acquired Assets, free and clear of any Lien, except (i) Liens set forth
on Schedule 2.1h, (ii) Liens for current taxes not yet delinquent, (iii) Liens
imposed by law and incurred in the ordinary course of business for obligations
not yet due to carriers, warehousemen, laborers, materialmen, and the like, and
(iv) minor defects in title, none of which materially interferes with the use of
the Acquired Asset. Seller has the full right to sell, convey, transfer, assign
and deliver the Acquired Assets to Purchaser.
4.6 Real Property.
(a) Schedule 2.2(a) sets forth a true, accurate and complete
list of the Real Property Leases. Seller has delivered to Purchaser a
true, accurate and complete copy of the Real Property Leases.
(b) To the knowledge of Seller, none of the land subject to
the Real Property Leases are subject to a Lien, easement, right-of-way,
building or use restriction, exception, variance, reservation or
limitation as might in any material respect interfere with or impair
the present and continued use thereof in the usual and normal conduct
of the Division.
(c) To the knowledge of Seller, the Real Property Leases are
in full force and effect, valid and enforceable in accordance with its
terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, moratorium, reorganization or similar laws in
effect which affect the enforcement of creditors' rights generally and
by equitable limitations on the availability of specific remedies. The
Real Property Leases have not been amended or modified except as
reflected therein.
(d) Seller has not received any notice of any dispute, claim,
event of default or event which constitutes or would constitute (with
notice or lapse of time or both) a default under any of the Real
Property Leases. All rent and other amounts due and payable with
respect to the Real Property Leases have been paid through the date of
this Agreement.
(e) Seller, without duty or obligation of inspection or
investigation, has no knowledge of any claim, potential claim or causes
for claim, action or cause of action, or liability associated with
hazardous material contamination, storage or disposal on any location
set forth on Schedule 1.1. Upon notification, Seller will use
commercially reasonable best efforts to remedy any issues pursuant to
this Section discovered prior to closing. If Seller is unable or
unwilling to use commercially reasonable best efforts to remedy
disclosed issues, Seller and Purchaser will split the cost of a Phase I
EPA Test, escalating to a Phase II Test. Should either test expose
significant environmental issues, Seller will allow Purchaser to reject
assignment of the lease associated with the property in question and
move store location within 120 days. Notwithstanding anything else in
this agreement, Purchaser shall have no obligation or liability
whatsoever with regard to any property leases where there is a disputed
environmental issue incurred prior to the Closing Date.
4.7 Employment and Labor Matters. To the Seller's knowledge, Seller has
and currently is conducting the Division in full compliance with all Laws
relating to employment and employment practices, terms and conditions of
employment, wages and hours and nondiscrimination in employment. During the past
five years there has been no labor strike, dispute, slow-down, work stoppage or
other labor difficulty actually pending or threatened against or involving
Seller. None of the employees of Seller is covered by any collective bargaining
agreement.
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4.8 No Defaults or Violations.
(a) Seller has not materially breached any provision of, nor
is it in default under any material term of any Contract
related to the operation of the Division to which it is a
party or under which it has any rights or by which it is bound
that would have a Material Adverse Effect on the Division, and
to Seller's knowledge no other party to any such Contract has
materially breached such Contract or is in material default
thereunder.
(b) No notice from any Governmental Authority has been
received by Seller claiming any material violation of any Law.
4.9 Brokers. Seller has not used any broker or finder in connection
with the transactions contemplated hereby and neither Purchaser nor any
Affiliate of Purchaser has or shall have any liability or otherwise suffer or
incur any Loss as a result of or in connection with any brokerage or finder's
fee or other commission of any Person retained by Seller in connection with any
of the transactions contemplated by this Agreement.
4.10 Inventory Files. Seller represents and warrants that information
files referred to as DC Inventory File and Store Inventory File(s) containing
the demand history and quantities of products were complete and reasonably
accurate and with no material difference expected at closing. Seller
acknowledges that this file represents the products qualified by the Purchaser
and subject to the conditions in Section 2.1. Products listed in the DC
Inventory Data File and Store Inventory File(s) shall be referred to hereafter
as part of "Qualified Inventory". File(s) supplied by ▇▇▇▇▇▇ ▇▇▇▇ July 25-27,
2000.
4.11 Seller represents and warrants that the total of all Obsolete
product as defined shall not exceed $75,000. Product found to exceed that amount
shall be considered Non-Qualified Inventory and returned to the Seller. Said
excess product shall not be considered part of the Inventory Value, Retained
Inventory, or Returned Inventory.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF PURCHASER.
Purchaser hereby represents and warrants to Seller, as of the date of
this Agreement, as follows:
5.1 Due Incorporation. Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of Arkansas, with all
requisite corporate power and authority to own, lease and operate its properties
and to carry on its businesses as they are now being owned, leased, operated and
conducted.
5.2 Due Authorization. Purchaser has full power and authority to enter
into this Agreement and the Related Agreements and to consummate the
transactions contemplated hereby and thereby. The execution, delivery and
performance by Purchaser of this Agreement and the Related Agreements have been
duly and validly approved by the board of directors of Purchaser and no other
actions or proceedings on the part of Purchaser are necessary to authorize this
Agreement, the Related Agreements and the transactions contemplated hereby and
thereby. Purchaser has duly and validly executed and delivered this Agreement
and has duly and validly executed and delivered the Related Agreements. This
Agreement constitutes legal, valid and binding obligations of Purchaser and the
Related Agreements, upon execution and delivery by Purchaser, will constitute
legal, valid and binding obligations of Purchaser, in each case enforceable in
accordance with their respective terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, moratorium, reorganization or
similar laws in effect which affect the enforcement of creditors' rights
generally and by equitable limitations on the availability of specific remedies.
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5.3 Consents and Approvals; No Conflicts, etc.
(a) Except as set forth on Schedule 5.3, no consent,
authorization or approval or filing or registration with, or
cooperation from, any Governmental Authority or any other Person not a
party to this Agreement is necessary in connection with the execution,
delivery and performance by Purchaser of this Agreement and the Related
Agreements and the consummation of the transactions contemplated hereby
and thereby.
(b) The execution, delivery and performance by Purchaser of
this Agreement and the Related Agreements do not and will not (i) to
the Purchaser's knowledge, violate any Law applicable to Purchaser or
any of its properties or assets; (ii) to the Purchaser's knowledge,
violate or conflict with, result in a breach or termination of,
constitute a default or give any third party any additional right
(including a termination right) under, permit cancellation of, result
in the creation of any Lien upon any of the assets or properties of
Purchaser under, or result in or constitute a circumstance which, with
or without notice or lapse of time or both, would constitute any of the
foregoing under any Contract to which Purchaser is a party or by which
Purchaser or any of its assets or properties are bound; or (iii)
violate or conflict with any provision of Purchaser's articles of
incorporation or bylaws (or similar organizational instruments).
5.4 Brokers. Purchaser has not used any broker or finder in connection
with the transactions contemplated hereby, and neither Seller nor any Affiliate
of Seller has or shall have any liability or otherwise suffer or incur any Loss
as a result of or in connection with any brokerage or finder's fee or other
commission of any Person retained by Purchaser in connection with any of the
transactions contemplated by this Agreement.
5.5 Knowledge of Breach. Except as set forth on the Schedules attached
to this Agreement, neither Purchaser nor any of its employees or representatives
has actual knowledge of any fact or circumstance that with or without notice,
lapse of time or both, would constitute a breach of any representation of Seller
contained in Article IV of this Agreement.
ARTICLE VI.
COVENANTS OF SELLER
Seller agrees to perform each of the following covenants:
6.1 Fulfillment of Conditions. Prior to the Closing, Seller shall use
its commercially reasonable efforts to cause to be fulfilled the conditions of
Closing as set forth in Article VIII.
6.2 Implementing Agreement. Subject to the terms and conditions hereof,
Seller shall take all action required of it to fulfill its obligations under the
terms of this Agreement and the Related Agreements and shall otherwise use its
commercially reasonable efforts to facilitate the consummation of the
transactions contemplated hereby.
6.3 Conduct of Business Pending Closing.
1. Ordinary Course. Seller shall carry on its business
diligently, in the ordinary course and substantially in the same manner
as heretofore. Seller shall acquire Inventory in accordance with its
ordinary course of business.
2. Business and Goodwill. Seller will use its commercially
reasonable efforts to preserve the operation of the Business and to
preserve for Purchaser the goodwill of Seller's suppliers, customers
and vendors and of others having business relations with Seller.
3. Compliance. Seller will use commercially reasonable efforts
to duly comply with all provisions of contracts, agreements and orders
and with all applicable laws that if violated might impair the conduct
of the Division or have a Material Adverse Effect on the Business.
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4. Material Transactions. Seller will not enter into any
material transaction, contract or commitment in connection with the
operation of the Division other than in the ordinary course of business
or with the written consent of the Purchaser.
6.4 Access to Information, Premises. From the date hereof to the
Closing, Seller shall give to Purchaser, its counsel, accountants, employees and
other representatives, reasonable access after notice during normal business
hours, to review, inspect, investigate and audit all of Seller's properties,
books, contracts, commitments and records directly related to the Division and
furnish the Purchaser with copies of such documents (at Purchaser's expense)
directly related to the Division as the Purchaser may reasonably request.
6.5 Confidential Information. After the Closing Date, Seller shall not
directly or indirectly, disclose or use for its own benefit or for the benefit
of any other Person, any Confidential Information related to the Division.
Seller agrees that upon the request of Purchaser, on or after the date of this
Agreement it will immediately destroy or deliver to Purchaser all papers, books,
manuals, lists, correspondence and documents containing the Confidential
Information related to the Division, together with all copies thereof other than
such materials as shall be necessary to permit the Seller to prepare its Tax
Returns.
6.6 Tax Matters. Seller shall make available to Purchaser such records
as Purchaser may require for the preparation of any Tax Returns or other similar
reports or forms required to be filed by Purchaser and such records as Purchaser
may require for the defense of any audit, examination, administrative appeal or
litigation of any such Tax Return or other similar report or form.
6.7 License of Name. Seller will grant to Purchaser on the Closing Date
an exclusive royalty-free license to use the name "USA Autostores" and the trade
names and trademarks related thereto for a period of five (5) years in the
Protected Territories. Seller shall retain the right to use the name "USA
Autostores" during this period for the existing equipment business located in
Alexandria, LA. Purchaser shall at all times maintain the good reputation of the
name "USA Autostores and the trademarks and trade names related thereto and the
goodwill symbolized thereby. Notwithstanding the foregoing, the Seller may
terminate this license on ten days written notice in the event Purchaser (i)
uses the trade name, trademark or other proprietary information in a manner
reasonably likely, in the Seller's sole determination, to damage the reputation
of such trademark or trade name or the goodwill symbolized thereby or (ii) use
such trade names or trademarks in a manner that might be deemed to create a
unitary composite ▇▇▇▇. Other than as expressly set forth in this Agreement,
Purchaser shall have no right to use the marks, trade names, trademarks or other
proprietary rights of Seller without the prior written approval of Seller.
Purchaser will at no time assert any claim to any goodwill, reputation or
ownership of any trademark, trade name or other proprietary information of
Seller.
6.8 Non-Competition.
(a) Covenant. As a material inducement to Purchaser to
purchase the Acquired Assets, Seller agrees that for a period of five
years from and after the Closing Date, Seller shall not, directly or
indirectly, own, manage, control, or have any interest in any
corporation, partnership, or other entity which carries on a business
which would be competitive with the Business, as operated on the
Closing Date, within the Protected Territories; provided, however, that
nothing in this Section 6.8 shall prevent Seller from collecting the
Retained Receivables or selling the Returned Inventory outside the
Protected Territories. Notwithstanding the above, the Seller will
continue to operate the Equipment Store #94 in Alexandria, La. for the
purpose of repairing and selling equipment and related products.
(b) Severability. Should any court of competent jurisdiction
determine that, consistent with the established precedent of the forum
state, the public policy of such state requires a more limited
restriction in the territory, duration, nature of restricted activity,
or any combination thereof, it would be in furtherance of the
intentions of the parties hereto for the court
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to so interpret and construe the terms of this section to apply to only
such more limited restriction to an appropriate degree.
(c) Injunctive Relief. The parties acknowledge that the remedy
at law for any breach of this agreement would likely be inadequate, and
that in the event of any such breach or threatened breach of the
provisions of this agreement, the non breaching party shall be entitled
to an injunction restraining the other party in order to prevent any
such breach, in addition to, and not exclusive of, any other right or
remedy otherwise available hereunder, at law, or in equity.
6.9 Credit Due to Customers. Prior to closing, Seller will use its best
efforts to issue all credits to customers of the DC for merchandise, stock
lifts, rebates, allowances, discounts, or amounts due to customers incurred
prior to closing. Credits not issued prior to closing (if any) will be issued in
the full amount due to Purchaser or Customer immediately after closing or
deducted from the Post-Audit Reserve. In all cases, Seller retains liability and
obligations for credits incurred to customers prior to closing but not paid or
issued prior to closing. All Credits Due Customer incurred by Seller prior to
closing and not paid shall be listed on Schedule 5.4 and deducted at closing.
With respect to credit due customers of the store group, Seller retains
liability for all credit obligations incurred related to product returns prior
to the Closing Date.
CHAPTER VII
COVENANTS OF PURCHASER
Purchaser agrees to perform each of the following covenants:
7.1 Fulfillment of Conditions. Prior to Closing, Purchaser shall use
commercially reasonable efforts to cause to be fulfilled the conditions to
Closing as set forth in Article IX.
7.2 Employee Benefits. As of the Closing, Purchaser shall cause the
Continuing Employees to be included in all of Purchaser's sponsored employee
benefit plans, including health insurance and long-term disability plans;
provided that such employees will be considered to have been hired by the
Purchaser as of the Closing Date and such Continuing Employees will not receive
credit for past service to Seller for purposes of calculating the amount of any
benefit to which any Continuing Employee may become entitled under any plan that
is an employee benefit pension plan, as well as eligibility for benefits to
which any Continuing Employee may be entitled under any plan that is an employee
welfare benefit plan.
The definition of Continuing Employee does not extend, include, or
transfer in any way, the obligations or liabilities of the Seller to the
Employees, accrued and owing through the Closing Date, including but not limited
to any liability of obligations for the payment of salary or benefits, vacation
or personal leave time, expense reimbursement, severance benefits, retirement
plan contributions, COBRA protection or benefits or any other insurance coverage
or otherwise.
Seller shall timely discharge and pay all of these liabilities to its
employees, including any Continuing Employees to the extent not expressly
assumed by the Purchaser as an Assumed Obligation. Further, it being clearly
understood that all Continuing Employees are considered to be new employees of
the Purchaser with their employment date beginning on the closing date of this
transaction. These Continuing Employees are subject to the normal eligibility,
time in position, and/or service periods required of new employees for inclusion
and participation in the Purchaser's benefit programs beginning employment on
the Closing Date.
7.3 Tax Matters. Purchaser shall make available to Seller such records
as Seller may require for the preparation of any Tax Returns or other similar
reports or forms required to be filed by Seller and such records as Seller may
require for the defense of any audit, examination, administrative appeal or
litigation of any such Tax Return or other similar report or form.
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7.4 Employee Transfers. Prior to the Closing, Purchaser, in it's sole
discretion, shall offer to substantially all of the employees of the Division
employment with the Purchaser. All such offers of employment shall be
conditioned upon the occurrence of the Closing and an undertaking on the part of
full-time employees to spend substantially all of their professional time on the
operation of the Division. Except for accrued but unused vacation pay of
Continuing Employees and as otherwise expressly provided in this Agreement, all
liabilities for salaries, compensation, vacation time, sick time, severance pay
and other benefits accrued for the benefit of employees prior to the Closing
Date shall be the sole responsibility of the Seller and shall not be assumed by
Purchaser. The amount of any vacation pay, as agreed to by the parties, assumed
by Purchaser pursuant to this agreement shall be deducted from the Consideration
at Closing.
7.5 Cooperation by Continuing Employees. Purchaser shall use its
reasonable efforts to cause the Continuing Employees to cooperate with Seller
and assist in the defense (to the extent reasonable) of any claim, suit, action
or proceeding by any third party subject to indemnification under Article XI of
this Agreement.
7.6 Confidential Information. Purchaser shall not, and shall cause its
Affiliates not to, directly or indirectly, disclose or use for their own benefit
or for the benefit of any other Person, any Confidential Information except (i)
in connection with the operation of the Division or the Business, (ii) such
materials as shall be necessary to permit the Purchaser to prepare its Tax
Returns or (iii) Confidential Information transferred to Purchaser pursuant to
this Agreement.
7.7 Retained Receivables. If the Purchaser receives any remittance in
payment of a Retained Receivable it will immediately forward such remittance to
Seller in the form received, properly endorsed to Seller, if appropriate. In
connection with any efforts to collect any of the Accounts Receivable or any
future receivable generated by the Purchaser, Purchaser shall not take any
actions that would reasonably be expected to adversely affect or impair the
Seller's right or ability to collect the Retained Receivables for a period not
to exceed 180 days.
ARTICLE VIII.
CONDITIONS PRECEDENT TO PURCHASER'S PERFORMANCES
The obligation of Purchaser to purchase the Acquired Assets pursuant to
the terms and conditions of this Agreement is subject to the satisfaction, prior
to or at Closing, of each of the following conditions:
8.1 Representations, Warranties and Covenants of Seller. Except for
such changes as are permitted or contemplated by this Agreement, the
representations and warranties of Seller contained in this Agreement shall be
true and correct in all material respects at and as of the Closing Date with the
same force and effect as if made at and as of the Closing Date. Seller shall
have duly performed and complied with in all material respects all covenants and
agreements required by this Agreement to be performed by it prior to or on the
Closing Date. Seller shall have delivered to Purchaser a certificate to the
foregoing effect executed by its president or other authorized officer.
8.2 ▇▇▇▇ of Sale. Seller shall have executed and delivered to Purchaser
a ▇▇▇▇ of Sale, Assignment and Assumption of Liabilities Agreement attached
hereto as Exhibit A ("▇▇▇▇ of Sale").
8.3 Litigation. None of the parties hereto shall be a party to or shall
have received notice of any suit or threatened suit to enjoin or restrain any or
all of the transactions contemplated herein or to nullify or render ineffective
such transactions if accomplished or alleging any damages in connection
therewith.
8.4 Amendment of Assumed Contracts. No amendment or modification shall
have been made to or termination or cancellation effected with respect to any of
the Assumed Contracts, except with the express written consent of Purchaser.
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8.5 Delivery and Form of Documents. Seller shall have delivered to
Purchaser all of the documents required to be delivered by this Agreement on the
Closing Date.
ARTICLE IX.
CONDITIONS PRECEDENT TO SELLER'S PERFORMANCE
The obligations of Seller to sell the Purchased Assets pursuant to the
terms and conditions of this Agreement are subject to the satisfaction, prior to
or at the Closing, of each of the following conditions:
9.1 Representations, Warranties and Covenants of Purchaser. Except for
such changes as permitted or contemplated by this Agreement, the representations
and warranties of Purchaser contained in this Agreement shall be true and
correct in all material respects at and as the Closing Date with the same force
and effect as if made at and as the Closing Date. Purchaser shall have duly
performed and complied with in all material respects all covenants and
agreements required by this Agreement to be performed by it prior to or on the
Closing Date. Purchaser shall have delivered to Seller a certificate to the
foregoing effect executed by its president or other authorized officer.
9.2 ▇▇▇▇ of Sale. Purchaser shall have executed and delivered to Seller
the ▇▇▇▇ of Sale.
9.3 Litigation. None of the parties hereto shall be a party to or shall
have received notice of any suit or threatened suit to enjoin or restrain any or
all of the transactions contemplated herein or to nullify or render ineffective
such transactions if accomplished or alleging any damages in connection
therewith.
9.4 Delivery and Form of Documents. Purchaser shall have delivered to
Seller all of the documents required to be delivered by this Agreement on the
Closing Date.
ARTICLE X.
CLOSING
10.1 Closing. The closing ("Closing") of the sale contemplated herein
shall take place at the offices of Mayor, Day, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P., ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇, at 9:00 a.m. on Monday, September 18,
2000, or at such other time, date or place as the parties may mutually agree
upon. The day on which Closing takes place is herein referred to as the "Closing
Date". The transactions contemplated by this Agreement shall be effective as of
the close of business on the Closing Date.
10.2 Deliveries by Seller. At the Closing, in addition to any other
documents or agreements required under this Agreement, Seller shall deliver to
Purchaser the following:
(a) the ▇▇▇▇ of Sale;
(b) other instruments of transfer reasonably required by
Purchaser to evidence the transfer of the Acquired Assets to Purchaser;
(c) a certificate of the President or other authorized officer
of Seller as required by Section 8.1;
(d) the Acquired Assets; and
(e) evidence of the release of all Liens required to be
released under this Agreement.
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10.3 Deliveries by Purchaser. At the Closing, in addition to any other
documents or agreements required under this Agreement, Purchaser shall deliver
to Seller the following:
(a) the ▇▇▇▇ of Sale;
(b) a certificate of Purchaser's President or other authorized
officer as required by Section 9.1; and
(c) the Consideration and a Letter of Credit, if applicable.
ARTICLE XI.
INDEMNIFICATION
11.1 Survival. The representations and warranties of the parties hereto
contained herein shall survive the Closing for a period of 180 days, except that
the representations and warranties contained in:
(a) Title: Section 4.5 shall be for a period of two (2) years
after the closing date
(b) Environmental Matters. With respect to environmental
matters affecting the Acquired Assets shall survive for a period of 180
days.
11.2 Indemnification by Seller. Seller agrees to indemnify each of the
Purchaser Indemnified Parties against, and agrees to hold each of them harmless
from, any and all Losses incurred or suffered by them relating to or arising out
of or in connection with any and all Losses suffered, sustained, incurred or
required to be paid by any Purchaser Indemnified Party because of or that result
from or arise out of:
(a) the failure to fulfill any agreement or covenant of Seller
contained in this Agreement or in any certificate or other writing
furnished to Purchaser by or on behalf of Seller in connection
herewith; or
(b) the assertion against any Purchaser Indemnified Party of
any liability relating to or arising out of the business, operations or
assets of the Seller prior to the date of this Agreement or the actions
or omissions of the Seller's directors, officers, shareholders,
employees or agents prior to the Closing Date and not expressly assumed
by Purchaser.
11.3 Indemnification by Purchaser. Purchaser agrees to indemnify the
Seller Indemnified Parties against, and agrees to hold each of them harmless
from, any and all Losses incurred or suffered by them relating to or arising out
of or in connection with any of the following:
(a) any breach of or failure by Purchaser to perform any
covenant or obligation of Purchaser set out or contemplated in this
Agreement or any Related Agreement or any document delivered at the
Closing; or
(b) the assertion against any Seller Indemnified Party of any
liability relating to or arising out of the Acquired Assets or Assumed
obligations after the Closing Date.
11.4 Claims. The provisions of this Section shall be subject to Section
11.5. As soon as is reasonably practicable after becoming aware of a claim for
indemnification under this Agreement, the Indemnified Person shall promptly give
notice to the Indemnifying Person of such claim and the amount the Indemnified
Person will be entitled to receive hereunder from the Indemnifying Person;
provided that
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the failure of the Indemnified Person to give notice shall not relieve the
Indemnifying Person of its obligations under this Article XI except to the
extent (if any) that the Indemnifying Person shall have been prejudiced thereby.
If the Indemnifying Person does not object in writing to such indemnification
claim within 30 days of receiving notice thereof, the Indemnified Person shall
be entitled to recover promptly from the Indemnifying Person the amount of such
claim (but such recovery shall not limit the amount of any additional
indemnification to which the Indemnified Person may be entitled pursuant to
Section 11.2 or 11.3), and no later objection by the Indemnifying Person shall
be permitted. If the Indemnifying Person agrees that it has an indemnification
obligation but objects that it is obligated to pay only a lesser amount, the
Indemnified Person shall nevertheless be entitled to recover promptly from the
Indemnifying Person the lesser amount, without prejudice to the Indemnified
Person's claim for the difference.
11.5 Notice of Third Party Claims; Assumption of Defense. The
Indemnified Person shall give notice as promptly as is reasonably practicable to
the Indemnifying Person of the assertion of any claim, or the commencement of
any suit, action or proceeding, by any Person not a party hereto in respect of
which indemnity may be sought under this Agreement; provided that the failure of
the Indemnified Person to give notice shall not relieve the Indemnifying Person
of its obligations under this Article XI except to the extent (if any) that the
Indemnifying Person shall have been prejudiced thereby. The Indemnifying Person
may, at its own expense (a) participate in the defense of any claim, suit,
action or proceeding and (b) upon notice to the Indemnified Person and the
Indemnifying Person's delivering to the Indemnified Person a written agreement
that the Indemnified Person is entitled to indemnification pursuant to Section
11.2 or 11.3 for all Losses arising out of such claim, suit, action or
proceeding and that the Indemnifying Person shall be liable for the entire
amount of any Loss, at any time during the course of any such claim, suit,
action or proceeding, assume the defense thereof, provided that (i) the
Indemnifying Person's counsel is reasonably satisfactory to the Indemnified
Person, and (ii) the Indemnifying Person shall thereafter consult with the
Indemnified Person upon the Indemnified Person's reasonable request for such
consultation from time to time with respect to such claim, suit, action or
proceeding. If the Indemnifying Person assumes such defense, the Indemnified
Person shall have the right (but not the obligation) to participate in the
defense thereof and to employ counsel, at its own expense, separate from the
counsel employed by the Indemnifying Person. If, however, the Indemnified Person
reasonably determines in its judgment that representation by the Indemnifying
Person's counsel of both the Indemnifying Person and the Indemnified Person
would present such counsel with a conflict of interest, then such Indemnified
Person may employ separate counsel (Seller's consent to the choice of counsel is
required, such consent not to be unreasonably withheld) to represent or defend
it in any such claim, action, suit or proceeding and the Indemnifying Person
shall pay the reasonable fees and disbursements of such separate counsel.
Whether or not the Indemnifying Person chooses to defend or prosecute any such
claim, suit, action or proceeding, all of the parties hereto shall cooperate in
the defense or prosecution thereof.
11.6 Settlement or Compromise. Any settlement or compromise made or
caused to be made by the Indemnified Person or the Indemnifying Person, as the
case may be, of any such claim, suit, action or proceeding of the kind referred
to in Section 11.5 shall also be binding upon the Indemnifying Person or the
Indemnified Person, as the case may be, in the same manner as if a final
judgment or decree had been entered by a court of competent jurisdiction in the
amount of such settlement or compromise; provided that no obligation,
restriction or Loss shall be imposed on the Indemnified Person as a result of
such settlement without its prior written consent. The Indemnified Person will
give the Indemnifying Person at least 30 days' notice of any proposed settlement
or compromise of any claim, suit, action or proceeding it is defending, during
which time the Indemnifying Person may reject such proposed settlement or
compromise; provided that from and after such rejection, the Indemnifying Person
shall be obligated to assume the defense of and full and complete liability and
responsibility for such claim, suit, action or proceeding and any and all Losses
in connection therewith in excess of the amount of unindemnifiable Losses which
the Indemnified Person would have been obligated to pay under the proposed
settlement or compromise.
11.7 Payment of Indemnification Obligations. In the event that Seller
or Purchaser is required to make any payment under this Article XI, such party
shall promptly pay the Purchaser Indemnified Party or the Seller Indemnified
Party, as the case may be, the amount of such indemnity obligation.
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11.8 Exclusive Remedy. Following the Closing, the indemnification
provisions set forth in this Agreement shall constitute the sole and exclusive
recourse and remedy (whether through indemnification, contribution or otherwise)
available to the parties hereto with respect to the breach of any
representation, warranty or covenant contained in this Agreement except as set
forth in Section 6.8 or 3.4.
11.9 Insurance or Third Party Indemnification. Notwithstanding anything
to the contrary herein, an Indemnifying Person shall not be liable for a Loss
arising out of or in connection with any matter described in this Article XI if
and to the extent such Loss is covered by a policy of insurance or benefits from
a right to indemnification from a Person not a party to this Agreement and
payment is made under such policy to the Indemnified Person by the insurer or
under such right to indemnification by such Person, as applicable.
ARTICLE XII.
MISCELLANEOUS
12.1 Expenses. Each party hereto shall bear its own expenses, including
all legal and accounting fees, with respect to the transactions contemplated
hereby.
12.2 Amendment. This Agreement may be amended, modified or
supplemented, but only in writing signed by Purchaser and Seller.
12.3 Notices. Any notice, request, instruction or other document to be
given hereunder by a party hereto shall be in writing and shall be deemed to
have been given (a) when received if given in person or by courier or a courier
service, (b) on the date of transmission if sent by telex, facsimile or other
wire transmission or (c) five Business Days after being deposited in the mail,
certified or registered, postage prepaid:
IF TO PURCHASER, ADDRESSED AS FOLLOWS:
SouthSide Acquisition Company, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Telephone No.: ▇▇▇ ▇▇▇ ▇▇▇▇ ________
Facsimile No.: ▇▇▇ ▇▇▇ ▇▇▇▇
With a copy to:
Friday, ▇▇▇▇▇▇▇▇, & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: A. Wyckliff ▇▇▇▇▇▇, Jr.
FAX: ▇▇▇-▇▇▇-▇▇▇▇
IF TO SELLER, ADDRESSED AS FOLLOWS:
▇▇▇▇▇▇ Automotive Group, Inc.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chief Executive Officer
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
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with a copy to:
Mayor, Day, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P.
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other individual or address as a party hereto may designate for
itself by notice given as herein provided.
12.4 Dispute Resolution. Any dispute or claim arising hereunder shall
be settled by arbitration before a single arbitrator to be selected by mutual
agreement of the parties or if the parties cannot agree in twenty days after
notice of the dispute, by the American Arbitration Association ("AAA") as
arbitrator. Any party may commence arbitration by sending a written notice of
arbitration to the other party. The notice will state the dispute with
particularity. The arbitration hearing shall be commenced thirty (30) days
following the date of delivery of notice of arbitration by one party to the
other, by the arbitrator. The arbitration shall be conducted in Dallas, Texas,
in accordance with the commercial arbitration rules promulgated by AAA, and each
party shall retain the right to cross-examine the opposing party's witnesses,
either through legal counsel, expert witnesses or both. The decision of the
arbitrator shall be final, binding and conclusive on all parties (without any
right of appeal therefrom) and shall not be subject to judicial review. As part
of his decision, the arbitrator may allocate the cost of arbitration, including
feels of attorneys and experts, as he or she deems fair and equitable in light
of all relevant circumstances. Judgment on the award rendered by the arbitrator
may be entered in any court of competent jurisdiction.
12.5 Assignment. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns;
provided that no assignment of any rights or obligations shall be made by Seller
without the written consent of Purchaser or by Purchaser without the written
consent of Seller.
12.6 No Third Party Beneficiaries. This Agreement is solely for the
benefit of the parties hereto and, to the extent provided herein, their
respective Affiliates, directors, officers, employees, agents and
representatives, and no provision of this Agreement shall be deemed to confer
upon third parties any remedy, claim, liability, reimbursement, cause of action
or other right.
12.7 Publicity. Except as required by Law or the rules of any stock
exchange, no public announcement or other publicity regarding the transactions
referred to herein shall be made by Seller or Purchaser or any of their
Affiliates, officers, directors, employees, representatives or agents without
the prior written agreement of the other party hereto. Immediately after the
Closing, Seller shall prepare a public announcement or announcements of the
transactions referred to herein, and prior to the release of such announcement
or announcements Purchaser will be given an opportunity to review its form,
content and manner of distribution and to consent to its release, such consent
not to be unreasonably withheld. Nothing in this Section 12.7 shall prevent such
parties from discussing such transactions with those Persons whose approval,
agreement or opinion, as the case may be, is required for consummation of such
particular transaction or transactions.
12.8 Further Assurances. Upon the reasonable request of Purchaser,
Seller will on and after the date of this Agreement execute and deliver to
Purchaser such other documents, releases, assignments and other instruments as
may be required to effectuate completely the transfer and assignment to
Purchaser of, and to vest fully in Purchaser title to, each of the Acquired
Assets, and to otherwise carry out the purposes of this Agreement.
12.9 Severability. If any provision of this Agreement shall be held
invalid, illegal or unenforceable, the validity, legality or enforceability of
the other provisions hereof shall not be affected thereby, and there shall be
deemed substituted for the provision at issue a valid, legal and enforceable
provision as similar as possible to the provision at issue.
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12.10 Entire Understanding. This Agreement and the Related Agreements
set forth the entire agreement and understanding of the parties hereto with
respect to the transactions contemplated hereby and supersede any and all prior
agreements, arrangements and understandings among the parties relating to the
subject matter hereof.
12.11 Applicable Law. This Agreement shall be governed by and construed
and enforced in accordance with the internal laws of the State of Texas without
giving effect to the principles of conflicts of law thereof.
12.12 Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
[signature page follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
and delivered as of the date first above written.
SOUTHSIDE ACQUISITION COMPANY, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
-------------------------
Title: Secretary
------------------------
▇▇▇▇▇▇ AUTOMOTIVE GROUP, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------
Title: Chief Executive Officer
------------------------
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▇▇▇▇ OF SALE, ASSIGNMENT AND
ASSUMPTION OF LIABILITIES AGREEMENT
THIS ▇▇▇▇ OF SALE, ASSIGNMENT AND ASSUMPTION OF LIABILITIES AGREEMENT
("▇▇▇▇ of Sale") is entered into and effective on the 18th day of September,
2000, by and between ▇▇▇▇▇▇ Automotive Group, Inc., a Louisiana corporation
("Seller") and Southside Acquisition Co., Inc., an Arkansas corporation
("Purchaser").
WITNESSETH:
WHEREAS, Purchaser and Seller have entered into an Asset Purchase
Agreement (the "Asset Purchase Agreement") with regard to all of Seller's assets
related to the operation of the Division (as such term is defined in the Asset
Purchase Agreement) pursuant to which Seller has agreed to transfer to
Purchaser, and Purchaser has agreed to acquire, all of Seller's right, title and
interest in and to the Acquired Assets (as such term is defined in the Asset
Purchase Agreement);
NOW THEREFORE, in consideration of the mutual agreements set forth in
the Asset Purchase Agreement the parties hereto, intending to be legally bound,
hereby agree as follows:
SECTION 2. TRANSFER OF ASSETS. For value received, the adequacy and
receipt of which is hereby acknowledged, Seller hereby grants, sells, transfers,
conveys, assigns and delivers to Purchaser, its successors and assigns, to have
and to hold forever, all right, title and interest of Seller in and to the
Acquired Assets; provided, however, that Seller hereby assigns or agrees to
assign certain contracts and agreements subject to all terms, conditions and
limitations set forth in the Asset Purchase Agreement.
SECTION 3. ASSUMPTION OF CERTAIN OBLIGATIONS. Purchaser assumes the
Assumed Obligations as set forth in the Asset Purchase Agreement subject to all
terms, conditions and limitations set forth in the Asset Purchase Agreement
including any limitation on the assignment of certain contracts or agreements.
SECTION 4. FURTHER ASSURANCE. From time to time hereafter and without
further consideration, Seller shall execute and deliver such additional or
further instruments of conveyance, assignment and transfer and take such actions
as Purchaser may reasonably request in order to more effectively convey and
transfer to Purchaser the Acquired Assets sold to Purchaser hereunder or as
shall be reasonably necessary or appropriate in connection with the carrying out
of Seller's obligations hereunder or the purposes of this ▇▇▇▇ of Sale.
SECTION 5. SUCCESSORS AND ASSIGNS. This ▇▇▇▇ of Sale is binding upon,
inures to the benefit of and is enforceable by the parties hereto and their
respective successors and assigns.
SECTION 6. GOVERNING LAW. The validity, interpretation, construction,
enforcement and performance of this ▇▇▇▇ of Sale shall be governed by the
internal laws of the State of Texas, without regard to its conflicts of laws
principles.
SECTION 7. DEFINED TERMS. Capitalized terms that are used herein and
not defined herein shall have the meanings set forth in respect thereof in the
Asset Purchase Agreement.
SECTION 8. COUNTERPARTS. This ▇▇▇▇ of Sale may be executed in
counterparts, each of which when executed by the parties hereto shall be deemed
an original and all of which together shall be deemed the same ▇▇▇▇ of Sale.
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IN WITNESS WHEREOF, the parties hereto have duly executed this ▇▇▇▇ of
Sale as of the date first written above.
▇▇▇▇▇▇ AUTOMOTIVE GROUP, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------
Title: CEO
--------------------------
SOUTHSIDE ACQUISITION CO., INC.
By: /s/ ▇. ▇▇▇▇▇▇▇▇ Lord, Jr.
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Name: ▇. ▇▇▇▇▇▇▇▇ Lord, Jr.
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Title: President
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