Exhibit 2.3
AMENDED AND RESTATED
STOCK PURCHASE AGREEMENT
THIS AMENDED AND RESTATED STOCK PURCHASE AGREEMENT (the "Agreement") is
made and entered into as of the 1st day of November, 1997, by and among
CROSS-CONTINENT AUTO RETAILERS, INC. ("Purchaser"), a Delaware corporation;
THE XXXXXXXX FAMILY TRUST R-501 (the "Seller"); and JRJ INVESTMENTS, INC.
(the "Company"), a Nevada corporation.
RECITALS
A. The Company owns and operates a dealership known as "Xxxxxxxx Motor
Cars," located at 0000 X. Xxxxxxx, Xxx Xxxxx, Xxxxxx (the "Las Vegas
Dealership"), and a dealership known as "Xxxxxxxx BMW," located at 000 Xxxx
Xxxx Xxxxx, Xxxxxxxxx, Xxxxxx (the "Henderson Dealership"); hereinafter
referred to individually as a "Dealership" and collectively as the
"Dealerships."
B. The Company has been granted and operates the following new
automobile manufacturer's franchises at the Las Vegas Dealership:
1. Land Rover,
2. Jaguar,
3. Volkswagen,
4. Audi,
5. Bentley and Rolls Royce, and
6. BMW;
and has been granted a Satellite Location Addendum to its dealer agreement
with BMW to operate a BMW new automobile manufacturer's franchise at the
Henderson Dealership. Pursuant to the Satellite Location Addendum, the
Henderson Dealership is the primary BMW location and the Las Vegas Dealership
will be the satellite location.
C. The Company leases the premises (the "Las Vegas Premises") on which
the Las Vegas Dealership is located pursuant to a lease agreement with JRJ
Properties, a Nevada general partnership (the "Las Vegas Lease").
D. The Company leases the premises (the "Henderson Premises") on which
the Henderson Dealership is located pursuant to a lease agreement with the
Seller (the "Henderson Lease").
E. Seller owns a tract of approximately 2.5 acres (the "2.5 Acre
Tract") adjacent to the Henderson Premises and having an address of 000 Xxxx
Xxxx Xxxxx.
F. The Seller is the owner of all of the issued and outstanding shares
of capital stock of the Company (the "Shares").
G. The parties have renegotiated certain terms and conditions of the
Stock Purchase Agreement, dated October 8, 1997, as amended by an Amendment
to Stock Purchase Agreement, dated October 14, 1997, heretofore entered into
by the parties and wish to set forth in their entirety the renegotiated terms
and conditions and agreements of the Purchaser to purchase and receive from
the Seller and of the Seller to sell to the Purchaser all of the Shares, all
as set forth in this Amended and Restated Stock Purchase Agreement and the
other documents referred to herein.
AGREEMENT
In consideration of the mutual covenants, agreements, representations,
and warranties set forth in this Agreement, Purchaser, Seller, and the
Company agree as follows:
1. PURCHASE AND SALE OF THE SHARES. Subject to and upon the
terms and conditions of this Agreement, at the Closing (hereinafter defined)
Seller shall sell, transfer, convey, assign, and deliver to the Purchaser,
and Purchaser shall purchase, acquire and accept from Seller, all of the
Shares, free and clear of all security interests, liens, claims, agreements,
encumbrances, or restrictions of any kind, whether written or oral.
2. PURCHASE PRICE. The purchase price to be paid by Purchaser
to Sellers for the Shares shall be $18,335,000 (the "Purchase Price"),
subject to the adjustment set forth in Paragraph 3 of this Agreement.
3. ADJUSTMENT TO THE PURCHASE PRICE. In the event the Net Worth
(hereinafter defined) is more or less than $3,000,000, the Purchase Price
shall be increased or decreased by an amount equal to the difference between
$3,000,000 and the Net Worth. As used in this Agreement, the term "Net
Worth" shall mean the net worth of the Company as shown as total
shareholders' equity on the balance sheet of the Company in the Audited
Financial Statements (hereinafter defined) as of September 30, 1997, as
adjusted by the Net Worth Adjustments (hereinafter defined). Within a
reasonable period of time after the date of this Agreement, but no later than
November 30, 1997, Purchaser's accountants shall calculate adjustments to Net
Worth based on the books and records of the Company as of the close of
business on October 31, 1997, using the values for the New Vehicle Inventory
(hereinafter defined), the Used Vehicle Inventory (hereinafter defined), the
Parts and Accessories Inventory (hereinafter defined), and the Tangible
Personal Property (hereinafter defined), as determined in accordance with
subparagraph 12(c), and prepare a letter setting forth the unaudited
adjustments that should be made to the Net Worth (the "Net Worth
Adjustments").
4. PAYMENT OF PURCHASE PRICE. Subject to the provisions of
subparagraph 20(e), with respect to the Deposit Date (as defined in
subparagraph 20(e)) and the provisions of subparagraph
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20(g), with respect to the Closing (as defined in paragraph 5), Purchaser
shall pay the Purchase Price, as adjusted, as follows:
a. $13,575,000, plus or minus the amount of any increase or
reduction in the Purchase Price in accordance with paragraph
3 hereof, by cashier's check or other immediately available
funds (the "Cash");
b. Purchaser shall execute and deliver a promissory note to
Seller in the original principal amount of $2,760,000 (the
"Note"), bearing interest on the unpaid principal at eight
percent (8%) per annum, payable in sixty (60) equal monthly
installments of principal and interest in the amount of
$55,962 per month. The Note shall be in the form of Exhibit
"A" hereto.
c. Purchaser shall issue to Seller 128,205 shares of restricted
common stock (the "Restricted Stock"); provided, however,
that if the closing price for Purchaser's common stock on
the first anniversary of the Closing Date is less than
$15.60 per share, Purchaser shall either (i) issue to Seller
shares of its fully registered, unrestricted common stock
(the "Unrestricted Shares") so that the aggregate value of
the Restricted Shares and the Unrestricted Shares issued to
Seller (based on the closing price for Purchaser's common
stock on the first anniversary of the Closing Date) shall
equal $2,000,000, or (ii) pay to Seller in the form of a
cashier's check or other immediately available funds an
amount equal to the difference between $2,000,000 and the
product of the number of Restricted Shares that are required
to be issued to Seller on the Closing Date times the closing
price for Purchaser's common stock on the first anniversary
of the Closing Date.
Purchaser shall not issue any fractional shares and shall
pay Seller cash in lieu of any fractional shares based on a
price of $15.60 per share or the closing price of
Purchaser's common stock as quoted in THE WALL STREET
JOURNAL on the first anniversary of the Closing Date,
whichever date is applicable.
The certificates representing any Restricted Shares that are
issued to Seller shall bear a restrictive legend that the
stock has not been registered under applicable federal and
state securities laws. It is understood and agreed that,
other than as set forth in the Registration Rights Agreement
referenced in subparagraph 6(a)(viii), Purchaser has no
obligation to register the Restricted Shares that are to be
issued to Seller.
5. CLOSING. Subject to the terms and conditions set forth in
this Agreement, the Closing of the purchase and sale of the Shares shall take
place at the offices of Jones, Jones, Close & Xxxxx, Chartered, 3773 Xxxxxx
Xxxxxx Parkway, Third Floor South, Las Vegas, Nevada 89109, or at such other
place as may be mutually agreed upon by Purchaser and Seller, on January 5,
1998,
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subject to the mutual agreement of the parties to select another date. The
date on which the Closing is to occur is hereinafter referred to as the
"Closing Date."
6. TRANSACTIONS AT CLOSING. The following transactions shall
take place on or before the Closing:
a. DELIVERIES BY SELLER. The Seller shall deliver the
following to the Purchaser:
(i) Stock certificates representing the Shares in duly
transferrable form;
(ii) Such other documents and instruments as Purchaser may
reasonably request in order to vest in Purchaser good
and marketable title to the Shares and to any and all
right, title, interest or claim of any kind that
Seller may have in the properties, assets or business
of the Company;
(iii) A New Las Vegas Lease and a new Henderson Lease
(that includes the 2.5 Acre Track), in the forms of
Exhibits "B," and "C," hereto (collectively, the
"Leases");
(iv) Copies of resolutions of the Board of Directors of
the Company, duly certified by its Secretary, in form
reasonably satisfactory to Purchaser's counsel,
authorizing the execution, delivery and performance
of this Agreement and all other documents to which
the Company is a party as contemplated hereby, and
all actions to be taken by the Company hereunder and
thereunder;
(v) A Seller's certificate in the form of Exhibit "E"
hereto, duly executed by the Seller and the Company;
(vi) An opinion of counsel to the Seller, in the form of
Exhibit "F" hereto;
(vii) An Investment Letter executed by Seller, in the form
of Exhibit "G" hereto;
(viii) A Registration Rights Agreement (the "Registration
Rights Agreement") executed by Seller, in the form
of Exhibit "H" hereto;
(ix) The Management Agreements (referred to in
subparagraphs 20(f) and 20(g);
(x) The Escrow Agreement referenced in subparagraph
20(g);
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(xi) Any instruments and other documents specifically
required by this Agreement, to which Seller or the
Company is a party, that are not otherwise set
forth in this subparagraph 6(a); and
(xii) Any other instruments or documents deemed reasonably
necessary or desirable by the Purchaser in order to
consummate the transactions contemplated hereby.
b. DELIVERIES BY PURCHASER. The Purchaser shall deliver the
following to the Seller:
(i) Subject to the provisions of subparagraphs 20(e)
and 20(g), the Cash, the Note, and a stock
certificate representing the Restricted Shares;
(ii) Copies of resolutions of the Board of Directors of
the Purchaser, duly certified by its Secretary, in
form reasonably satisfactory to Seller's counsel,
authorizing the execution, delivery and performance
of this Agreement and all other documents to which
the Purchaser is a party as contemplated hereby, and
all action to be taken by Purchaser hereunder and
thereunder;
(iii) The Registration Rights Agreement executed by
Purchaser;
(iv) A Purchaser's Certificate in the form of Exhibit "I"
hereto, duly executed by the Purchaser;
(v) An opinion of counsel to the Purchaser, in the form
of Exhibit "J" hereto;
(vi) The Employment Agreements referenced in subparagraph
7(o);
(vii) Any instruments and other documents specifically
required by this Agreement, to which Purchaser is
a party, that are not otherwise set forth in this
subparagraph 6(b); and
(viii) Any other instruments or documents deemed reasonably
necessary or desirable by the Seller in order to
consummate the transactions contemplated hereby.
7. REPRESENTATIONS AND WARRANTIES OF THE SELLER AND THE COMPANY.
The Seller and the Company jointly and severally represent and warrant to
Purchaser, effective as of the date of this Agreement and again on the Closing
Date (unless another date is indicated), each of the following:
a. AUTHORITY AND BINDING AGREEMENT. Seller has the legal power
and capacity to enter into this Agreement and to perform its
obligations hereunder. This
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Agreement has been duly and validly executed and delivered
by Seller and the Company and is a valid and binding
obligation of Seller and the Company (relating to those
certain agreements of the Company contained in this
Agreement), enforceable against Seller and the Company
in accordance with its terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating
to the enforcement of creditors' rights generally and by
general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or
at law). Seller has (i) good and marketable title to the
Shares, free and clear of any security interests, liens,
claims, agreements, encumbrances, or restrictions of any
kind, and (ii) the complete and unrestricted right, power,
and authority to sell, transfer, and assign the Shares in
accordance with this Agreement.
b. ORGANIZATION AND STANDING. Seller is duly formed, validly
existing, and in good standing under the laws of the State
of Nevada and has all necessary power and authority to own
the Shares. The Company is duly incorporated, validly
existing, and in good standing under the laws of the State
of Nevada and has all necessary power and authority to own,
lease, and operate its properties and assets and to conduct
its business as its business is now being conducted. Seller
has delivered to Purchaser complete and accurate copies of
the Company's articles of incorporation and bylaws,
including all amendments thereto and have made available to
Purchaser its minute book and stock records. At Closing,
Schedule 7(b) will set forth a complete and accurate list of
all officers, directors and assumed or fictitious names of
the Company as of the date of this Agreement. The Company
is qualified to do business and is in good standing in each
state in which it transacts business. The Company does not
have any subsidiaries nor any direct or indirect equity
interest in any corporation, partnership, or other entity.
The Company is a "small business corporation" and has
maintained a valid election to be an "S" corporation under
Subchapter S of the Internal Revenue Code of 1986, as
amended.
c. CAPITALIZATION. The authorized capital stock of the Company
consists of 2,500 shares of common stock, having no par
value. On the date hereof, Seller owns beneficially and of
record 100 shares of common stock of the Company, which
comprises the Shares. The Shares (i) constitute all of the
issued and outstanding shares of capital stock of the
Company, (ii) have been validly authorized and issued, (iii)
are fully paid and nonassessable, (iv) have not been issued
in violation of any preemptive rights or of any federal or
state securities laws, and (v) are not subject to any
agreement that relates to the voting or control of any of
the Shares. There are no outstanding subscriptions,
options, rights, warrants, convertible securities, or any
other agreements or commitments obligating the Company to
issue, deliver, or sell any additional shares of its capital
stock of any class or any other securities of any kind.
There are no bonds, debentures,
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notes, or other indebtedness or securities of the Company
having the right to vote on any matters on which the
shareholders of the Company may vote. There are no
outstanding rights, agreements, or arrangements of any
kind obligating the Company to repurchase, redeem, or
otherwise acquire any shares of capital stock or other
voting securities of the Company.
d. NO CONFLICTS. Neither the execution and delivery of this
Agreement nor the fulfillment of or compliance with the
terms and provisions hereof will (i) violate, conflict with,
or result in a breach of the terms, conditions or provisions
of, or constitute a default or an event which, with notice
or lapse of time or both, would constitute a default under,
(y) the articles of incorporation or bylaws of the Company,
or (z) any contract, agreement, mortgage, deed of trust, or
other instrument or obligation to which the Seller or the
Company is a party or by which either of them is bound,
except for agreements between the Company and the respective
manufacturers (or the authorized sales/distributor entities
directly or indirectly owned by the respective
manufacturers) of Land Rover, Volkswagen, Audi, Bentley and
Rolls Royce or BMW (individually, a "Manufacturer" and
collectively, the "Manufacturers"), which require the
consent of the Manufacturer; (iii) other than with respect
to obtaining the consents referenced in subparagraph 7(e)(i)
and (iii), violate any provision of any applicable law or
regulation or of any order, decree, writ or injunction of
any court or governmental body, or (iv) result in the
creation or imposition of any lien, charge, restriction,
security interest or encumbrance of any kind whatsoever on
any property or asset of the Company or on the Shares.
e. CONSENTS. No consent or approval by, or any notification
of or filing with, any governmental entity or agency or any
other person or entity is required in connection with the
execution, delivery or performance of this Agreement by
Seller or the Company, other than consent from (i) the
Nevada Department of Motor Vehicles, (ii) the Manufacturers,
and (iii) if required, the Federal Trade Commission (the
"FTC") and the United States Department of Justice (the
"Justice Department") under the Xxxx-Xxxxx-Xxxxxx Act.
f. REAL PROPERTY. On the Deposit Date (as defined in
subparagraph 20(e), Schedule 7(f) will set forth a complete
and accurate (i) legal description of all real property
owned, or previously owned, by the Company, and (ii)
description of each lease or sublease of real property under
which the Company holds, or previously held, a leasehold
interest. Each of the leases and subleases and subleases
are in full force and effect and constitutes a legal, valid
and binding obligation of the parties thereto. The Company
has performed the covenants required to be performed by it
under each of the leases and subleases to which it is a
party and is not in default under any of the leases or
subleases to which it is a party. To the best of Seller's
and the Company's knowledge, the zoning of each tract of
real property owned, leased or otherwise utilized by the
Company
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permits the presently existing improvements and the
continuation of the business presently being conducted
on such real property. To the best of Seller's and the
Company's knowledge, there are no pending or proposed
changes to such zoning or of any pending or proposed
condemnation action, affecting any real property owned,
leased or otherwise utilized by the Company.
g. TANGIBLE PERSONAL PROPERTY. On the Deposit Date, Schedule
7(g) will set forth a complete and accurate description of
(i) all equipment, furniture, fixtures, and other tangible
personal property (other than inventory) owned by the
Company, and (ii) each lease of personal property under
which the Company holds a leasehold interest. Each of the
leases is in full force and effect and constitutes a legal,
valid, and binding obligation of the parties thereto. The
Company has performed the covenants required to be performed
by it under each of the leases to which it is a party and is
not in default under any of the leases to which it is a
party. To the best of Seller's and the Company's knowledge,
the Tangible Personal Property (hereinafter defined) is in
good repair and operating condition, has been regularly and
properly maintained and fully serviced, and is suitable for
the purposes for which it is presently being used. All
Tangible Personal Property described on Schedule 7(g) shall
be at one or the other of the Dealerships, in good working
order and condition, and free and clear of all liens and
other encumbrances. As used in this Agreement, the term
"Tangible Personal Property" shall mean all tangible
personal property that is listed on the appraisal of
Xxxxxxxx & Xxxxxxx, dated February 14, 1997, together with
that certain schedule of Additions/Deductions to Xxxxxxxx &
Xxxxxxx Appraisal previously agreed to by and between the
Company and Purchaser (the "Appraisal"), adjusted to include
those items of tangible personal property acquired by the
Company and to exclude those items of tangible personal
property disposed of by the Company, in the ordinary course
of business subsequent to the Appraisal, owned by the
Company on the Deposit Date.
h. INVENTORIES. On the Deposit Date, Schedule 7(h) will set
forth a complete and accurate description of the New Vehicle
Inventory (hereinafter defined), Used Vehicle Inventory
(hereinafter defined), and Parts and Accessories Inventory
(hereinafter defined). As used in this Agreement, the term
"New Vehicle Inventory" shall mean all new vehicles and
demonstrators having less than 6,000 miles on the odometer
owned by the Company on the Deposit Date; and the term "Used
Vehicle Inventory" shall mean all used vehicles and
demonstrators having 6,000 miles or more on the odometer
owned by the Company on the Deposit Date; and the term
"Parts and Accessories Inventory" shall mean all parts and
accessories purchased from the Manufacturers or other
reputable suppliers and owned by the Company on the Deposit
Date. To the best of Seller's and the Company's knowledge,
each inventory of the Company consists of goods of a
quality and in quantities that are saleable in the ordinary
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course of the Company's business with normal xxxx-up at
prevailing market prices. All parts and accessories in the
Parts and Accessories Inventory are in returnable condition,
are undamaged parts and accessories, are still in the
original, resalable merchandising package, are in unbroken
lots, are listed for sale in the current dealer parts and
accessories price schedule of each Manufacturer or other
supplier, and were purchased directly from the Manufacturers
or other reliable suppliers.
i. LICENSES AND PERMITS. On the Deposit Date, Schedule 7(i)
will set forth a complete and accurate description of all
permits, licenses, franchises, certificates, and similar
items and rights, owned or held by the Company (hereinafter
collectively referred to as the "Licenses and Permits").
The Licenses and Permits (i) are adequate for the operation
of the Company's business, and (ii) are valid and in full
force and effect, except as set forth on Schedule 7(i).
Other than with respect to obtaining the consents referenced
in subparagraph 7(e), no additional permit, license,
franchise, certificate, or similar item or right is required
by the Company for the operation of its business.
j. INTELLECTUAL PROPERTY. On the Deposit Date, Schedule 7(j)
will set forth a complete and accurate description of all
intellectual property presently in use by the Company, which
intellectual property includes (without limitation) software
patents, trademarks, trade names, service marks, copyrights,
trade secrets, customer lists, inventions, formulas,
methods, processes, advertising materials, Internet sites,
and any other proprietary information or property
("Intellectual Property"). There are no outstanding
licenses or consents to third parties granting the right to
use any Intellectual Property owned by the Company. To the
best of Seller's and the Company's knowledge, no
Intellectual Property used by the Company infringes on any
rights owned or held by any other person or entity, and no
person is infringing on the rights of the Company in any
Intellectual Property used by the Company. Any royalties or
fees payable by the Company to any third party by reason of
the use of any Intellectual Property by the Company is set
forth on Schedule 7(j). No additional Intellectual Property
is required by the Company for the continued operation of
its business, in the manner now conducted.
k. TITLE TO PROPERTIES AND ENCUMBRANCES. Other than with
respect to obtaining the consents referenced in subparagraph
7(e), the Company has good and marketable title to (or, (i)
in the case of leased property, valid and subsisting
leasehold interests in, and (ii) in the case of Intellectual
Property, a valid right to use) all of its properties and
assets, including (without limitation) the properties and
assets that will be listed on Schedules 7(f), 7(g), 7(h),
7(i) and 7(j). The properties and assets of the Company are
subject to no liens, deeds of trust, mortgages,
encumbrances, conditional sales agreements, security
interests, claims, or restrictions of any kind or character,
except for (i) the encumbrances
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that will be listed on Schedule 7(k) to which Purchaser
consents, and (ii) liens for current taxes not yet due and
payable or for taxes the validity of which are being
contested in good faith by appropriate proceedings.
l. FINANCIAL STATEMENTS. The Company has delivered to the
Purchaser copies of balance sheets for the Company dated
August 31, 1997 (the "Balance Sheet Date"), and statements
of income and retained earnings for the periods ending
August 31, 1997 (hereinafter collectively referred to as the
"Financial Statements"). The Financial Statements are
unaudited. To the best of Seller's and the Company's
knowledge, (i) the Financial Statements fairly present the
financial condition of the Company at the dates mentioned
and the results of its operations for the periods specified
and were prepared in accordance with its normal and
customary accounting procedures; and (ii) the balance sheet
in the Financial Statements (y) discloses all of the debts,
liabilities, and obligations of any nature (whether
absolute, accrued, contingent, or otherwise, and whether due
or to become due) of the Company as of the Balance Sheet
Date and (z) includes appropriate reserves for all taxes and
other liabilities accrued or due at such dates but not yet
paid.
m. INDEBTEDNESS FOR BORROWED MONEY AND GUARANTIES. On the
Deposit Date, Schedule 7(m) will set forth a complete and
accurate description of the Company's indebtedness for
borrowed money. Seller has delivered to the Purchaser
complete and accurate copies of all instruments evidencing
or relating to the Company's indebtedness for borrowed
money. To the best of Seller's and the Company's knowledge,
the Company is not in default or violation of any provision
of any agreement evidencing or relating to its indebtedness
for borrowed money. Schedule 7(m) will also set forth a
complete and accurate list of (i) all guaranties by the
Company of any obligation or liability of any person or
entity, including (without limitation) any guaranties of
installment sales contracts or leases, (ii) all warranties
on vehicles that have been sold by the Company for the last
three (3) years for which there is any contingency of
liability for the Company, and (iii) all loans from the
Company to any person or entity.
n. TAX MATTERS. To the best of Seller's and the Company's
knowledge, (i) the Company has filed or will file all
federal, state, local and foreign tax returns and tax
reports required to be filed by it for periods ending on or
prior to the Closing Date; (ii) all such returns and reports
are and will be correct and complete in all material
respects; and (iii) all federal, state, local, and foreign
income, profits, franchise, property, excise, sales, use,
occupation, payroll, employment, and other taxes and
assessments for periods ending on or prior to the Closing
Date that are or will be due and payable by the Company on
or before the Closing have been or will be properly
computed, duly reported, fully paid, and discharged. Seller
has no actual knowledge of any unpaid taxes that require
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payment by the Company, except for current taxes not yet due
and payable. To the best of Seller's and the Company's
knowledge, (i) no issues have been raised in writing with
the Company by the Internal Revenue Service or any other
taxing authority in connection with any tax return or tax
report filed by the Company, and (ii) the Company has not
executed any waiver of the statute of limitations on the
assessment or collection of any tax. Seller agrees to
indemnify and hold harmless the Purchaser with respect to
any income or other tax (and any penalties and interest
payable with respect thereto) reportable and payable by
Seller or the Company which arise from the operation of the
Company prior to the Deposit Date or otherwise payable by
Seller.
o. TRANSACTIONS SINCE THE BALANCE SHEET DATE. Since the
Balance Sheet Date, except as set forth on Schedule 7(o):
(i) other than negotiating three (3) year written employment
agreements to be executed on or before the Closing Date (the
"Employment Agreements") with each of Xxxxx X. Xxxxxxxx,
Xx., Xxxx X. Xxxxxxxx, and Xxxx X. Xxxx (individually, a
"Key Employee" and collectively, the "Key Employees"), the
Company has not incurred any debts, liabilities, or
obligations, except current liabilities in the ordinary
course of business; discharged or satisfied any liens or
encumbrances, or paid any debts, liabilities, or
obligations, except in the ordinary course of business;
mortgaged, pledged, or otherwise subjected to any lien or
other encumbrance any of its properties or assets; canceled
any debt or claim; sold or transferred any properties or
assets, except the Jaguar Assets (hereinafter defined) and
sales from inventory in the ordinary course of business; nor
entered into any transaction other than in the ordinary
course of business; (ii) other than with respect to the
Jaguar Assets, there has not been any material adverse
change in the business, operations, properties, assets,
revenues, earnings, liabilities, or condition (financial or
otherwise) of the Company; (iii) there has not been any
declaration, setting aside or payment of any dividend or
other distribution in respect of, or any direct or indirect
redemption, purchase or other acquisition of, any of the
capital stock of the Company; (iv) the Company has not
issued or sold or contracted to issue or sell any stock,
securities or options, of any nature whatsoever; (v) the
Company has not increased the compensation, commissions,
bonuses, or other remuneration payable to any officer,
director, employee, or to any other person or entity,
whether now or hereafter payable, including any increase
pursuant to any pension, profit-sharing or other plan or
commitment, (vi) there has not been any damage, destruction
or loss (whether or not covered by insurance) affecting any
asset or property of the Company; (vii) the Company has not
made any capital expenditure or capital expenditure
commitment, individually or in the aggregate, in excess of
$25,000.00; (viii) the Company has not made any loan or
advance to any person or entity or guaranteed any obligation
or liability of any person or entity, including (without
limitation) any guaranties of any installment sales
contracts or leases, other than as will be set forth on
Schedule 7(m); (ix) the Company has not given any
indemnifications to any person or
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entity; (x) the Company has not acquired any properties
or assets other than in the ordinary course of business;
(xi) the Company has not made any change in its method of
accounting or accounting practices, including (without
limitation) any change in depreciation or amortization
policies or rates; (xii) the Company has not granted any
waiver or release of any claim or right held by it;
(xiii) except for entering into the Leases, the Company
has not amended or terminated any material contract,
agreement, or license to which it is a party; (xiv) the
Company has not made any material write-down of the value
of any asset of the Company or any material write-off as
uncollectible of any account receivable or note receivable;
(xv) the Company has not changed its past practices in the
acquisition or sale of its new vehicle, used vehicle, or
parts and accessories inventories; and (xvi) the Company
has not agreed, in writing or otherwise, to do or permit
any of the foregoing;
p. LITIGATION. On the Deposit Date, Schedule 7(p) will set
forth a complete and accurate description of all actions,
suits, claims, investigations or legal, administrative or
arbitration proceedings, pending or threatened, whether at
law or in equity, involving the Company or any of its
properties, assets, or business, and all judgments, orders,
decrees, writs or injunctions of any court or governmental
department, commission, agency, instrumentality or
arbitrator applicable to Seller or to the Company. Neither
the Seller nor the Company has any actual knowledge of any
facts that might result in any other action, suit, claim,
investigation, or legal, administrative or arbitration
proceeding.
q. COMPLIANCE WITH LAWS.
(i) To the best of Seller's and the Company's knowledge,
the Company has complied and is in compliance in all
material respects with all federal, state, local and
foreign laws, ordinances, rules, codes, regulations,
and orders (including those related to environmental
protection and occupational safety and health)
applicable to the Company.
(ii) To the best of Seller's and the Company's knowledge,
there are no past or present events, conditions,
circumstances, activities, practices, incidents, plans
or actions, based on or resulting from the conduct of
the business of the Company, including the manufacture,
processing, distribution, use, treatment, storage,
disposal, transport, or handling, or the emission,
discharge, release, or threatened release into the
environment, of any pollutant, contaminant, chemical,
or industrial toxic or hazardous material, substance or
waste, which violates any laws or the regulations
promulgated thereunder currently in effect relating to
pollution or protection of the environment (the
"Environmental Laws"), including (without limitation)
the Comprehensive Environmental Response, Compensation,
and Liability Act ("CERCLA"), or any plan,
12
order, decree, judgment, injunction, notice or demand
letter from a governmental department, commission,
agency or instrumentality applicable to the Company,
or which could give rise to any common law or other
legal liability. To the best of Seller's and the
Company's knowledge, all real property currently or
formerly owned, leased or otherwise utilized by the
Company contains no spill, deposit, or discharge of
any hazardous substance (as that term is currently
defined under CERCLA or any applicable state law), for
which the Company could be liable.
(iii) On the Deposit Date, Schedule 7(q) will set forth a
complete and accurate description of each underground
storage tank of any kind or nature that is located on
any real property currently or formerly owned, leased
or otherwise utilized by the Company. Schedule 7(q)
will also set forth a complete history of each such
underground storage tank, including the dates and
types of all tests.
(iv) The Company has delivered to Purchaser copies of all
existing environmental site audits in the possession
of the Seller or the Company that cover any real
property currently or formerly owned, leased, or
otherwise utilized by the Company.
r. CONTRACTS AND AGREEMENTS. On the Deposit Date, Schedule
7(r) will set forth a complete and accurate description of
all material written or oral contracts and agreements to
which the Company is a party or by which it or any of its
property is bound, unless any such contract or agreement is
set forth on either Schedule 7(f), 7(g), 7(s), 7(t), 7(u) or
7(v). All such contracts and agreements are in full force
and effect and are binding upon the parties thereto, and,
other than with respect to obtaining the consents required
from the Manufacturers, none of the parties thereto are in
breach of any of the provisions thereof.
s. EMPLOYEE BENEFIT PLANS. On the Deposit Date, Schedule 7(s)
will set forth a complete and accurate description of all
pension, retirement, savings, deferred compensation, profit
sharing, stock option, bonus, incentive, severance,
retirement, health, insurance and other employee benefit
plans that are binding upon the Company. To the best of
Seller's and the Company's knowledge, there have been no
material defaults, breaches, or omissions by the Company or
any fiduciary under any of such plans.
t. INSURANCE. On the Deposit Date, Schedule 7(t) will set
forth a complete and accurate description of all insurance,
including (without limitation) property damage insurance,
general liability insurance, worker's compensation, and
group health insurance maintained by the Company and will
summarize the substantive terms of each of the insurance
policies, including (without
13
limitation) whether the insurance policies are "claims
made" or "occurrence" policies. The Company is carrying
insurance that is reasonable in light of the risks
attendant to the business and activities in which the
Company is engaged. All of the insurance is in full
force and effect and will not be affected by, or
terminated or lapse by reason of, the transactions
contemplated by this Agreement.
u. PERSONNEL. On the Deposit Date, Schedule 7(u) will set
forth a complete and accurate list of (i) all current
employees of the Company and all independent contractors
regularly performing services on behalf of the Company,
(ii) their respective rates of compensation, including any
salary, bonus or other payment arrangement made with any of
them, and (iii) any accrued vacation of any employees of the
Company. Except as set forth on Schedule 7(u), the Company
does not have any employment agreements or contracts between
the Company and any person or entity. No employee of the
Company is represented by any union or collective bargaining
agent. The Company is not a party to or bound by any
collective bargaining agreement, nor has the Company
experienced any strikes, grievances, claims of unfair labor
practices, or other collective bargaining disputes. The
Company has not, to the Seller's actual knowledge, committed
any unfair labor practice. Seller has no actual knowledge
of any organizational effort being made or threatened by or
on behalf of any labor union with respect to employees of
the Company within the past five (5) years. To the best of
Seller's and the Company's knowledge, the Company has (i)
paid or has made provision for the payment of all
compensation due any person or entity, (ii) complied in all
material respects with all applicable laws, rules, and
regulations relating to the employment of labor, including
those related to wages, hours, collective bargaining and the
payment and withholding of taxes, and (iii) withheld and
paid to the appropriate governmental authority, or is
holding for payment not yet due to such authority, all
amounts required by law or agreement to be withheld from the
compensation of its employees.
v. ACCOUNTS RECEIVABLE. On the Deposit Date, Schedule 7(v)
will set forth a complete and accurate list of all accounts
receivable and notes receivable of the Company and an aging
analysis of the accounts receivable. To the best of
Seller's and the Company's knowledge, except as set forth on
Schedule 7(v), (i) all accounts receivable and notes
receivable of the Company are valid and enforceable claims,
arose in the ordinary course of business, require no further
performance by the Company, and are collectible without
resort to litigation; and (ii) no material objection, claim,
or offset has been made regarding any of the accounts
receivable or notes receivable. There are and at Closing
there will be no payables or receivables due or owing
between Seller and the Company.
w. BROKERS. Other than Elysium Enterprises, Inc. (the
"Broker"), neither Seller nor the Company has employed,
directly or indirectly, any broker or finder, or
14
incurred any liability for any brokerage fees, commissions,
or finder's fees, and other than the Broker, no broker or
finder has acted directly or indirectly for Seller or the
Company in connection with this Agreement or the
transactions contemplated by this Agreement.
x. DELIVERY OF DOCUMENTS. Complete and accurate copies of all
written instruments listed or described on the Schedules
referenced herein have been or will be furnished to
Purchaser. The Company will make available to Purchaser, to
the extent requested by Purchaser, all books, records, and
facilities of the Company.
y. BANK ACCOUNTS AND POWERS OF ATTORNEY. On the Deposit Date,
Schedule 7(y) will set forth a complete and accurate list of
(i) the names and addresses of all persons holding a power
of attorney on behalf of the Company, and (ii) the account
numbers and names of all banks or other financial
institutions in which the Company currently has an account,
deposit, or safe deposit box, with the names of all persons
authorized to draw on the accounts or deposits or to have
access to the boxes.
z. DISCLOSURE.
(i) To the best of Seller's and the Company's knowledge,
there have been no events, transactions or information
relating to the Company which, singly or in the
aggregate could reasonably be expected to have a
material adverse affect on the business, operations,
properties, assets, revenues, earnings, liabilities, or
condition (financial or otherwise) of the Company. To
the best of Seller's's and the Company's knowledge, no
representation or warranty by Seller or the Company in
this Agreement or in any of the exhibits attached
hereto, or other statement in any other writing
furnished or to be furnished to Purchaser by or on
behalf of Seller or the Company in connection with the
transactions contemplated by this Agreement, contains
or will contain any untrue statement of a material
fact, or omits or will omit to state a material fact
necessary to make the statements contained herein not
misleading.
(ii) Except for the failure to obtain any consent set forth
in subparagraph 7(e), Seller has no actual knowledge,
(i) of any reason why the Company cannot continue its
business in the same manner following the execution of
this Agreement and the Closing as it has been operated
prior thereto, or (ii) at any time in the foreseeable
future the business of the Company shall be materially
adversely affected by any event, except to the extent
that the Purchaser causes the business of the Company
to change following the Deposit Date.
15
8. REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser
represents and warrants to Seller, effective as of the date of this Agreement
and again at Closing, each of the following:
a. INCORPORATION. Purchaser is duly incorporated, is validly
existing, and is in good standing under the laws of the
State of Delaware and has all necessary power and authority
to own, lease, and operate its properties and assets and
to conduct its business as its business is now being
conducted. Purchaser has delivered to Seller complete and
accurate copies of Purchaser's articles of incorporation
and bylaws, including all amendments thereto. The Purchaser
is qualified to do business and is in good standing in each
state in which it transacts business.
b. AUTHORITY AND BINDING AGREEMENT. Purchaser has the
corporate power and authority to enter into this Agreement
and to perform its obligations hereunder. This Agreement
has been duly and validly executed and delivered by
Purchaser and is a valid and binding obligation of
Purchaser, enforceable against Purchaser in accordance with
its terms, except as the enforceability thereof may be
limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to the enforcement
of creditors' rights generally and by general principles of
equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
c. NO CONFLICTS. Neither the execution and delivery of this
Agreement nor the consummation of the transactions
contemplated by this Agreement will (i) violate, conflict
with, or result in a breach of the terms, conditions or
provisions of, or constitute a default or an event which,
with notice or lapse of time or both, would constitute a
default under, (y) the articles of incorporation or bylaws
of the Purchaser, or (z) any contract, agreement, mortgage,
deed of trust, or other instrument or obligation to which
the Purchaser is a party or by which it is bound, (iii)
other than with respect to obtaining the consents referenced
in subparagraph 7(e)(i) and (iii), violate any provision of
any applicable law or regulation or of any order, decree,
writ or injunction of any court or governmental body, or
(iv) result in the creation or imposition of any lien,
charge, restriction, security interest or encumbrance of any
kind whatsoever on any property or asset of the Purchaser or
on the Restricted Shares.
d. BROKERS. Other than the Broker, the Purchaser has not
employed, directly or indirectly, any broker or finder, or
incurred any liability for any brokerage fees, commissions
or finders' fees, and other than the Broker, no broker or
finder has acted directly or indirectly for the Purchaser in
connection with this Agreement or the transactions
contemplated by this Agreement.
16
e. LITIGATION. Purchaser is not a party to any pending or, to
its actual knowledge, any threatened claim, action, suit,
investigation or proceeding, or subject to any order,
judgment or decree, except for matters which in the
aggregate, will not have, or cannot reasonably be expected
to have, a materially adverse effect on the financial
condition of the Purchaser, and none that would affect the
Purchaser's ability to consummate the transactions and
perform its obligations contemplated hereby.
9. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made by the parties in this Agreement or in
any certificate, schedule, statement, document or instrument furnished
hereunder or in connection with the negotiation, execution and performance of
this Agreement shall survive the Closing for a period of three (3) years, and
any claim or cause of action for indemnification under subparagraph 15(a) or
subparagraph 16(a) for breaches of representations or warranties set forth in
this Agreement or in any exhibit or document furnished hereunder may be made
in respect of such matters within three (3) years after the Closing Date;
PROVIDED, HOWEVER, the parties expressly agree that the indemnification
provisions under subparagraph 15(b) and subparagraph 16(b) shall not be
subject to the three (3) year limitation set forth herein. Notwithstanding
any investigation or audit conducted before or after the Closing or the
decision of any party to complete the Closing, each party shall be entitled
to rely upon the representations and warranties set forth herein for the time
period set forth above.
10. SELLER'S OBLIGATIONS PRIOR TO CLOSING. Seller agrees to do
the following prior to the Deposit Date, and thereafter not do or cause the
Company to do any act that would be in violation of any of the following:
a. CONDUCT OF BUSINESS BY THE COMPANY PRIOR TO THE DEPOSIT
DATE. Seller shall cause the Company to conduct its
operations according to the ordinary and usual course of
business reasonably consistent with past and current
practices, to maintain and preserve its business
organization, assets and properties, and vendor and supplier
relationships, and to retain the services of its officers,
employees, agents, and independent contractors, and shall
not, without the prior written consent of Purchaser, allow
the Company to engage in any practice, take any action, or
enter into any transaction outside of the ordinary course of
business. Without limiting the generality of the foregoing,
Seller shall prohibit the Company, without the prior written
consent of Purchaser, from directly or indirectly taking any
of the actions described in subparagraph 7(o).
b. FULL ACCESS. Seller shall cause the Company to permit
Purchaser and representatives of the Purchaser to have full
access to and to examine, at all reasonable times and
places, and in a manner so as not to interfere with the
normal business operations of the Company; the books,
records, properties, assets and operations of the Company.
Such examination shall include access to the officers,
directors, employees, agents and representatives of the
Company. Seller shall cause the Company to furnish to
Purchaser and representatives of
17
Purchaser with such financial, operating and other data
and information, and copies of documents with respect to
the Company, as Purchaser shall from time to time request.
Such access and information shall not in any way affect
or diminish any of the representations or warranties made
in this Agreement.
c. AUDIT. Seller shall cause the Company to permit the
completion of an audit (the "Audit") to be conducted under
generally accepted auditing standards, of the books,
records, and financial statements of the Company for 1996,
and through September 30, 1997, and any additional period
prior to the Deposit Date requested by the Purchaser or
required by applicable law, and shall cause Audited
Financial Statements (hereinafter defined) to be prepared in
accordance with generally accepted accounting principles,
which shall include reserves for any extended warranties,
charge-backs, inventory write downs, repossessions,
contracts in transit, and any other appropriate accruals and
reserves. As used in this Agreement, "Audited Financial
Statements" shall mean an audited (i) balance sheet, dated
September 30, 1997, for the Company, and (ii) income
statement for the nine (9) month period ending September 30,
1997, for the Company. The Audit will be conducted by
Purchaser's accountants, Price Waterhouse, LLP. Seller
agrees to cause the full cooperation of the officers,
directors, employees and accountants of the Company in the
Audit.
d. NOTICE OF ADVERSE CHANGES. Seller shall give prompt written
notice to Purchaser of any material adverse change in the
business, operations, properties, assets, revenues,
earnings, liabilities, or condition (financial or otherwise)
of the Company.
e. STANDSTILL. From the date hereof to the earlier of the
Closing Date or the date this Agreement expires or
terminates, Seller shall not, directly or indirectly,
through any officer, director, employee, or otherwise, (i)
solicit or initiate the submission of any proposal or offer
from any person or entity (including any officers or
employees of the Company) relating to any liquidation,
dissolution, recapitalization, merger, consolidation,
acquisition, or purchase of all or a material portion of the
assets and properties of the Company, or the acquisition or
purchase of any equity interest in the Company, or (ii)
participate in any negotiations regarding, or furnish to any
other person or entity any information with respect to, or
otherwise cooperate in any manner with, or assist or
participate in, facilitate or encourage, any effort or
attempt by any other person or entity to do or seek any of
the foregoing.
f. FURTHER ASSURANCES. Seller shall from time to time, upon
the request of Purchaser, execute and deliver to Purchaser
such further instruments and take such other action as
Purchaser may reasonably request, in order to consummate the
transactions contemplated by this Agreement in accordance
with its terms.
18
g. INSURANCE AND RISK OF LOSS. Seller shall cause the Company
to maintain the insurance the Company is carrying in
connection with the operation of the Dealership, including
(without limitation) property damage insurance, general
liability insurance, worker's compensation, and group
health insurance. The Seller and the Company shall have the
risk of loss for damage by fire or other casualty to the
assets and properties of the Company before Closing. In the
event of any material loss or damage to the assets and
properties of the Company prior to Closing, Purchaser shall
have the option to terminate this Agreement.
11. PURCHASER'S OBLIGATIONS PRIOR TO CLOSING. Purchaser agrees to
do the following prior to Closing:
a. DUE DILIGENCE. Until the transactions contemplated by this
Agreement close or this Agreement expires or terminates,
Purchaser may conduct such investigations, reviews and
inspections of the business, operations, properties, assets,
revenues, earnings, liabilities, and condition (financial or
otherwise) of the Company as Purchaser and Purchaser's
representatives deem necessary or desirable to determine
whether a material adverse change in the Company has
occurred.
b. FURTHER ASSURANCES. Purchaser shall from time to time, upon
the request of the Seller, execute and deliver to Seller
such further instruments and take such further action as the
Seller may reasonably request, in order to consummate the
transactions contemplated by this Agreement in accordance
with its terms.
c. PURCHASER'S NON-DISCLOSURE OF CONFIDENTIAL INFORMATION
REGARDING THE COMPANY. Purchaser acknowledges that it may
possibly have access to certain confidential information of
the Company, including (without limitation) lists of
accounts, operational policies, and pricing and costs
policies (the "Confidential Information"). The Purchaser
agrees that it will not disclose such Confidential
Information to any person or entity for any purpose or
reason whatsoever, except to employees and authorized
representatives of the Purchaser, or as required by law,
unless such Confidential Information becomes known to the
public generally through no fault of the Purchaser. In the
event of a breach or threatened breach by Purchaser of the
provisions of this subparagraph, the Seller and/or the
Company shall be entitled to temporary restraining order,
without bond, and an injunction restraining the Purchaser
from disclosing, in whole or in part, such Confidential
Information. Nothing herein shall be construed as
prohibiting the Seller and/or the Company from pursuing any
other available remedy for such breach or threatened breach,
including the recovery of damages.
(d) MANAGEMENT OF THE DEALERSHIPS. During any period of time
between the Deposit Date and the Closing that Purchaser is
managing the Dealerships
19
pursuant to a management agreement,Purchaser will not,
and will not cause the Company to, do any act that would
cause the Seller or the Company to be in violation of any
of the provisions set forth in paragraph 10.
12. SELLER'S AND PURCHASER'S OBLIGATIONS PRIOR TO CLOSING.
a. ASSISTANCE. Seller and Purchaser agree to use their best
efforts to create a workable, smooth and orderly transition
of Purchaser's acquisition of the Company.
x. XXXX-XXXXX-XXXXXX NOTIFICATION. The parties shall, if and
to the extent required by law, prepare, and Purchaser shall
file, all reports or other documents required or requested
by the FTC or the Justice Department under the
Xxxx-Xxxxx-Xxxxxx Act, and all regulations promulgated
thereunder, concerning the transactions contemplated by
this Agreement, and comply promptly with any request by the
FTC or the Justice Department for additional information
concerning such transactions, so that the waiting period
specified in the Xxxx-Xxxxx-Xxxxxx Act will expire as soon
as reasonably possible after the execution and delivery of
this Agreement. The parties agree to furnish to one another
such information concerning the Purchaser, the Seller, and
the Company as the parties need to perform their obligations
hereunder. The Purchaser agrees to pay all filing fees and
costs due governmental agencies with regard to the
notification under and compliance with the Xxxx-Xxxxx-Xxxxxx
Act and all regulations promulgated thereunder.
c. PHYSICAL INVENTORIES. On or before the Deposit Date,
Purchaser and Seller shall conduct a physical inventory of
the New Vehicle Inventory, the Used Vehicle Inventory, the
Parts and Accessories Inventory, and the Tangible Personal
Property. The physical inventories shall be collectively
referred to in this Agreement as the "Physical Inventories."
The value of the New Vehicle Inventory, the Used Vehicle
Inventory, the Parts and Accessories Inventory, and the
Tangible Personal Property shall be determined as follows:
(i) Purchaser and Seller shall calculate the value of the
New Vehicle Inventory. The value of each new vehicle
shall be the cash sum equal to the factory invoice
price (excluding any Company internal profit) to the
Company, less any factory holdback rebate and any other
factory rebate or incentive, advertising credits and
interest credits, which the Company may have received
prior to the Deposit Date, plus performed PDI at the
Company's cost (excluding any internal profit), options
added at the Company's cost (excluding any internal
profit), and any freight and handling charges paid,
prior to the Deposit Date. Any demonstrator and rental
vehicle shall be valued for a cash sum equal to an
amount as calculated above, except demonstrators and
rental vehicles having 6,000
20
miles or more on the odometer shall be treated as a
Used Vehicle. The value of any new vehicle shall be
decreased by an amount equal to the Company's cost
(excluding any internal profit) of repair for any
physically damaged vehicle. Seller agrees that all
factory rebates and other credits on any new vehicles
sold after the Deposit Date shall be retained by the
Company.
(ii) Purchaser and Seller shall agree to the value of the
Used Vehicle Inventory. Any demonstrators and rental
vehicles having less than 6,000 miles on the odometer
shall be treated as a New Vehicle.
(iii) Purchaser and Seller shall calculate the value of
the Parts and Accessories Inventory. The value of
the parts and accessories shall be the cost of the
parts and accessories set forth in the dealer
parts and accessories price schedule in effect on
the date of the inventory for the applicable
Manufacturer or other reliable supplier. The
Seller agrees that all rebates and credits on any
parts or accessories shall be retained by the
Company.
(iv) Purchaser and Seller shall calculate the value of the
Tangible Personal Property. The value of any item of
tangible personal property listed in the Appraisal
shall be the value of the property set forth in the
Appraisal, and the value of any item of tangible
personal property that is not listed in the Appraisal
shall be the Company's actual cost (excluding any
internal profit).
13. CONDITIONS PRECEDENT TO OBLIGATION OF PURCHASER. The obligation
of Purchaser to consummate the transactions contemplated by this Agreement is
subject to the satisfaction on or prior to the Closing Date of the following
conditions, each of which may be waived by the Purchaser:
a. REPRESENTATIONS, WARRANTIES AND AGREEMENTS. All
representations and warranties made by the Seller and the
Company in or pursuant to this Agreement shall be true and
correct in all material respects as of the Closing Date with
the same effect as though such representations and
warranties were made on the Closing Date, except to the
extent that such representations and warranties expressly
relate to any earlier date. Seller and the Company shall
have performed and complied with all the covenants and
agreements and satisfied all the conditions required by this
Agreement to be performed, complied with or satisfied by
Seller and the Company on or prior to the Closing Date.
Seller must have delivered to the Purchaser a certificate
dated as of the Closing Date certifying that this condition
has been fulfilled.
b. NO ADVERSE CHANGE. Purchaser shall have determined, to its
satisfaction, that as of the Closing Date, there has been no
material adverse change beyond the
21
control of Purchaser in the business, operations,
properties, assets, revenues, earnings, liabilities
or condition (financial or otherwise) of the Company.
c. EXHIBITS. Purchaser shall have timely received all exhibits
to this Agreement.
d. TRANSFER OF SHARES. The certificate(s) representing the
Shares shall have been transferred and conveyed by Seller to
Purchaser in a manner and by instruments acceptable to
Purchaser and its counsel, free and clear of all liens,
claims, encumbrances, or restrictions of any kind.
Contemporaneously with the consummation of the transfer of
the Shares, Seller shall put Purchaser in full possession
and enjoyment of all properties and assets of the Company.
In addition, Purchaser shall have received the complete
stock ledgers, minute books and other corporate records of
the Company.
e. THIRD PARTY APPROVALS. This Agreement and the transactions
contemplated by this Agreement shall have received all
required approvals and consents from all persons and
entities from which such approvals or consents are required,
including (without limitation) (i) BMW of North America,
Inc. and Volkswagen of America, Inc., but not the other
Manufacturers (ii) the FTC and the Justice Department under
the Xxxx-Xxxxx-Xxxxxx Act and the regulations promulgated
thereunder, and (iii) the Nevada Department of Motor
Vehicles.
f. COMPLIANCE WITH SECURITIES LAWS. Purchaser shall have (i)
received the Investment Letter, (ii) received the
Registration Rights Agreement, and (iii) determined that all
state and federal securities laws have been fully satisfied
relating to the purchase of the Shares by Purchaser.
g. LEASES. The Purchaser shall have received the Leases,
executed by the respective landlords.
h. PHYSICAL INVENTORIES. Purchaser shall have conducted the
Physical Inventories.
i. APPROVAL OF DOCUMENTATION. The form and substance of all
opinions, certificates, instruments and other documents
delivered to Purchaser in connection with this Agreement
shall be satisfactory in all reasonable respects to
Purchaser and Purchaser's counsel.
j. CORPORATE DIRECTORS AND OFFICERS. The composition of the
directors and officers of the Company shall be as requested
by Purchaser, effective as of the Closing.
k. OPINION OF COUNSEL TO SELLER AND THE COMPANY. Seller and
the Company shall have delivered to Purchaser an opinion of
counsel reasonably satisfactory to Purchaser, dated as of
the Closing Date, that contains such opinions that are
22
reasonably requested by Purchaser, including (without
limitation with respect to the Seller) an opinion that the
Shares were issued and will be transferred to Purchaser, in
compliance with all state securities laws.
x. XXXX-XXXXX-XXXXXX WAITING PERIOD. The applicable waiting
period under the Xxxx-Xxxxx-Xxxxxx Act, and the regulations
promulgated thereunder, shall have expired.
m. AUDIT. [INTENTIONALLY OMITTED]
n. ADDITIONAL INFORMATION. Seller and the Company shall have
furnished to Purchaser and Purchaser's counsel such
additional information, certificates, and other documents as
Purchaser shall have reasonably requested.
14. CONDITIONS PRECEDENT TO OBLIGATION OF SELLER. The obligation of
Seller to consummate the transactions contemplated by this Agreement is subject
to the satisfaction on or prior to the Closing Date of the following conditions,
each of which may be waived by the Seller:
a. REPRESENTATIONS, WARRANTIES AND AGREEMENTS. All
representations and warranties made by the Purchaser in or
pursuant to this Agreement shall be true and correct in all
material respects as of the Closing Date with the same
effect as though such representations and warranties were
made on the Closing Date, except to the extent that such
representations and warranties expressly relate to an
earlier date, and Purchaser shall have performed and
complied with all of the covenants and agreements and
satisfied all the conditions required by this Agreement to
be performed, complied with or satisfied by Purchaser on or
prior to the Closing Date. The Purchaser must have
delivered to the Sellers a certificate dated as of the
Closing Date certifying that this condition has been
fulfilled.
b. DELIVERY OF PURCHASE PRICE. Subject to the provisions of
subparagraphs 20(e) and 20(g), the Purchaser shall have
delivered (i) the Cash, (ii) the Note and (iii) the
Restricted Shares.
c. LEASES. Seller shall have received the Leases, executed by
the Company.
d. APPROVAL OF DOCUMENTATION. The form and substance of all
certificates and other documents required to be delivered to
Seller in connection with this Agreement shall be
satisfactory in all reasonable respects to Seller and
Seller's counsel.
e. ADDITIONAL INFORMATION. Purchaser shall have furnished to
Seller and Seller's counsel such additional information,
certificates, and other documents as Seller shall have
reasonably requested.
23
15. SELLER'S OBLIGATIONS AFTER CLOSING.
a. GENERAL INDEMNITY. Seller shall indemnify, defend and hold
Purchaser and its successors and assigns (the "Purchaser
Indemnified Parties") harmless from and against any and all
liabilities, damages, losses, claims, costs and expenses,
including (without limitation) reasonable attorneys' fees,
arising from or related to (i) any breach of any
representation, warranty, covenant or agreement made by
Seller in this Agreement, or in any certificate or other
document delivered on behalf of Seller or the
nonperformance of any covenant or obligation of Seller
under this Agreement, (ii) any debts, liabilities, or
obligations of any nature (whether absolute, accrued,
contingent or otherwise and whether due or to become due) of
the Company at the Balance Sheet Date that are not reflected
in the Financial Statements, (iii) the conduct of the
business or other operations of the Company prior to the
Deposit Date, (iv) the failure of Seller or the Company to
comply with any federal, state, or local tax laws for any
matter occurring prior to the Deposit Date or otherwise
payable by Seller, and (v) any and all actions, suits,
proceedings, demands and judgments, arising from or related
to any of the matters set forth in this subparagraph 15(a)
occurring prior to the Deposit Date or as a result of the
conduct of the Seller following the Deposit Date.
b. ENVIRONMENTAL INDEMNIFICATION. With respect to any existing
or future liability arising out of any condition, activity
or event existing or occurring prior to the Closing Date
with respect to the Las Vegas Premises, the Henderson
Premises or the 2.5 Acre Tract (individually, a "Property"
and collectively, the "Properties") that violates or
violated any Environmental Laws or for which there may be
any environmental liability in tort, or otherwise (an
"Environmental Event"), the Seller agrees that it will
indemnify, defend and hold harmless the Purchaser
Indemnified Parties from and against all claims, damages,
actions, suits, proceedings, demands, assessments,
adjustments, costs, and expenses, including reasonable
attorneys' fees and expenses of investigation, incurred by
any Purchaser Indemnified Party as a result of the
Environmental Event, and further including, if necessary,
the costs and expenses of any remediation, transportation,
incineration, treatment, or other necessary and appropriate
disposition or mitigation of the Environmental Event.
Notwithstanding the preceding sentence, it is expressly
agreed by the parties that the indemnification provided for
therein shall not apply to any Environmental Event caused
(i) by contamination migrating into or onto a Property from
or through any other real property or (ii) as a result of
the conduct of the Purchaser following the Deposit Date.
c. SELLER'S NON-DISCLOSURE OF CONFIDENTIAL INFORMATION
REGARDING THE COMPANY. Seller acknowledges that the Seller
has in the past, currently has, and in the future may
possibly have access to Confidential Information. Seller
24
agrees that the Seller will not disclose such Confidential
Information to any person or entity for any purpose or
reason whatsoever except to employees and authorized
representatives of the Purchaser, or as required by law,
unless the Confidential Information becomes known to the
public generally through no fault of the Seller. In the
event of a breach or threatened breach by the Seller of this
subparagraph, the Purchaser shall be entitled to a temporary
restraining order, without bond, and an injunction
restraining the Seller from disclosing, in whole or in part,
such Confidential Information. Nothing herein shall be
construed as prohibiting the Purchaser from pursuing any
other available remedy for such breach or threatened breach,
including the recovery of damages.
d. SELLER'S AND XXXXXXXX'X COVENANT NOT TO COMPETE. Both
Seller and Xxxxx X. Xxxxxxxx, Xx. ("Xxxxxxxx") agree that
they will not, either directly or indirectly, alone or with
others, either as an employee, owner, partner, agent,
stockholder, member, director, officer or otherwise:
(i) enter into or engage in the business of operating a new
vehicle dealership, warranty repair business, or other
related new vehicle business with respect to any of
Land Rover, Volkswagen, Audi, Bentley and Rolls Royce
or BMW automobiles within the Las Vegas or Henderson,
Nevada metropolitan areas (the "Restricted Area") for a
term of three (3) years from the Closing Date (the
"Restricted Period"), unless the Purchaser shall not be
approved by the applicable Manufacturer as the owner of
the Company with respect to any of the listed brands of
automobiles, in which the case the limitation contained
herein shall not apply to such brand or brands.
(ii) Further, neither the Seller nor Xxxxxxxx will
individually, collectively or in conjunction with
others, directly or indirectly, within the Restricted
Period and Restricted Area, directly or indirectly,
solicit or hire any employee of the Company or
encourage any such employee to leave such employment
unless such employee's employment with the Company or
the Purchaser has been terminated. Seller and Xxxxxxxx
also agree that in the event of a breach of these
covenants, the Purchaser may protect its rights by
injunction or otherwise.
16. PURCHASER'S OBLIGATIONS AFTER CLOSING.
a. GENERAL INDEMNITY. Purchaser shall indemnify, defend and
hold Seller and its successors and assigns (the "Seller
Indemnified Parties") harmless from and against any and all
liabilities, damages, losses, claims, costs and expenses,
including (without limitation) reasonable attorneys' fees,
arising from or related to (i) any breach of any
representation, warranty, covenant or agreement made by
Purchaser in this Agreement, or in any certificate or other
document
25
delivered on behalf of Purchaser or the nonperformance
of any covenant or obligation of Purchaser under this
Agreement, (ii) any debts, liabilities, or obligations
of any nature (whether absolute, accrued, contingent
or otherwise and whether due or to become due) of the
Company accruing after the Deposit Date, (iii) the
conduct of the business or other operations of the Company
after the Deposit Date, (iv) the failure of Purchaser to
comply, or causing the Company to fail to comply, with any
federal, state, or local tax laws for any matter occurring
after the Deposit Date or applicable to the transactions
contemplated by this Agreement, and (v) any and all actions,
suits, proceedings, demands and judgments, arising from or
related to any of the matters set forth in this subparagraph
16(a), unless such matter has occurred as the result of the
conduct of Seller following the Deposit Date.
b. ENVIRONMENTAL INDEMNIFICATION. With respect to any future
liability arising out of any condition, activity or event,
caused by, or under the control of, the Purchaser or the
Company occurring after the Deposit Date with respect to any
of the Properties that violates any Environmental Laws or
for which there may be any liability for an Environmental
Event, the Purchaser agrees that it will indemnify, defend
and hold harmless the Seller Indemnified Parties from and
against all claims, damages, actions, suits, proceedings,
demands, assessments, adjustments, costs, and expenses,
including reasonable attorneys' fees and expenses of
investigation, incurred by any Seller Indemnified Party as a
result of the Environmental Event, and further including, if
necessary, the costs and expenses of any remediation,
transportation, incineration, treatment, or other necessary
and appropriate disposition or mitigation of the
Environmental Event. Notwithstanding the preceding sentence,
it is expressly agreed by the parties that the
indemnification provided for therein shall not apply to any
Environmental Event caused (i) by contamination migrating
into or onto a Property from or through any other real
property or (ii) as a result of the conduct of the Seller
following the Deposit Date.
c. PRE-CLOSING PROFITS FROM OPERATIONS. In addition to payment
of the Purchase Price, Purchaser agrees that it will, or
will cause the Company to, pay to Seller an amount equal to
the net profits from the operation of the Company from
September 30, 1997, through the close of business on October
31, 1997 (the "Profits Distribution"). The Profits
Distribution shall be paid to Seller no later than twenty
days following the Deposit Date.
17. INFORMATION REGARDING THE PURCHASER.
a. INSIDER LIABILITY. Seller acknowledges that trading in the
Purchaser's securities by persons possessing material
non-public information may result in private lawsuits for
damages or to civil or criminal proceedings by the
Securities and Exchange Commission. Seller also
acknowledges that liability may be imposed on insiders who
privately disclose otherwise non-public material information
26
where such disclosure coincide with trading Purchaser's
securities by such insiders or by the recipients of such
information.
b. SELLER'S NON-DISCLOSURE OF CONFIDENTIAL INFORMATION
REGARDING THE PURCHASER. Seller acknowledges that the
Seller may possibly have access to certain confidential
information of the Purchaser. Seller agrees that the
Seller will not disclose such confidential information to
any person or entity for any purpose or reason whatsoever
except as required by law, unless the confidential
information becomes known to the public generally through no
fault of the Seller. In the event of a breach or threatened
breach by the Seller of this subparagraph, the Purchaser
shall be entitled to a temporary restraining order, without
bond, and an injunction restraining the Seller from
disclosing, in whole or in part, such confidential
information. Nothing herein shall be construed as
prohibiting the Purchaser from pursuing any other available
remedy for such breach or threatened breach, including the
recovery damages.
18. TERMINATION.
a. MUTUAL CONSENT. This Agreement may be terminated by the
written consent of the parties.
b. BY THE PURCHASER. This Agreement may be terminated by
written notice of termination given by the Purchaser to
Seller if a material default should be made by Seller in the
observance of or in the due and timely performance by Seller
of any of the agreements and covenants of the Seller herein
contained, or if there shall have been a material breach by
Seller of any of the warranties and representations of the
Seller herein contained, or if the conditions of this
Agreement to be complied with or performed by Seller at or
before the Deposit Date or the Closing Date, as applicable,
shall not have been complied with or performed at the time
required for such compliance or performance and such
noncompliance or nonperformance shall not have been waived
by the Purchaser.
c. BY THE SELLER. This Agreement may be terminated by written
notice of termination given by the Seller to the Purchaser
if a material default should be made by the Purchaser in the
observance of or in the due and timely performance by the
Purchaser of any of the agreements and covenants of the
Purchaser herein contained, or if there shall have been a
material breach by the Purchaser of any of the warranties
and representations of the Purchaser, or if the conditions
of this Agreement to be complied with or performed by the
Purchaser at or before the Deposit Date or the Closing Date,
as applicable, shall not have been complied with or
performed at the time required for such compliance or
performance and such noncompliance or nonperformance shall
not have been waived by the Seller.
27
19. SECTION 338(h)(10) ELECTIONS.
a. Seller agrees to make an election under Section 338(h)(10)
of the Internal Revenue Code and all comparable elections
under state and local tax law with respect to the Company.
b. Purchaser and Seller shall jointly file Form 8023-A with the
Internal Revenue Service in accordance with Section 338 of
the Internal Revenue Code and the regulations thereunder no
later than the 15th day of the ninth month beginning after
the month that includes the Closing Date in accordance with
Internal Revenue Code Section 338(g) and Treasury Regulation
Section 1.338(h)(10)-1(d)(2).
c. Purchaser and Seller shall allocate the Purchase Price to
the assets conveyed pursuant to this Agreement using a
reasonable asset valuation which will be agreed to by
Purchaser and Seller no later than ninety (90) days after
the Closing Date. In all events, however, Purchaser and
Seller agree to conformity of the treatment of all asset
allocations with respect to the Section 338(h)(10)
elections.
20. ADDITIONAL AGREEMENTS.
x. XXXXXXXX MOTORS CARS AND XXXXXXXX BMW NAMES. The Seller
consents for all purposes to the Purchaser's continued use
of the Xxxxxxxx Motor Cars, Xxxxxxxx BMW, and any other
names including the word "Xxxxxxxx" (collectively, the
"Xxxxxxxx Names") that are, or could be used, in connection
with the operation of the Dealerships within the Restricted
Area. Purchaser is not obligated to use any Xxxxxxxx Names.
Seller shall not be prohibited from using the name Xxxxxxxx
(i) in any non-competing business venture, (ii) in
connection with the operation of a new automobile dealership
for either of Land Rover, Audi, or Bentley and Rolls Royce
automobiles if Purchaser is not approved by the applicable
Manufacturer as the owner of the Company with respect to any
such brand or brands of automobiles, or (iii) from using any
Xxxxxxxx Name if Purchaser ceases using the name Xxxxxxxx in
connection with all of its automobile dealerships within the
Restricted Area. The parties acknowledge that the
Dealerships' television, radio and print advertisements
aimed at the Restricted Area may also be broadcast or
distributed outside the Restricted Area, and the Seller
agrees such advertisements shall not be a violation of this
Agreement, and
(i) No separate consideration, over and above the Purchase
Price, is owed by the Purchaser to the Seller for this
consent to use the Xxxxxxxx Names as provided herein.
(ii) As soon as practicable after the Closing, the Seller
and Purchaser agree to file any required certificates,
terminations or consents necessary to allow Purchaser
to use the Xxxxxxxx Names. The parties mutually agree
28
to take other reasonable steps as from time to time may
be appropriate to avoid confusion and mistake by third
parties as to their respective corporate identities.
(iii) The Purchaser's right to use the Xxxxxxxx Names in
the Restricted Area shall be binding on the Seller
and on all of its successors, assigns,
transferees, and licensees, and every sale,
assignment, license or transaction entered into by
the Seller shall be expressly subject to the
Purchaser's continued right to use the Xxxxxxxx
Names in the Restricted Area as provided in this
Agreement.
(iv) Other provisions hereof to the contrary
notwithstanding, Purchaser's right to continued
use of the Xxxxxxxx Names shall absolutely
terminate on the first to occur of the termination
of this Agreement, the mutual agreement of the
Seller and the Purchaser after Closing, or the
Purchaser's cessation of use thereof in the
Restricted Area.
b. EMPLOYEE LIST. To the extent not set forth in Schedule
7(u), Seller agrees to provide, on or before the Deposit
Date, a list of all employees of the Company. Such list
shall contain the employee's name, employment description,
annual compensation or formula for computing such annual
compensation, accrued vacation pay, and tentative vacation
plans.
c. JAGUAR FRANCHISE. Notwithstanding any representation,
warranty or covenant of the Company or the Seller with
respect to the operation of the Dealerships or the
maintenance of the Company's assets prior to Closing,
Purchaser and Seller agree that Purchaser is not purchasing
the right to sell and service new Jaguar automobiles (the
"Franchise"), pursuant to a Jaguar Cars new automobile
dealer agreement (the "Franchise Dealer Agreement"),
including without limitation (i) the Franchise, (ii) all new
unregistered Jaguar automobiles, including demonstrators,
and optional equipment attached thereto (the "New Jaguar
Automobiles"), (iii) all service department tools, designed
for and used in the servicing of only Jaguar automobiles,
and parts and accessories manufactured for installation only
on Jaguar automobiles (collectively, the "Jaguar Parts"),
(iv) the goodwill with respect to the Franchise, together
with all right, title and interest of the Company in and to
all fictitious firm names, trade names, logos, service
marks, copyrighted materials, trade secrets, and other
proprietary rights uniquely relating to and used in
connection with only the Franchise (the "Jaguar Goodwill"),
and (v) all records in the possession of Company uniquely
pertaining to the sale and servicing of only Jaguar
automobiles (the "Jaguar Records"). The Franchise, the New
Jaguar Automobiles, the Jaguar Parts, the Jaguar Goodwill,
and the Jaguar Records are sometimes hereinafter referred to
collectively as the "Jaguar Assets." Prior to Closing, the
Company shall distribute the Jaguar Assets to Seller,
subject to Seller either paying in full or, with the consent
of the lien holder(s) and the release of the Company
therefrom, assuming the Company's floor plan liability
29
secured by liens on such New Jaguar Automobiles. Seller
shall have until June 30, 1998, to relocate the Jaguar
Assets (whether by sale or otherwise). Prior to the
relocation of the Jaguar Assets, either the Purchaser or the
Company shall manage and operate the Jaguar Assets under a
Management Agreement as provided herein.
e. PARTIAL PAYMENT OF PURCHASE PRICE. On November 12, 1997
(the "Deposit Date"), Purchaser shall pay to Seller xxxxxxx
money in an amount equal to the Net Worth, plus $575,000,
plus $200,000 representing the Jaguar Deposit (as defined in
the Management Agreement referenced in subparagraph 20(f).
The Net Worth and the $575,000 are collectively referred to
hereinafter as the "Deposit." The Deposit shall be credited
to the Purchase Price at the Closing. If by the close of
business on December 31, 1997, either BMW of North America,
Inc. or Volkswagen of America, Inc. has not approved
Purchaser to acquire ownership of the Company, (i) this
Agreement shall terminate, unless the parties shall mutually
agree to extend the Closing Date, and (ii) the Seller and
the Company shall be jointly and severally obligated to, and
hereby agree to, refund the Deposit to Purchaser no later
than January 15, 1998.
f. MANAGEMENT AGREEMENT. Purchaser and Seller agree that
effective as of November 1, 1997, Purchaser shall manage the
Dealerships under a Management Agreement in the form of
Exhibit "K" hereto.
g. APPROVAL BY THE MANUFACTURERS. Notwithstanding anything
contained in this Agreement to the contrary, if by the close
of business on December 31, 1997, (i) both BMW of North
America, Inc. and Volkswagen of America, Inc. have approved
Purchaser to acquire ownership of the Company, (ii) any
other Manufacturer has not approved Purchaser to acquire
ownership of the Company, and (iii) all other conditions to
the obligations of the parties hereunder (other than those
requiring the taking of action at the Closing) have been
satisfied or waived, Purchaser and Seller shall conduct the
Closing of the transactions contemplated by this Agreement,
but shall place that portion of the Cash which equals the
amounts set forth on Schedule 20(g) for any Manufacturers
that have not given their approval into an interest bearing
account pursuant to an escrow agreement (the "Escrow
Agreement") between Purchaser and Seller. The Escrow
Agreement shall be in the form of Exhibit "L" hereto. The
Company shall manage the franchise for each Manufacturer
that has not given its approval by the Closing, under a
Management Agreement in the form of Exhibit "M" hereto.
21. GENERAL PROVISIONS.
a. ENTIRE AGREEMENT. This Agreement contains and constitutes
the entire agreement between the parties regarding the
subject matter hereof and supersedes all prior agreements
and understandings between the parties relating to the
subject matter of this Agreement. Other than as referenced
herein, there
30
are no agreements, understandings, restrictions, warranties
or representations between the parties relating to the subject
matter hereof other than those set forth in this Agreement.
This Agreement is not intended to have any legal effect
whatsoever, or to be a legally binding agreement, or any
evidence thereof, until it has been signed by Seller,
the Company, and the Purchaser.
b. EXHIBITS. Preliminary drafts of all Schedules and Exhibits
A through Fshall be prepared by the Seller on or before
November 7, 1997, and delivered to Purchaser for Purchaser's
review. Preliminary drafts of Exhibits G through L shall be
prepared by Purchaser on or before November 7, 1997, and
delivered to Seller for Seller's review. Final Schedules
and the forms of final Exhibits shall be prepared by the
party that prepared the preliminary drafts, initialed and
dated by the parties, and shall be deemed incorporated
herein even if not physically attached to this Agreement.
SCHEDULES (FOR REFERENCE ONLY):
Schedule 7(b) Officers, Directors, and Assumed Names
Schedule 7(f) Real Property
Schedule 7(g) Tangible Personal Property
Schedule 7(h) Inventories
Schedule 7(i) Licenses
Schedule 7(j) Intellectual Property
Schedule 7(k) Encumbrances
Schedule 7(m) Indebtedness and Guaranties
Schedule 7(p) Litigation
Schedule 7(o) Transactions Since the Balance Sheet Date
Schedule 7(q) Underground Storage Tanks
Schedule 7(r) Contracts and Agreements
Schedule 7(s) Employee Benefit Plans
Schedule 7(t) Insurance
Schedule 7(u) Personnel
Schedule 7(v) Accounts Receivable
Schedule 7(y) Bank Accounts and Powers of Attorney
Schedule 20(g) Manufacturer Allocation
EXHIBITS (FOR REFERENCE ONLY):
Exhibit "A" The Note
Exhibit "B" Las Vegas Lease
Exhibit "C" Xxxxxxxxx Lease
Exhibit "D" [Intentionally Omitted]
Exhibit "E" Seller's Certificate
Exhibit "F" Opinion of Sellers' Counsel
Exhibit "G" Investment Letter
Exhibit "H" Registration Rights Agreement
31
Exhibit "I" Purchaser's Certificate
Exhibit "J" Opinion of Purchaser's Counsel
Exhibit "K" Pre-Closing Management Agreement
Exhibit "L" Escrow Agreement
Exhibit "M" Non-Approving Manufactures Management
Agreement
c. THIRD PARTY CONSENTS. The Seller and the Purchaser
mutually agree to cooperate and use their respective
reasonable, good faith efforts to prepare all documentation,
to effect all filings and to obtain all permits, consents,
approvals, and authorizations of all third parties and
governmental entities as may be necessary to consummate the
transactions contemplated by this Agreement.
d. FURTHER ACTIONS. From time to time, as and when requested
by any parties hereto, the other parties shall execute and
deliver, or cause to be executed and delivered, all such
documents and instruments and shall take, or cause to be
taken, all such further or other actions as such other
parties may reasonably deem necessary or desirable to
consummate the transactions contemplated by this Agreement.
e. PUBLICITY. The parties hereto agree that no public release
or announcement concerning the terms of the transactions
contemplated by this Agreement shall be issued by any party
without the prior written consent of the other parties
(which consent shall not be unreasonably withheld), except
as such release or announcement may be required by law, in
which case the party required to make the release or
announcement shall allow the other parties reasonable time
to comment on such release or announcement in advance of
such issuance.
f. AMENDMENT. This Agreement may not be amended, modified, or
terminated except by an instrument in writing signed by all
parties to this Agreement.
g. CONSTRUCTION. All pronouns and any variations thereof
shall be deemed to refer to the masculine, feminine or
neuter gender thereof or to the plurals of each, as the
identity of the person or persons or the context may
require. The descriptive headings contained in this
Agreement are for reference purposes only and are not
intended to describe, interpret, define or limit the scope,
extent or intent of this Agreement or any provision
contained in this Agreement.
h. INVALIDITY. If any provision contained in this Agreement
shall for any reason be held to be invalid, illegal, void or
unenforceable in any respect, such provision shall be deemed
modified so as to constitute a provision conforming as
nearly as possible to such invalid, illegal, void or
unenforceable provision while still remaining valid and
enforceable; and the remaining terms or provisions contained
herein shall not be affected thereby.
i. EXPENSES. Whether or not the transactions contemplated by
this Agreement are consummated, each of the parties to this
Agreement shall be responsible for its
32
own costs and expenses incurred in connection with the
preparation and negotiation of this Agreement and with
the transactions contemplated hereby.
j. BINDING EFFECT AND ASSIGNMENT. This Agreement shall be
binding upon and shall inure to the benefit of the parties
hereto and their respective heirs, administrators,
executors, successors and permitted assigns. Purchaser may
assign its rights under this Agreement to an affiliated
entity, and thereafter the Purchaser and its assignee shall
be fully obligated, responsible and liable for the
performance of the Purchaser's obligations hereunder.
Except for the obligation to deliver the Shares in
accordance with the terms hereof, Seller may assign its
rights under this Agreement to an entity wholly owned by
Seller, and thereafter the Seller and its assignee shall be
fully obligated, responsible and liable for the performance
of the Seller's obligations hereunder. Any assignment in
violation of this Agreement shall be void.
k. ATTORNEYS' FEES. In the event any party instigates
litigation to enforce or protect its rights under this
Agreement, the party prevailing in any such litigation shall
be entitled, in addition to all other relief, to reasonable
attorneys' fees, out-of-pocket costs and disbursements
relating to such litigation.
l. NOTICES. All notices and other communications hereunder
shall be (i) in writing, dated with the current date of such
notice, and signed by the party giving such notice, and (ii)
mailed, postpaid, registered or certified, return receipt
requested, addressed to the party to be notified, or
delivered by personal delivery or by overnight courier.
Notice shall be deemed given when received by the party to
be notified or when the party to be notified refuses to
accept delivery of the notice. The initial addresses of the
parties shall be as follows:
IF TO PURCHASER:
Cross-Continent Auto Retailers, Inc.
0000 X. Xxxxxx
X.X. Xxx 000
Xxxxxxxx, Xxxxx 00000-0000
Attention: Xxxxxx X. Xxxx
(000) 000-0000
IF TO SELLER OR THE COMPANY:
Xxxxx X. Xxxxxxxx, Xx.
40 Innisbrook
Las Vegas, Nevada 89113
33
with a copy to:
Jones, Jones, Close & Xxxxx, Chartered
0000 Xxxxxx Xxxxxx Xxxxxxx, 0xx Xxxxx Xxxxx
Xxx Xxxxx, Xxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
The parties hereto shall have the right from time to time to
change their respective addresses by not less than ten (10)
days prior written notice to the other parties.
m. DEFINITION OF KNOWLEDGE. As used in this Agreement, the
Seller's or the Company's "actual knowledge" or "knowledge"
shall include the knowledge of the Seller and the employees
and agents of the Company. Each representation and warranty
that is limited to the Seller's or the Company's "actual
knowledge" or "knowledge" is made with the understanding
that the Seller or the Company has made a good faith effort
to examine whatever sources of information as are in the
possession or control of the Seller or the Company in order
to verify the truth and accuracy of such representation and
warranty.
n. TIME IS OF THE ESSENCE. Time shall be of the essence with
respect to this Agreement and the consummation of the
transactions contemplated hereby.
o. REMEDIES. None of the remedies provided for in this
Agreement shall be the exclusive remedy of any party for a
breach of this Agreement. The parties hereto shall have the
right to seek any other remedy at law or in equity in lieu
of or in addition to any remedies provided for in this
Agreement.
p. SURVIVAL OF OBLIGATIONS. To the extent necessary to carry
out the terms and provisions of this Agreement, the
obligations and rights arising from or related to this
Agreement shall survive the Closing and shall not be merged
into the various documents executed and delivered at the
time of the Closing.
q. WAIVER. No waiver of any breach or default hereunder shall
be considered valid unless in writing and signed by the
party giving such waiver, and no such waiver shall be deemed
a waiver of any subsequent breach or default of the same or
similar nature.
r. GOVERNING LAW. This Agreement shall be construed, enforced,
and governed in accordance with the laws of the State of
Nevada.
s. MEDIATION AND VENUE. If a dispute arises out of or relates
to this Agreement, or the breach thereof, and if the dispute
cannot be settled through negotiation, the parties agree
first to try in good faith to settle the dispute by
mediation administered by the American Arbitration
Association under its Commercial Mediation Rules before
resorting to arbitration, litigation, or some other dispute
34
resolution procedure. The jurisdiction and venue for any
proceeding, whether by mediation, arbitration, litigation or
other dispute resolution procedure, shall be Xxxxx County,
Nevada.
t. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which taken together shall constitute
one and the same instrument.
u. SUPERSEDING OF INITIAL STOCK PURCHASE AGREEMENT AND
AMENDMENT TO STOCK PURCHASE AGREEMENT. This Amended and
Restated Stock Purchase Agreement replaces and supersedes in
their entirety the Stock Purchase Agreement, dated October
8, 1997, and the Amendment to Stock Purchase Agreement,
dated October 14, 1997, by and among the parties hereto.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
PURCHASER: CROSS-CONTINENT AUTO RETAILERS, INC.,
a Delaware corporation
By:
----------------------------------------------------
Xxxx Xxxxxxxxx, Chairman and Chief Executive Officer
SELLER: THE XXXXXXXX FAMILY TRUST R-501
By:
----------------------------------------------------
Xxxxx X. Xxxxxxxx, Xx., Trustee
COMPANY: JRJ INVESTMENTS, INC., a Nevada corporation
By:
----------------------------------------------------
Xxxxx X. Xxxxxxxx, Xx., President
35
