INVESTMENT AGREEMENT
THE PARTS SOURCE, INC., DBA ACE AUTO PARTS, a Florida corporation (the
"COMPANY"), having its principal place of business at 0000 Xxxxx Xxxxxxxx
Xxxxxx, Xxxxxxxxxx, Xxxxxxx 00000, telephone (000) 000-0000, facsimile (813)
581-0695, and AUTOPARTS FINANCE COMPANY, INC., a Delaware corporation (the
"INVESTOR"), having its principal place of business at 00000 Xxxx X. Xxxxxxx
Xxxxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000, telephone (000) 000-0000,
facsimile (000) 000-0000 hereby agree as follows:
PREAMBLE:
1. The Company has offered shares of its Common Stock, par value $.001
per share (the "COMMON STOCK") to the Investor.
2. The Common Stock is being offered pursuant to exemptions provided by
Section 4(2) of the Securities Act of 1933 (the "SECURITIES ACT"), and the
Common Stock issued will be subject to certain transfer restrictions as set
forth herein.
TERMS:
ARTICLE 1. OFFER AND ACCEPTANCE
Section 1.1. OFFER. Subject to the terms and conditions of this
Agreement, the Investor hereby offers to purchase the number of shares of
Common Stock set forth below for and in consideration of the purchase price
of $2,500,000.00.
Number of Shares: 229,273
Per Share Purchase Price: $11.00
Section 1.2. ACCEPTANCE. The Company hereby accepts the Offer in
consideration of the purchase price specified in Section 1.1 of this
Agreement. Unless and until the Company accepts this Agreement and the
Company receives payment in full for the shares of Common Stock sold
hereunder (the "PURCHASED SHARES"), the Investor will not become a holder of
the Purchased Shares and such securities will not be considered issued or
outstanding.
ARTICLE 2. CLOSING DATE; DELIVERY
Section 2.1. CLOSING DATE. The closing for the purchase and sale of
the Purchased Shares (the "CLOSING") shall be held at the offices of Schifino
& Xxxxxxxxx, P.A., Xxx Xxxxx Xxxx Xxxxxx, Xxxxx 0000, Xxxxx, Xxxxxxx 00000
on or before October 25, 1996 at 10:00 a.m. or at such other time and place
as the Company and the Investor may from time to time in writing mutually
agree (the
"CLOSING DATE").
Section 2.2. CLOSING. At the Closing, the Company will issue a
certificate registered in the name of the Investor representing the Purchased
Shares against payment of the purchase price therefor by wire transfer. The
Company will deliver such certificate to the Investor promptly after the
Closing.
ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Investors as follows:
Section 3.1. ORGANIZATION AND STANDING. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Florida. The Company has all requisite corporate power to own and
operate its properties and assets, to carry on its business as presently
conducted, to execute and deliver this Agreement, to sell and issue the
Purchase Shares hereunder and to carry out and perform its obligations under
the terms of this Agreement.
Section 3.2. AUTHORIZATION. All corporate action of the part of the
Company, its directors and stockholders necessary to authorize the execution
and delivery of this Agreement, the performance of the Company's obligations
hereunder and the sale and issuance of the Purchase Shares has been duly
taken or will be taken before the Closing. This Agreement has been duly
executed and delivered by the Company and is a valid and legally binding
obligation of the Company, which is enforceable against the Company in
accordance with its terms. The execution and delivery of this Agreement by
the Company, the performance of its obligations hereunder and the sale and
issuance of the Purchased Shares will not violate any law applicable to the
Company or its Articles of Incorporation or Bylaws or breach or be a default
under (with or without the giving of notice or the lapse of time) any
material contract, agreement or instrument to which the Company is a party.
The Purchased Shares have been duly authorized and, when issued and paid for
in accordance with the terms of this Agreement will be validly issued, fully
paid and nonassessable and free and clear of all liens, encumbrances and
adverse claims other than restrictions on transfer under this Agreement and
applicable federal and state securities laws or those that are imposed by or
through the Investor.
Section 3.3. NO REGISTRATION REQUIREMENT. Subject to the truth and
accuracy of the representations of the Investor set forth in Article 4 of
this Agreement, the offer, sale and issuance of the Purchased Shares as
contemplated by this Agreement are exempt from the registration and
prospectus delivery requirements of Section 5 of the Securities Act, and
neither the Company nor any person acting on its behalf will take any action
hereafter that would cause the loss of such exemption.
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Section 3.4. DISCLOSURE. The Company has previously delivered to the
Investor a copy of its (i) Prospectus dated April 8, 1996; (ii) Form 10-Q's
for the quarterly periods ended March 3,1 1996 and June 30, 1996; and (iii)
[identify any other documents]. There has been no material adverse change in
the Company's financial position or results, business or prospects since the
date thereof. Neither the representations or warranties by the Company
contained in this Agreement nor any other statement or certificate furnished
or to be furnished to the Investors pursuant hereto or in connection with the
transactions contemplated hereby by the Company (when read together) 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 therein
or herein not misleading in light of the circumstances under which they were
made.
Section 3.5. CAPITAL STOCK OF COMPANY. Schedule A hereto sets forth a
true and complete list of the number of shares of all capital stock and
options authorized, issued and outstanding as of a recent date.
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF THE INVESTOR
The Investor hereby represents and warrants to the Company as follows:
Section 4.1. PRIVATE OFFERING. The Investor understands that the
Purchased Shares have not been registered under the Securities Act on the
ground that the sale provided for in this Agreement and the issuance of
Purchased Shares hereunder is exempt from registration under the Securities
Act pursuant to Section 4(2) thereof, that the Company's reliance on such
exemption is predicated on the Investor's representations set forth herein
and that in order to obtain such exemption, the transfer of such Purchased
Shares is restricted by Section 4.2. of this Agreement and the legend
required by Section 4.2. of this Agreement.
Section 4.2. TRANSFER RESTRICTIONS. The Investor will not offer for
sale, sell or otherwise transfer any Purchased Shares unless such shares have
been registered under the Securities Act and under applicable state
securities laws or such shares or their offer, sale or transfer are exempt
from such registration and the Company has received an opinion of counsel, in
form and substance reasonable satisfactory to the Company, to the effect that
such shares or their offer, sale or transfer are so exempt. Any certificate
representing any Purchased Shares issued hereunder shall bear the following
legend:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933. THESE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE
TRANSFERRED UNLESS THEY ARE REGISTERED UNDER THE SECURITIES ACT OF 1933 OR
THEY OR SUCH OFFER, SALE OR TRANSFER ARE EXEMPT FROM SUCH REGISTRATION AND
THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
COMPANY IN FORM AND SUBSTANCE TO THAT EFFECT.
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Section 4.3. INVESTMENT INTENT. The Investor is purchasing the
Purchased Shares for the Investor's own account and not for other persons and
for investment and not with a view to the distribution of any of the
Purchased Shares.
Section 4.4. INFORMATION. The Investor has received a copy of the items
set forth on Schedule B hereto and has carefully reviewed such materials.
The Company has delivered no other material, nor made any oral or written
representations to any Investor regarding the Company or its prospects other
than those representations contained in this Agreement. The Investor has had
an opportunity to ask questions and receive answers from the Company
regarding the business, properties, financial condition and prospects of the
Company and to obtain additional information (to the extent the Company
possessed such information or could acquire it without unreasonable effort or
expense) necessary to verify the accuracy of any information furnished to the
Investor.
Section 4.5. INVESTOR SOPHISTICATION, SUITABILITY. The Investor has
such knowledge and experience in financial and business matters that the
Investor is capable of evaluating the merits and risks of investment in the
Purchased Shares. The Investor has determined that the Purchased Shares are
a suitable investment for the Investor and that the Investor could bear the
complete loss of the Investor's investment in the Purchased Shares.
Section 4.6. CAPACITY; ENFORCEABILITY. The Investor represents and
warrants that: (a) if it is executing this Agreement in a representative or
fiduciary capacity, it has full power and authority to execute and deliver
this Agreement in such capacity and on behalf of its principal; and (b) this
Agreement constitutes a valid and legally binding obligation of the Investor
enforceable against the Investor in accordance with its terms.
Section 4.7. INDEMNIFICATION. The Investor shall indemnify the Company
against any and all claims, losses and liabilities (and actions and
proceedings in respect thereof) arising out of or related to any breach of
any warranty or agreement made by the Investor in this Article 4 or any
misrepresentation of the Investor contained herein and will reimburse the
Company for any legal or any other expense reasonably incurred in connection
with investigating or defending any such claim, loss, liability, action or
proceeding.
ARTICLE 5. CONDITIONS TO INVESTOR'S OBLIGATIONS AT CLOSING
The Investor's obligations to purchase the Purchased Shares at the
Closing are subject to the fulfillment on or before the Closing Date of the
following conditions to the extent not waived by the Investor:
Section 5.1. REPRESENTATIONS AND WARRANTIES CORRECT. The
representations and warranties made by the Company in Article 3 hereof shall
be true and correct when made, and shall be true and correct on the Closing
Date.
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Section 5.2. COVENANTS. All covenants, agreements and conditions
contained in this Agreement to be performed by the Company on or prior to the
Closing Date shall have been performed or complied with in all respects.
Section 5.3. CLOSING DATE. The Closing shall have occurred on or before
October 25, 1996, unless extended.
Section 5.4. COMPLIANCE CERTIFICATE. The Company shall have delivered
to the Investor a certificate, executed by the President of the Company,
dated the Closing Date, certifying the fulfillment of the conditions
specified in Sections 5.1. and 5.2. of this Agreement.
Section 5.5. LEGAL OPINION. The Company shall have delivered to the
special counsel to the Investor a written legal opinion of its counsel,
Schifino & Xxxxxxxxx, P.A. as to the matters in Sections 3.1., 3.2., and
3.3., subject to customary qualifications and assumptions.
Section 5.6. PROCEEDINGS AND DOCUMENTS. All corporate and other
proceedings in connection with the transactions contemplated at the Closing
and all documents and instruments incident to such transactions shall be
reasonably satisfactory in substance and form to the Investor, and the
Investor shall have received all such counterpart originals or certified or
other copies of such documents as they may reasonably request.
ARTICLE 6. CONDITIONS TO COMPANY'S OBLIGATIONS AT CLOSING
The Company's obligation to sell the Purchased Shares at the Closing is
subject to the fulfillment on or before the Closing Date of the following
conditions to the extent not waived by the Company.
Section 6.1. RECEIPT OF PAYMENT. The Company shall have received
payment for the Purchased Shares.
Section 6.2. REPRESENTATIONS CORRECT. The representations made in
Article 4 hereof shall be true and correct when made, and shall be true and
correct on the Closing Date.
Section 6.3. QUALIFICATIONS, LEGAL INVESTMENT. No stop order or other
order enjoining the sale of the Purchased Shares shall have been issued and
no proceedings for such purpose shall be pending or, to the knowledge of the
Company, threatened by any person or governmental authority. At the time of
the Closing, the sale and issuance of the Purchased Shares shall be legally
permitted by all laws and regulations to which the Investor and the Company
are subject.
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ARTICLE 7. BOARD PARTICIPATION
Section 7.1. MEETINGS OF THE BOARD OF DIRECTORS. As long as the
Investor owns in excess of five percent (5%) of the issued and outstanding
shares of the Company, the Investor shall be entitled to select an authorized
representative to attend all regularly scheduled and all special meetings of
the Board of Directors of the Company. Any notice required in connection
with such meetings shall be sent to:
Autoparts Finance Company, Inc.
00000 Xxxx X. Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attn: Vice President & General Counsel
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
The Investor's representative shall not be a member of the Company's
Board of Directors.
Section 7.2. COPIES OF DOCUMENTS. The Investor shall be provided with
(a) a copy of the minutes of all meetings of the Board of Directors of the
Company, and (b) a copy of any documents filed with the Securities and
Exchange Commission. Such documents shall be sent to the Investor, at the
address identified in Section 7.1 above, no later than 14 days following the
meeting or filing date.
ARTICLE 8. MISCELLANEOUS
Section 8.1. SURVIVAL. The representations, warranties, covenants and
agreements made by the parties herein shall survive any investigation made by
the Investor or the Company and shall survive the Closing of the transactions
contemplated hereby.
Section 8.2. EXPENSES. The Company and the Investor shall each bear its
own expenses and legal fees incurred on its behalf with respect to this
Agreement and the transactions contemplated hereby.
Section 8.3. NOTICES. Any notice, request or other communication
required or permitted to be given under this Agreement, except as otherwise
provided for in Section 7 hereof, shall be in writing and deemed to have been
properly given when delivered in person, or when sent by telecopy or other
electronic means and confirmation of receipt is received or two days after
being sent by certified or registered United States mail, return receipt
requested, postage prepaid, addressed (a) if to the Investor, at the address
set forth on Schedule A, or (b) if to the Company, at the address set forth
above. Any party may change its address for notices in the manner set forth
above.
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Section 8.4. SUCCESSORS AND ASSIGNS. Except as otherwise provided
herein, the terms of this Agreement shall inure to the benefit of and be
binding upon the respective heirs, legal representatives and corporate or
partnership successors of the parties. The Investor may not assign its
rights to purchase Common Stock hereunder without the prior written consent
of the Company.
Section 8.5. THIS AGREEMENT. This Agreement sets forth the entire
agreement of the parties with respect to the subject matter hereof and its
supersedes and discharges all prior negotiations and agreements (written or
oral) concerning such subject matter.
Section 8.6. NON-WAIVER. Neither the failure of nor any delay by any
party to this Agreement to enforce any right hereunder or to demand
compliance with its terms is a waiver of any right hereunder or constitutes a
course of dealing that modified this Agreement.
Section 8.7. WAIVERS. No waiver of any right or remedy under this
Agreement shall be binding on any party unless it is in writing and is signed
by the party to be charged. No such waiver of any right or remedy under any
term of this Agreement shall in any event be deemed to apply to any
subsequent default under the same or any other term contained herein.
Section 8.8. AMENDMENTS. No amendment, modification or termination of
this Agreement shall be binding on any party hereto unless it is in writing
and is signed by the parties hereto.
Section 8.9. SEVERABILITY. The terms of this Agreement are severable
and the invalidity of all or any part of any term of this Agreement shall not
render invalid the remainder of this Agreement or the remainder of such term.
If any term of this Agreement is so broad as to be unenforceable, such term
shall be interpreted to be only so broad as is enforceable.
Section 8.10. THIRD PARTIES. Nothing herein expressed or implied is
intended or shall be construed to give any person other than the parties
hereto any rights or remedies under this Agreement.
Section 8.11. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, all of which shall constitute one and the same
instrument, and any party hereto may execute this Agreement by signing one or
more counterparts.
Section 8.12. GOVERNING LAW. The validity, terms, performance and
enforcement of this Agreement shall be governed by laws of the State of
Florida that are applicable to agreements negotiated, executed, delivered and
performed solely in the state of Florida.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed by its duly authorized officer on this 22nd day of October, 1996.
THE COMPANY:
THE PARTS SOURCE, INC.
DBA ACE AUTO PARTS
By: /s/ XXXXXX X. XXX
---------------------
Name: Xxxxxx X. Xxx
Title: President
THE INVESTOR:
AUTOPARTS FINANCE COMPANY, INC.
By: /s/ E. XXXXXX XXXXXX
---------------------
Name: E. Xxxxxx Xxxxxx
Title: Vice President
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