EXHIBIT 10.
AGREEMENT FOR SALE AND PURCHASE OF ASSETS
BY AND AMONG
RHINO AUTOMOTIVE, LLC d/b/a UPSTATE MITSUBISHI
AND
AUTOMOTIVE GROUP HOLDINGS, INC.
October ___, 2003
THIS AGREEMENT FOR SALE AND PURCHASE OF ASSETS (this Agreement, together
with the exhibits and schedules attached hereto being hereinafter referred to as
this "Agreement"), made and entered into this ____ day of October, 2003, by and
among Rhino Automotive, LLC, a South Carolina limited liability company
("Seller") and Automotive Group Holdings, Inc, a Georgia corporation ("Buyer").
WHEREAS the Dealer owns a car dealership located at 0000 Xxxxxxx Xxxxxxxxx,
in Anderson, South Carolina (the "Business");
WHEREAS the Dealer wishes to sell and transfer and Buyer wishes to purchase
certain assets of the Dealer and assume certain liabilities upon the terms and
conditions set forth herein;
NOW, THEREFORE, in consideration of the respective representations,
warranties and covenants set forth herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
SECTION 1. THE CLOSING
1.1 GENERAL PROVISIONS. Subject to the terms and conditions hereof, at the
closing of the transactions contemplated herein (the "Closing"), the Dealer
shall sell, assign and transfer and Buyer shall purchase the Acquired Assets (as
defined in Section 2.1 below) and assume the liabilities referenced in Section
2.3. The Closing shall be held as soon as reasonably practicable (and in any
event within 10 business days) after fulfillment of all conditions set forth in
Sections 10 and 11 hereof but in any event no later than December 15, 2003 (the
"Closing Date"), at the offices of Wyche, Burgess, Xxxxxxx & Xxxxxx, P.A. or at
such other date, time and place as the parties hereto may mutually agree.
1.2 TERMINATION. This Agreement may be terminated at any time prior to the
Closing Date:
(1) by mutual written consent of the parties hereto;
(2) as provided in Section 1.1;
(3) by the Dealer, upon a material breach of this Agreement on the part of
Buyer which has not been cured (upon notice and reasonable opportunity to
cure) and which would cause the conditions set forth in Section 10 to be
incapable of being satisfied by December 15, 2003;
(4) by Buyer, upon a material breach of this Agreement on the part of the
Dealer which has not been cured (upon notice and reasonable opportunity to
cure) and which would cause the conditions set forth in Section 11 to be
incapable of being satisfied by December 15, 2003; or
(5) by either party if the Closing has not occurred by 6:00 p.m. on December
15, 2003.
1.3 APPLICATION OF DEPOSIT UPON TERMINATION. In the event this Agreement
is terminated, the Deposit (as hereinafter defined) shall be applied as follows:
(1) As determined by the parties if this Agreement is terminated upon mutual
consent of the parties;
(2) Refunded by Dealer to Buyer if Dealer commits a material breach of this
Agreement (and such default is not timely cured) and/or fails to satisfy a
closing condition through no fault of Buyer; or
(3) Retained by Dealer if Buyer commits a material breach of this Agreement
(and such default is not timely cured) and/or or fails to satisfy a closing
condition through no fault of Dealer.
SECTION 2. PURCHASE OF ASSETS AND ASSUMPTION OF LIABILITIES
2.1 THE ACQUIRED ASSETS. The "Acquired Assets" shall include all assets of
the Dealer used in any respect in the operation of the Business (except for
Excluded Assets as defined below in Section 2.2), which Acquired Assets shall
include, but not be limited to, the following (except for Excluded Assets as
defined below in Section 2.2):
(1) Dealer's new vehicle inventory and untitled demonstrators (the "New
Vehicles"), a current listing of which is attached hereto as SCHEDULE
2.1(1) (which schedule shall be updated by the Dealer and provided to Buyer
not more than 5 business days prior to Closing);
(2) All Dealer's parts and accessories, and new and unused oil, grease and
chemical inventories and Dealer's "parts return" privilege (the
"Parts/Products Inventory");
(3) All rights under the leases set forth ON SCHEDULE 2.1(3) (the "Leases");
(4) All work-in-progress (including the entire proceeds to be collected for
such service);
(5) The goodwill of Dealer in and with respect to the Business;
(6) The deposits and prepaid expenses set forth on SCHEDULE 2.1(6);
(7) All fixed assets, including furniture, fixtures, equipment, leasehold
improvements (except to the extent such are owned by or revert to the owner
of the real property) and signage ("Fixed Assets");
(8) All other assets of any type or nature used in the Business, except for
Excluded Assets or assets exclusively associated with the Excluded Assets.
2.2 EXCLUDED ASSETS. The following assets of the Business are excluded
from this sale and shall remain the property of the Dealer (the "Excluded
Assets"):
(1) Cash on hand, cash in accounts and certificates of deposit in accounts of
the Dealer;
(2) Accounts receivable.
(3) Any parts and accessories not "current" in the manufacturer's price book or
not in useable condition, or which are unreturnable, damaged or obsolete.
(4) All computer systems and all other tangible assets specifically set forth
or described on SCHEDULE 2.2 (which Schedule may be amended by Buyer in
good faith with the consent of the Dealer during the due diligence period
referenced in Section 10.7 to include assets reasonably considered by Buyer
not to be in good condition, reasonable wear and tear excepted, as
contemplated in Section 4.10).
(5) Intangible assets associated with the Business not specifically listed in
Section 2.1.
2.3 ASSUMPTION OF LIABILITIES. Buyer is not assuming or agreeing to pay or
purchase any liabilities or obligations of the Dealer of any nature whatsoever,
except as follows:
(1) the Leases;
(2) any other liabilities set forth on SCHEDULE 2.3.
SECTION 3. PURCHASE PRICE
3.1 PURCHASE PRICE. The purchase price for the Acquired Assets shall
consist of the following items (subject to adjustment as provided in Section 3.2
(as adjusted, the "Purchase Price"):
(1) an amount equal to Dealer's factory invoice cost of the Dealer's New
Vehicles, plus
(2) the value of the Parts/Products Inventory, as such is determined by an
inventory audit to be taken as close as possible to the Closing (and in no
event more than 7 days prior to Closing), which audit shall be taken by
Buyer and supervised by Dealer. The value ascribed to the Parts/Products
Inventory shall be the value at which such Parts/Products Inventory is
listed in the most recent Mitsubishi price book; plus
(3) book value of the Fixed Assets, as shown on Dealer's books as of the date
which is no more than 7 days prior to Closing, plus
(4) $300,000.00.
3.2 PURCHASE PRICE ADJUSTMENTS. The aggregate Purchase Price payable under
Section 3.1 shall be subject to the following adjustments:
(1) The Purchase Price shall be reduced by $.15 per mile for mileage in excess
of 1,000 miles on all demonstrators purchased hereunder.
(2) The Purchase Price shall be adjusted, dollar for dollar, increased or
decreased, as applicable, by the amount of any additions or removals (at
dealer net cost) of any of the New Vehicles or equipment and/or accessories
thereon.
(3) In the event that any of the New Vehicles have been damaged to any extent,
the Purchase Price thereof shall be reduced by the amount necessary to
repair such damage as determined by an independent body shop to be mutually
selected by the parties.
(4) The Purchase Price shall be increased dollar for dollar to the extent of
any deposits set forth on SCHEDULE 2.1(6).
3.3 PAYMENT.
(A) DEPOSIT. Dealer acknowledges receipt of a deposit of $10,000 previously
paid by Buyer to Seller ("Deposit") to be credited towards the Purchase
Price, unless otherwise returned or retained hereunder.
(B) BALANCE OF PURCHASE PRICE. The balance of the Purchase Price (the Purchase
Price less the Deposit) shall be payable to Seller at Closing in cash,
certified check, or other immediately available funds.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE DEALER
Dealer warrants and represents to Buyer as set forth below, which
representations and warranties shall survive the Closing Date for a period of 18
months (the "Warranty Period").
4.1 ORGANIZATION, POWERS AND QUALIFICATION. Incorporation, Powers and
Qualification. Dealer is a limited liability company duly organized, existing
and in good standing under the laws of the State of South Carolina and is
entitled to own its properties and assets and has all requisite corporate power
and authority to carry on its business as now conducted by it.
4.2 CAPITALIZATION; SUBSIDIARIES; PARTNERSHIPS. All outstanding capital
stock of the Dealer is owned as set forth on SCHEDULE 4.2 and no other persons
have voting power with respect to such capital stock. Dealer does not have any
subsidiaries. Dealer is not a partner or a joint venturer with any other person
or legal entity.
4.3 CORPORATE DOCUMENTS. Copies of the Dealer's Articles of Organization
and all amendments thereto and Operating Agreement as amended to date, certified
by the Dealer's secretary, which will be delivered to Buyer, will be complete
and correct as of the date of this Agreement.
4.4 AUTHORIZATION AND EXECUTION OF DOCUMENTS. This Agreement has been duly
authorized, executed and delivered by the Dealer and constitutes a valid and
legally binding obligation of the Dealer enforceable against Dealer in
accordance with its terms. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby (1) will not result in any
breach of the terms and conditions of or constitute a default under the Articles
of Organization or Operating Agreement of the Dealer or any instrument or
obligation to which Dealer is now a party or by which Dealer or any of its
properties or assets may be bound and (2) will not violate any existing order,
writ, or decree of any court, agency or governmental body, or any contract,
agreement, indenture or instrument to which Dealer is a party or by which Dealer
is bound.
4.5 PENDING LITIGATION. There are no proceedings or actions of any type
pending that would limit or impair the power or authority of the Dealer to enter
into this Agreement. There is no pending action, proceeding or material claim of
any type, or to Dealer's knowledge, threatened against Dealer, its properties or
business (including the Business). Furthermore, Dealer does not know or have
reasonable grounds to know of any basis for such action, or of any governmental
investigation or proceeding relative to Dealer, its properties or business
(including the Business). The Dealer is not in default with respect to any
order, writ, injunction or decree of any court, or federal, state, municipal or
other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, which is specifically directed at Dealer,
and to its knowledge, is not in material default with respect to any such item
with general applicability to Dealer.
4.6 RESERVED.
4.7 ABSENCE OF UNDISCLOSED LIABILITIES. Except to the extent disclosed
otherwise in this Agreement, the Dealer has no material liabilities of any
nature (including unpaid federal, state or local taxes), whether accrued,
absolute, known or unknown, contingent or otherwise that would materially affect
its ability to consummate the sale contemplated hereunder.
4.8 ABSENCE OF CERTAIN CHANGES. Since December 31, 2002 and except as
disclosed elsewhere in this Agreement, there has not been any change in the
condition (financial or otherwise), of the properties, assets, liabilities or
business prospects of the Dealer (including the Business), which has been
materially adverse or has occurred outside of the ordinary course of business,
including but not limited to, the following:
(1) Any engagement on the part of the Dealer in any unusual transactions
affecting the Business.
(2) Any damage, destruction or loss (whether or not covered by insurance)
materially and adversely affecting the properties, assets, business or
prospects of the Dealer (including the Business).
(3) Any change in the accounting methods, practices or principles followed by
Dealer, or any change in depreciation or amortization policies or rates
theretofore adopted.
(4) Any debts, obligations or liabilities incurred by Dealer, except current
liabilities incurred and obligations under agreements entered into in the
ordinary course of business and except as to matters set out in other
portions of this Agreement.
(5) Any sale, lease, abandonment or other disposition by the Dealer of any real
property, or, other than in the ordinary course of business, of any
equipment, furniture, fixtures or other properties.
(6) Any labor troubles, strikes or any other occurrence or condition relating
to employees which materially or adversely affects or reasonably may
materially or adversely affect the assets, properties, business or
prospects of the Dealer (including the Business).
(7) Any increase in the compensation payable or to become payable by the Dealer
to any of its officers, employees or agents, or any bonus payment,
profit-sharing, pension or other employee benefit or arrangement made to or
with any of them.
4.9 TAX RETURNS. The Dealer has filed, in correct form, all tax returns,
extensions and estimates (federal, state and local) required to be filed by them
as of the date hereof and has paid all taxes shown to be due and payable on the
returns or on any assessment received by Dealer, as well as all other taxes
(federal, state and local) due and payable by them on or before the date hereof
(taking into account any extensions thereon), other than state and local realty
taxes which are payable but which are not yet due. The Internal Revenue Service
has not conducted an examination of the Dealer's current income tax returns. The
Dealer has not executed any waiver that would have the effect of extending any
applicable statute of limitations in respect to tax liabilities.
4.10 LIENS, MORTGAGES, CHARGES AND ENCUMBRANCES; CONDITION OF ASSETS.
All Acquired Assets, when transferred, will be free and clear of all liens,
encumbrances, security interests, leases and claims of others, except as set
forth on SCHEDULE 4.10. Dealer's transfer of the Acquired Assets hereunder will
not give rise to a lien on the Acquired Assets or a cause of action by any party
against Buyer. Except as set forth on Section 4.10, the Acquired Assets are in
good condition, reasonable wear and tear excepted.
4.11 LEASES. All leases wherein the Dealer is either lessor or lessee or
otherwise has an interest or obligation are described on SCHEDULE 4.11.
4.12 COMPLIANCE WITH APPLICABLE LAWS, REGULATIONS AND OBLIGATIONS. The
Dealer has complied in all material respects with all laws, regulations and
orders applicable to it or its business (including the Business). Except for
routine business licenses and regulatory permits and/or certificates required by
local or state jurisdictions or sales tax permits, Dealer does not need any
governmental permits or licenses in connection with the transaction of its
business (including the Business) as presently conducted. No notice or warning
from any governmental authority with respect to any failure or alleged failure
of the Dealer to comply with any law, regulation or order has been issued or
given and is currently in effect, nor is any such notice or warning proposed or
threatened so far as is known to Dealer.
4.13 ENVIRONMENTAL MATTERS. The Dealer is in material compliance with all
local, state and federal environmental statutes, laws, rules, regulations and
permits, including but not limited to the Comprehensive Environmental Response,
Compensation, and Liability Act, 42 U.S.C. 9601 et seq. ("CERCLA"). Except in
the ordinary course of business and in material compliance with applicable laws
during the Dealer's possession of the property, the Dealer has not, nor to
Dealer's actual knowledge without investigation have other parties, used,
stored, disposed of or permitted any "hazardous substance" (as defined in
CERCLA), petroleum hydrocarbon (including, but not limited to motor oil,
transmission fluid, anti-freeze and lubricants), polychlorinated biphenyl,
asbestos or radioactive material (collectively, "Hazardous Substances") to
remain at, on, in or under any of the property covered by any of the real
property leases assumed hereunder. The Dealer has not installed, used, or
disposed of any asbestos or asbestos-containing material on, in or under any of
the property used in the Business other than vehicle brakes and related parts
and other than de minimus amounts used in the ordinary course of business.
4.14 BENEFIT PLANS; OTHER EMPLOYMENT MATTERS. All bonus, pension,
profit sharing, retirement, stock purchase, stock option, hospitalization,
insurance, and other employee compensation or benefit plans ("Benefit Plans") to
which the Dealer is a party are identified on SCHEDULE 4.14. Dealer represents
and warrants to Buyer that the Dealer is not a party to any employee contracts
or compensa-tion ar-range-ments with respect to its employees, and Dealer will
indemnify Buyer with respect to any and all liabilities arising under any such
contract or arrangement.
4.15 PROPERTIES.
(1) The Dealer leases all real property used in connection with the Acquired
Assets from Nick Castranous, or an affiliated entity.
(2) All Dealer's leases are referenced on SCHEDULE 4.11. All of the personal
property leased to Dealer is leased under validly existing leases. As of
the date hereof, there are no amounts owed by the Dealer under any of the
leases to which it is a party, there are no amounts this will become due
and payable by the Dealer under such leases as a result of actions prior to
the date hereof (other than lease payments in the ordinary course of
business).
(3) All Acquired Assets are located in Xxxxxxxx County, South Carolina.
4.16 DISCLOSURE. No representation or warranty by the Dealer in this
Agreement, or any statement or certificate furnished to or to be furnished to
Buyer pursuant hereto, or in connection with the transactions contemplated
hereby, contains or will contain at Closing any untrue statement of a material
fact, or omits or will omit to state a material fact necessary to make the
statements contained therein not misleading.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer warrants and represents to Dealer as follows, which representations
and warranties shall survive the Closing Date for the Warranty Period:
5.1 INCORPORATION, POWERS AND QUALIFICATION. Buyer is a corporation duly
organized, existing and in good standing under the laws of the State of Georgia,
duly qualified to do business in and is in good standing in the State of South
Carolina, and is entitled to own its properties and assets and has all requisite
corporate power and authority to carry on its business as now conducted by it.
5.2 AUTHORIZATION AND EXECUTION OF DOCUMENTS. This Agreement has been duly
authorized, executed and delivered by Buyer and constitutes a valid and legally
binding obligation of Buyer enforceable against Buyer in accordance with its
terms. The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby (1) will not result in any breach of the terms
and conditions of or constitute a default under the Articles of Incorporation or
Bylaws of Buyer, or any instrument or obligation to which Buyer is now a party
or by which Buyer or any of its properties or assets may be bound and (2) will
not violate any existing order, writ, injunction or decree of any court,
administrative agency or governmental body, or any contract, agreement,
indenture or instrument to which Buyer is a party or by which it is bound.
5.3 CORPORATE DOCUMENTS. Copies of the Buyer's Articles of Incorporation
and all amendments thereto and Bylaws as amended to date, certified by the
Buyer's secretary, which will be delivered to Dealer, will be complete and
correct as of the date of this Agreement.
5.4 LITIGATION. There are no proceedings or actions of any type pending
that would limit or impair the power or authority of Buyer to enter into this
Agreement. There is no pending action, proceeding or material claim of any type,
or to Buyer's knowledge, threatened against Buyer, its properties or business.
Furthermore, Buyer does not know or have reasonable grounds to know of any basis
for such action, or of any governmental investigation or proceeding relative to
Buyer, its properties or business. Buyer is not in default with respect to any
order, writ, injunction or decree of any court, or federal, state, municipal or
other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, which is specifically directed at Buyer,
and to its knowledge, is not in material default with respect to any such item
with general applicability to Buyer.
5.5 DISCLOSURE. No representation or warranty by Buyer in this Agreement,
nor any statement or certificate furnished to or to be furnished to Dealer
pursuant hereto, or in connection with the transactions contemplated hereby,
contains or will contain at Closing any untrue statement of a material fact, or
omits or will omit to state a material fact necessary to make the statements
contained therein not misleading.
SECTION 6. INDEMNIFICATION
6.1 INDEMNIFICATION OF BUYER. Dealer agrees to indemnify and hold Buyer
harmless from and against any claim, loss, liability, damage or expense that
Buyer sustains or becomes subject to as a result of (a) the operation by the
Dealer of the Business prior to the Closing Date (except for the Assumed
Liabilities), (b) the breach or non-fulfillment by the Dealer of any warranty,
representation or covenant of the Dealer set forth herein (not expressly waived
in writing by Buyer), and (c) any claim against, or liability or obligation of,
Dealer which (i) is asserted against or sustained by Buyer, its agents or
employees and (ii) has not been express-ly assumed by Buyer pursuant to this
Agreement. Any such indemni-fication shall include any costs, including
reasonable attorneys' fees incurred by Buyer, whether or not suit is brought,
subject to Section 6.3. Further, subject to Sections 6.3 and 6.4, in the event
Dealer breaches any warranty or representa-tion made in this Agreement or fails
to perform any requirement or obliga-tion undertaken in this Agreement (not
expressly waived in writing by Buyer), Dealer agrees to pay all costs, including
attorneys' fees (including at the appellate level), incurred by Buyer in the
enforcement hereof, whether or not suit is brought. Any such demand or claim
arising out of breach of warranties, covenants, or indemnities must be made
prior to the expiration of the Warranty Period.
6.2 INDEMNIFICATION OF THE DEALER. Buyer agrees to indemnify and hold
Dealer harmless from and against any claim, loss, liabili-ty, damage or expense
that Dealer sus-tains or becomes subject to as a result of (a) the operation by
Buyer of the Business from and after the Closing Date, (b) as a result of the
breach or non-fulfillment by Buyer of any warranty, representation or covenant
of Buyer set forth herein (not expressly waived in writing by Dealer), and (c)
any claim against, or liability or obligation of, Dealer which (i) is asserted
against or sustained by Dealer, its agents or employees and (ii) has been
assumed by Buyer pursuant to this Agreement. Any such indemni-fication shall
include any costs, including attorneys' fees incurred by the Dealer, whether or
not suit is brought, subject to Section 6.3. Further, subject to Sections 6.3
and 6.4, in the event Buyer breaches any warranty or representa-tion made in
this Agreement or fails to perform any requirement or obliga-tion undertaken in
this Agreement (not expressly waived in writing by Dealer), Buyer agrees to pay
all costs, including reasonable attorneys' fees (including at the appellate
level), incurred by the Dealer in the enforcement hereof, whether or not suit is
brought. Any such demand or claim arising out of breach of warranties,
covenants, or indemnities must be made prior to the expiration of the Warranty
Period.
6.3 DEFENSE AND SETTLEMENT. A party seeking indemnification pursuant to
this Section 6 (an "indemnified party") shall give prompt notice to the party
from whom such indemnification is sought (the "indemnifying party") of the
assertion of any claim, or the commencement of any action or proceeding, in
respect of which indemnity may be sought hereunder. The indemnified party shall
assist the indemnifying party in the defense of any such action or proceeding.
The indemnifying party shall have the right to, and shall at the request of the
indemnified party, assume the defense of any such action or proceeding at its
own expense. In any such action or proceeding, the indemnified party shall have
the right to retain its own counsel, but the fees and expenses of such counsel
shall be at its own expense unless:
(a) The indemnifying party and the indemnified party shall have mutually agreed
to the retention of such counsel; or
(b) The named parties to any such suit, action or proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified
party and, in the reasonable judgment of the indemnified party,
representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them.
An indemnifying party shall not be liable under this Section 6.3 for any
settlement effected without its consent of any claim, litigation or proceeding
in respect of which indemnity may be sought hereunder. The indemnifying party
may settle any claim without the consent of the indemnified party, but only if
the sole relief awarded is monetary damages that are paid in full by the
indemnifying party. An indemnified party shall, subject to its reasonable
business needs, use reasonable efforts to minimize the indemnification sought
from the indemnifying party hereunder. Notwithstanding the foregoing, no
investigation by an indemnified party at or prior to the Closing shall relieve
an indemnifying party of any liability hereunder, unless the indemnified party
seeks indemnity in respect of a representation or warranty which it actually had
reason to believe to be incorrect as a result of its investigation prior to the
Closing and the indemnified party intentionally failed to bring such belief to
the attention of the indemnifying party prior to the Closing.
6.4 LIMITATIONS ON INDEMNIFICATION. Notwithstanding anything to the
contrary contained in this Section 6, no indemnification shall be required to be
made by either party for breaches of representations or warranties until the
aggregate amount of all such claims by a party exceeds $25,000, provided
however, that Purchase Price Adjustments as contemplated in Section 3.2 shall
not be subject to this limitation. Once such aggregate amounts exceed $25,000,
such party shall thereupon be entitled to indemnification for all amounts,
including the initial $25,000. In addition, the parties shall have no obligation
under this Section 6 for any consequential liability, damage or loss the
indemnified party may suffer as the result of any demand, claim or lawsuit. And,
notwithstanding anything to the contrary contained herein, the absolute maximum
aggregate liability of the Dealer for indemnification damages pursuant to this
Section 6 shall be limited to the Purchase Price.
SECTION 7. [RESERVED]
SECTION 8. ADDITIONAL COVENANTS AND WARRANTIES OF THE PARTIES
8.1 ACCESS. Dealer shall allow Buyer and its counsel, accountants, and
other representatives, reasonable access, during normal business hours and upon
reasonable notice throughout the period prior to the Closing, to all its
properties, books, contracts, commitments and records associated with the
Business at a place determined by the Dealer, and shall furnish Buyer during
such period with all such information concerning the Business as Buyer
reasonably may request.
8.2 CONFIDENTIALITY. Each party will and will cause its employees and
agents (including, without limitation, attorneys and accountants) to hold in
strict confidence, unless disclosure is compelled by judicial or administrative
process, or in the opinion of its counsel, by other requirements of law, all
Confidential Information (as defined below) and will not disclose the same to
any person. Confidential Information shall be used only for the purpose of and
in connection with consummating the transactions contemplated herein. If this
Agreement is terminated, each party hereto will promptly return all documents of
whatever type, kind or nature, including but not limited to, photocopies, notes,
memoranda, computer discs, calculations, work sheets, abstracts, synopses,
tapes, recordings, etc., whether in the possession of Buyer, its agents or
employees, or Dealer, its agents or employees, received by it from each other
party containing Confidential Information. The covenants in this Section 8.2
shall survive the Closing Date forever. The term "Confidential Information"
shall mean the contents of this Agreement as well as all information of any kind
concerning a party hereto that is furnished by such party or on its behalf
pursuant to Section 8.1 hereof, except information (i) ascertainable or obtained
from public or published information, (ii) received from a third party not known
to the recipient of Confidential Information to be under an obligation to keep
such information confidential, (iii) which is or becomes known to the public
(other than through a breach of this Agreement), (iv) of which the recipient was
in possession prior to disclosure thereof in connection with the transactions
contemplated herein, or (v) was independently developed by the recipient without
the benefit of Confidential Information.
8.3 EXPENSES AND PRORATION OF TAXES. Dealer will pay its expenses in
connection with the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby, including brokerage fees,
attorneys' fees and accountants' fees, if any. Buyer shall pay all its own
expenses in connection with the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby. State, county and
municipal and other ad valorem taxes related to the Acquired Assets shall be
prorated and accounted for as between Dealer and Buyer as of midnight on the
Closing Date, as is customary in transactions of this kind. Any sales taxes
which may be payable in connection with the transfer of any of the Acquired
Assets, shall be borne solely by Buyer. Any sales and use tax, as well as all
withholding and FICA taxes, accrued through the date of the Closing shall be
paid by Dealer. All other applicable transfer documentary filing and other taxes
and fees that might be due or payable as a result of the conveyance, assignment,
transfer or delivery of Acquired Assets, levied on the Dealer or Buyer shall be
borne by the responsible party therefor, it being the understanding that all
sales taxes incident to any conveyances herein shall be paid by the Buyer.
8.4 RISK OF LOSS. The risk of any material loss or material damage to the
property of the Dealer from fire or other casualty shall be borne by the Dealer
at all times prior to the Closing Date. In the event of any such major loss or
major damage prior to Closing this makes it impractical to continue operations
in the present locations, Buyer may, at its option, terminate this Agreement. In
the event Buyer elects not to terminate this Agreement for any reason, the
proceeds of any claim for any loss payable under any insurance policies with
respect thereto shall go to Buyer. Prior to the Closing Date, Dealer shall
maintain insurance in reasonable amounts on the Acquired Assets.
8.5 BROKERS. Buyer and Dealer covenant and warrant that no broker or
finder has acted for them or any of them in connection with this Agreement or
the transactions contemplated hereby. Buyer and Dealer agree to indemnify and
hold the other harmless from any such brokerage fee and against any other claim
for brokerage commission, finder's fee or any similar commission, fee or charge
relative to this Agreement or the transactions contemplated hereby and any and
all expenses of any character (including reasonable attorneys fees) incurred in
connection with the investigation or defense of any such claim.
8.6 BEST EFFORTS. Each party shall use their respective best efforts to
cause all conditions to Closing set forth in Section 10 and 11 to be met as soon
as reasonably practicable.
8.7 DEALER'S EMPLOYEES. Buyer shall not be required to hire any of the
Dealer's employees, provided that Buyer may hire any such employee of the Dealer
employed in the Business as it chooses upon such terms as it deems appropriate.
Buyer shall not be responsible for any severance pay or other benefits that may
be payable to Dealer's employees that it does not hire, and with respect to any
former employees of the Dealer hired by Buyer, Buyer shall not assume any
severance pay plan or other obligations that might be owed to any such former
employee.
8.8 ALLOCATION. Buyer shall prepare, or cause to be prepared, at least five
(5) business days prior the Closing Date, an allocation of the Purchase Price
(and all other capitalizable costs) among the Acquired Assets in accordance with
Section 1060 of the Internal Revenue Code (the "Allocation"). The parties agree
to use their best efforts to agree upon the Allocation prior to closing, and if
agreed upon, will adopt the Allocation for all purposes (including financial
accounting and Tax purposes). Buyer and Dealer shall file U.S. Internal Revenue
Service Form 8594 in a timely manner and in accordance with the Allocation.
SECTION 9. CONDUCT OF BUSINESS PENDING CLOSING
9.1 CONDUCT OF THE DEALER PENDING CLOSING. During the period commencing on
the date hereof and continuing until the Closing Date, Dealer covenants and
agrees to the following (except to the extent that Buyer shall otherwise
expressly consent in writing, which consent shall not be unreasonably delayed or
withheld); provided, however, that any breach of or inaccuracy in any of the
covenants given in this Section 9.1 must be material in the aggregate with
respect to the business of the Dealer (including the Business) before such
breach shall be actionable or shall constitute grounds for termination or
failure to perform under this Agreement:
(1) Dealer will carry on its business (including the Business) only in the
ordinary course in substantially the same manner as heretofore conducted
and, to the extent consistent with such business (including the Business),
use all reasonable efforts to preserve intact their business organizations,
maintain the services of their present officers and employees and preserve
their relationships with customers, suppliers and others having business
dealings with them so that their goodwill and going business shall be
unimpaired at the Closing Date.
(2) Dealer will promptly advise Buyer orally and in writing of any change in
the business of the Dealer (including the Business) which is or may
reasonably be expected to be materially adverse to the business of the
Dealer (including the Business).
(3) Dealer will not take, agree to take, or knowingly permit to be taken any
action or do or knowingly permit to be done anything in the conduct of the
business of the Dealer (including the Business), or otherwise, which would
be contrary to or in breach of any of the terms or provisions of this
Agreement, or which would cause any of the representations of the Dealer
contained herein to be or become untrue in any material respect.
(4) Dealer will not incur any indebtedness for borrowed money, issue or sell
any debt securities, or assume or otherwise become liable, whether
directly, contingently or otherwise, for the obligation of any other party,
other than in the ordinary course of business.
(5) After the execution of this Agreement, Dealer will not incur any expense
outside the ordinary course of business or aggregate capital expenditures
in excess of $25,000 without the prior written consent of Buyer.
(6) Dealer will not grant any employees or officers any increase in
compensation or in severance or termination pay, or enter into any
employment agreement with any employee or officer without the consent of
Buyer.
(7) After the execution of this Agreement, Dealer will not transfer any assets
referenced in Section 2.1(7) aggregating in excess of $10,000.00 without
the consent of Buyer, which consent shall not be unreasonably withheld.
(8) Prior to the Closing or the termination of this Agreement, Dealer will not
acquire or agree to be acquired, merge or consolidate with any other
company, or purchase substantially all of the assets of any other business,
corporation, partnership, association or other business organization,
entity or division thereof.
9.2 CONDUCT OF BUYER PENDING CLOSING. During the period commencing on the
date hereof and continuing until the Closing Date, Buyer covenants and agrees to
the following (except to the extent that Dealer shall otherwise expressly
consent in writing, which consent shall not be unreasonably delayed or
withheld); provided, however, that any breach of or inaccuracy in any of the
covenants given in this Section 9.2 must be material in the aggregate with
respect to Buyer before such breach shall be actionable or shall constitute
grounds for termination or failure to perform under this Agreement:
(1) Buyer will not amend its Articles of Organization or Operating Agreement as
in effect on the date hereof in any manner that will adversely affect
Dealer in any material respect.
(2) Buyer will promptly advise Dealer orally and in writing of any change in
its business which is or may reasonably be expected to be materially
adverse to Buyer.
(2) Buyer will not take, agree to take, or knowingly permit to be taken any
action or do or knowingly permit to be done anything in the conduct of its
business or otherwise, which would be contrary to or in breach of any of
the terms or provisions of this Agreement, or which would cause any of the
representations of Buyer contained herein to be or become untrue in any
material respect.
SECTION 10. CONDITIONS PRECEDENT TO CLOSING OF BUYER
Unless waived by Buyer in writing, the obligations of Buyer under the
Agreement are subject to the fulfillment, prior to or at Closing, of each of the
following conditions:
10.1 REPRESENTATIONS AND WARRANTIES TRUE AT CLOSING. The several warranties
and representations of the Dealer contained herein shall be construed to be
continuous and continuing from the date of this Agreement to the Closing Date,
and shall be true in all material respects at the time of Closing as though such
representations and warranties were made at and as of such time, and shall not
be affected by any investigation, verification or approval by any party hereto
or by anyone on behalf of any of such parties.
10.2 PERFORMANCE. Dealer shall have complied with all agreements, covenants
and conditions required by this Agreement to be performed or complied with by
them on or before Closing (unless expressly waived in writing by Buyer).
10.3 DELIVERY OF DOCUMENTS. Dealer shall have delivered to Buyer all
documents and other information required to be provided to Buyer on or before
Closing as set forth herein. The following additional documents shall be
delivered to Buyer on or before Closing:
(1) A Certificate of Good Standing from the State of South Carolina with
respect to Dealer;
(2) A certificate signed by the Dealer stating that all the warranties and
representations made by the Dealer herein remain true and correct on the
Closing Date and that all covenants and agreements required herein to have
been performed by them by Closing have been performed, and that all
conditions in this Section have been met (except as expressly waived in
writing by Buyer);
(3) Certified copies of actions of the Manager(s) of the Dealer approving this
Agreement and all documents to be executed and delivered in accordance
herewith and authorizing the officers of the Dealer to execute this
Agreement and to take all other steps required to carry out the terms
hereof;
(4) Any necessary assignments and bills of sale necessary to transfer the
Acquired Assets and have Buyer assume the liabilities to be assumed
hereunder; and
(5) Any and all other instruments and documents that may be reasonably
necessary to effectuate the obligations of the Dealer hereunder.
10.4 CONDUCT OF BUSINESS. The Business shall have been conducted in the
usual and customary manner, and there shall have been no material casualty or
material adverse change in the Business or the financial condition of the Dealer
from the date hereof through the Closing Date.
10.5 CONSENTS AND APPROVALS. All approvals, permits, orders, consents, or
other authorizations (whether corporate, shareholder, regulatory or otherwise)
which, in the reasonable opinion of counsel for Buyer, are necessary to the
consummation of the transactions contemplated hereby shall have been obtained
(including the consent of all vehicle manufacturers associated with the Dealer),
and no governmental entity or judicial authority shall have issued any order,
writ, injunction or decree prohibiting the consummation of the transactions
contemplated hereby. Such approvals shall have been obtained without the
imposition of any condition or requirements that, in the reasonable judgment of
Buyer, renders the consummation of this transaction unduly burdensome.
10.6 OPINION OF COUNSEL. Dealer shall have furnished Buyer with an opinion
of counsel, dated as of the Closing Date, substantially in the form attached
hereto as EXHIBIT A, and otherwise in form and substance reasonably satisfactory
to Buyer and its counsel.
10.7 DUE DILIGENCE. Within 30 days of the date hereof, Buyer shall have
completed a due diligence investigation of the Dealer, the results of which
shall be satisfactory in all respects to Buyer.
10.8 FINANCING. Within 30 days of the date hereof, Buyer shall have
obtained financing acceptable in all respects to it and sufficient to enable it
purchase the Acquired Assets. Buyer shall use its reasonable best efforts to
obtain such financing.
SECTION 11. CONDITIONS PRECEDENT TO CLOSING OF THE DEALER
Unless waived by Dealer in writing, the obligations of the Dealer under
this Agreement are subject to the fulfillment, prior to or at Closing, of each
of the following conditions:
11.1 REPRESENTATIONS AND WARRANTIES TRUE AT CLOSING. The several warranties
and representations of Buyer contained herein shall be construed to be
continuous and continuing from the date of this Agreement to the Closing Date,
and shall be true in all material respects at the time of Closing as though such
representations and warranties were made at and as of such time, and shall not
be affected by any investigation, verification or approval by any party hereto
or by anyone on behalf of any of such parties.
11.2 PERFORMANCE. Buyer shall have performed and complied with all
agreements, covenants and conditions required by this Agreement to be performed
or complied with by Buyer prior to or at Closing (unless expressly waived in
writing by Dealer).
11.3 DELIVERY OF DOCUMENTS. Buyer shall have delivered to Dealer all
documents and other information required to be provided to Dealer on or before
Closing as set forth herein. The following additional documents shall be
delivered to Dealer on or before Closing:
(1) The Purchase Price to be paid to Dealer pursuant hereto (payable by wire
transfer);
(2) Certified copies of actions of the board of directors and shareholders of
Buyer approving this Agreement and all documents to be executed and
delivered in accordance herewith and authorizing the officers of Buyer to
execute this Agreement and to take all other steps required to carry out
the terms hereof;
(3) A Certificate of Good Standing from the State of South Carolina with
respect to Buyer;
(4) A certificate signed by an authorized officer of Buyer stating that all the
warranties and representations made by it herein remain true and correct on
the Closing Date and that all covenants and agreements required herein to
have been performed by Buyer by Closing have been performed, and that all
conditions set forth in this Section have been met (except as expressly
waived in writing by the Dealer); and
(5) Any and all other instruments and documents that may be reasonably
necessary to effectuate the obligations of Buyer hereunder.
11.4 CONDUCT OF BUSINESS. The business of Buyer shall have been conducted
in the usual and customary manner, and there shall have been no material
casualty or material adverse change in the business or financial condition of
Buyer from the date hereof through the Closing Date.
11.5 OPINION OF COUNSEL. Buyer shall have furnished Dealer with an opinion
of counsel, dated as of the Closing Date, substantially in the form attached
hereto as EXHIBIT B, and otherwise in form and substance reasonably satisfactory
to Dealer and its counsel.
SECTION 12. MISCELLANEOUS
12.1 ENTIRE AGREEMENT; AMENDMENT. This Agreement contains the entire
agreement between the parties hereto and supersedes all prior written or oral
understandings or agreements. This Agreement may be amended only by an
instrument in writing signed by all the parties hereto.
12.2 PARTIES IN INTEREST. All the terms and provisions of this Agreement
shall be binding upon and inure to the benefit of and be enforceable by the
parties hereto and their respective heirs, executors, administrators, successors
and assigns, provided that none of the parties hereto shall assign any of its
rights or privileges hereunder prior to the consummation of the transactions
contemplated hereby without the written consent of the other parties. No
assignment of rights under this Agreement will be binding unless agreed to in
writing by each of the parties.
12.3 GOVERNING LAW. This Agreement shall be construed and governed in
accordance with the laws of the State of South Carolina.
12.4 NOTICES. All notices hereunder shall be sent by depositing the same in
the United States mail in a sealed envelope, with postage prepaid, marked
confidential and addressed to Dealer and Buyer at the following addresses, or at
such other address as shall be furnished in writing:
As to Dealer : Rhino Automotive, LLC
0000 Xxxxxxx Xxxx
Xxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxx
(000) 000-0000 (telephone)
(000) 000-0000 (fax)
With a Copy to: Wyche, Burgess, Xxxxxxx & Xxxxxx, P.A.
Xxxx Xxxxxx Xxx 000
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Xxxxx X. X'Xxxxx
(000) 000-0000 (telephone)
(000) 000-0000 (fax)
As to Buyer: Automotive Group Holdings, Inc.
_______________________________
_______________________________
Attn: Xxxx Xxxxxx
________________(telephone)
________________(fax)
With a Copy to: _______________________________
_______________________________
_______________________________
Attn:__________________________
_________________(telephone)
_________________(fax)
12.5 HEADINGS. The headings of the sections of this Agreement are for the
convenience of reference only and do not form a part hereof and in no way
modify, interpret or construe the meanings of the parties.
12.6 SEVERABILITY. Each portion of this Agreement is severable, and if one
portion shall prove to be invalid, unenforceable or violative of any statute,
regulation, ordinance or other law, the remainder of the Agreement shall remain
in full force and effect.
12.7 COUNTERPARTS. This Agreement may be signed in one or more
counterparts, all of which shall be construed to be an original.
END OF PAGE -- THE NEXT PAGE IS THE SIGNATURE PAGE
EXECUTED AND WITNESSED as of the day and year first above written.
WITNESSES: RHINO AUTOMOTIVE, LLC
________________________ By: /s/ Xxxxxxx Xxx
-----------------
Xxxxxxx Xxx, Manager
________________________ By: /s/ Xxxxxxxx Xxxxxxx
----------------------
Xxxxxxxx Xxxxxxx, Manager
_________________________ AUTOMOTIVE GROUP HOLDINGS, INC.
________________________ By: /s/ Xxxxx Xxxxxx
------------------
Its: President
LIST OF EXHIBITS:
------------------
Exhibit A - Form of Opinion of Dealer's Counsel
Exhibit B - Form of Opinion of Buyer's Counsel
LIST OF SCHEDULES:
-------------------
2.1(1) New Vehicle Inventory
2.1(3) Leases (as part of Acquired Assets)
2.1(6) Deposits and Pre-paid expenses
2.2 Tangible assets not part of Acquired Assets
2.3 Assumed Liabilities (other than Leases)
4.2 List of Shareholders of Dealer
4.10 Liens on Acquired Assets at time of transfer
4.11 Leases (includes real and personal property)
4.14 Benefit Plans
EXHIBIT A
[Buyer]
[Address]
RE: Agreement for Sale and Purchase of Assets (the "Agreement")
executed as of October__, 2003, by and between Rhino Automotive, LLC, a South
Carolina limited liability company ("Dealer") and Automotive Group Holdings,
Inc.
Ladies and Gentlemen:
We have acted as counsel to the Dealer all in connection with the
transactions contemplated in the Agreement. Capitalized terms used in this
opinion which are defined in the Agreement shall have the meaning ascribed to
such terms in the Agreement, unless otherwise defined herein.
For the purpose of giving this opinion, we have examined executed copies of
the following (collectively, the "Transaction Documents"):
1. the Agreement; and
2. that certain instruments of conveyance and other documents delivered
pursuant to the Agreement by the Dealer and of which we received an
executed copy.
We have also examined certificates of public officials and of the Dealer
and such other documents and records (including the corporate records of the
Dealers), and have made such inquiries and investigations of law, as we have
considered necessary to render the opinions contained herein. We have assumed
the genuineness of all signatures (except for Dealer's signatures), the
authenticity of all documents submitted to us as originals, the conformity to
authentic original documents of all documents submitted to us as certified,
conformed, or photo static copies, and the accuracy and completeness of all
corporate and other records made available to us by the Dealer and any of their
affiliates. With respect to certain matters of fact, we have relied upon
certificates of public officials and a certificate and representations of
executive officers of the Dealers. We believe we are justified in our reliance
on such certificates and representations. No inference should be drawn from our
representation of Dealer that we have investigated or taken measures to confirm
the accuracy of such certificate or any such representations relied upon by us
in rendering this opinion. However, nothing has come to our attention in our
representation of the Dealer that leads us to believe that our reliance on such
certificate or representations is not justified.
We are members of the bar of the State of South Carolina. Our opinions set
forth in this letter are limited to matters governed by the laws of the State of
South Carolina and the United States of America in force on the date of this
letter. We express no opinion with regard to any matter that may be (or which
purports to be) governed by the laws of any other state or jurisdiction.
Based upon the foregoing and subject to the conditions set forth below, we
are of the opinion that:
1. The Dealer is a limited liability company, existing and in good standing
under the law of the State of South Carolina.
2. Dealers has the corporate power to enter into and perform its obligations
under the Transaction Documents.
3. Dealer's members and managers have adopted by requisite vote the
resolutions necessary to authorize Dealer's execution, delivery and
performance of each of the Transaction Documents.
4. Dealer has duly executed and delivered each of the Transaction Documents.
5. Each of the Transaction Documents is a valid and binding obligation of the
Dealer and is enforceable against the Dealer in accordance with its terms.
6. The Dealer's execution and delivery of each of the Transaction Documents
and the performance of its obligation thereunder will not (a) violate any
provisions of the Dealer's articles of organization or operating agreement,
(b) to our knowledge, constitute a violation by Dealer of any applicable
provision of statutory law or governmental regulation, or (c) violate any
material agreement of the Dealer.
With respect to the opinion in paragraph (1) above, we have relied upon
certificates of public officials and have, without further investigation,
assumed no change in the information set forth thereon from the respective dates
thereof.
Each of the opinions expressed above with respect to enforceability are
subject to the following additional qualifications:
(a) The effect of bankruptcy, insolvency, reorganization, moratorium,
conservatorship, receivership, or other similar laws relating to or
affecting the rights of creditors generally in the event of insolvency,
reorganization, moratorium or receivership.
(b) The application of general principles of equity, including, but not limited
to, the right of specific performance (regardless of whether enforceability
is considered in a proceeding in equity or at law).
(c) The unenforceability of provisions to the effect that failure to exercise
or delay in exercising rights or remedies will not operate as a waiver of
any such rights or remedies, or to the effect that provisions therein may
only be waived in writing to the extent that an oral agreement has been
entered into modifying such provisions.
(d) The exercise of any judicial remedy by Buyer is subject to compliance by
the Buyer with the appropriate rules of procedure and statutes governing
the bringing of adjudicative proceedings, including, but not limited to,
rules and statutes regarding venue, pleading, service of process,
qualification to do business and statutes of limitation.
No opinion is given as to:
(a) any provision of the Transaction Documents requiring or in effect requiring
that any waiver or amendment of any provision of the Transaction Documents
or any other agreement, instrument or other document may be effected only
in writing or in a particular form;
(b) any provision releasing, exculpating or exempting any person or entity
from, or requiring indemnification or legal defense of any person or entity
for, liability for action or inaction, to the extent the action or inaction
involves negligence, willful misconduct or unlawful conduct or does not
satisfy a standard required by law; or
(c) any matter governed by or arising under any law requiring or in effect
requiring accurate and/or complete disclosure or prohibiting or in effect
prohibiting inaccurate and/or incomplete disclosure.
Whenever in this letter the phrase "to our knowledge", the phrase "come to
our attention" or any similar phrase is used, we are referring to the current
awareness of information of the attorneys of this law firm, after such inquiry
of such attorneys as we believe to be reasonable in the circumstances, who are
included in either of the following descriptions: (i) lawyers primarily involved
in the preparation of an opinion or statement set forth herein, and (ii) lawyers
whose relationship with the Dealer, or with the subject matter of any such
opinion or statement, is of such significance that the lawyer principally
responsible for the transactions contemplated by the Agreement reasonably
believes those lawyers should be consulted with respect to such opinion or
statement.
Our opinions are limited to the specific issues addressed herein and are
limited in all respects to laws, regulations and facts existing on the date
hereof. We do not undertake to advise you of any changes in such laws or facts
which may occur after the date hereof. This letter is being furnished to you in
connection with the Agreement and is not to be used, circulated, quoted or
otherwise relied upon by any other person or entity or for any other purpose
without our prior written consent.
Very truly yours,
EXHIBIT B
[Seller Parties]
[Address]
RE: Agreement for Sale and Purchase of Assets (the "Agreement")
executed as of October__, 2003, by and between Rhino Automotive, LLC, a South
Carolina limited liability company ("Dealer") and Automotive Group Holdings,
Inc.
Ladies and Gentlemen:
We have acted as counsel to Automotive Group Holdings, Inc. in connection
with the transactions contemplated in the Agreement. Capitalized terms used in
this opinion which are defined in the Agreement shall have the meaning ascribed
to such terms in the Agreement, unless otherwise defined herein.
For the purpose of giving this opinion, we have examined executed copies of
the following (collectively, the "Transaction Documents"):
1. the Agreement; and
2. those certain instruments of conveyance, assignment and/or assumption and
other documents delivered pursuant to the Agreement by the Buyer and of
which we received an executed copy.
We have also examined certificates of public officials and of the Buyer and
such other documents and records (including the corporate records of the Buyer),
and have made such inquiries and investigations of law, as we have considered
necessary to render the opinions contained herein. We have assumed the
genuineness of all signatures (except for the Buyer's signatures), the
authenticity of all documents submitted to us as originals, the conformity to
authentic original documents of all documents submitted to us as certified,
conformed, or photostatic copies, and the accuracy and completeness of all
corporate and other records made available to us by the Buyer and any of Buyer's
affiliates. With respect to certain matters of fact, we have relied upon
certificates of public officials and a certificate and representations of
executive officers of the Buyer. We believe we are justified in our reliance on
such certificates and representations. No inference should be drawn from our
representation of Buyer that we have investigated or taken measures to confirm
the accuracy of such certificate or any such representations relied upon by us
in rendering this opinion. However, nothing has come to our attention in our
representation of the Buyer that leads us to believe that our reliance on such
certificate or representations is not justified.
We are members of the bar of the State of South Carolina. Our opinions set
forth in this letter are limited to matters governed by the laws of the State of
South Carolina and the United States of America in force on the date of this
letter. We express no opinion with regard to any matter that may be (or which
purports to be) governed by the laws of any other state or jurisdiction.
Based upon the foregoing and subject to the conditions set forth below, we
are of the opinion that:
1. The Buyer is a corporation, existing and in good standing under the law of
the Georgia, and duly registered to do business in and in good standing in
the State of South Carolina.
2. The Buyer has the corporate power to enter into and perform its obligations
under the Agreement and the other Transaction Documents.
3. Each of the Buyer's shareholders and members of its board of directors have
adopted by requisite vote (if such vote is required) the resolutions
necessary to authorize the Buyer's execution, delivery and performance of
each of the Transaction Documents.
4. The Buyer has duly executed and delivered each of the Transaction Documents
(as applicable).
5. Each of the Transaction Documents is a valid and binding obligation of the
Buyer (to which it is a party) and is enforceable against the Buyer (if it
is a party) in accordance with its terms.
6. The Buyer's execution and delivery of each of the Transaction Documents and
the performance of its obligation thereunder will not (a) violate any
provisions of the Buyer's articles of incorporation or bylaws, (b) to our
knowledge, constitute a violation by the Buyer of any applicable provision
of statutory law or governmental regulation, or (c) violate any material
agreement of the Buyer.
With respect to the opinion in paragraph (1) above, we have relied upon
certificates of public officials and have, without further investigation,
assumed no change in the information set forth thereon from the respective dates
thereof.
Each of the opinions expressed above with respect to enforceability are
subject to the following additional qualifications:
(a) The effect of bankruptcy, insolvency, reorganization, moratorium,
conservatorship, receivership, or other similar laws relating to or
affecting the rights of creditors generally in the event of insolvency,
reorganization, moratorium or receivership.
(b) The application of general principles of equity, including, but not limited
to, the right of specific performance (regardless of whether enforceability
is considered in a proceeding in equity or at law).
(c) The unenforceability of provisions to the effect that failure to exercise
or delay in exercising rights or remedies will not operate as a waiver of
any such rights or remedies, or to the effect that provisions therein may
only be waived in writing to the extent that an oral agreement has been
entered into modifying such provisions.
(d) The exercise of any judicial remedy by the Dealer is subject to compliance
by the Dealer with the appropriate rules of procedure and statutes
governing the bringing of adjudicative proceedings, including, but not
limited to, rules and statutes regarding venue, pleading, service of
process, qualification to do business and statutes of limitation.
No opinion is given as to:
(a) any provision of the Transaction Documents requiring or in effect requiring
that any waiver or amendment of any provision of the Transaction Documents
or any other agreement, instrument or other document may be effected only
in writing or in a particular form;
(b) any provision releasing, exculpating or exempting any person or entity
from, or requiring indemnification or legal defense of any person or entity
for, liability for action or inaction, to the extent the action or inaction
involves negligence, willful misconduct or unlawful conduct or does not
satisfy a standard required by law; or
(c) any matter governed by or arising under any law requiring or in effect
requiring accurate and/or complete disclosure or prohibiting or in effect
prohibiting inaccurate and/or incomplete disclosure.
Whenever in this letter the phrase "to our knowledge", the phrase "come to
our attention" or any similar phrase is used, we are referring to the current
awareness of information of the attorneys of this law firm, after such inquiry
of such attorneys as we believe to be reasonable in the circumstances, who are
included in either of the following descriptions: (i) lawyers primarily involved
in the preparation of an opinion or statement set forth herein, and (ii) lawyers
whose relationship with the Buyer, or with the subject matter of any such
opinion or statement, is of such significance that the lawyer principally
responsible for the transactions contemplated by the Agreement reasonably
believes those lawyers should be consulted with respect to such opinion or
statement.
Our opinions are limited to the specific issues addressed herein and are
limited in all respects to laws, regulations and facts existing on the date
hereof. We do not undertake to advise you of any changes in such laws or facts
which may occur after the date hereof. This letter is being furnished to you in
connection with the Agreement and is not to be used, circulated, quoted or
otherwise relied upon by any other person or entity or for any other purpose
without our prior written consent.
Very truly yours,
