Exhibit 2.1
Execution Copy 1/10/02
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made this 11/th/
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day of January, 2002, by and among SONIC AUTOMOTIVE, INC., a Delaware
corporation (the "Buyer"), each of the companies identified as a Seller on the
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signature page hereto (each, a "Seller" and, collectively, the "Sellers") and
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THE XXXXXX X. XXXXXX REVOCABLE TRUST, a trust formed under an agreement dated
December 13, 2001 (the "Stockholder").
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W I T N E S S E T H:
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WHEREAS, the Sellers are engaged in the automobile dealership
businesses set forth opposite their respective names on Exhibit A-1 (each
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business being referred to herein as a "Business" and collectively as the
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"Businesses"); and
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WHEREAS, the Sellers desire to sell and the Buyer desires to buy, or to
cause one or more subsidiaries or affiliates of the Buyer to buy, substantially
all of the assets pertaining to the Businesses, subject to the terms and
conditions of this Agreement; and
WHEREAS, contemporaneously with the execution and delivery of this
Agreement, the Buyer and the other parties referred to in Exhibit A-2 have
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entered into the agreements listed on said Exhibit A-2 (such agreements on such
Exhibit A-2, excluding this Agreement, being hereinafter collectively called the
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"Other Agreements"); and
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WHEREAS, contemporaneously with the execution and delivery of this
Agreement, Xxxxxx X. Xxxxxx, an individual resident of the State of Michigan
("Xxxxxx"), and the Buyer have entered into a Guaranty Agreement, pursuant to
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which Xxxxxx guarantees to the Buyer the performance of all of the obligations
and liabilities of the Sellers and the Stockholder hereunder; and
WHEREAS, concurrently with the execution and delivery of this
Agreement, the Sellers are notifying the Manufacturers (as defined in Article I
below) of the transactions contemplated by this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter contained, the receipt and legal sufficiency of which are hereby
acknowledged, and intending to be legally bound, the parties hereby agree as
follows:
ARTICLE I
Certain Definitions
1.1 "Assets" shall mean: the New Vehicles (as defined in Section 3.1);
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the Demonstrators (as defined in Section 3.2); the Used Vehicles (as defined in
Section 3.5); the
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Parts (as defined in Section 4.3); the Miscellaneous Inventories (as defined in
Section 5.1); the Work in Progress (as defined in Section 5.3); the Fixtures and
Equipment (as defined in Section 5.4); the Miscellaneous Assets (as defined in
Section 5.5); the Prepaid Expenses (as defined in Section 5.9); the goodwill of
the Businesses; and any other assets and properties of any Seller to be
transferred to the Buyer hereunder.
1.2 "Closing Date" shall mean the date of the closing of the purchase
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and sale of the Assets (the "Closing"). The Closing shall take place, subject to
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the satisfaction of the conditions set forth in Article VIII and Article IX of
this Agreement, no later than the Closing Date Deadline (as hereinafter
defined). The Closing shall be held at a mutually agreed upon location in
Detroit, Michigan, or at such other place as the parties shall mutually agree,
at 9:30 a.m. on the Closing Date. The Closing shall be deemed to be effective as
of the opening of business on the Closing Date.
1.3 "Closing Date Deadline" shall be the date which is the sixtieth
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(60/th/) day after the date of this Agreement; provided, however, if, as of such
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date, the approvals or other conditions set forth in Sections 8.8, 8.13, 8.17 or
8.18 of this Agreement shall not have been obtained or satisfied, the Buyer
shall have the option (a) to terminate this Agreement if it appears unlikely
that the approvals of the Manufacturers required by Section 8.13 shall be
forthcoming, or (b) to extend the Closing Date Deadline for an additional thirty
(30) day period. In addition, to the foregoing, if the Sellers reasonably
believe that the approvals of the Manufacturers required by Section 8.13 above
will be forthcoming, the Sellers may elect to extend the original Closing Date
Deadline for an additional thirty (30) days.
1.4 "Existing Leases" shall mean the leases set forth on Schedule 1.4
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hereto (all real property, including all buildings, improvements and fixtures
constructed thereon, subject to any of the Existing Leases is referred to herein
as the "Leased Premises").
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1.5 "Inventory Date" shall mean the close of business on the date of
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completion of the Inventory (as defined in Section 4.1), which date shall not be
more than three (3) days prior to the Closing Date, or such other date prior to
the Closing as is mutually agreed by the Sellers and the Buyer.
1.6 "Liabilities" shall mean: (a) all obligations of the Sellers
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arising in the ordinary course of business after the Closing Date, and not as a
result of any breach or default, under (i) the Existing Leases, (ii) all
Contracts (as defined in Section 7.10) that are set forth on Annex A of Part I
of Schedule 2.4 attached hereto, and (iii) all other contracts and leases of the
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Sellers that are not material to the respective Businesses and that have been
entered into in the ordinary course of business prior to the Closing; (b) any
floor plan or other indebtedness of the Sellers assumed by the Buyer pursuant to
Section 2.4(b) hereof; (c) all Environmental Liabilities (as hereinafter
defined) with respect to the Real Property in excess of the Environmental
Indemnification Cap (as defined in Section 10.6 below); and (d) the COBRA
obligations under Section 10.12(d) below. For purposes of this Agreement: a
"material" contract or lease shall be any contract or lease of a Seller which
either (a) gives rise to an ordinary course payment obligation of $5,000 per
month or more or (b) is not terminable upon notice of thirty (30) days or less
without penalty; and "Environmental Liabilities" shall mean all known or unknown
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environmental liabilities and claims arising out of the ownership, use or
operation of any of the Assets or the Real Property prior to the Closing and any
liabilities or obligations of the Sellers arising as a result of acts or
occurrences occurring prior to Closing under any Environmental Laws, including
but not limited to the Comprehensive Environmental Response, Compensation and
Liability Act, as amended.
1.7 "Manufacturers" shall mean General Motors Corporation, American
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Honda Motor Co., Inc., Mitsubishi Motor Manufacturing of America Inc./Mitsubishi
Motor Sales of America Inc., Rolls-Royce Motor Cars Inc./Rolls-Royce Motor Cars
and Bentley Motor Cars, and Saab Cars USA Inc. For purposes of the Buyer's
application to the respective Manufacturers, as contemplated by Section 10.11
below, the addresses of the respective Manufacturers and the relevant contact
person(s) at each of the Manufacturers are set forth on Schedule 1.7 hereto.
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1.8 "Owned Real Property" shall mean (a) the Purchased Leasehold
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Improvements and (b) all real property, including all buildings, improvements
and fixtures constructed thereon, subject to any of the Real Property Purchase
Agreements.
1.9 "Purchased Leasehold Improvements" shall mean all leasehold
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improvements owned by any Seller that are located at the Leased Premises subject
to an Existing Lease.
1.10 "Real Property" shall mean the Owned Real Property and the Leased
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Premises.
1.11 "Real Property Purchase Agreements" shall mean all of the Real
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Property Purchase Agreements listed on Schedule 1.11 hereto.
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ARTICLE II
Sale and Purchase of the Assets; Other Agreements
2.1 Sale and Purchase. Upon the terms and subject to the conditions
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hereinafter set forth, at the Closing, the Sellers will sell, transfer and
convey the Assets to the Buyer and the Buyer will purchase the Assets from the
Sellers for the consideration set forth in this Agreement. The sale, transfer
and conveyance of the Assets shall be made by the execution and delivery at the
Closing of one or more bills of sale from each of the Sellers in a form
reasonably satisfactory to the Buyer's counsel and the Sellers' counsel (the
"Bills of Sale") and such other instruments of assignment, transfer and
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conveyance as the Buyer shall reasonably request. Except to the extent
specifically included within the Assets, the Sellers will not sell, and the
Buyer will not purchase, any other tangible or intangible assets of the Sellers
including, but not limited to, any asset which will be purchased and sold
hereunder only upon the mutual agreement of the Buyer and the Sellers if the
Buyer and the Sellers do not so mutually agree and the other assets of the
Sellers listed on Schedule 2.1 attached hereto. The Sellers agree that if any
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assets not purchased by the Buyer hereunder are not removed from the Real
Property within thirty (30) days after the Closing Date, they shall become the
property of the Buyer without the payment of any consideration in addition to
the consideration otherwise provided herein. The Buyer agrees to
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provide timely and reasonable access to the Sellers for the purpose of removing
such assets during such thirty (30) day period.
2.2 Aggregate Purchase Price.
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(a) The aggregate purchase price (the "Aggregate Purchase
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Price") to be paid for the Assets shall consist of the sum of: (i) [***], as the
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purchase price for the Businesses and the intangible assets included in the
Assets (the "Business and Intangible Assets Purchase Price"); (ii) the New
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Vehicle Purchase Price (as defined in Section 3.1); (iii) the Demonstrator
Purchase Price (as defined in Section 3.2); (iv) the Used Vehicle Purchase Price
(as defined in Section 3.5); (v) the Parts Purchase Price (as defined in Section
4.4); (vi) the Miscellaneous Inventories Purchase Price (as defined in Section
5.1); (vii) the Work in Progress Purchase Price (as defined in Section 5.3);
(viii) the Fixtures and Equipment Purchase Price (as defined in Section 5.4);
and (ix) the Prepaid Expenses Purchase Price (as defined in Section 5.9).
(b) The Business and Intangible Assets Purchase Price shall be
allocated among the Sellers by mutual agreement of the Buyer and the Sellers as
promptly as possible after the date hereof. The components of the Purchase
Price, other than the Business and Intangible Assets Purchase Price, shall be
allocated among the Sellers in accordance with their respective Assets upon
which such components are based, as reflected in Part I of Schedule 2.2 hereto,
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to be completed by the Buyer and the Sellers at least three (3) days prior to
the Closing Date. The parties acknowledge that the New Vehicle Purchase Price,
the Parts Purchase Price and the Miscellaneous Inventories Purchase Price will
be based upon information contained in Schedule 3.1 and the Inventory, both of
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which are to be delivered prior to the Closing Date. The parties also
acknowledge that adjustments to those categories of Assets will have to be made
to reflect ordinary course increases or decreases in those assets between the
time of delivery of such Schedules and the Inventory and the Closing Date, and
that the related components of the Aggregate Purchase Price will have to be
adjusted to reflect any such adjustments to those Assets. All of the foregoing
adjustments (with appropriate payments by the parties) will be made as promptly
as possible after the Closing, the parties hereby agreeing to cooperate with
each other in making such adjustments and shall promptly pay any amount owing as
a result of any such adjustment. Each party will use the Aggregate Purchase
Price and Liabilities allocations described in Part II of Schedule 2.2 hereto
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(as adjusted pursuant to this Section 2.2(b)) in all reporting to, and all Tax
(as defined in Section 7.12) returns filed with, the Internal Revenue Service
and other state and local taxing authorities.
2.3 Payment of Aggregate Purchase Price. Upon the terms and subject to
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the conditions hereinafter set forth, at the Closing, the Buyer shall deliver to
the Sellers cash, by wire transfer to an account or accounts designated by the
Sellers at least one Business Day prior to the Closing, in an amount equal to
the Aggregate Purchase Price. Such cash shall be paid to the Sellers in the
respective amounts set forth opposite their names on Part III of Schedule 2.2,
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to be delivered to the Buyer by the Sellers at least three (3) days prior to the
Closing Date. As used herein, the term "Business Day" shall mean a day other
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than a Saturday, Sunday or a day on which banks are required to be closed in the
State of North Carolina.
[***] These portions of this exhibit have been omitted and filed separately with
the Commission pursuant to a request for confidential treatment.
4
2.4 Assignment and Assumption.
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(a) At the Closing, the Sellers will assign to the Buyer the
Liabilities, and the Buyer will assume and agree to perform and discharge the
Liabilities, pursuant to separate assignment and assumption agreements with the
Sellers in a form reasonably acceptable to the Buyer's and the Sellers' counsel
(the "Assumption Agreements"). Notwithstanding anything herein to the contrary,
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except as expressly provided in this Section 2.4 and in the Assumption
Agreements, the Buyer does not and will not assume or become liable, or
otherwise be responsible, for any obligations or liabilities of any Seller of
any kind whatsoever, fixed or contingent, known or unknown, and whether or not
any of such liabilities or obligations are the subject matter of any of the
representations and warranties of the Sellers and the Stockholder in this
Agreement (collectively, the "Retained Liabilities"), as a result of the
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transactions contemplated in this Agreement, including without limitation the
Retained Liabilities set forth on Part II of Schedule 2.4.
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(b) Notwithstanding the provisions of Section 2.4(a) above, at the
Closing, the Buyer may elect to assume (i) the floor plan indebtedness of any or
all of the Sellers outstanding as of the Closing and/or other indebtedness of
any or all of the Sellers outstanding as of the Closing and/or (ii) any or all
of the Sellers' respective accounts payable and accrued expenses as of the
Closing, in which case the Aggregate Purchase Price payable in cash at the
Closing will be reduced by the unpaid principal of, and accrued interest on,
such indebtedness outstanding as of the Closing and/or the amount of such
accounts payable and accrued expenses. With respect to any such indebtedness to
be assumed, the amount thereof shall be as set forth in estoppel and/or payoff
letters from the respective lenders, or as otherwise mutually agreed by the
Buyer and the Sellers. In the event of such assumption, such indebtedness,
accounts payable and/or accrued expenses shall become part of the "Liabilities"
for all purposes of this Agreement (including, without limitation, the
indemnification obligations of the Buyer under Section 10.6 below). In addition
to assuming any outstanding floor plan indebtedness of the Sellers as of the
Closing, the Buyer may elect to assume, for a period of up to thirty (30) days
following the Closing, the obligations of the Sellers arising after the Closing
under the respective floor plan arrangements of the Sellers. In such event, the
Sellers shall use their best reasonable efforts to cooperate to facilitate such
assumption by the Buyer, and the liabilities and obligations of the Sellers
arising after the Closing under such floor plan arrangements shall also become
"Liabilities" for all purposes of this Agreement; provided, however, to the
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extent that any such obligations shall arise out of the operation of the
Businesses prior to the Closing, the Sellers, jointly and severally, shall
reimburse the Buyer the full amount of such obligations, except to the extent
such obligations are Liabilities pursuant to this Section 2.4, promptly upon
demand by the Buyer.
2.5 Assumption of Existing Leases. At the Closing, each Seller that is a
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tenant under an Existing Lease and the Buyer shall execute and deliver an
Assignment and Assumption Agreement with respect to such Existing Lease in a
form reasonably acceptable to the respective counsel of such Seller and the
Buyer (the "Existing Lease Assignment"). Prior to the Closing, the Sellers shall
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use their best reasonable efforts to obtain any required consents of the
landlords under the Existing Leases and the Buyer shall reasonably cooperate
with the Sellers in such efforts.
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2.6 Other Agreements. It is the intention of the Buyer and the Sellers
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that the Closing under this Agreement take place concurrently with the
respective closings under the Other Agreements.
ARTICLE III
New Vehicles; Demonstrators and Used Vehicles
3.1 New Vehicles. Subject to Section 3.3(b), at the Closing, the Buyer
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shall purchase all of the Sellers' untitled new motor vehicles (meaning 2001 and
2002 model year vehicles but excluding Demonstrators, all service loaners,
rental car vehicles, company-owned vehicles, conversion vans, vehicles for
commercial and/or municipal use or sale and similar-type vehicles) in the
Sellers' stock and unsold by the Sellers as of the Closing Date and which are
listed on Schedule 3.1 hereto, which Schedule the Sellers shall deliver to the
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Buyer not more than three (3) days prior to the Closing (collectively, the "New
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Vehicles" and each, individually, a "New Vehicle"). The purchase price to be
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paid by the Buyer for each New Vehicle shall be the price at which the New
Vehicle was invoiced to the respective Seller by the respective Manufacturer;
provided, however, the purchase price for New Vehicles acquired by a Seller in
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the ordinary course of such Seller's business pursuant to a dealer trade with a
party other than an affiliate of such Seller, shall be the amount paid to the
other dealer for such New Vehicle; provided, further, that the purchase price
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for New Vehicles shall be adjusted pursuant to this Article III (the sum of all
such amounts to be paid for New Vehicles as determined by this Article III is
herein referred to as the "New Vehicle Purchase Price"); provided, however, the
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price of any pre-reported sold vehicles for which the sale cannot be reversed
shall be as mutually agreed by the Buyer and the Sellers. In the event the Buyer
and the Sellers cannot agree upon a price with respect to any such pre-reported
sold vehicle, the Buyer shall not be obligated to purchase, and the Sellers
shall not be obligated to sell, such vehicle. Schedule 3.1 shall set forth the
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model, invoice cost, and all other information necessary to calculate the New
Vehicle Purchase Price with respect to each New Vehicle listed in such Schedule
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3.1. At the Closing, the Sellers shall assign to the Buyer, without any
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additional consideration therefor, by appropriate documents reasonably
satisfactory to the Buyer, all unfilled retail orders for motor vehicles entered
into in the ordinary course of business, and deposits made thereon, and the
Buyer shall assume such Seller's obligations under such retail orders. Any
profits or proceeds derived from such unfilled retail orders shall belong to the
Buyer.
3.2 Demonstrators. Subject to Section 3.3(b), at the Closing, the Buyer
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shall purchase each of the Sellers' untitled new 2001 and 2002 model year motor
vehicles (excluding service loaners, rental car vehicles, company-owned
vehicles, conversion vans, vehicles for commercial and/or municipal use or sale,
and similar-type vehicles) in the Sellers' stock and unsold by the Sellers as of
the Closing Date which either (A) is used in the ordinary course of business for
the purpose of demonstration or (B) has, as of the Closing Date, more than 500
miles on its odometer, and in either case is listed on Schedule 3.2, which
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Schedule the Sellers shall deliver to the Buyer no more than three (3) days
prior to the Closing (collectively, the "Demonstrators" and each, individually,
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a "Demonstrator"). For purposes of this Agreement, any motor vehicle with more
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than 6,000 miles on its odometer and any prior model year new
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motor vehicle shall be deemed to be "used" rather than a "Demonstrator" or "New
Vehicle". The purchase price to be paid by the Buyer for each Demonstrator shall
be the price at which the Demonstrator was invoiced to the respective Seller by
the respective Manufacturer, as adjusted pursuant to this Article III (the sum
of all such amounts to be paid for Demonstrators hereunder is herein referred to
as the "Demonstrator Purchase Price"). Schedule 3.2 shall set forth each
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Demonstrator's model, invoice cost, odometer reading and all other information
necessary to calculate the Demonstrator Purchase Price with respect to such
Demonstrator.
3.3 Adjustment of New Vehicle and Demonstrator Purchase Price. (a) The
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purchase price paid for each New Vehicle and each Demonstrator purchased under
this Article III shall be: (i) increased by the dealer cost of any equipment and
accessories which have been installed in such vehicles in the ordinary course of
business; and (ii) decreased by the sum of (A) the dealer cost of any equipment
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and accessories which have been removed from such vehicles, (B) [***] of any
factory floor plan assistance relative to such vehicles, (C) all paid or unpaid
rebates, discounts, holdback for dealer account and other factory incentives
(including without limitation rebates applied for and paid but not earned and
incentive monies claimed on pre-reported units), and (D) refundable advertising
allowances, if any.
(b) Notwithstanding anything herein to the contrary, the Buyer shall
have no obligation hereunder and under the Stock Purchase Agreement dated the
date hereof with respect to the purchase of the stock of Xxxxxx Cadillac, Inc.
(Detroit) and Xxxxxx Cadillac, Inc. (Dallas) (the "Xxxxxx Stock Purchase
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Agreement") to purchase an aggregate amount of New Vehicles or Demonstrators
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exceeding (i) [***] 2001 model year Cadillacs, (ii) [***] 2001 model year cars
of models (other than Cadillac) manufactured by General Motors Corporation,
(iii) [***] 2001 model year cars manufactured by American Honda Motor Co., Inc.,
(iv) [***] 2001 model year cars manufactured by Saab Cars USA Inc., and each
such excess vehicle (collectively, the "Excess Vehicles") shall be deemed to be
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"used" rather than a "Demonstrator" or a "New Vehicle".
3.4 Damaged or Repaired New Vehicles and Demonstrators. If any New
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Vehicles or Demonstrators shall have suffered any damage prior to the Closing
Date which is not reflected on Schedule 3.1 or Schedule 3.2, the respective
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Seller shall notify the Buyer in writing on or prior to the Closing Date. In
such case, the respective Seller and the Buyer will attempt to agree on the cost
to cover such repairs, which amount shall be deducted from the price to be paid
for such New Vehicle or Demonstrator. In the event the Buyer and the respective
Seller cannot agree on the cost of repairs, the Buyer shall have no obligation
to purchase any such damaged New Vehicle or Demonstrator and the respective
Seller shall have no obligation to sell such damaged New Vehicle or
Demonstrator. With respect to any New Vehicle or Demonstrator which shall have
been damaged and repaired prior to the Closing Date and with respect to which
notification of such damage must be given to any purchaser pursuant to
applicable state law, the respective Seller and the Buyer will attempt to agree
on an adjustment to the price to reflect the decrease, if any, in the wholesale
value of such New Vehicle or Demonstrator resulting from such damage and repair,
which amount shall be deducted from the price to be paid for such New Vehicle or
Demonstrator. In the event the Buyer and the respective Seller cannot agree on
such adjustment, the Buyer shall have no obligation to purchase such New Vehicle
or Demonstrator and the respective Seller shall have no obligation to sell such
New Vehicle or Demonstrator.
[***] These portions of this exhibit have been omitted and filed separately with
the Commission pursuant to a request for confidential treatment.
7
3.5 Used Vehicles. The purchase price of each motor vehicle owned by a
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Seller that is not a New Vehicle or a Demonstrator as of the Closing Date,
including prior model year new vehicles, demonstrator automobiles having an
odometer reading in excess of 6,000 miles, service loaners, rental car vehicles,
company-owned vehicles, conversion vans, vehicles for commercial and/or
municipal use or sale, and similar-type vehicles as well as any Excess Vehicles,
shall be equal to the price as determined in accordance with the valuation
method set forth in Schedule 3.5 hereto; provided, however, that the purchase
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price of those used vehicles older than the 1995 model year or with an odometer
reading in excess of 70,000 miles that have not been reconditioned and have not
passed a safety inspection consistent with the Sellers' past practices shall be
the price upon which the Buyer and the respective Sellers mutually agree. Any
such vehicles as to which a purchase price is determined pursuant to this
Section 3.5 or Schedule 3.5 are collectively referred to herein as the "Used
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Vehicles," and shall be purchased by the Buyer, and sold by the Sellers, at the
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Closing. The aggregate sum of all prices assigned to such Used Vehicles to be
purchased by the Buyer pursuant to the terms of this Section 3.5 or Schedule 3.5
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shall be referred to herein as the "Used Vehicle Purchase Price." It is
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understood and agreed that the Buyer shall have no obligation to purchase, and
the Sellers shall have no obligation to sell, any vehicle addressed in this
Section 3.5 or in Schedule 3.5 for which the price must be mutually agreed
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between the Buyer and the respective Seller if an agreed upon price cannot be
determined for such vehicle.
ARTICLE IV
Parts/Accessories
4.1 The Inventory. The Buyer and the Sellers shall engage a mutually
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acceptable third party engaged in the business of appraising, valuing and
preparing inventories for automobile dealerships (hereinafter referred to as the
"Inventory Service") to prepare an inventory list (the "Inventory") of the parts
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and accessories, as well as of the Miscellaneous Inventories (as defined in
Section 5.1), owned by and either used or held for use by any Seller in its
Business. The Inventory (insofar as it relates to parts and accessories) shall
be posted to the respective Manufacturers' approved system of inventory control
and will show each item extended by its unit price. The cost of the Inventory
shall be borne 50% by the Buyer and 50% by the Sellers. The Buyer shall have the
right to deduct the Sellers' portion of such expense from the consideration to
be paid to the Sellers under the terms of this Agreement and to remit such sums
directly to the Inventory Service. The Inventory shall be completed by the
Inventory Date. The Inventory shall identify each part and accessory and its
purchase price.
4.2 Returnable and Nonreturnable Replacement Parts and Accessories. The
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Inventory shall classify replacement parts and accessories as "returnable" or
"nonreturnable." For purposes of this Agreement, the terms "returnable parts"
and "returnable accessories" shall describe and include only those new undamaged
replacement parts and new undamaged accessories (excluding prior model year
vehicle accessories) for vehicles which are listed (coded) in the latest current
Master Parts Price List Suggested List Prices and Dealer Prices, or other
applicable similar price lists, of the respective Manufacturers, with
supplements or the equivalent
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in effect as of the Inventory Date (the "Master Price List"), as returnable to
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the respective Manufacturers at not less than the purchase price reflected in
the Master Price List or in the most recent applicable price list. The purchase
price for each "returnable part" and "returnable accessory" shall be the price
listed in the Master Price List with no reduction for stock order discounts or
any other discounts; [***]. As used herein, the term "Aged Parts" shall mean,
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with respect to any Seller, all items in inventory of those stock keeping units
of "returnable parts" and "returnable accessories" for which such Seller has had
no bona fide sale to an unaffiliated third party at arm's length within [***]
months of the Closing Date. All parts and accessories listed (coded) in the
Master Price List as nonreturnable to the Manufacturer shall be classified as
"nonreturnable." The purchase price for each "nonreturnable" part and accessory,
non-Manufacturer part or accessory, "Jobber" or "NPN" parts and accessories
(collectively, the "Nonreturnable Parts"), shall be equal to [***] percent
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([***]%) of the dealer's cost thereof; provided, however, in the event that the
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aggregate price for Nonreturnable Parts (determined as aforesaid) for all of the
Sellers exceeds [***] percent ([***]%) of the aggregate purchase price for all
"returnable parts" and "returnable accessories" and Nonreturnable Parts for all
of the Sellers, the purchase price for such Nonreturnable Parts whose aggregate
purchase price (determined as aforesaid) is in excess of [***] percent ([***]%)
of the aggregate purchase price for all "returnable parts" and "returnable
accessories" and Nonreturnable Parts for all of the Sellers shall be as mutually
agreed by the Buyer and the Stockholder. The purchase price of special
accessories such as vogue tires, custom wheels, chrome trim, gold trim, tops, CD
players, etc., which are compatible with current model year New Vehicles will be
dealer cost; provided, however, the amount of such special accessory inventory
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shall not exceed a supply that will reasonably equip [***] ([***]) vehicles per
store. The purchase price of special accessories in excess of that needed to
reasonably equip [***] ([***]) vehicles per store, as well as special
accessories for prior model year vehicles, will be as mutually agreed between
the Buyer and the respective Seller. The purchase price for all other nuts,
bolts and any other parts not addressed in this Section 4.2, shall equal the
value thereof as mutually agreed between the Buyer and the Sellers. It is
understood and agreed that the Buyer shall have no obligation to purchase, and
the Sellers shall have no obligation to sell, any item addressed in this Section
4.2 for which the price must be mutually agreed between the Buyer and the
Sellers if an agreed upon price cannot be determined for such item.
4.3 Parts. At the Closing, the Buyer shall, subject to the provisions of
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Section 4.2 above, purchase all parts and accessories owned by the Sellers at
the Closing Date and listed on the Inventory (the "Parts") provided, however,
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that the Buyer shall not be obligated to purchase any damaged parts or
accessories, parts and accessories with component parts missing, superseded or
obsolete parts or accessories, or used parts or accessories. The Sellers agree
that if parts and accessories that the Buyer is not obligated to purchase
hereunder are not removed from the Real Property within thirty (30) days after
the Closing Date, they shall become the property of the Buyer without the
payment of any consideration in addition to the consideration otherwise
[***] These portions of this exhibit have been omitted and filed separately with
the Commission pursuant to a request for confidential treatment.
9
provided herein. The Buyer agrees to provide access to the Sellers for the
purpose of removing such parts and accessories during such thirty (30) day
period.
4.4 Parts Purchase Price. The purchase price for the Parts will equal the
--------------------
total of the respective prices therefor, as determined pursuant to the
provisions of Section 4.2 above (the "Parts Purchase Price").
--------------------
4.5 Parts Return Privileges. The Sellers shall assign to the Buyer at
-----------------------
Closing any net parts return privileges under the respective Manufacturers'
Parts Return Plans that may have accrued to the Sellers prior to the Closing
(and any other special parts return authorizations which may have been granted
to the Sellers by respective Manufacturers). At the request of the Buyer, the
Sellers shall use their reasonable best efforts to assist the Buyer in effecting
any one-time parts return offered by the respective Manufacturers, and will
promptly pay over to the Buyer any monies received from the respective
Manufacturers related thereto.
ARTICLE V
Miscellaneous Inventories; Work in Progress; Fixtures
and Equipment; Prepaid Expenses
5.1 Miscellaneous Inventories. At the Closing, the Buyer shall purchase
-------------------------
all useable gas, oil and grease, all undercoat material and body materials in
unopened cans and such other miscellaneous useable and saleable articles in
unbroken lots (including office supplies) which (i) are on the Sellers'
respective dealership premises, (ii) are owned by any Seller on the Closing
Date, (iii) do not represent more than a sixty (60) day supply of any particular
item(s), and (iv) are identified in the Inventory taken by the Inventory Service
on the Inventory Date (the "Miscellaneous Inventories"). The purchase price for
-------------------------
the Miscellaneous Inventories shall be equal to the current replacement cost of
the Miscellaneous Inventories as determined by the Inventory Service and set
forth on the Inventory (the sum of all prices of the Miscellaneous Inventories
pursuant to the terms of this Section 5.1 shall be referred to herein as the
"Miscellaneous Inventories Purchase Price").
----------------------------------------
5.2 Miscellaneous Items Not Included in the Inventory. The Buyer shall
-------------------------------------------------
have no obligation to purchase any miscellaneous items that are not included in
the Miscellaneous Inventories. The Sellers agree that any miscellaneous items
that are not included in the Miscellaneous Inventories and are not removed from
the Real Property within thirty (30) days after the Closing Date shall become
the property of the Buyer without the payment of any consideration in addition
to the consideration otherwise provided herein. The Buyer agrees to provide
access to the Sellers for the purpose of removing such items during such thirty
(30) day period.
5.3 Work in Progress. At the Closing, the Buyer shall buy at the Sellers'
----------------
actual cost for parts and labor such shop labor and sublet repairs as any Seller
shall have caused to be performed on any repair orders which are in process at
the opening of business on the Closing Date (the "Work in Progress") (the
----------------
aggregate sum of all costs of the Sellers for the Work in
10
Progress pursuant to the terms of this Section 5.3 shall be referred to herein
as the "Work in Progress Purchase Price"). The Buyer shall complete such repair
-------------------------------
work and shall be entitled to the entire proceeds to be collected for such
services.
5.4 Fixtures and Equipment. At the Closing, the Buyer shall purchase all
----------------------
fixtures, machinery, equipment (including special tools and shop equipment
reasonably necessary for the servicing of motor vehicles), furniture, the
Purchased Leasehold Improvements, and all signs and office equipment (including,
without limitation, computer equipment used in normal dealership operations)
owned by any Seller and used or held by any Seller for use in connection with
the Business, including the items listed on Schedule 5.4 hereto, which Schedule
------------ --------
5.4 the Sellers shall deliver to the Buyer not later than five (5) days prior to
---
the Closing, (and expressly excluding all leasehold improvements unless they are
Purchased Leasehold Improvements and all vehicles used or held for use in the
Business such as (without limitation) company-owned vehicles, service loaners
and rental car vehicles) (collectively referred to herein as the "Fixtures and
------------
Equipment"). The purchase price for the Fixtures and Equipment shall be the
---------
Sellers' respective depreciated book value thereof as of the Closing Date as
reflected in said Schedule 5.4 attached hereto (the "Fixtures and Equipment
------------ ----------------------
Purchase Price"); provided, however, the Fixtures and Equipment Purchase Price
-------------- -------- -------
shall not include the value of (a) any leasehold improvements that are not
Purchased Leasehold Improvements or (b) any items of Fixtures and Equipment
which (i) are leased pursuant to contracts or leases included in the
Liabilities, or (ii) are not physically identifiable.
5.5 Miscellaneous Assets. At the Closing, and without payment of any
--------------------
additional consideration, the Buyer shall purchase all of the Sellers'
respective (i) unused shop repair orders, parts sales tickets, accounting forms,
binders, office and shop supplies (not in unbroken lots) and such shop reference
manuals, parts reference catalogs, non-accounting file copies for all sales for
the three (3) years preceding the Closing Date, (ii) copies of new and used car
sales records and specifically wholesale parts sales records, new and used parts
sales records, and service sales records for the three (3) years preceding the
Closing Date, (iii) product sales training material and reference books on hand
as of the Closing Date and sales and other promotional materials used in
connection with the Businesses, and all copyrights with respect to the
foregoing, (iv) customer and registration lists pertaining to the sale of motor
vehicles, service files, repair orders, owner follow-up lists and similar
records relating to the operation of the Businesses, (v) telephone numbers and
listings used in connection with the Businesses, (vi) names and addresses of
service customers and prospective purchasers, (vii) all lawfully transferrable
licenses and permits of the Businesses, (viii) all rights and claims under or
arising out of the contracts and leases included in the Liabilities, and (ix)
rights in the States of California, Colorado, Florida, Michigan, North Carolina,
Tennessee and Texas to the tradenames "Xxx Xxxxxx" and "Xxxxxx" and any other
tradenames, trademarks and service marks used by any Seller, all of which are
listed on Schedule 5.5 hereto, and any similar variations thereof (all the
------------
foregoing items collectively referred to herein as the "Miscellaneous Assets").
--------------------
5.6 Certain Records of the Sellers; Access by the Sellers. The Sellers may
-----------------------------------------------------
retain all corporate records, financial records and correspondence which are not
necessary for the continued operation of the Businesses by the Buyer. For a
period of three (3) years following the Closing Date, the Buyer will allow the
Sellers, and their authorized agents and representatives
11
access, upon reasonable notice during normal business hours, to the books and
records (including systems) regarding post-Closing adjustments arising during
the three (3) day period prior to Closing. In addition, the Buyer shall maintain
all books and records included in the Purchased Assets and, for so long as the
Buyer is so obligated to maintain such books and records (but in any event for a
period of at least six (6) years), provide the Sellers with reasonable access
thereto.
5.7 Warranty Obligations of the Sellers. To the extent that any Seller or
-----------------------------------
any of their respective affiliates may have issued or sold, on their behalf or
on the behalf of third parties, warranties on the vehicles sold by any Seller on
or prior to the Closing Date (the "Warranties") and to the extent the Warranties
----------
are not included in the Work in Progress, the Buyer shall have no responsibility
to perform any services required under the Warranties, unless authorized in
writing by the respective Seller accompanied by arrangements in writing
satisfactory to the Buyer to assure the Buyer of payment for all work performed
by the Buyer, and, if so authorized by the respective Seller, the respective
Seller shall reimburse the Buyer for all of the Buyer's costs for parts and
labor in connection therewith at established internal rates for parts and labor.
In the absence of such authorization and arrangements, the Buyer shall have no
responsibility for, and the Sellers and the Stockholder, jointly and severally,
shall indemnify and hold the Buyer harmless from and against any Losses (as
defined in Section 10.6(b)) arising out of or based upon, such Warranties. On
the Closing Date, the Sellers shall supply the Buyer with a list to which the
Warranties, if any, are applicable, which list shall include the names of the
purchasers, the make and year model of the vehicles purchased and the date of
purchase, and a description of the Warranty, including the issuer thereof. The
Sellers shall also supply to the Buyer at or prior to the Closing Date an
address for and a designation of the person who will be responsible, on behalf
of each Seller, for authorizing the Buyer to perform any services under the
Warranties, if any, issued by the Sellers on vehicles sold by them on or prior
to the Closing Date. The Sellers shall reimburse the Buyer promptly upon demand
for all sums due or payable by the Sellers to the Buyer under this Section 5.7.
5.8 Accounts Receivable. The Sellers shall retain all accounts receivable
-------------------
arising out of the operation of the Businesses prior to the Closing and the
Buyer shall retain all accounts receivable arising out of sales and/or services
of the Businesses after the Closing. After the Closing, the Buyer shall
cooperate with the Sellers and shall use reasonable and ordinary efforts,
including providing the Sellers with access to the Buyer's books, records and
employees (at the Sellers' expense) to assist the Sellers in their efforts to
collect their accounts receivable for a period of six (6) months after the
Closing. The Buyer shall accept payment of the Sellers' accounts receivable at
no charge to the respective Sellers and shall forward to the respective Sellers,
promptly upon receipt, all the money so received on said accounts. For purposes
of this Section 5.8, any payment received by the Buyer from an account debtor
shall be applied against the oldest outstanding account of such debtor with the
Buyer or the respective Seller, except to the extent that the account debtor (a)
is disputing an outstanding debt to the Seller, in which case the payment shall
not be applied to such disputed debt, or (b) specifically identifies the payment
of a particular invoice, in which case the payment shall be applied to such
identified invoice. Notwithstanding anything to the contrary stated herein, the
Buyer shall have no responsibility to collect any Seller's accounts receivable.
12
5.9 Prepaid Expenses. At the Closing, the Buyer shall purchase all prepaid
----------------
expenses owned by any Seller that are transferable to the Buyer and can be used
by the Buyer at the respective Seller's actual cost (the "Prepaid Expenses").
----------------
The purchase price for the Prepaid Expenses shall be equal to the amount of such
Prepaid Expenses, prorated as of the Closing Date (the "Prepaid Expenses
----------------
Purchase Price").
--------------
ARTICLE VI
Representations and Warranties of the Buyer
The Buyer represents and warrants to the Sellers and the Stockholder as
follows:
6.1 Organization; Power and Authority; Authorization. The Buyer is a
------------------------------------------------
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware, is duly qualified to do business and is in good
standing in every jurisdiction in which the nature of its business makes such
qualification necessary and has full corporate power and authority to own or use
the properties it purports to own and use and to carry on its business as now
being conducted. The Board of Directors of the Buyer has duly approved this
Agreement, all other agreements, certificates and documents executed or to be
executed by the Buyer in connection herewith, and the transactions contemplated
hereby and thereby. The Buyer has full corporate power and authority to execute
and deliver this Agreement and all other agreements, certificates and documents
executed or to be executed by the Buyer in connection herewith, to consummate
the transactions contemplated hereby and thereby and to perform its obligations
hereunder and thereunder. This Agreement, and all other agreements, certificates
and documents executed or to be executed by the Buyer in connection herewith,
have been duly authorized by all necessary corporate actions and constitute or,
when executed and delivered, will constitute legal, valid and binding agreements
of the Buyer enforceable against the Buyer in accordance with their respective
terms.
6.2 Non-Violation; Consents. Except as set forth on Schedule 6.2 attached
----------------------- ------------
hereto, the execution and delivery of this Agreement, the consummation of the
transactions contemplated by this Agreement and compliance with the provisions
hereof do not and will not: (a) conflict with or violate any of the provisions
of the Buyer's Restated Certificate of Incorporation or Bylaws, each as amended,
or any resolution of the Board of Directors or the stockholders of the Buyer;
(b) violate any law, ordinance, rule or regulation or any judgment, order, writ,
injunction or decree or similar command of any court, administrative or
governmental agency or other body applicable to the Buyer; (c) violate or
conflict with or result in a breach of, or constitute a default under, any
material instrument, agreement or indenture or any mortgage, deed of trust or
similar contract to which the Buyer is a party or by which the Buyer is bound or
affected; or (d) require the consent, authorization or approval of, or notice
to, or filing or registration with, any governmental body or authority, or any
other third party.
6.3 Litigation. There are no actions, suits or proceedings pending, or, to
----------
the knowledge of the Buyer, threatened against or affecting the Buyer which
might adversely affect the power or authority of the Buyer to carry out the
transactions to be performed by it hereunder.
13
6.4 Brokers and Finders. The Buyer has not engaged any broker, finder or
-------------------
any other person or entity who would be entitled to any broker's commission or
finder's fee in respect of the execution of this Agreement and/or the
transactions contemplated hereby, other than such fee or commission the entire
cost of which will be borne by the Buyer.
6.5 Financing. The Buyer has sufficient funds or sources of credit
---------
available to consummate the purchase contemplated by this Agreement.
6.6 No Misstatements or Omissions. To the knowledge of the Buyer, no
-----------------------------
representation or warranty made by the Buyer in this Agreement, and no statement
contained in any agreement, instrument, certificate or Schedule furnished or to
be furnished by the Buyer pursuant hereto, contains or will contain any untrue
statement of a material fact or omits or will omit to state a material fact
necessary in order to make such representation or warranty or such statement not
misleading.
ARTICLE VII
Representations and Warranties of the Sellers and the Stockholder
The Sellers and the Stockholder, jointly and severally, represent and
warrant to the Buyer, as follows:
7.1 Organization; Power and Authority; Authorization.
------------------------------------------------
(a) Each Seller is a corporation duly organized, validly existing and
in good standing under the laws of the State of its incorporation as shown on
Schedule 7.1, is duly qualified to do business and is in good standing in every
------------
jurisdiction in which the nature of its business makes such qualification
necessary and has full corporate power and authority to own or use the
properties it purports to own and use and to carry on its business as now being
conducted. Schedule 7.1 sets forth each person or entity which has a record or
------------
beneficial ownership interest in any Seller and the extent and nature of such
ownership interest held by such owner. There are no outstanding options or
warrants with respect to the capital stock of any of the Sellers, nor are there
any outstanding securities which are convertible or exchangeable into capital
stock of any of the Sellers. There are no voting trusts, shareholders'
agreements or other agreements, instruments or rights of any kind or nature
whatsoever outstanding with respect to shares of capital stock of any of the
Sellers. Except for Xxxxxx Cadillac, Inc., a Tennessee corporation ("MC-TN"),
-----
and Xxxxxx Cadillac, Incorporated, a Florida corporation ("MC-FL"), each of the
-----
Sellers has full corporate power and authority to execute and deliver this
Agreement and all other agreements, certificates and documents executed or to be
executed by it in connection herewith, to consummate the transactions
contemplated hereby and thereby and to perform its obligations hereunder and
thereunder. As of the Closing, each of MC-TN and MC-FL shall have full corporate
power and authority to execute and deliver this Agreement and all other
agreements, certificates and documents executed or to be executed by it in
connection
14
herewith, to consummate the transactions contemplated hereby and thereby and to
perform its obligations hereunder and thereunder.
(b) The Stockholder is a trust duly formed and validly existing under
the laws of the State of Michigan. The Stockholder has full trust capacity,
power and authority to execute and deliver this Agreement and all other
agreements, certificates and documents executed or to be executed by the
Stockholder in connection herewith, to consummate the transactions contemplated
hereby and thereby and to perform its obligations hereunder and thereunder.
Xxxxxx, as the sole trustee of the Stockholder, has the full power and authority
to execute and deliver this Agreement on behalf of the Stockholder, and to
execute and deliver all other agreements, certificates and documents executed
and delivered by the Stockholder pursuant hereto. The Stockholder owns
sufficient shares of each of the Sellers to authorize and approve the
transactions contemplated by this Agreement at the shareholder level.
(c) This Agreement, and all other agreements, certificates and
documents executed or to be executed by any Seller other than MC-TN and MC-FL in
connection herewith, have been duly authorized by all necessary corporate action
and constitute or, when executed and delivered, will constitute legal, valid and
binding agreements of such Seller enforceable against such Seller in accordance
with their respective terms. This Agreement, and all other agreements,
certificates and documents executed or to be executed by MC-TN and MC-FL in
connection herewith, shall have been duly authorized by all necessary corporate
action prior to the Closing, and constitute or, when executed and delivered,
will constitute legal, valid and binding agreements of such Seller enforceable
against such Seller in accordance with their respective terms. This Agreement,
and all other agreements, certificates and documents executed or to be executed
by the Stockholder in connection herewith, constitute or, when executed and
delivered, will constitute legal, valid and binding agreements of the
Stockholder enforceable against the Stockholder in accordance with their
respective terms.
7.2 No Violation; Consents. Except as set forth in Schedule 7.2 attached
---------------------- ------------
hereto, the execution and delivery of this Agreement, the consummation of the
transactions contemplated by this Agreement and compliance with the provisions
hereof do not and will not: (a) conflict with or violate any of the provisions
of the respective Articles of Incorporation or Bylaws, each as amended, of any
Seller, any resolution of the Board of Directors of any Seller, or the trust
agreement of the Stockholder; (b) violate any law, ordinance, rule or regulation
or any judgment, order, writ, injunction or decree or similar command of any
court, administrative or governmental agency or other body applicable to any of
the Sellers, Assets, Businesses or Liabilities; (c) violate or conflict with or
result in a breach of, or constitute a default under, or an event giving rise to
a right of termination of, any Contract (as defined in Section 7.10 below), any
material instrument, agreement or indenture or any mortgage, deed of trust or
similar contract to which any of the Sellers or the Stockholder is a party or by
which any of the Sellers or the Stockholder or any of the Assets are bound; (d)
result in the creation or imposition of any Encumbrance upon any of the Assets;
or (e) require the consent, authorization or approval of, or notice to, or
filing or registration with, any governmental body or authority, or any other
third party with respect to a Contract.
15
7.3 Litigation. There are no actions, suits or proceedings pending or, to
----------
the knowledge of the Sellers, threatened against any of the Sellers or the
Stockholder which might adversely affect the power or authority of any of them
to carry out the transactions to be performed by any of them hereunder. There
are no actions, suits or proceedings pending or, to the knowledge of the
Sellers, threatened against or affecting any of the Sellers, other than those
disclosed on Schedule 7.3 attached hereto, which will have, or could reasonably
------------
be expected to have, a material adverse effect upon the Assets or the
Liabilities of such Seller or the business, earnings, results of operations or
condition (financial or otherwise) of any Business of such Seller. Except as set
forth on Schedule 7.3, to the knowledge of the Sellers, all actions, suits or
------------
proceedings described on, or required to be described on, Schedule 7.3 are
------------
adequately covered by insurance.
7.4 Title to Assets; Encumbrances; No Infringement.
----------------------------------------------
(a) Except as disclosed on Schedule 7.4 attached hereto, the Sellers
------------
have good title to the Assets, free and clear of all liens (including Tax
liens), security interests, encumbrances, actions, claims, payments or demands
of any kind and character (collectively, "Encumbrances"), except Encumbrances
------------
disclosed on Schedule 7.4 hereto and Encumbrances for ad valorem personal
------------
property taxes not yet due and payable.
(b) All of the Assets will be transferred at the Closing free and
clear of all Encumbrances, except Encumbrances for ad valorem personal property
taxes not yet due and payable and Encumbrances securing only the Liabilities. No
person has notified any Seller or the Stockholder in writing that it has a claim
and, to the knowledge of the Sellers, there is no reasonable basis for any
claim, against any of the Sellers that any of the operations, activities or
products of such Seller infringe the patents, trademarks, tradenames, copyrights
or other property rights of others, or that such Seller is wrongfully using the
property rights of others. No person has notified any Seller or the Stockholder
in writing that it has a claim and, to the knowledge of the Sellers, there is no
reasonable basis for any claim, by any of the Sellers against any third party
that the operations, activities or products of such third party infringe the
patents, trademarks, tradenames, copyrights or other property rights of such
Seller, or that such other third party is otherwise wrongfully using the
property rights of such Seller.
(c) During the last five (5) years, none of the Sellers has operated
its Business(es) under any tradenames, trademarks or service marks other than
the tradenames, trademarks or service marks listed or referred to in Section
5.5.
7.5 Permits and Approvals. Except as disclosed on Schedule 7.5 attached
--------------------- ------------
hereto, there are no material permits or approvals used or obtained for use by
any Seller which are required under applicable law in connection with the
ownership or operation of the Businesses.
7.6 Financial Statements.
--------------------
(a) Each of the Sellers has delivered to the Buyer such Seller's
annual financial statements for each of the last two (2) fiscal years of such
Seller, as well as the monthly year-to-date financial statements of such Seller,
all as described in Schedule 7.6 attached hereto
------------
16
(the "Financial Statements"). Except as set forth on Schedule 7.6, the Financial
-------------------- ------------
Statements have been prepared in accordance with generally accepted accounting
principles consistently applied. Each balance sheet included in the Financial
Statements fairly presents the financial condition of the respective Seller as
of the date thereof, and each related statement of income included in the
Financial Statements fairly presents the results of operations of the respective
Seller for the periods indicated, all in accordance with generally accepted
accounting principles consistently applied, except as set forth on Schedule 7.6.
------------
To the knowledge of the Sellers, the Financial Statements contain adequate
reserves for all reasonably anticipated claims relating to matters with respect
to which the respective Sellers are self-insured. The Financial Statements are
in all material respects in accord with the books and records of the respective
Sellers, which books and records are true, correct and complete in all material
respects.
(b) Except for executory obligations under the contracts and
agreements to which it is a party, none of the Sellers has any outstanding
material claims, liabilities, obligations or indebtedness of any nature, fixed
or contingent, except as set forth in its Financial Statements or as specified
in the Schedules to this Agreement, and except for liabilities incurred in the
ordinary course of business since the date of the Financial Statements that are
of the kind and type reflected in the Financial Statements.
7.7 Brokers and Finders. None of the Sellers nor the Stockholder has
-------------------
engaged any broker, finder or any other person or entity who would be entitled
to any brokerage commission or finder's fee in respect of the execution of this
Agreement and/or the consummation of the transactions contemplated hereby, other
than such fee or commission the entire cost of which will be borne by the
Sellers or the Stockholder.
7.8 Compliance with Laws.
--------------------
(a) Except as set forth on Schedule 7.8 (a) attached hereto, the
----------------
Assets and the Real Property comply in all material respects with, and each of
the Businesses has been conducted in all material respects in compliance with,
all laws, rules and regulations (including all worker safety laws, but excluding
all Environmental Laws (as hereinafter defined)), applicable zoning and other
laws, ordinances, regulations and building codes, and none of the Sellers or the
Stockholder has received any written notice of any violation thereof which has
not been remedied.
(b) Except as set forth on Schedule 7.8(b) attached hereto, (i) none
---------------
of the Sellers has at any time generated, used, treated or stored Hazardous
Materials (as hereinafter defined) on, or transported Hazardous Materials to or
from, the Real Property or any property adjoining or adjacent to the Real
Property in material violation of, or so as to impose liability under, any
Environmental Law, and, to the knowledge of the Sellers, no party has taken such
actions on or with respect to the Real Property, provided, however, certain
-------- -------
petroleum products are stored and handled by the Sellers in the ordinary course
of business in compliance in all material respects with all Environmental Laws,
(ii) none of the Sellers has at any time released or disposed of Hazardous
Materials on the Real Property or any property adjoining or adjacent to the Real
Property in material violation of, or so as to impose liability under, any
Environmental Law, and, to the knowledge of the Sellers, no party has taken any
such actions on the Real
17
Property, (iii) the Real Property complies in all material respects with, and
each of the Sellers has at all times been in compliance in all material respects
with, all Environmental Laws and the requirements of any permits issued under
such Environmental Laws with respect to the Real Property, the Assets and the
operation of the Businesses, (iv) there are no past, pending or, to the
knowledge of the Sellers, threatened environmental claims against any of the
Sellers, the Real Property, any of the Assets or the Businesses, (v) to the
knowledge of the Sellers, there are no facts or circumstances, conditions or
occurrences regarding any of the Sellers, the Real Property, any of the Assets
or the Businesses that could reasonably be anticipated to form the basis of an
environmental claim against any of the Sellers, any of the Assets or the
Businesses or to cause the Real Property, any of the Assets or any of the
Businesses to be subject to any restrictions on its ownership, occupancy, use or
transferability under any Environmental Law, (vi) there are not now and, to the
knowledge of the Sellers, never have been any underground storage tanks located
on the Real Property, (vii) none of the Sellers has, nor, to the knowledge of
the Sellers, has any other person, ever transported or arranged for the
transportation of any Hazardous Materials to any site other than the Real
Property in material violation of, or so as to impose liability under, any
Environmental Law, and (viii) except as set forth on Schedule 7.8(b), none of
---------------
the Sellers nor the Stockholder has operated any of the Businesses at any
location other than the Real Property. As used herein, the term "Environmental
-------------
Laws" shall mean all applicable federal, state and local laws, statutes,
----
regulations, rules, ordinances and common law, and all judgments, decrees,
orders, agreements or permits, issued, promulgated, approved or entered
thereunder by any governmental authority relating to pollution or Hazardous
Materials or protection of human health or the environment, including, but not
limited to, the Comprehensive Environmental Response, Compensation and Liability
Act ("CERCLA"), as amended. As used herein, the term "Hazardous Materials" means
------ -------------------
any waste, pollutant, chemical, hazardous substance, toxic substance, hazardous
waste, special waste, solid waste, asbestos, radioactive materials,
polychlorinated biphenyls, petroleum or petroleum-derived substance or waste
(regardless of specific gravity), or any constituent or decomposition product of
any such pollutant, material, substance or waste, regulated under or as defined
by any Environmental Law.
(c) None of the Sellers or the Stockholder, nor, to the knowledge of
the Sellers, any director, officer, agent or employee of any of the Sellers or
any other person or entity associated with or acting for or on behalf of any of
the Sellers, has, directly or indirectly, made any illegal payment to any person
or entity, regardless of form, whether in money, property or services: (i) to
obtain favorable treatment in securing business for a Seller, (ii) to pay for
favorable treatment for business secured for a Seller, or (iii) to obtain
special concessions or for special concessions already obtained from any of the
Sellers.
7.9 Fixtures and Equipment; Real Property.
-------------------------------------
(a) The Fixtures and Equipment, together with all equipment leased
pursuant to the equipment leases included in the Contracts (as defined in 7.10
below), constitute in the aggregate all of the fixtures, machinery, equipment,
furniture, signs and office equipment used or intended for use by the Sellers in
the Businesses and, taken as a whole with respect to each Seller, are in good
operating condition, maintenance and repair, ordinary wear and tear excepted.
The Leased Premises comprise all of the real property, buildings and
improvements thereon which are used by the Businesses, other than the Owned Real
Property, and the Leased Premises
18
are not subject to the possessory rights of anyone other than the respective
Sellers. All Demonstrators have been operated in the ordinary course of
business, are operated with dealer tags and have not had certificates of title
issued with respect to them. To the knowledge of the Sellers, the Leased
Premises (including, without limitation, the roof, the walls and all plumbing,
wiring, electrical, heating, air conditioning, fire protection and other
systems, as well as all paved areas, included therein or located thereat) is in
good working order, condition and repair and is not in need of maintenance or
repairs except for maintenance and repairs which are routine, ordinary and not
material in nature or cost.
(b) With respect to each Existing Lease, to the knowledge of the
Sellers, no event or condition currently exists which would give rise to a
material repair or restoration obligation if such Existing Lease were to
terminate. Except as set forth in the Existing Leases, the Sellers do not have
any knowledge of any event or condition which currently exists which would
create a legal or other impediment to the use of the Leased Premises as
currently used, or would increase the additional charges or other sums payable
by the tenant under any of the Existing Leases (including, without limitation,
any pending Tax reassessment or other special assessment affecting the Leased
Premises).
(c) To the knowledge of the Sellers, there has been no work performed,
services rendered or materials furnished in connection with repairs,
improvements, construction, alteration, demolition or similar activities with
respect to the Leased Premises for at least ninety (90) days before the date
hereof; there are no outstanding claims or persons entitled to any claim or
right to a claim for a mechanics' or materialmen's lien against the Leased
Premises; and there is no person or entity other than the Company in or entitled
to possession of the Leased Premises.
(d) To the knowledge of the Sellers, each Seller has all easements and
rights, including, but not limited to, easements for power lines, water lines,
sewers, roadways and other means of ingress and egress, necessary to conduct the
business such Seller now conducts, all such easements and rights are perpetual,
unconditional appurtenant rights to the Leased Premises, and none of such
easements or rights are subject to any forfeiture or divestiture rights.
(e) Neither the whole nor any portion of any of the Real Property has
been condemned, expropriated, ordered to be sold or otherwise taken by any
public authority, with or without payment or compensation therefor, and the
Sellers do not have any knowledge of any such pending or threatened
condemnation, expropriation, sale or taking, and do not have any knowledge of
any pending assessments which would affect the Real Property.
(f) None of the Real Property is in violation in any material respect
of any public or private restriction or any law or any building, zoning, health,
safety, fire or other law, ordinance, code or regulation, and no notice from any
governmental body has been served upon any of the Sellers or upon any of the
Real Property claiming any violation in any material respect of any such law,
ordinance, code or regulation or requiring or calling to the attention of any of
the Sellers the need for any work, repair, construction, alterations or
installation on or in connection with said properties which has not been
complied with. To the knowledge of the Sellers, all improvements which comprise
a part of the Real Property are located within the record lines of the Real
Property and none of the improvements located on the Real Property encroach upon
any adjoining property or any easements or rights of way and no improvements
19
located on any adjoining property encroach upon any of the Real Property or any
easements or rights of way servicing the Real Property.
7.10 Contracts. Each of the Sellers has in all material respects performed
---------
all of its obligations required to be performed by it to the date hereof, and is
not in default or alleged to be in default in any material respect, under any
material contract or lease (as defined in Section 1.6 above) to be assigned to
the Buyer hereunder (collectively, the "Contracts"), and there exists no event,
---------
condition or occurrence which, after notice or lapse of time or both, would
constitute such a default. To the knowledge of the Sellers, no other party to
any Contract is in default in any respect of any of its obligations thereunder.
Each of the Contracts is valid and in full force and effect and enforceable
against the applicable Seller in accordance with its terms, and, to the
knowledge of the Sellers, is enforceable against the other parties thereto in
accordance with its terms. Except as set forth in Schedule 7.2 hereto, each
------------
Contract is assignable to the Buyer without the consent of the other party(ies)
thereto.
7.11 Adequacy of Assets; Possession. Except for the Sellers' cash and
------------------------------
accounts receivable and rights under its dealership agreements with the
respective Manufacturers and the assets listed on Schedule 2.1, the Assets of
------------
the Sellers, together with the Real Property and the Contracts (including all
equipment leased pursuant to the equipment leases included in the Contracts) of
the Sellers, comprise all of the assets, properties, contracts, leases and
rights necessary for the Buyer to operate the Businesses substantially in the
manner operated by the Sellers prior to the Closing. The tangible assets
included within the Assets are physically identifiable and are in the possession
of the Sellers.
7.12 Taxes. Each of the Sellers has filed all federal, state and local
-----
governmental Tax returns required to be filed by it in accordance with the
provisions of law pertaining thereto and has paid all taxes and assessments
(including, without limitation of the foregoing, income, excise, unemployment,
social security, occupation, franchise, property and import taxes, duties or
charges and all penalties and interest in respect thereof (collectively, the
"Taxes")) required by such Tax returns or otherwise to have been paid to date.
-----
7.13 Employees; Employee Benefit Plans.
---------------------------------
(a) Schedule 7.13(a) attached hereto discloses, as of the date hereof,
----------------
all of the Sellers' employees whose individual cash compensation for the year
ended December 31, 2000 was in excess of $100,000 and whose individual cash
compensation is expected to exceed $100,000 in the current calendar year,
together with the amount of total cash compensation paid to each such person for
the twelve (12) month period ending December 31, 2000 and the current aggregate
base salary or hourly rate (including, bonus or commission pay), title, length
of employment, employment contract, if any, and accrued vacation time for each
such person. None of the Sellers is currently, nor in the past five (5) years
has it ever been, a party to any collective bargaining agreement or other labor
contract, and there has not been, nor, to the knowledge of the Sellers, is there
pending or threatened, any union organizational drive or application for
certification of a collective bargaining agent with respect to any of the
Sellers' employees.
20
(b) The Sellers have listed on Schedule 7.13(b) and have delivered to
----------------
the Buyer true and complete copies of all Employee Benefit Plans (as defined
below) and related documents established, maintained or contributed to by any
Seller. For the purpose of all of the representations in this Section 7.13(b),
the term "Sellers" shall include the Sellers and all employers, whether or not
incorporated, that are treated together with the Sellers as a single employer
within the meaning of Section 414 of the Internal Revenue Code of 1986, as
amended (the "Code"). The term "Employee Benefit Plan" shall include all plans
---- ---------------------
described in Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA") and also shall include, without limitation, any
-----
deferred compensation, stock, employee or retiree pension benefit, welfare
benefit or other similar fringe or employee benefit plan, program, policy,
contract or arrangement, written or oral, qualified or nonqualified, funded or
unfunded, foreign or domestic, covering employees or former employees of the
Sellers and maintained or contributed to by any Seller. Where applicable, each
Employee Benefit Plan (i) has been administered in material compliance with the
terms of such Employee Benefit Plan and the requirements of ERISA, the Code, and
all other applicable laws, and (ii) is in material compliance with the reporting
and disclosure requirements of ERISA and the Code. No Seller maintains or
contributes to, nor has ever maintained or contributed to, an Employee Benefit
Plan subject to Title IV of ERISA or a "multiemployer plan." There are no facts
relating to any Employee Benefit Plan that (i) have resulted in a "prohibited
transaction" of a material nature or have resulted or are reasonably likely to
result in the imposition of a material excise tax, penalty or liability pursuant
to Section 4975 of the Code, (ii) have resulted in a material breach of
fiduciary duty or violation of Part 4 of Title I of ERISA, or (iii) have
resulted in or are reasonably likely to result in any material liability
(whether or not asserted as of the date hereof) of any Seller or any ERISA
affiliate pursuant to Section 412 of the Code arising under or related to any
event, act or omission occurring on or prior to the date hereof. Each Employee
Benefit Plan that is intended to qualify under Section 401(a) or to be exempt
under Section 501(c) of the Code is so qualified or exempt as of the date hereof
in each case as such Employee Benefit Plan has received favorable determination
letters from the Internal Revenue Service with respect thereto. To the knowledge
of the Sellers, the amendments to and operation of any Employee Benefit Plan
subsequent to the issuance of such determination letters do not adversely affect
the qualified status of any such Employee Benefit Plan. No Employee Benefit Plan
has an "accumulated funding deficiency" as of the date hereof, whether or not
waived, and no waiver has been applied for. No Seller has made any promises or
incurred any liability under any Employee Benefit Plan or otherwise to provide
health or other welfare benefits to current or future retirees or other former
employees of such Seller, except as specifically required by law. No Seller has
received any written claims and, to the knowledge of the Sellers, there are no
threatened claims (other than routine claims for benefits) or lawsuits with
respect to any of the Sellers' respective Employee Benefit Plans. Schedule
--------
7.13(b) hereto sets forth a list of the Sellers' respective employees or former
-------
employees who are currently receiving COBRA continuation coverage. As used in
this Section 7.13, all technical terms enclosed in quotation marks shall have
the meaning set forth in ERISA or the Code, as the case may be.
7.14 Manufacturer Communications. Except as set forth on Schedule 7.14,
--------------------------- -------------
since January 1, 2000, none of the Manufacturers has (a) notified any of the
Sellers in writing, or Xxxxxx in any manner, of any deficiency in dealership
operations, including, but not limited to, the following areas: (i) brand
imaging, (ii) facility conditions, (iii) sales efficiency, (iv) customer
21
satisfaction, (v) warranty work and reimbursement, or (vi) sales incentives; (b)
otherwise advised any of the Sellers in writing, or Xxxxxx in any manner, of a
present or future need for facility improvements or upgrades in connection with
any of the Businesses; or (c) notified any of the Sellers in writing, or Xxxxxx,
in any manner, of the awarding or possible awarding of any of its respective
franchises to entities other than the Sellers or Xxxxxx in the Metropolitan
Statistical Areas in which the Businesses operate.
7.15 No Misstatements Or Omissions. To the knowledge of the Sellers, no
-----------------------------
representation or warranty made by any of the Sellers or the Stockholder in this
Agreement, and no statement contained in any agreement, instrument, certificate
or Schedule furnished or to be furnished by any of the Sellers or the
Stockholder pursuant hereto, contains or will contain any untrue statement of a
material fact or omits or will omit to state a material fact necessary in order
to make such representation or warranty or such statement not misleading.
ARTICLE VIII
CONDITIONS PRECEDENT TO THE BUYER'S OBLIGATIONS
The obligations of the Buyer to perform this Agreement at Closing are
subject to the following conditions precedent which shall be fully satisfied at
or before the Closing, unless waived in writing by the Buyer.
8.1 Representations and Warranties. All of the representations and
------------------------------
warranties of the Sellers and the Stockholder herein contained shall be true and
correct in all material respects on and as of the Closing Date as if made on and
as of the Closing Date, and the Buyer shall have received a certificate from the
Stockholder and a certificate from a duly authorized officer of each of the
Sellers, dated the Closing Date, to such effect.
8.2 Compliance with Agreements. Each of the agreements or obligations
--------------------------
required by this Agreement to be performed or complied with by the Sellers and
the Stockholder at or before the Closing shall have been duly performed or
complied with in all material respects, and the Buyer shall have received a
certificate from the Stockholder and a certificate from a duly authorized
officer of each of the Sellers, dated the Closing Date, to such effect.
8.3 No Litigation. No action, suit or proceeding shall have been
-------------
instituted by a governmental agency or any other third party to prohibit or
restrain the sale contemplated by this Agreement or otherwise challenge the
power and authority of the parties to enter into this Agreement or to carry out
their obligations hereunder or the legality or validity of the sale contemplated
by this Agreement.
8.4 Inventory. The Inventory shall have been completed to the reasonable
---------
satisfaction of the Buyer.
8.5 Corporate Organization; Encumbrances. Each of the Sellers shall have
------------------------------------
furnished to the Buyer: (a) a certificate of good standing of such party issued
by the Secretary of
22
State of its incorporation dated no earlier than fifteen (15) Business Days
prior to the Closing Date; (b) a copy of the Articles of Incorporation of such
party certified by the Secretary of State of the State of its incorporation
dated no earlier than fifteen (15) Business Days prior to the Closing Date; (c)
a certificate of the Secretary of such party, dated the Closing Date, in form
and substance reasonably satisfactory to the Buyer, certifying as to (i) no
amendments to the Articles of Incorporation of such party since the date of the
certificate delivered in accordance with Section 8.5(b); (ii) the Bylaws of such
party attached to such certificate being true and correct; (iii) the incumbency
and signatures of the officers of such party executing this Agreement and any
other agreements, instruments or documents to be executed by such party in
connection herewith; and (iv) the resolutions duly adopted by the Board of
Directors and the stockholders of such party in accordance with Section 8.6
below; and (d) recent UCC Reports (as defined in Section 10.5(b) below) for each
of the Sellers (including UCC Reports for each of the tradenames required to be
listed under Section 5.5) or other evidence reasonably satisfactory to the Buyer
and its counsel that the Assets are free and clear of all Encumbrances.
8.6 Board and Stockholder Resolutions. Each of the Sellers shall have
---------------------------------
furnished to the Buyer a copy of the resolutions duly adopted by the Board of
Directors and the stockholders of such party authorizing the execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby, certified by an authorized officer of such party as of the Closing Date.
8.7 No Material Adverse Change or Contracts or Liabilities. There shall
------------------------------------------------------
have been no material adverse change or development in any of the Assets or the
Liabilities of the Sellers or in the prospects, properties, earnings, results of
operations or condition (financial or otherwise) of the Businesses, and no event
shall have occurred or circumstance exist that may, or could reasonably be
expected to, result in such a material adverse change; provided, that, the
-------- ----
foregoing shall not apply to changes generally occurring in the Sellers'
industry.
8.8 Motor Vehicle Licenses. The Buyer shall have been licensed as a Motor
----------------------
Vehicle Dealer under applicable State motor vehicle dealer registration laws and
shall have obtained all other authorizations, consents, licenses and permits
from applicable governmental agencies having or asserting jurisdiction, which
the Buyer deems necessary or appropriate to conduct business as an automobile
dealer at the Real Property or such other location as the Buyer may determine.
8.9 Consents and Approvals. The Sellers shall have obtained and delivered
----------------------
to the Buyer all other authorizations, consents and approvals from governmental
bodies or authorities specified in Schedule 7.2 hereto and from third persons
------------
and entities as are required to assign the Contracts to the Buyer at Closing.
8.10 Certificates of Origin; Etc. The Sellers shall have transferred to the
---------------------------
Buyer certificates of title or origin for all New Vehicles, Demonstrators and,
if applicable, Used Vehicles, and all of their respective registration lists,
owner follow-up lists and service files on hand as of the Closing Date with
respect to the Businesses.
23
8.11 Termination of the Sellers' Agreements with Manufacturers. The Sellers
---------------------------------------------------------
shall have terminated in writing their respective dealer agreements and any
other applicable sales and service agreements with the respective Manufacturers
(except for the Oldsmobile dealer agreement with respect to the Lonetree,
Colorado dealership if the Buyer elects not to acquire the Oldsmobile assets
related thereto).
8.12 Bills of Sale; Etc. The Sellers shall have executed, as appropriate,
------------------
and delivered to the Buyer the Bills of Sale, other documents of transfer of
title contemplated hereby and any and all other documents necessary or desirable
in connection with the transfer of the Assets, which documents shall warrant
title to the Buyer consistent with this Agreement and shall in all respects be
in such form as may be reasonably required by the Buyer and its counsel.
8.13 Manufacturer Approval. Each of the Manufacturers shall have approved
---------------------
(a) the Buyer or the Buyer's affiliate as an authorized dealer at the present
dealership locations in the Sellers' existing facilities as currently configured
for dealership operations, and (b) O. Xxxxxx Xxxxx or O. Xxxxxx Xxxxx'x designee
as the authorized dealer operator; and each of the Manufacturers shall have
executed a dealer agreement, and any other applicable sales and service
agreements, on terms reasonably satisfactory to the Buyer.
8.14 Consents; Releases of Encumbrances. All consents, approvals, notices,
----------------------------------
filings and/or registrations set forth on Schedule 7.2 hereto shall have been
------------
obtained or made and the Sellers shall have delivered to the Buyer evidence
thereof reasonably satisfactory to the Buyer. The Sellers shall have obtained
releases or discharges of, or shall otherwise have made provision satisfactory
to the Buyer for the release or discharge of, all Encumbrances set forth on
Schedule 7.4 hereto, except for Encumbrances which secure only the Liabilities.
------------
8.15 Other Agreements. The closing under each of the Other Agreements shall
----------------
have occurred or shall be occurring simultaneously with the Closing.
8.16 Change of Name. Each of the Sellers shall have delivered to the Buyer
--------------
all documents, including, without limitation, resolutions of the Board of
Directors and stockholders of the Sellers, necessary to effect a change of name
of the Sellers after the Closing to names other than the corporate names and
tradenames referred to in Section 5.5 hereof or any variation thereof.
8.17 HSR. All applicable waiting periods under the HSR Act (as defined in
---
Section 10.14 below) shall have expired without any indication by the Antitrust
Division (as defined in Section 10.14 below) or the FTC (as defined in Section
10.14 below) that either of them intends to challenge the transactions
contemplated hereby or, if any such challenge or investigation is made or
commenced, such challenge or investigation shall have been concluded in a way
which lawfully permits the transactions contemplated hereby in all material
respects.
8.18 Audited Financial Statements of the Sellers. The Buyer shall have
-------------------------------------------
completed preparation of such audited financial statements of the Sellers as may
be required by applicable regulations of the SEC or by the Buyer's lenders.
24
8.19 Opinion of Counsel. The Buyer shall have received an opinion of
------------------
Xxxxxxx & Xxxxx L.L.P., counsel to the Sellers and the Stockholder, and such
Michigan counsel reasonably acceptable to the Buyer, in substantially the form
of Exhibit B hereto.
---------
8.20 Existing Leases. With regard to each Existing Lease, the Seller that
---------------
is a party thereto shall have executed and delivered an Existing Lease
Assignment and the landlord(s) under such Existing Lease shall have given any
required consent to the assignment thereof from such Seller to the Buyer. The
Buyer shall have received (a) an estoppel certificate, in form and substance
reasonably acceptable to the Buyer, from the applicable landlord(s) with respect
to each of the Existing Leases and (b) subordination and non-disturbance
agreements, in form and substance reasonably acceptable to the Buyer, from the
applicable mortgagees of any Leased Premises.
ARTICLE XI
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SELLERS AND THE
STOCKHOLDER
The obligations of the Sellers and the Stockholder to perform this
Agreement at Closing are subject to the following conditions precedent which
shall be fully satisfied at or before the Closing, unless waived in writing by
the Sellers:
9.1 Representations and Warranties. All of the representations and
------------------------------
warranties of the Buyer herein contained shall be true and correct in all
material respects on and as of the Closing Date as if made on and as of the
Closing Date, and the Sellers shall have received a certificate from a duly
authorized officer of the Buyer, dated the Closing Date, to such effect.
9.2 Compliance with Agreements. Each of the agreements or obligations
--------------------------
required by this Agreement to be performed or complied with by the Buyer at or
before the Closing shall have been duly performed or complied with in all
material respects, and the Sellers shall have received a certificate from a duly
authorized officer of the Buyer, dated the Closing Date, to such effect.
9.3 No Litigation. No action, suit or proceeding shall have been
-------------
instituted by a governmental agency or any third party to prohibit or restrain
the sale contemplated by this Agreement or otherwise challenge the power and
authority of the parties to enter into this Agreement or to carry out their
obligations hereunder or the legality or validity of the sale contemplated by
this Agreement.
9.4 Inventory. The Inventory shall have been completed to the reasonable
---------
satisfaction of the Sellers.
9.5 Corporate Organization; Board Resolutions. The Buyer shall have
-----------------------------------------
furnished to the Sellers: (a) a certificate of good standing of the Buyer issued
by the Secretary of State of the State of Delaware dated no earlier than fifteen
(15) Business Days prior to the Closing Date; and (b) a certificate of the
Secretary or an Assistant Secretary of the Buyer, dated the Closing
25
Date, in form and substance reasonably satisfactory to the Sellers, certifying
as to (i) the Restated Certificate of Incorporation of the Buyer attached to
such certificate being true and correct; (ii) the Bylaws of the Buyer attached
to such certificate being true and correct; (iii) the incumbency and signatures
of the officers of the Buyer executing this Agreement and any other agreements,
instruments or documents to be executed by the Buyer in connection herewith; and
(iv) the resolutions of the Board of Directors of the Buyer authorizing the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby.
9.6 Payment of Aggregate Purchase Price; Assumption Agreements. The Buyer
----------------------------------------------------------
shall have tendered to the Sellers the Aggregate Purchase Price and shall have
executed and delivered the Assumption Agreements.
9.7 Other Agreements. The closing under each of the Other Agreements shall
----------------
have occurred or shall be occurring simultaneously with the Closing.
9.8 HSR. All applicable waiting periods under the HSR Act shall have
---
expired without any indication of the Antitrust Division or the FTC that either
of them intends to challenge the transactions contemplated hereby, or, if any
such challenge or investigation is made or commenced, such challenge or
investigation shall have been concluded in a way which lawfully permits the
transactions contemplated hereby in all material respects.
9.9 Opinion of Counsel. The Sellers and the Stockholder shall have
------------------
received an opinion of Parker, Poe, Xxxxx & Xxxxxxxxx, L.L.P., counsel to the
Buyer, in substantially the form of Exhibit C hereto.
---------
9.10 Existing Leases. The Buyer shall have executed and delivered an
---------------
Existing Lease Assignment with respect to each Existing Lease and the
landlord(s) under such Existing Leases shall have given the required consent to
the assignment thereof from such Seller to the Buyer.
9.11 Consents and Approvals. The Sellers shall have obtained all
----------------------
authorizations, consents and approvals from third persons and entities as are
required to assign the Contracts to the Buyer at Closing. The Sellers
acknowledge that it is their obligation to use best reasonable efforts to obtain
such authorizations, consents and approvals.
9.12 Manufacturer Approval. Each of the Manufacturers shall have approved
---------------------
(a) the Buyer or the Buyer's affiliate as an authorized dealer at the present
dealership locations in the Sellers' existing facilities as currently configured
for dealership operations, and (b) O. Xxxxxx Xxxxx or O. Xxxxxx Xxxxx'x designee
as the authorized dealer operator; and each of the Manufacturers shall have
executed a dealer agreement, and any other applicable sales and service
agreements, on terms reasonably satisfactory to the Buyer.
9.13 Consents. All consents, approvals, notices, filings and/or
--------
registrations set forth on Schedule 7.2 hereto shall have been obtained or made.
------------
The Sellers acknowledge that it is their obligation to use best reasonable
efforts to obtain such authorizations, consents and approvals.
26
ARTICLE X
COVENANTS AND AGREEMENTS
10.1 Bulk Sales. The parties shall comply with all applicable bulk sale or
----------
other similar laws with respect to the transactions contemplated hereby. The
Buyer may waive the provisions of this Section 10.1.
10.2 Further Assurances. The Sellers and the Stockholder agree that they
------------------
will, at any time and from time to time, after the Closing, upon request of the
Buyer, do, execute, acknowledge and deliver all such further acts, deeds,
assignments, transfers, conveyances, powers of attorney and assurances, in a
form reasonably satisfactory to the Buyer's counsel, as may be reasonably
required to convey and transfer to and vest in the Buyer, and protect its
rights, title and interest in and enjoyment of, all the Assets. No Seller shall
amend, or waive any rights under, any of the Existing Leases.
10.3 Satisfaction of Closing Conditions. The parties hereto shall use their
----------------------------------
reasonable best efforts to obtain, and to cooperate with each other in
obtaining, all authorizations, approvals, licenses, permits and other consents
contemplated by Articles VIII and IX.
10.4 No Material Adverse Changes. During the period from the date of this
---------------------------
Agreement through the Closing Date, the Sellers will operate their respective
Businesses only in the ordinary course of business and in accordance with past
practices. The Sellers shall promptly notify the Buyer of any material adverse
change or development in any of the Assets or the Liabilities or in the
earnings, results of operations or condition (financial or otherwise) of the
Businesses, and of the occurrence of any event or circumstance that will, or
could reasonably be expected to, result in such a material adverse change that
is not an event or circumstance generally affecting the Sellers' industry.
10.5 Access; Environmental Audit.
---------------------------
(a) Until Closing, the Sellers shall afford to the Buyer, its
attorneys, accountants and such other representatives of the Buyer as the Buyer
shall designate to the Sellers, free and full access at all reasonable times,
and upon reasonable prior notice, to the Assets and the properties, books and
records of the Sellers, and to interview personnel, suppliers and customers of
the Sellers, in order that the Buyer may have full opportunity to make such
further investigation as it shall reasonably desire of the Assets, the
Liabilities and the Businesses. The Sellers shall furnish to the Buyer the due
diligence materials set forth in Schedule 10.5 hereto as soon as practicable,
but in no event later than thirty (30) days after the date of this Agreement,
and shall provide to the Buyer and its representative such additional
information as the Buyer may reasonably request. The contact person(s) at each
of the Sellers for purposes of arranging such access and requesting such
additional information is Xxxxxxx Xxxxxxxxx and no employee, supplier or
customer of the Sellers shall be contacted with respect to this Agreement or the
transactions contemplated hereby without her prior consent. The Sellers shall
allow an environmental consulting firm selected by the Buyer (the "Environmental
-------------
Auditor") to have
-------
27
prompt access to the Real Property in order to conduct an environmental
investigation of the Owned Real Property, as contemplated by the Real Property
Purchase Agreements, and the Leased Premises, as contemplated by Section 10.9
below, and otherwise satisfactory to the Buyer in scope and reasonably
acceptable to the Sellers (such scope being sufficient to result in a Phase I
environmental audit report and a Phase II environmental audit report, if desired
by the Buyer) of, and to prepare a report with respect to, the Real Property
(the "Environmental Audit"). Each of the Sellers shall provide to the
-------------------
Environmental Auditor: (i) reasonable access to all of its existing records
concerning the matters which are the subject of the Environmental Audit; and
(ii) reasonable access to the employees of such Seller and the last known
addresses of former employees of such Seller who are most familiar with the
matters which are the subject of the Environmental Audit (the Sellers agreeing
to request such former employees respond to any reasonable requests or inquiries
by the Environmental Auditor). The Environmental Auditor shall coordinate all
visits to the Real Property and conversations with employees of the Sellers with
the Xxxxxxx Xxxxxxxxx and shall use reasonable efforts to minimize any
disruption of the Sellers' businesses in performing such investigations. The
Sellers shall otherwise cooperate with the Environmental Auditor in connection
with the Environmental Audit. The Buyer shall bear the costs, fees and expenses
in connection with any Environmental Audit and any financial audit.
(b) Within twenty (20) days after the date hereof, the Sellers will
obtain from a nationally recognized provider and provide to the Buyer, at the
Sellers' expense, a Uniform Commercial Code search report, judgment lien report
and federal, state and local Tax lien report (collectively, a "UCC Report") with
----------
respect to each of the Sellers from all jurisdictions in which the Sellers and
their respective assets are located. The Sellers will obtain and provide to the
Buyer separate UCC Reports with respect to each of the Sellers' respective
corporate names and all other names each such Seller has used in the last five
(5) years. If the Sellers do not timely provide the UCC Reports to the Buyer,
the Buyer may obtain such reports, and the Sellers shall reimburse the Buyer for
all expenses incurred by the Buyer in connection therewith.
10.6 Indemnification by the Sellers and the Stockholder.
--------------------------------------------------
(a) All representations and warranties of the Sellers and the
Stockholder contained herein, or in any agreement, certificate or document
executed by any of the Sellers or the Stockholder in connection herewith, shall
survive the Closing for a period of [***] years with the exception of (i) the
representations and warranties contained in Section 7.12, which shall survive
the Closing until the expiration of the applicable Tax statutes of limitation
plus a period of sixty (60) days; (ii) the representations and warranties
contained in Sections 7.6(b) and 7.8(b), which shall survive the Closing for a
period of [***] years; and (iii) the representations and warranties contained in
Section 7.4(a), which shall survive the Closing indefinitely. As to each
representation and warranty of the parties to this Agreement, the date to which
such representation and warranty shall survive is hereinafter referred to as the
"Survival Date." All information contained in any Schedule furnished hereunder
-------------
by any of the Sellers or the Stockholder shall be deemed a representation and
warranty by the Sellers and the Stockholder made in this Agreement as to the
accuracy of such information.
(b) Subject to the terms and conditions of Sections 10.6, 10.8 and
10.18, the Sellers and the Stockholder, jointly and severally, agree to
indemnify and hold harmless the
[***] These portions of this exhibit have been omitted and filed separately with
the Commission pursuant to a request for confidential treatment.
28
Buyer and its subsidiaries, officers and directors, and their respective
permitted successors and assignees (collectively, the "Buyer Indemnitees"), from
-----------------
and against any and all losses, damages, liabilities, obligations, assessments,
suits, actions, proceedings, claims or demands, including costs, expenses and
fees (including reasonable attorneys' fees and expert witness fees incurred in
connection therewith) ("Losses"), suffered by any of them or asserted against
------
any of them or any of the Assets, arising out of or based upon (i) the breach or
failure of any representation or warranty of any of the Sellers or the
Stockholder contained herein (other than in Sections 7.1 and 7.4(a)), or in any
agreement, certificate or document executed by any of the Sellers or the
Stockholder in connection herewith, to be true and correct, (ii) the breach or
failure of any representation or warranty of any of the Sellers or the
Stockholder contained in Sections 7.1 or 7.4(a) to be true and correct, (iii)
the breach of any covenant or agreement of any of the Sellers or the Stockholder
contained in this Agreement, (iv) the Retained Liabilities, (v) any arrangements
or agreements made or alleged to have been made by any of the Sellers or the
Stockholder with any broker, finder or other agent in connection with the
transactions contemplated hereby, (vi) except with respect to the Liabilities,
any waiver by the Buyer of the provisions of any applicable bulk sales laws,
(vii) any matter, item, circumstance or condition listed, contained or otherwise
referred to on Schedule 7.3, Schedule 7.8(a) or Schedule 7.8(b) or (viii) the
------------ --------------- ---------------
amendment and/or termination and winding up of the 401(k) Plan (as defined in
Section 10.12(c) or any other Employee Benefit Plans.
10.7 Indemnification by the Buyer.
----------------------------
(a) All representations and warranties of the Buyer contained herein,
or in any agreement, certificate or document executed by the Buyer in connection
herewith, shall survive the Closing for a period of [***] years. All information
contained in any Schedule furnished hereunder by the Buyer shall be deemed a
representation and warranty by the Buyer made in this Agreement as to the
accuracy of such information.
(b) Subject to the terms and conditions of Sections 10.7, 10.8 and
10.18, the Buyer agrees to indemnify and hold harmless the Sellers and their
respective subsidiaries, directors and officers, the Stockholder and Xxxxxx, and
their respective permitted successors and assigns (the "Seller Indemnitees"),
------------------
from and against any and all Losses incurred in connection with, suffered by any
of them, or asserted against any of them, arising out of or based upon (i) the
breach or failure of any representation or warranty of the Buyer contained
herein, or in any agreement, certificate or document executed by the Buyer in
connection herewith, to be true and correct, (ii) the breach of any covenant or
agreement of the Buyer contained in this Agreement, (iii) the Buyer's failure to
discharge the Liabilities, or (iv) any arrangements or agreements made or
alleged to have been made by the Buyer with any broker, finder or other agent in
connection with the transactions contemplated hereby.
10.8 Limitations on Indemnification.
------------------------------
(a) No claim for indemnification with respect to a breach of a
representation and warranty shall be made by any Buyer Indemnitee or Seller
Indemnitee, as the case may be, after the applicable Survival Date unless prior
to such Survival Date the Buyer Indemnitee or Seller Indemnitee, as the case may
be, shall have given the Sellers or the Buyer, as the case may
[***] These portions of this exhibit have been omitted and filed separately with
the Commission pursuant to a request for confidential treatment.
29
be, written notice of such claim for indemnification based upon actual loss
sustained, or potential loss anticipated as a result of the existence of any
claim, demand, suit, or cause of action against such Buyer Indemnitee or Seller
Indemnitee, as the case may be. No claim for indemnification pursuant to Section
10.6(b)(iv) shall be made by any Buyer Indemnitee after the [***] anniversary of
the Closing Date unless prior to such date the Buyer Indemnitee shall have given
the Sellers written notice of such claim for indemnification based upon actual
loss sustained, or potential loss anticipated as a result of the existence of
any claim, demand, suit, or cause of action against such Buyer Indemnitee.
(b) The Sellers and the Stockholder shall have no indemnification
liability under this Agreement unless and until (and only to the extent that)
all claims with respect to such Losses pursuant to this Agreement and for
"Buyer's Damages" under the Xxxxxx Stock Purchase Agreement and the Arngar Stock
Purchase Agreement (as defined on Exhibit A-1) exceed a cumulative aggregate
-----------
total of [***] (the "Basket"); provided, however, the foregoing Basket
------ -------- -------
limitation shall not apply to (1) claims under Sections 10.6(b)(ii) or
10.6(b)(iv), (2) claims under Section 10.6(b)(iii), in so far as such claims
relate to a breach of Section 10.9 below, (3) claims under Section
10.6(b)(viii), or (4) claims based upon fraud. With respect to any claim for
indemnity under Section 10.6(b)(i) above, if the matter is also the basis for a
claim for indemnity under any other provision of this Section 10.6 for which the
Basket limitation is not applicable, the Basket limitation shall not be
applicable to such claim.
(c) Except in the case of claims based upon fraud, the aggregate
indemnification liability of the Sellers and the Stockholder under this
Agreement and the "Seller" under each of the Xxxxxx Stock Purchase Agreement and
the Arngar Stock Purchase Agreement shall be [***], which amount is inclusive of
indemnification obligations contemplated by the Environmental Indemnification
Cap (as defined below). Notwithstanding the foregoing, the Sellers and the
Stockholder shall have no indemnification obligations hereunder with respect to
indemnification obligations contemplated by the Environmental Indemnification
Cap to the extent such indemnification obligations would require payments by the
Sellers in excess of the Environmental Indemnification Cap. As used in this
Agreement, the "Environmental Indemnification Cap" shall mean the obligations
---------------------------------
under this Agreement and the Other Agreements to remediate environmental
contamination, including, without limitation, pursuant to (A) Paragraph 7(e) of
the respective Real Property Purchase Agreement, (B) Paragraph 5(e) of the
"Owned Real Property Rider" under the Arngar Stock Purchase Agreement, (C)
Section 10.9(b) below or (D) Section 9.6 of each of the Xxxxxx Stock Purchase
Agreement and the Arngar Stock Purchase Agreement, and/or to indemnify for
Environmental Liabilities or breaches of representations or warranties with
respect to environmental matters, in either case with respect to the Owned Real
Property and/or the Leased Premises, and the "Owned Real Property" and/or the
"Leased Premises" under each of the Xxxxxx Stock Purchase Agreement and the
Arngar Stock Purchase Agreement, in the maximum aggregate amount of [***].
(d) In connection with any claim for indemnification with respect to
which the Buyer or the Sellers, as the case may be, have an enforceable claim
against any third party (contractual or otherwise) on account of the item for
which such claim for indemnification has been made, the Buyer or the Sellers, as
the case may be, shall, at the time of payment by the
[***] These portions of this exhibit have been omitted and filed separately with
the Commission pursuant to a request for confidential treatment.
30
indemnifying party of the claim for indemnification, assign to the other party
such claim; provided, however, the assignee of such claim shall further protect
-------- -------
and indemnify the assignor in connection with the pursuit by the assignee of
such claim against such third party; provided, further, however, this clause (d)
-------- ------- -------
shall not require the assignment of any claims under any insurance policy.
(e) No Buyer Indemnitee or Seller Indemnitee, as the case may be,
shall be entitled to indemnification pursuant to this Article 10 to the extent
of any insurance (including title insurance) proceeds received by the Buyer or
the Sellers, as the case may be, in connection with the facts giving rise to
such indemnification (and the Buyer or the Sellers shall seek full recovery
under all insurance policies covering any Losses to the extent permitted),
provided that this clause (e) shall not be applicable to the extent it would
give the insurance company a basis to deny coverage with respect to the
particular claim involved.
(f) The provisions of Sections 10.6 and 10.7 shall be effective upon
consummation of the Closing, and prior to the Closing, shall have no force and
effect. Following the Closing, except in the case of claims based upon fraud,
the sole and exclusive remedy for the breach of any representation, warranty or
covenant contained in, or otherwise relating to, this Agreement shall be
indemnification provided for in this Agreement.
10.9 Remediation of Leased Premises.
------------------------------
(a) Following the execution of this Agreement, the Buyer may, at its
option, commission the Environmental Audit with respect to the Leased Premises.
The Environmental Audit shall be conducted in accordance with standards and
procedures selected by the Buyer and the Environmental Auditor, and may include,
without limitation, drilling and soil borings at the Leased Premises at
locations specified by the Environmental Auditor, collecting and analyzing
samples of the soil, groundwater, surface water, sediment or other media at, on,
under or around the Leased Premises, and sampling for the presence of any
Hazardous Materials on the Leased Premises, and shall otherwise by conducted as
provided in Section 10.5 above. In doing the Environmental Audit, the Buyer
shall not unreasonably interfere with the respective Seller's business
operations and shall restore the Leased Premises to its prior condition.
(b) If the Environmental Audit disclose that Hazardous Materials are
present at, on, under or around the Leased Premises in violation of, or so as to
impose liability under, applicable Environmental Laws (including without
limitation, the soil, ground water, surface water, sediment or other media) then
the Buyer and the Environmental Auditor in consultation with the respective
Seller shall formulate a plan to remove and/or remediate such Hazardous
Materials in accordance with all applicable Environmental Laws to the level
required by the applicable governmental agency. The remediation shall be done by
remediation firms selected by the Buyer and the Environmental Auditor in
accordance with the remediation plan formulated in consultation with the
respective Seller and the respective Seller shall be reasonably apprised of the
status of the remediation and the costs incurred on an ongoing basis. The
remediation shall be complete upon the receipt of documentation evidencing the
satisfaction of the applicable governmental agency.
31
(c) If at any time during the period commencing on the Closing Date
and ending on the fifth anniversary date of the Closing Date, Hazardous
Materials are found to be present at, on, under or around the Leased Premises,
in violation of, or so as to impose liability under, any applicable
Environmental Laws (including without limitation, the soil, groundwater, surface
water, sediment or other media) which resulted from events that occurred or
conditions that existed prior to the Closing and provided that such Hazardous
Materials were not the subject of remediation pursuant to Paragraph (b) above,
the respective Seller, at its expense, shall be obligated to remediate and/or
remove such Hazardous Material in accordance with all applicable Environmental
Laws to the level required by the applicable governmental agency; provided,
however, that the Buyer's recovery shall be subject to the Environmental
Indemnification Cap. Any costs in excess of such amount shall be the
responsibility of the Buyer. In connection with such remediation, the Buyer
shall: provide the respective Seller with access to the Leased Premises to
conduct its own investigation or testing with regards to the matter, provide
such Seller with the results, including analytical data, of any investigation or
testing conducted by the Buyer or, if available to the Buyer, any third party,
provide such Seller with a copy of, or otherwise inform such Seller of, any
contact with any governmental agency with respect thereto, and cooperate in good
faith with such Seller in performing such tasks as they and their respective
technical professionals and representatives may reasonably request as being
necessary to complete any environmental investigations or environmental
remediation being undertaken by them pursuant to this Section 10.9(c), with the
Buyer being compensated for any such services rendered.
10.10 No Negotiations or Discussions. Neither any of the Sellers nor the
------------------------------
Stockholder shall, directly or indirectly, at any time on or prior to the
earlier of the Closing Date or the date of this Agreement is terminated pursuant
to Section 10.13(a), pursue, initiate, encourage or engage in any negotiations
or discussions with, or provide any information to, any person or entity (other
than the Buyer and its representatives and affiliates) regarding the sale or
possible sale to any such person or entity of any of the Assets or capital stock
of any of the Sellers or any merger or consolidation or similar transaction
involving any of the Sellers.
10.11 Regarding the Manufacturers. Promptly upon the execution of this
---------------------------
Agreement, the Sellers will notify the respective Manufacturers regarding the
transactions contemplated by this Agreement, utilizing a form of notification
reasonably acceptable to the Buyer. The Buyer shall promptly apply to the
respective Manufacturers for, or cause an affiliate of the Buyer to apply to the
respective Manufacturers for, the issuance of a franchise to operate an
automobile dealership upon the Real Property or at such other location as the
Buyer shall determine in its sole discretion. Effective as of the Closing, each
of the Sellers shall terminate its Dealer Sales and Service Agreements with the
respective Manufacturer. The Sellers shall take all reasonable steps to assist
the Buyer in the Buyer's efforts to obtain its own similar Dealer Sales and
Service Agreements with the Manufacturers. The parties acknowledge that the
Buyer's Dealer Agreements are subject to the approval of the respective
Manufacturers and that the Buyer would be unable to obtain its own, similar
Dealer Sales and Service Agreements absent the Sellers' termination of their
agreements. Notwithstanding the foregoing, at the request of the Buyer, each of
the Sellers shall allow the Buyer, for a period not to exceed thirty (30) days
after the Closing, to utilize such Seller's dealer code with the Manufacturer
until the respective Manufacturer has issued a new dealer code to the Buyer. The
Buyer hereby agrees to indemnify each of the Sellers from any and all
liabilities arising out of the use by the Buyer of such Seller's dealer
32
code including, without limitation, liabilities and obligations to the
respective Manufacturer and to any floor plan lender or other creditor providing
financing for products purchased under such Seller's dealer code by the Buyer
(or by such Seller on behalf of the Buyer) after the Closing.
10.12 The Sellers' Employees.
----------------------
(a) The Buyer shall have the right, but not the obligation, to offer
employment to any or all of the Sellers' employees. If permitted by law and
applicable regulations, the Sellers shall, in consideration for the sale of
substantially all of the Sellers' assets in bulk, assign and transfer to the
Buyer, without additional charge therefor, the amount of reserve in the Sellers'
respective State Unemployment Compensation Funds with respect to the Businesses
and the corresponding experience rate.
(b) At the request of the Buyer prior to the Closing, each of the
Sellers will continue its health care coverage for a period not to exceed thirty
(30) days after the Closing for those employees of such Seller hired by the
Buyer. If the Buyer makes such request, the Buyer will indemnify and hold the
Sellers harmless for all liabilities, obligations, costs and expenses incurred
by the Sellers arising out of or based upon such continued coverage for such
employees.
(c) Each of the Sellers shall amend any Employee Benefit Plan that
includes a cash or deferred arrangement under Section 401(k) of the Code (the
"401(k) Plan") as of the Closing Date to (i) bring the 401(k) Plan into
-----------
compliance with current applicable law, (ii) provide that the participants in
the 401(k) Plan hired by the Buyer shall be deemed to incur a "severance from
employment" for purposes of Section 401(k)(2) of the Code in connection with the
consummation of the transactions contemplated by this Agreement, (iii) fully
vest all accounts of all such participants in the 401(k) Plan, and (iv) provide
for the distribution of all such accounts. In addition, subject to acceptance by
the Buyer's 401(k) plan, the Sellers' 401(k) Plan shall allow participants
therein who are hired by Buyer to roll over outstanding participant loans to the
Buyer's 401(k) plan and the Sellers' 401(k) Plan shall not treat such
outstanding loans as in default. To the extent that any of Sellers' 401(k) Plans
or other Employee Benefit Plans list any of the Sellers' "doing business as"
names or trademark names as plan sponsors or participating employers, each of
the Sellers also shall amend such 401(k) Plan and other Employee Benefit Plans
to remove such names as plan sponsors or participating employers effective as of
the Closing. Each of the Sellers shall deliver to the Buyer at Closing a duly
executed plan amendment and resolutions of the Board of Directors of such Seller
reflecting the foregoing amendments. Each of the Sellers shall deliver drafts of
the foregoing documents to the Buyer at least fifteen (15) days prior to the
Closing. The Sellers shall retain all liability and responsibility for their
respective Employee Benefit Plans and shall promptly take any and all actions
necessitated by or related to the amendment and/or termination of any Employee
Benefit Plan.
(d) [***]
[***] These portions of this exhibit have been omitted and filed separately with
the Commission pursuant to a request for confidential treatment.
33
[***]
10.13 Termination.
-----------
(a) Notwithstanding any other provision herein contained to the
contrary, this Agreement may be terminated at any time prior to the Closing:
(i) by the written mutual consent of the parties hereto prior
to the Closing Date Deadline;
(ii) by the Buyer prior to the Closing Date Deadline (as the
same may have been extended pursuant to Section 1.3 hereof) in the event of any
material breach by any of the Sellers or the Stockholder of any of their
respective representations, warranties, covenants or agreements contained herein
which is not cured within thirty (30) days (or such shorter period ending on the
Closing Date Deadline) after receipt of notice of such breach from the Buyer;
(iii) by the Sellers prior to the Closing Date Deadline (as the
same may have been extended pursuant to Section 1.3 hereof) in the event of any
material breach by the Buyer of any of the Buyer's representations, warranties,
covenants or agreements contained herein which is not cured within thirty (30)
days (or such shorter period ending on the Closing Date Deadline) after receipt
of notice of such breach from the Sellers;
(iv) at any time after the Closing Date Deadline, by written
notice by the Buyer or the Sellers (subject to the parties' respective options
to elect to extend the Closing Date Deadline in accordance with Section 1.3) to
the other parties hereto if the Closing shall not have occurred on or before the
Closing Date Deadline (as the same may have been extended in accordance with
Section 1.3); provided, however, the Buyer shall not be entitled to terminate
-------- -------
this Agreement under this clause (iv) prior to the extended Closing Date
Deadline unless it appears unlikely that the conditions to Closing contained in
Section 8.13 above shall not be satisfied prior to such Closing Date Deadline.
(v) [Intentionally Deleted];
(vi) by the Buyer or the Sellers, by written notice to the
other, in the event that any Manufacturer, or any other person claiming by,
through or under any Manufacturer, shall exercise any right of first refusal,
preemptive right or other similar right, with respect to any of the Assets; or
(vii) by the written mutual consent of the Buyer and the Sellers,
if, after any initial HSR Act filing, the FTC makes a "second request" for
information, or if the FTC or the Antitrust Division challenges the transactions
contemplated hereby.
[***] These portions of this exhibit have been omitted and filed separately with
the Commission pursuant to a request for confidential treatment.
34
In addition to any other provisions of this Agreement providing for termination,
if any of the Other Agreements are terminated for any reason thereunder, then
either the Buyer or the Sellers may terminate this Agreement by notice in
writing to the other party(ies) hereto; provided, however: (a) the Buyer may not
-------- -------
terminate this Agreement pursuant to this clause if such Other Agreement is
terminated because the Buyer was in material breach of any of its
representations, warranties, covenants or agreements contained in such Other
Agreement; (b) the Sellers may not terminate this Agreement pursuant to this
clause if such Other Agreement is terminated because any of the Sellers or the
other "sellers" under such Other Agreement was in material breach of any of
their respective representations, warranties, covenants or agreements contained
in such Other Agreement; and (c) no party hereto may terminate this Agreement
pursuant to Section 10.13(a)(ii), (iii) or (iv) if such party is in material
breach of any of his or its representations, warranties, covenants or agreements
contained in this Agreement.
(b) In the event of termination of this Agreement pursuant to Section
10.13(a), this Agreement shall be of no further force or effect; provided,
--------
however, that (i) any termination pursuant to Section 10.13(a)(ii), (iii) or
-------
(iv) shall not relieve any party hereto of any liability for breach of any
representation, warranty, covenant or agreement hereunder occurring prior to
such termination; and (ii) any termination pursuant to Section 10.13(a) shall
not relieve any party hereto of its obligations hereunder to pay the fees and
expenses of third parties; provided, further, that all filings, applications and
-------- -------
other submissions made pursuant to this Agreement or prior to the execution of
this Agreement in contemplation hereof shall, to the extent practicable, be
withdrawn from the agency or other entity to which made.
10.14 HSR. Subject to the determination by the Buyer and the Sellers that
---
compliance by the Sellers and the Buyer with the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), is not required, the
-------
Sellers and the Buyer shall each prepare and file with the Federal Trade
Commission (the "FTC") and the Antitrust Division of the Department of Justice
---
(the "Antitrust Division"), and, subject to Section 10.13(a)(iv), respond as
------------------
promptly as practicable to all inquiries received from the FTC or the Antitrust
Division for additional information or documentation. The Buyer shall pay the
HSR Act filing fees.
10.15 The Sellers' Financial Statements. The Sellers shall allow, cooperate
---------------------------------
with and assist the Buyer's accountants, and shall instruct the Sellers'
accountants to cooperate, in the preparation of audited financial statements of
the Sellers as necessary for any required filings by the Buyer with the SEC or
as required by the Buyer's lenders; provided, however, that the expense of such
-------- -------
audit shall be borne by the Buyer.
10.16 Curing Breaches of Representations and Warranties. Upon written
-------------------------------------------------
notice by the Buyer of the discovery by the Buyer prior to the Closing of a
breach of any representation or warranty of the Sellers or the Stockholder
contained in this Agreement, the Sellers will, if requested in writing by the
Buyer, at their expense, undertake reasonable efforts to cure such breach prior
to the Closing. If the Buyer shall have requested the Sellers to cure any such
breach pursuant to this Section 10.16 and the Sellers shall have cured such
breach prior to the Closing, the Buyer shall not be entitled to claim such
breach as a failure of the Buyer's condition to close under Section 8.1 hereof.
35
10.17 Concerning Tradenames, Etc. The Sellers and the Stockholder
--------------------------
acknowledge and agree that the Buyer has acquired all of the goodwill of the
Sellers and, in so doing, all of the Sellers' right, title and interest in and
to the tradenames, trademarks and service marks referenced in Section 5.5 above
and shall be free to use, from and after the Closing, such tradenames,
trademarks and service marks, and derivations thereof, in the manufacture, sale,
marketing or distribution of products or services commonly associated with an
automobile dealership. Accordingly, the Sellers and the Stockholder, for
themselves and their respective affiliates, hereby agree that, from and after
the Closing, the Sellers shall not, directly or indirectly, use in the States of
California, Colorado, Florida, Michigan, North Carolina, Tennessee and Texas,
any of the tradenames, trademarks and service marks referred to in Section 5.5
above, or any derivation thereof, in connection with (a) the manufacture, sale,
marketing or distribution of products or services commonly associated with an
automobile dealership or (b) any other business where the use of such
tradenames, trademarks and service marks, or any derivation thereof, would cause
confusion with any of the tradenames, trademarks and service marks referred to
in said Section 5.5; provided, however, notwithstanding the foregoing, nothing
-------- -------
contained in this Section 10.17 shall prohibit the family members of Xxxxxx from
owning and operating an automobile dealership business under a name which
includes the name "Xxxxxx", provided that, (i) such dealership is not located
within one hundred (100) miles of the Businesses and (ii) the name "Xxxxxx" is
not used alone and is used only in conjunction with such family member's full
name (e.g., Xxxxxx Xxxxxx) and in no event is used in conjunction with the name
"Xxxxxx", "Don" or other derivations thereof.
10.18 Indemnification Procedures Regarding Third Party Claims. The
-------------------------------------------------------
procedures to be followed by the parties hereto with respect to indemnification
hereunder regarding claims by third persons which could give rise to an
indemnification obligation hereunder shall be as follows:
(a) Promptly after receipt by any Buyer Indemnitee or Seller
Indemnitee, as the case may be, of notice of the commencement of any action or
proceeding (including, without limitation, any notice relating to a Tax audit)
or the assertion of any claim by a third person which the person receiving such
notice has reason to believe may result in a claim by it for indemnity pursuant
to this Agreement, such person (the "Indemnified Party") shall give a written
-----------------
notice of such action, proceeding or claim to the party against whom
indemnification pursuant hereto is sought (the "Indemnifying Party"), setting
------------------
forth in reasonable detail the nature of such action, proceeding or claim,
including copies of any documents and written correspondence from such third
person to such Indemnified Party; provided, however, that failure to give such
notice promptly shall not relieve the Indemnifying Party of its or his
obligations hereunder except to the extent it or he shall have been materially
prejudiced by such failure.
(b) The Indemnifying Party shall be entitled, at its own expense, to
participate in the defense of such action, proceeding or claim, and, if (i) the
action, proceeding or claim involved seeks (and continues to seek) solely
monetary damages and is a matter other than a Tax audit, (ii) the Indemnifying
Party confirms, in writing, its obligation hereunder to indemnify and hold
harmless the Indemnified Party with respect to such damages in their entirety
pursuant to Sections 10.6 or 10.7 hereof, as the case may be, and (iii) the
Indemnifying Party shall be, in the
36
reasonable judgment of the Indemnified Party, able to adequately satisfy any
adverse judgment as a result of its indemnification obligation with respect to
such action, proceeding or claim, then the Indemnifying Party shall be entitled
to assume and control such defense with counsel chosen by the Indemnifying Party
and approved by the Indemnified Party, which approval shall not be unreasonably
withheld or delayed. The Indemnified Party shall be entitled to participate
therein after such assumption, the costs of such participation following such
assumption to be at its own expense. Upon assuming such defense, the
Indemnifying Party shall have full rights to enter into any monetary compromise
or settlement which is dispositive of the matters involved, subject to the
consent of the Indemnified Party, such consent not to be unreasonably withheld
or delayed.
(c) With respect to any action, proceeding or claim as to which (i)
the Indemnifying Party does not have the right to assume the defense or (ii) the
Indemnifying Party shall not have exercised its right to assume the defense, the
Indemnified Party shall assume and control the defense of and contest such
action, proceeding or claim with counsel chosen by it and approved by the
Indemnifying Party, which approval shall not be unreasonably withheld. The
Indemnifying Party shall be entitled to participate in the defense of such
action, proceeding or claim, the cost of such participation to be at its own
expense. The Indemnifying Party shall be obligated to pay the reasonable
attorneys' fees and expenses of the Indemnified Party to the extent that such
fees and expenses relate to claims as to which indemnification is due under
Sections 10.6 or 10.7 hereof, as the case may be. The Indemnified Party shall
have full rights to enter into any monetary compromise or settlement which is
dispositive of the matters involved, subject to the consent of the Indemnifying
Party, such consent not to be unreasonably withheld or delayed.
(d) Both the Indemnifying Party and the Indemnified Party shall
cooperate fully with one another in connection with the defense, compromise or
settlement of any such action, proceeding or claim, including, without
limitation, by making available to the other all pertinent information and
witnesses within its control.
10.19 Oldsmobile Franchises. The parties acknowledge that the Assets
---------------------
include the Oldsmobile assets of Xxxxxx Cadillac-Olds of Sanford, Florida (and
the Owned Real Property includes the related real property of such dealership),
but shall not include the assets of Xxx Xxxxxx Oldsmobile, Lone Tree, Colorado,
unless the Buyer elects, prior to the Closing, to acquire such assets. If the
Buyer elects to acquire such assets, the Buyer will also assume the Existing
Lease related to such dealership. With respect to each of the foregoing
Oldsmobile dealerships (and assuming, in the case of the Sanford, Florida
dealership, that the Buyer elects to acquire its assets), if the respective
Seller elects and General Motors will approve, the Buyer will pay such Seller
for unpaid transition assistance payments and assume the Seller's rights to
receive the remaining payments from General Motors; provided, however, such
-------- -------
Sellers shall not enter into any agreement which would require the Buyer to stop
selling Oldsmobile vehicles prior to the end of production.
10.20 Sellers' Representative. Upon the execution of this Agreement by each
-----------------------
Seller, each Seller shall be deemed to have irrevocably appointed and
constituted Xxxxxx (the "Seller Representative") as its agent and
---------------------
attorney-in-fact with full power of substitution to act or to do any and all
things and execute any and all documents which may be necessary, convenient or
appropriate to facilitate the consummation of the transactions contemplated by
this Agreement, including
37
but not limited to receipt and disbursement of payments, receipt of notices and
administration of the provisions of this Agreement. The Buyer shall be entitled
to rely on any an all action taken by the Seller Representative without any
liability to, or obligation to inquire of, any of the Sellers.
10.21 Schedules.
---------
(a) The Schedules attached or to be attached to this Agreement
pursuant to Article VII hereof are deemed to constitute an integral part of this
Agreement and to supplement the representations, warranties, covenants or
agreements of the Sellers and the Stockholder contained in this Agreement. The
inclusion of any item of any such Schedule shall not be construed as an
indication of the materiality or lack of materiality of such item. Each item
disclosed in such Schedules shall be deemed to be disclosed for all sections of
the Agreement to which such disclosure could reasonably be construed to apply.
(b) Prior to the Closing, the Sellers and the Stockholder may amend
any Schedule attached to this Agreement pursuant to Article VII hereof from time
to time by written notice to the Buyer, in order to provide supplemental and
updating information; provided, however, no such amendment shall be effective if
such amendment, either alone or in combination with any prior or contemporaneous
amendments to any of the Schedules, discloses a Material Adverse Item not
previously disclosed in the Schedules. For purposes of this Section 10.21(b)
(and not to be construed as a definition of materiality for any other purpose in
this Agreement) a "Material Adverse Item" shall mean (i) any event, occurrence
---------------------
or state of facts which does, or could reasonably be expected to, (A) prohibit
or prevent or substantially restrain or delay the sale contemplated by this
Agreement, (B) substantially impair or challenge the power and authority of the
Sellers or the Stockholder to enter into this Agreement or carry out their
respective obligations hereunder, or (C) substantially impair or challenge the
legality or validity of the sale contemplated by this Agreement, or (ii) any
single item or group of related items outside the ordinary course of business
(including, without limitation, contracts or leases) which adversely affects, or
could reasonably be expected to adversely affect, the Assets, the Liabilities or
the Businesses (including without limitation, the results of operations) by
[***] or more.
10.22 Certain Taxes. Personal property, use and intangible assessments and
-------------
other Taxes and utility charges with respect to the Assets shall be prorated on
a per diem basis and apportioned on a calendar year basis between the Sellers,
on the one hand, and the Buyer, on the other hand, as of the date of the
Closing. The Sellers shall be liable for that portion of such Taxes and
assessments relating to, or arising in respect of, periods on or prior to the
Closing Date, and the Buyer shall be liable for that portion of such Taxes and
assessments relating to, or arising in respect of, any period after the Closing
Date. Any Taxes attributable to the sale or transfer of the Assets to the Buyer
hereunder shall be paid 50% by the Sellers and 50% by the Buyer.
10.23 No Publicity. Except as may be required by law or the rules of the
------------
New York Stock Exchange or as necessary in connection with the transactions
contemplated hereby, no
[***] These portions of this exhibit have been omitted and filed separately with
the Commission pursuant to a request for confidential treatment.
38
party hereto shall (a) make any press release or other public announcement
relating to this Agreement or the transactions contemplated hereby, without the
prior approval of the other parties hereto or (b) otherwise disclose the
existence and nature of the transactions contemplated hereby to any person or
entity other than such party's accountants, attorneys, agents and
representatives, all of whom shall be subject to this nondisclosure obligation
as agents of such party. Each party shall afford the other parties an
opportunity to review any press release or other public announcement in advance
of its release.
10.24 Obligation to Vote Shares. The Stockholder covenants and agrees to
-------------------------
vote all of the voting shares of the capital stock of the Sellers held by it in
favor of the transactions contemplated by this Agreement and otherwise to take
all shareholder actions necessary to cause the Sellers to adopt, approve, and
consummate this Agreement and the transactions contemplated thereby.
ARTICLE XI
Miscellaneous
11.1 Assignment. Except as provided in this Section 11.1, this Agreement
----------
shall not be assignable by any party hereto without the prior written consent of
the other parties hereto. The Buyer may assign this Agreement, without the
consent of the other parties hereto, to a corporation, partnership, limited
liability company or other entity controlled by the Buyer, including a
corporation, partnership, limited liability company or other entity to be formed
at any time prior to the Closing Date, and to any person or entity who shall
acquire all or substantially all of the assets of the Buyer or of such
corporation, partnership, limited liability company or other entity controlled
by the Buyer (including any such acquisition by merger or consolidation);
provided said assignment shall be in writing and the assignee shall assume all
--------
obligations of the Buyer hereunder, whereupon the assignee shall be substituted
in lieu of the Buyer named herein for all purposes, and provided, further, that
-------- -------
the Buyer originally named herein shall continue to be liable with respect to
its obligations hereunder. The Buyer may assign this Agreement, without the
consent of the other parties hereto, as collateral security, and the other
parties hereto agree to execute and deliver any acknowledgment of such
assignment by the Buyer as may be required by any lender to the Buyer.
11.2 Governing Law. The interpretation and construction of this Agreement,
-------------
and all matters relating hereto, shall be governed by the laws of the State of
Michigan.
11.3 Accounting Matters. All accounting matters required or contemplated
------------------
by this Agreement shall be in accordance with generally accepted accounting
principles ("GAAP") as consistently applied by the Sellers, subject to the
----
deviations from GAAP set forth on Schedule 7.6.
------------
11.4 Fees and Expenses. Except as otherwise specifically provided in this
-----------------
Agreement, each of the parties hereto shall be responsible for the payment of
such party's fees,
39
costs and expenses incurred in connection with the negotiation and consummation
of the transactions contemplated hereby.
11.5 Amendments; Merger Clause. This Agreement, including the Exhibits and
-------------------------
Schedules and other documents referred to herein which form a part hereof,
contains the entire understanding of the parties hereto with respect to its
subject matter. Except for the Confidentiality Agreement between the Buyer and
Xxxxxx which shall remain in full force and effect until Closing, this Agreement
supersedes all prior agreements and understandings between the parties with
respect to such subject matter. This Agreement may not be amended except by a
writing executed by all of the parties hereto.
11.6 Waiver. To the extent permitted by applicable law, no claim or right
------
arising out of this Agreement or the documents referred to in this Agreement can
be discharged by a party, in whole or in part, by a waiver or renunciation of
the claim or right unless in writing signed by all the parties hereto. Any
waiver by a party hereto of a breach of any provision of this Agreement shall
not operate or be construed as a waiver of any subsequent breach of such
provision or any other provision of this Agreement. Neither the failure nor any
delay by any party hereto in exercising any right or power under this Agreement
or the documents referred to in this Agreement will operate as a waiver of such
right or power, and no single or partial exercise of any such right or power
will preclude any other or further exercise of such right or power or the
exercise of any other right or power.
11.7 Notices. All notices, claims, certificates, requests, demands and
-------
other communications hereunder shall be given in writing and shall be delivered
personally, sent by telecopier or sent by a nationally recognized overnight
courier, postage prepaid, and shall be deemed to have been duly given when so
delivered personally, or when telecopier receipt is acknowledged or one (1)
Business Day after the date of deposit with such nationally recognized overnight
courier. All such notices, claims, certificates, requests, demands and other
communications shall be addressed to the respective parties at the addresses set
forth below or to such other address as the person to whom notice is to be given
may have furnished to the others in writing in accordance herewith.
If to the Buyer, to:
Sonic Automotive, Inc.
0000 X. Xxxxxxxxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Fax No.: (000) 000-0000
Attention: Chief Financial Officer
40
With a copy to:
Parker, Poe, Xxxxx & Xxxxxxxxx L.L.P.
000 X. Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Fax No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx, Xx.
If to the Sellers or the Stockholder, to:
Xxxxxx X. Xxxxxx
00000 Xxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Fax No.: (000) 000-0000
With a copy to:
Xxxxxxx & Xxxxx LLP
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Fax No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxxx
11.8 Counterparts; Facsimile Signatures. This Agreement may be executed in
----------------------------------
any number of counterparts. Each such counterpart hereof shall be deemed to be
an original instrument, and all such counterparts together shall constitute but
one agreement. This Agreement may be executed by one or more facsimile
signatures.
11.9 Knowledge. Whenever any representation or warranty of any of the
---------
Sellers or the Stockholder contained herein or in any other document executed
and delivered in connection herewith is based upon the knowledge of any of the
Sellers, such knowledge shall be deemed to include the actual knowledge,
information and belief of any of Xxxxxx, Xxxxxxx Xxxxxxxxx, or the general
managers of the respective Sellers, after due inquiry of the dealership
management of the respective Sellers.
11.10 Accounting Disputes. Any dispute relating to accounting matters shall
-------------------
be resolved as provided in this Section 11.10. The parties first shall use
reasonable efforts to resolve any such accounting dispute. In the event the
dispute has not been resolved within a reasonable amount of time, either the
Buyer, on the one hand, or the Sellers, on the other hand, may provide written
notice to the other party that the matter will be submitted to an accounting
firm for resolution. The parties shall mutually agree in writing on a Detroit,
Michigan office of a mutually agreed upon accounting firm to be retained to
resolve the matter, and after joint retention of such firm the determination of
such firm shall be final and binding on the parties with respect to such
disputed accounting matter. The costs of the accounting firm shall be borne 50%
by the Buyer and 50% by the Sellers.
41
11.11 Permitted Successors; Assigns; No Third Party Beneficiaries.
-----------------------------------------------------------
Subject to Section 11.1, this Agreement shall be binding upon, inure to the
benefit of and be enforceable by the respective successors, heirs and assigns of
the parties hereto. Nothing in this Agreement, expressed or implied, is intended
or shall be construed to confer upon or give to any employee of any Seller, or
any other person, firm, corporation or legal entity, other than the parties
hereto and their successors and permitted assigns, any rights, remedies or other
benefits under or by reason of this Agreement.
11.12 Headings. The article and section headings contained in this
--------
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
11.13 Severability; Construction.
--------------------------
(a) In the event that any provision, or part thereof, of this
Agreement shall be held to be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions, or parts thereof, shall
not in any way be affected or impaired thereby.
(b) This Agreement shall be construed equitably, in accordance
with its terms, without regard to the degree to which the Sellers or the Buyer,
or their respective legal counsel, have participated in the drafting of this
Agreement.
11.14 Cooperation in SEC Filings Generally. At the request of the Buyer
------------------------------------
and at the Buyer's expense, the Sellers and the Stockholder shall reasonably
cooperate in the preparation by the Buyer of all filings to be made by the Buyer
with the SEC including, without limitation, any periodic filings and any filing
with respect to a registered offering of its securities by the Buyer and the
closing of the offering registered thereby.
11.15 Remedies. Except as expressly provided in this Agreement, each of
--------
the parties to this Agreement is entitled to all remedies in the event of a
breach provided at law or in equity, including, but not limited to, specific
performance.
11.16 Dispute Resolution. In the event of any dispute or disagreement
------------------
between the parties relating to this Agreement, the Buyer and the Sellers agree
to use their reasonable best efforts to attempt to resolve such dispute or
disagreement through good faith negotiations for a thirty (30) day period prior
to initiating any judicial or equitable proceeding in connection with such
dispute; provided, however, a party shall not be obligated to participate in
-------- -------
such negotiations to the extent that the failure to seek judicial or equity
remedies prior to the expiration of such thirty (30) day period would materially
prejudice such in pursuing any such remedy.
11.17 Good Faith Efforts. Whenever the parties are required to agree or
------------------
to attempt to agree on a certain matter or issue under this Agreement, the
parties shall use their reasonable, good faith efforts to reach such agreement.
[Signature Pages Follow]
42
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the day and year first above written.
BUYER: SONIC AUTOMOTIVE, INC.
/s/ O. Xxxxxx Xxxxx
-----------------------------------------------------
By: O. Xxxxxx Xxxxx
Its: Chief Executive Officer
SELLER: CAPITOL CADILLAC CORP.
/s/ Xxxxxx X. Xxxxxx
-----------------------------------------------------
By:
Its:
SELLER: CREST CADILLAC, INC.
/s/ Xxxxxx X. Xxxxxx
-----------------------------------------------------
By:
Its:
SELLER: XXX XXXXXX BUICK, INC.
/s/ Xxxxxx X. Xxxxxx
-----------------------------------------------------
By:
Its:
SELLER: XXX XXXXXX CADILLAC, INC.
(Colorado)
/s/ Xxxxxx X. Xxxxxx
----------------------------------------------------
By:
Its:
SELLER: XXX XXXXXX CADILLAC, INC.
(Texas)
/s/ Xxxxxx X. Xxxxxx
-----------------------------------------------------
By:
Its:
SELLER: XXX XXXXXX CADILLAC, INC.
(Plymouth)
/s/ Xxxxxx X. Xxxxxx
-------------------------------------------------
By:
Its:
SELLER: XXXXXX CADILLAC, INC.
(California)
/s/ Xxxxxx X. Xxxxxx
-------------------------------------------------
By:
Its:
SELLER: XXXXXX CADILLAC, INCORPORATED
/s/ Xxxxxx X. Xxxxxx
-------------------------------------------------
By:
Its:
SELLER: XXXXXX CADILLAC-OLDSMOBILE, LTD.
By: XXXXXX CADILLAC-OLDSMOBILE
OF XXXXXXX, INC., its general partner
/s/ Xxxxxx X. Xxxxxx
-------------------------------------------------
By:
Its:
SELLER: XXXXXX CHEVROLET, INC.
/s/ Xxxxxx X. Xxxxxx
-------------------------------------------------
By:
Its:
STOCKHOLDER: THE XXXXXX X. XXXXXX REVOCABLE TRUST
By an agreement dated December 13, 2001
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------------------
Name: Xxxxxx X. Xxxxxx
Its: Trustee
