Exhibit 10.1
ASSET PURCHASE AGREEMENT
BY AND AMONG
XXXX SECURITY INTERNATIONAL, INC.
EAGER BEAVER CAR WASH, INC.
AND
WASH DEPOT HOLDINGS, INC.
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November 8, 2007
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TABLE OF CONTENTS
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PAGE
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RECITALS.................................................................... 1
ARTICLE I REAL PROPERTY AND ASSET TRANSFER; CLOSING......................... 1
ARTICLE II TITLE............................................................ 9
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLERS...................... 11
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PURCHASER..................... 17
ARTICLE V ADDITIONAL AGREEMENTS OF SELLERS................................. 18
ARTICLE VI ADDITIONAL AGREEMENTS OF PURCHASER.............................. 20
ARTICLE VII CONDITIONS TO PURCHASER'S OBLIGATIONS.......................... 21
ARTICLE VIII CONDITIONS TO SELLERS' OBLIGATIONS............................ 21
ARTICLE IX INDEMNIFICATION ................................................ 22
ARTICLE X OTHER PROVISIONS................................................. 26
EXHIBITS
1.5(b) License of Intellectual Property
1.9(a)(v) Assignment Agreement
1.10(a)(i) Xxxx of Sale
1.10(a)(iv) Form of Special Warranty Deed
Schedules Enclosed in Disclosure Binder Attached Hereto and Made a Part Hereof
1.1 Car Wash Locations
1.4(b) Equipment
1.4(c) Contractual Obligations
1.4(d) Permits
1.7(f) Agreements of Company not being Assigned
2.1 Permitted Exceptions
3.3 Summary of Oral Agreements
3.5(b) Exceptions to governmental compliance
3.5(d) Litigation or administrative proceedings for
environmental violations
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3.5(e) Releases of "Hazardous Materials" and
Environmental Conditions
3.5(g) Proceedings which would affect use of the
Locations
3.8 Required Consents
3.11 Pending and Threatened Litigation
3.12 Employee Contracts
3.13 Employee Benefits
3.16 Intellectual Property
Appendix A Defined Terms
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ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement ("Agreement") is made as of
November 8, 2007 by and among Xxxx Security International, Inc. ("MSI"),
Eager Beaver Car Wash, Inc. ("Company") and Wash Depot Holdings, Inc.
("Purchaser"). For purposes of this Agreement, the Company, a wholly owned
subsidiary of MSI that owns the assets being sold under this Agreement, and
MSI are sometimes collectively referred to as "Sellers."
RECITALS
MSI is the sole shareholder of the Company. The Company owns car washes
listed by common street addresses, as set forth on Schedule 1.1 attached
(collectively, "Locations" and individually a "Location"). The Company owns the
real property, equipment and business located at and conducted from each of the
Locations.
Notwithstanding the fact that all Schedules are referred to as being
attached to this Agreement, some of the Schedules are not attached but instead
appear in a Disclosure Binder dated as of the date hereof. The Disclosure Binder
is organized under subheadings which correspond to the various Schedules
described in this Agreement. For purposes of identification, the Disclosure
Binder has been identified by the parties by a written statement executed by the
parties and appearing as the first page of the Disclosure Binder. All such
schedules in the Disclosure Binder are incorporated into this Agreement by
reference and made a part hereof.
ARTICLE I
Real Property and Asset Transfer; Closing
Section 1.1 Incorporation of Recitals. The recitals set forth above are
incorporated herein by reference and are a part of this Agreement.
Section 1.2 Place for Closing. The Closing under this Agreement shall take
place at the offices of Holland & Knight LLP ("Escrow Agent"), as agent for
Chicago Title Insurance Company, located at 000 X. Xxxxxx Xxxxxx, Xxxxx 0000,
Xxxxxxx, XX 00000 or such other place as the parties hereto may agree upon.
Subject to the terms and conditions hereof, the date the Closing occurs
("Closing Date") shall be sixty (60) days from the date of this Agreement, or
such other date that the parties to this Agreement agree to in writing, it being
understood that such date may be extended if required to give effect to the cure
period described in Section 1.8(d)(ii).
Section 1.3 Agreement to Transfer Assets; and Consideration.
(a) The Company shall transfer and MSI shall cause the Company to transfer
and deliver to Purchaser the Assets for the total consideration of Ten Million
Eight Hundred Eighty Five Thousand ($10,885,000) Dollars subject to the
adjustments and credits set forth in this Agreement ("Purchase Price") on the
Closing Date, payable by wire transfer in United States of America currency, to
an account as designated by MSI.
(b) On or before two (2) Business Days following the execution of this
Agreement, Purchaser shall pay the Escrow Agent Five Hundred Thousand ($500,000)
Dollars ("Deposit") in United States currency. The Escrow Agent, when it
receives the Deposit shall confirm to MSI in writing that the Deposit has been
paid to Escrow Agent. The Deposit, while held in Escrow, shall to the extent
possible, be invested in U.S. Treasury Bills or other short-term U.S. Government
securities, repurchase agreements with a national banking association for such
securities, investment-grade commercial paper or other investment-grade "money
market" investments as Purchaser and MSI jointly direct Escrow Agent, and
whenever not so invested shall be held by the Escrow Agent in a separate,
federally-insured, interest-bearing account with a national banking association
approved by Purchaser and MSI. The interest on the Deposit will be paid to the
party to this Agreement that receives the Deposit. The Escrow Agent shall pay
the Deposit to the Purchaser or Sellers, as applicable as set forth below.
(i) If the Closing occurs, the Deposit and the interest earned
on it shall be paid to MSI at the Closing, as a credit against the Purchase
Price to be paid by Purchaser.
(ii) The Escrow Agent shall promptly pay the Deposit to MSI,
if the Closing does not occur on or before the Closing Date and all conditions
set forth in Article VII have been satisfied, waived or would have been
satisfied with the passage of time, or this Agreement is terminated before the
Closing Date by MSI under the provisions of Section 1.8(d)(ii) or 1.8(d)(iii) of
this Agreement.
(iii) The Escrow Agent shall promptly pay the Deposit to
Purchaser if Closing does not occur on or before the Closing Date for any reason
other than as set forth in Section 1.3(b)(ii) above, including but not limited
to a condition set forth in Article VII of this Agreement not being satisfied
that has not been waived by Purchaser or this Agreement being terminated before
the Closing Date by Purchaser under the provisions of Section 1.8(d)(ii),
1.8(d)(iii) or 1.8(d)(iv) of this Agreement.
The Escrow Agent by executing this Agreement is agreeing to be bound only to the
provisions of this Agreement relating to the Deposit. The Escrow Agent will
disburse the Deposit to the parties only upon receipt of joint written
instructions from Purchaser and Sellers. In the event of a dispute between
Sellers and Purchaser concerning the Deposit, the Escrow Agent shall hold the
Deposit until ordered by a court having jurisdiction to pay the Deposit to
Sellers, Purchaser or into the court.
Section 1.4 Description of Assets. Upon the terms and subject to the
conditions set forth in this Agreement, on the Closing Date, as hereinabove
defined, the Companies shall and MSI shall cause the Companies to grant, convey,
sell, transfer and assign to Purchaser all assets of the Company set forth in
this Section 1.4 which assets are the following (the "Assets"):
(a) The Real Property, as defined in Appendix A of this Agreement;
(b) All equipment, computers, software, printers, vending machines,
machinery and parts, vehicles, tools, hoses, brushes, communication equipment,
sprinklers, and security equipment and similar items in and at the Locations
(collectively, the "Equipment"), the Equipment in the car wash tunnels of the
Locations is listed on Schedule 1.4(c);
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(c) All contractual rights and obligations of the Company as tenant or
landlord, as applicable, as listed on Schedule 1.4(c) ("Contractual
Obligations");
(d) All permits, licenses, franchises, consents and other approvals from
governments, governmental agencies (federal, state and local) ("Permits") held
by the Company relating to, used in or required for the operation of the Car
Wash Business or any of the Assets, all of which are listed on Schedule 1.4(d),
to the extent such Permits are assignable;
(e) All office equipment, furnishings, sales and promotional materials,
catalogues and advertising literature, and all pictures and photographs,
construction and "as-built" drawings, plans and specifications, and finish plans
in the possession or control of the Company, relating to the Locations and Car
Wash Business;
(f) All other personal property used by the Company to operate the Car Wash
Business and present at the Locations, except for the personal property and
intellectual property described in Section 1.5 below;
(g) All original agreements and contracts and title documents relating to
the items set forth in (a) through (f) above; and
(h) All intellectual property used in connection with the Car Wash
Business, including trademarks, trade names, copyrights, the website domain name
of Eager Beaver Car Wash, all rights in the name "Eager Beaver Car Wash," the
logo of "lucky the beaver" and other intellectual property (collectively, the
"Intellectual Property").
At Closing, Sellers shall convey to Purchaser good and marketable title to
the Assets identified above free and clear of all liens, security interests,
claims, all amounts owed or accrued as of the Closing, except for the Assumed
Liabilities, as defined in this Agreement and the Permitted Exceptions, as
defined in this Agreement.
At Closing, Sellers shall convey to Purchaser good and marketable title to
the Real Property , free and clear of any mortgages, collateral assignments,
security interests, liens, claims, charges or encumbrances ("Liens") without
exception, other than the Permitted Exceptions.
Section 1.5 Excluded Assets and Intellectual Property.
(a) The parties agree that the Assets being sold do not include accounts
receivables, cash, or any item of inventory, including without limitation, lobby
merchandise, chemicals used in the Car Wash Business, greeting cards, uniforms,
towels and printed material.
(b) Effective as of the Closing, subject to the terms below, the Company
is granted a nonexclusive, nontransferable, irrevocable license to use the name
"Eager Beaver Car Wash" solely in connection with its car washes located at 0000
00xx Xxxxxx, Xxxx Xxxxxxxxx, Xxxxxxx and 0000 X. Xxxxxxxxxx Xxxx., Xxxxxxxx,
Xxxxxxx (the "Additional Locations") under the provisions of the License of
Intellectual Property, attached hereto in the form of Exhibit 1.5(b). The
license granted as set forth in the License of Intellectual Property shall
automatically terminate upon the transfer by Sellers of all or substantially all
of the stock of the Company or as to an Additional Location when and if the
assets of the Additional Location is sold by the Company to a third party.
Sellers further agree that they shall not sublicense the Intellectual Property
or permit any third parties to use the Intellectual Property.
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(c) The original financial books and records of the Company, insurance
polices, insurance reserves and all utility and other deposits relating to the
Car Wash Business are not part of the Assets and shall remain the property of
Sellers. Copies of the financial books and records of the Car Wash Business will
be made available by the Sellers, to Purchaser both before and after Closing,
for examination, inspection and copying.
Section 1.6 Assumed Liabilities. Purchaser agrees to assume all rights and
obligations arising after the Closing Date under the Contractual Obligations as
defined in this Agreement relating to the Locations ("Assumed Liabilities"). For
purposes of this Agreement, "Assumed Liabilities" shall also be deemed to
include liabilities arising after the Closing as a result of violations of
Applicable Laws governing the environment, land use, zoning and safety in the
workplace (e.g. OSHA) at the Locations that were in existence prior to Closing
but were not known to the Sellers. Notwithstanding anything in this Agreement to
the contrary, the Purchaser may seek indemnification under the provisions of
Article IX for the violation of any representation, warranty or covenant of
Sellers under this Agreement regarding the Contractual Obligations or violations
of Applicable Laws.
Section 1.7 Non-Assumption of Liabilities. Purchaser shall not, by the
execution and performance of this Agreement or otherwise, assume, become
responsible for, or incur any liability or obligation of any nature of the
Sellers, except for the Assumed Liabilities described under Section 1.6 hereof.
By way of illustration, Purchaser shall not assume, become responsible for, or
incur any liability for whether legal or equitable, matured or contingent, known
or unknown, foreseen or unforeseen, ordinary or extraordinary, patent or latent,
arising out of or relating to: (a) the operation of the Company or the Car
Washes Business or the Assets prior to Closing; (b) violation of the
requirements of any governmental authority or of the rights of any third person,
relating to the reporting and payment of federal, state, or other income Tax
Liabilities of Sellers; (c) any severance pay, bonuses, sick pay, accrued
vacation pay obligation or other benefits, or any other claims or potential
claims that have been or could be brought or alleged by any of the Sellers'
employees for periods prior to the Closing Date; (d) or any obligations under
any employee benefit plan (within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended) or any other fringe benefit
program maintained or sponsored by Sellers or to which any of the Sellers
contributes or any contributions, benefits or liabilities therefore or any
liability for the withdrawal or partial withdrawal from or termination of any
such plan or program by the Sellers; (e) the debts of the Sellers; (f) any
violation by the Sellers of any federal, state or local antitrust, racketeering
or trade practice law; (g) liabilities of the Company under the agreements and
contracts listed in Schedule 1.7(f); (h) liabilities or obligations of the
Sellers for brokerage or other commissions relative to this Agreement or the
transactions contemplated hereunder; and (i) any and all liability and
obligation for commissions and bonuses listed on Schedule 3.12.
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Section 1.8 Time For Closing; Damages; and Termination.
(a) Following execution of this Agreement, subject to the terms and
conditions hereof, Purchaser and Sellers shall be obligated to conclude the
Closing by the Closing Date, time being of the essence. Neither the Sellers nor
Purchaser shall be deemed in default hereunder by reason of any failure of a
condition precedent to the obligations of either Sellers or Purchaser hereunder
where such failure has occurred for reasons beyond the control of the party
unable to satisfy the condition precedent to the other party's obligations under
this Agreement.
(b) If the failure to conclude this transaction is due to the
refusal and failure of Sellers to perform their obligations under this
Agreement, Purchaser may elect to either (i) seek to enforce this Agreement with
an action of specific performance, or alternatively, (ii) may terminate this
Agreement, receive a return of the Deposit and interest thereon and bring a
legal action for breach of contract against Sellers with a maximum recovery of
Five Hundred Thousand ($500,000) as liquidated damages. The parties acknowledge
that the Purchaser's actual damages in the event of a default by Sellers are
difficult to ascertain and that Five Hundred Thousand ($500,000) Dollars is a
fair approximation of the damages Purchaser is expected to suffer.
(c) If the failure to conclude this transaction is due to the
refusal and failure of Purchaser to perform its obligations under this
Agreement, Sellers shall be paid the Deposit and interest thereon, as sole and
liquidated damages. The parties acknowledge that the Sellers actual damages in
the event of a default by Purchaser are difficult to ascertain and that the
Deposit and interest is a fair approximation of the damages Sellers are expected
to suffer.
(d) This Agreement and the transactions contemplated hereby may be
terminated at any time prior to the Closing Date:
(i) by mutual written agreement of Purchaser and MSI;
(ii) by MSI, or by Purchaser in the event Purchaser or the
Sellers, as applicable, makes a misrepresentation under this Agreement or
breaches a covenant or agreement under this Agreement, and fails to cure such
misrepresentation or breach within ten (10) Business Days from the date of
written notice of the existence of such misrepresentation or breach;
(iii) by MSI or Purchaser, if the Closing does not occur by
the Closing Date or such other date as may be agreed to by the parties hereto in
writing, due to the non-fulfillment of a condition precedent to such party's
obligation to close as set forth at Article VII or VIII hereof, as applicable
(through no fault or breach by the terminating party); or
(iv) by Purchaser, if the provisions of Section 2.5(a), 2.5(b)
or 2.5(c) or 9.8 of this Agreement give Purchaser the election to terminate the
Agreement under this Section 1.8(d)(iv).
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All terminations shall be exercised by sending the other parties a written
notice of the termination. In the event this Agreement is terminated as provided
herein, this Agreement shall become void and be of no further force and effect,
the Deposit shall be paid as set forth in Section 1.3(c), and no party hereto
shall have any further liability to any other party hereto, except that Section
1.3(c), this Section 1.8, Article IX, Section 10.1, and Section 10.2 shall
survive and continue in full force and effect, notwithstanding termination. The
termination of this Agreement shall not limit, waive or prejudice the remedies
available to the parties, at law or in equity, for a breach of this Agreement,
except as limited by this Agreement.
Section 1.9 Deliveries by Purchaser.
(a) At the Closing, Purchaser shall deliver, all duly and properly
executed (where applicable):
(i) The Purchase Price in United States currency by wire transfer to
MSI as set forth in Section 1.3(a);
(ii) A copy of the resolutions of the Board of Directors of the
Purchaser authorizing the execution and delivery of this Agreement and each
other agreement to be executed and delivered in connection herewith on the
Closing Date (the resolutions and agreements to be executed in connection
herewith by Sellers and/or Purchaser are referred to in this Agreement
collectively, as the "Collateral Documents") and the consummation of the
transactions contemplated herein;
(iii) the License of Intellectual Property;
(iv) Other documents and instruments required by this Agreement or
reasonably requested by Sellers, if any; and
(v) An Assignment and Assumption Agreement in the form attached
hereto as Exhibit 1.9(a)(v) ("Assignment Agreement").
Section 1.10 Deliveries by Sellers.
(a) At the Closing, each of the Sellers shall deliver, all duly and
properly executed (where applicable):
(i) A Xxxx of Sale for the Assets related to the Locations owned by
each Sellers to be conveyed and assigned, in the form attached as Exhibit
1.10(a)(i);
(ii) A certified copy of resolutions of the directors of the Sellers
authorizing the execution and delivery of this Agreement and each of the
Collateral Documents to be executed in connection herewith by Sellers or either
of them;
(iii) The Certificate described at Section 7.1, executed by a
corporate officer of MSI;
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(iv) Special Warranty Deeds, conveying to Purchaser each parcel of
the Real Property, subject only to the Permitted Exceptions (as defined below),
in the form attached as Exhibit 1.10(a)(iv);
(v) Physical possession of all Assets, and the Real Property;
(vi) The Assignment Agreement;
(vii) Customary real property title documentation, including,
without limitation, mechanics' lien affidavits;
(viii) Satisfactory evidence of release of any liens on the Assets;
(ix) Affidavits of non-foreign status of Sellers that complies with
Section 1445 of the Internal Revenue Code;
(x) the License of Intellectual Property; and
(xi) Other documents and instruments required by this Agreement or
reasonably requested by Purchaser, if any.
Section 1.11 Transfer Tax and Pro-Rations.
(a) Sellers and Purchaser shall each bear or pay sales, transfer taxes and
fees imposed on the conveyance of the Assets by all governments, state, local
and federal in accordance with the provisions of Section 5.1 and 6.1.
(b) INTENTIONALLY OMITTED.
(c) The charges for the current year's real estate Taxes due with respect
to the Real Property, shall be prorated between the Company and the Purchaser
based on the Closing Date, with the Companies paying all such Taxes due prior to
the Closing Date and the Purchaser paying all such Taxes due on and after the
Closing Date.
(d) The charges for water, electricity, sewer rental, gas, telephone, all
other utilities pertaining to the Locations, and the Contractual Obligations
shall be prorated between the Company and the Purchaser based on the Closing
Date, with the Company paying all such charges due or accrued prior to the
Closing Date and the Purchaser paying all such Taxes due or accrued on and after
the Closing Date.
Section 1.12 Deferred Revenue. Purchaser agrees to honor all car wash
passes, pre-paid car wash coupon books, annual and summer passes, gift
certificates and pre-paid gift cards issued by the Company with respect to the
Car Wash Business (collectively, "Wash Passes"). At the Closing, Purchaser shall
receive a credit against the Purchase Price in the amount of 1/2 of the deferred
revenue for the Wash Passes of the Company on the books and records of the
Company as of the day preceding the day of Closing ("Wash Pass Credit"). In the
event that one-half of the actual amount of Wash Passes honored by Purchaser in
the one year following the Closing exceeds the sum of the Wash Pass Credit plus
$30,000, then, within 15 days of receipt of notice from Purchaser setting forth
such difference, Sellers shall remit to Purchaser the amount of such difference
in cash. Purchaser shall provide Sellers with reasonable proof of the amount
Wash Passes honored by Purchaser during the twelve month period following
Closing. Purchaser may not make a claim for payment under this Section 1.12
before 10 days after the one year anniversary of the Closing or after 60 days
after the one year anniversary of the Closing.
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Section 1.13 1031 Exchange. To facilitate a like-kind exchange under
Section 1031 of the Code, Purchaser may assign its rights under this Agreement
(in whole or in part) to a "qualified intermediary" under section
1.1031(k)-1(g)(4) of the treasury regulations (but such assignment shall not
relieve Purchaser of any of its obligations under this Agreement) and any such
qualified intermediary may re-assign to Purchaser. If Purchaser gives notice of
such assignment, Sellers shall provide Purchaser with a written acknowledgment
of such notice prior to Closing and agree to transfer the Assets to or on behalf
of the qualified intermediary at Closing. Sellers further acknowledge and agree
that Purchaser may transfer the Assets acquired hereunder (in whole or in part)
to a qualified intermediary following the Closing.
ARTICLE II
Title and Environmental Inspection
Section 2.1 Real Property. The Company owns the Real Property. Sellers
shall convey to Purchaser at Closing good and marketable title to the Real
Property, free and clear of any mortgages, collateral assignments, security
interests, liens, claims, charges or encumbrances without exception, other than
utility easements and other covenant restrictions set forth on Schedule 2.1 to
this Agreement, none of which impede the use of any of the Locations as a car
wash consistent with the manner in which the Car Wash Business is currently
operated or adversely affects the marketability of the title to any of the
Locations ("Permitted Exceptions").
Section 2.2 Owner's Title Policy. MSI has prior to the execution of this
Agreement delivered to Purchaser the Current Title Policies for the Real
Property. MSI and Purchaser shall order new title commitments ("Title
Commitments") for the Real Property from Chicago Title Insurance Company (the
"Title Insurer") as soon as practicable after the date of this Agreement. MSI
shall pay the premium of a standard coverage owner's title insurance policy for
the Real Property. The Title Commitments shall be dated after the date of this
Agreement with respect to each parcel of the Real Property, and shall be a
commitment of the Title Insurer to issue with respect to each parcel of the Real
Property a standard coverage ALTA owners policy of title insurance ("Title
Policy"). If the jurisdiction offers an extended coverage ALTA owner's policy
and a standard owners policy, and Purchaser wishes an extended coverage policy,
Purchaser shall solely pay the additional charge for the extended coverage. The
Title Policy when issued shall insure title to the Real Property covered by the
Title Policy to be in fee simple subject only to the Permitted Exceptions, as
defined above. MSI and Purchaser shall cause the Title Insurer to deliver to MSI
and Purchaser along with the Title Commitments copies of all documents noted as
exceptions in each of the Title Commitments. Following the date hereof, Sellers
shall not create or consent to the creation of, or permit to exist, any Lien or
other matter affecting title to any of the Real Property, without Purchaser's
prior written consent.
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Section 2.3 Survey. MSI has furnished to Purchaser all of the Current
Surveys. Purchaser, at its election, or as Purchaser's lenders may require, may
have updates or new surveys made at its expense ("Updated Surveys"). Within five
days after the execution of this Agreement, Purchaser will order the Updated
Surveys it requires and will notify Sellers in writing of the Locations for
which Updated Surveys have been ordered. Sellers will use commercially
reasonable efforts to cooperate and aid Purchaser's surveyor in preparing the
Updated Surveys commissioned by Purchaser. Purchaser shall use commercially
reasonable efforts to obtain the commissioned Updated Surveys as soon as
possible.
Section 2.4 Environmental Reports. MSI has furnished to Purchaser all of
the Phase 1 Environmental Reports relating to the Locations that it has obtained
or that are in its possession. Purchaser, at its election, may have new or
additional Phase 1 Environmental Reports made for the Locations at its expense
("Updated Phase 1 Reports"). Within five days after the execution of this
Agreement, Purchaser will order the Updated Phase 1 Reports it requires and will
notify Sellers in writing of the Locations for which Updated Phase 1 Reports
have been ordered. Sellers will use commercially reasonable efforts to cooperate
and aid Purchaser's environmental consultant in preparing the Updated Phase 1
Reports commissioned by Purchaser. Purchaser shall use commercially reasonable
efforts to obtain the commissioned Updated Phase 1 Reports as soon as possible.
Purchaser will furnish MSI with copies of each Updated Phase 1 Report obtained
by it for the Locations within five days after Purchaser receives each Updated
Phase 1 Report.
Section 2.5 Inspections.
(a) Purchaser shall have the right to examine the title to each of the
Locations. If during the Title Inspection Period, as hereafter defined,
Purchaser determines that the Location's title is subject to exceptions or
objections to title that do not come within the definition of Permitted
Exceptions, as set forth in Section 2.1 above, Purchaser shall have until the
end of the Title Inspection Period to notify MSI in writing specifying such
defects that in Purchaser's opinion are not Permitted Exceptions. MSI shall have
ten (10) days from receipt of written notice from Purchaser within which to
remove said defects, or agree to have them removed by Closing, or notify
Purchaser that MSI will not remove said defects. If MSI notifies Purchaser that
it will not remove said defects or MSI is unsuccessful in removing the defects
by Closing, Purchaser shall have the option of either: (i) accepting the title
to the Location in its then existing condition; or (ii) terminating this
Agreement. All exceptions to title or the surveys to which Purchaser does not
object during the Title Examination Period, or if objected to by Purchaser, are
cured by MSI or are subsequently waived by Purchaser shall be deemed to be
within the definition of Permitted Exceptions, as set forth in Section 2.1. The
Title Inspection Period as to each Location shall be ten days after the date
that Purchaser receives with respect to the Location, the last to be received of
(i) the New Title Commitment for the Location along with the documents noted as
exceptions in the New Title Commitment and (ii) the Updated Survey for the
Location, provided an Undated Survey was commissioned by Purchaser within the
time required by Section 2.4 of this Agreement. The Title Examination Period for
a Location shall be extended for an additional five (5) business day period with
respect to any supplements or updates to any New Title Commitment or Updated
Survey received by Purchaser prior to the Closing Date but Purchaser may only
object to facts first revealed by the supplement or update.
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(b) Purchaser shall have the right to examine the environmental compliance
condition of each of the Locations and to engage an environmental consultant at
its expense to prepare Phase I or Phase II environmental reports (including
Phase I or Phase II reports) on the Locations, and Sellers shall cooperate with
Purchaser in connection therewith. Notwithstanding the foregoing, Sellers agree
to pay one-half of the costs of the Phase II or other additional environmental
reports or testing with respect to the Venice, Florida Location. If during the
Environmental Inspection Period, as hereafter defined, Purchaser determines that
the Location's environmental condition requires remediation of soil or ground
water at a cost in excess of Five Thousand ($5,000) Dollars, Purchaser shall
have until the end of the Environmental Inspection Period to notify MSI in
writing specifying such defects that in Purchaser's opinion require remediation
in excess of Five Thousand ($5,000) Dollars. MSI shall have ten (10) days from
receipt of written notice from Purchaser within which to cure said defects or
agree pay to have them cured, and if MSI does not cure or pay to have said
defects cured, Purchaser shall have the option of either: (i) accepting the
title to the Location in its then existing environmental condition; or (ii)
terminating this Agreement. The Environmental Inspection Period as to each
Location shall be fifteen days after the later of (i) the date that Purchaser
receives with respect to the Location a written final Updated Phase 1 Report for
the Location, provided an Updated Phase 1 Report was commissioned by Purchaser
within the time required by Section 2.5 of this Agreement or (ii) the date that
Purchaser receives with respect to the Location a written final Phase II
environment report or the final written results of any additional testing
determined by Purchaser to be advisable, provided such Phase II or additional
testing was commissioned by Purchaser no later than fifteen days after receipt
of the Updated Phase I Report with respect to a particular Location; provided
that unless otherwise agreed by the parties, in no event will the Environmental
Inspection Period extend for more than 60 days past the date of this Agreement.
The parties acknowledge that Purchaser has given notice to Sellers of the
existence of an environmental condition at the Venice, Florida Location, and if
the parties do not reach satisfactory resolution of the issue, Purchaser shall
have the right to either: (i) accept the title to the Location in its then
existing environmental condition; or (ii) terminate this Agreement.
(c) From the date of this Agreement to midnight on the 30th day after the
date of this Agreement, Purchaser may terminate this Agreement, if Purchaser is
not reasonably satisfied with the results of its engineering diligence on the
buildings located on the Real Property, provided that the physical condition of
the roofs of the Locations at 0000 X. Xxxxxxxxx Xxx., Xxxx Xxxxx, Xxxxxxx and
000 Xxxxx Xxxxxx Xxxx, Xxxxxxxx, Xxxxxxx shall not be a basis for Purchaser to
terminate this Agreement. From the date of this Agreement to midnight on the
21st day after the date of this Agreement, Purchaser may terminate this
Agreement if Purchaser has a reasonable, good faith belief that any of the
Permitted Exceptions listed on Schedule 2.1 negatively impacts the operation of
a car wash at any of the Locations consistent with the manner in which the Car
Wash Business is currently operated.
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ARTICLE III
Representations and Warranties of Sellers
Whenever the phrase "to Sellers' knowledge" or any equivalent phrase is
used in this Agreement, the phrase shall mean the actual knowledge of any
corporate officer of MSI or Xxxxxxx Xxxxxxx, the director of car wash operations
of the Company. With knowledge that Purchaser is relying upon the
representations, warranties and covenants herein contained, Sellers represent
and warrant to Purchaser and make the following covenants for Purchaser's
benefit, at and as of the date hereof and the date of Closing.
Section 3.1 Organization and Good Standing. Each of the Sellers is duly
organized, legally existing and in good standing under the laws of the state of
their organization, with full power and authority to own its properties and
conduct its business as now being conducted, and has been duly admitted and is
in good standing under the laws of each state in which it owns property or
operates a business.
Section 3.2 Authorization; Ownership. The Sellers have by proper
proceedings duly authorized the execution, delivery and performance of this
Agreement and each of the Collateral Documents to be entered into by Sellers and
no other action is required by law or the certificate of incorporation, or
by-laws of any Sellers. This Agreement and the consummation of the transactions
contemplated hereby are valid and binding obligations of Sellers enforceable
against each Sellers in accordance with its terms; provided that (i) enforcement
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws of general application affecting the rights and remedies of
creditors, and (ii) enforcement may be subject to general principles of equity,
and the availability of remedies of specific performance and injunctive relief
may be subject to the discretion of the court before which any proceeding for
such remedies may be brought. The Sellers own each of the Assets.
Section 3.3 Contracts, Permits and Material Documents. The Sellers have
delivered to Purchaser true and correct copies of all of the following
("Material Documents") with respect to the Car Wash Business and the Assets: (i)
leases under which any of portion of the Real Property is leased to third
parties, (ii) the Contractual Obligations being assumed by Purchaser at Closing,
(iii) Phase 1 environmental reports for the Locations in the possession of
Sellers, and (iii) with respect to any oral contract, a summary of the principal
terms thereof as appearing on Schedule 3.3 to this Agreement. Each Material
Document is in full force and effect and constitutes the valid, legal, binding
and enforceable obligation of the Sellers (except as the enforceability thereof
may be limited by any applicable bankruptcy, reorganization, insolvency or other
laws affecting creditors' rights generally or by general principles of equity).
Sellers are not in breach or default of any material terms or conditions of the
Material Documents, or to Sellers' knowledge is any third party in breach or
default of any material terms or conditions of any Material Document. The
Company is not a party to, and the Company's property is not bound by, any
agreement or instrument which is material to the continued conduct of the Car
Wash Business of the Company, as now being conducted, except (i) for the
Material Documents, (ii) for debt which will be paid by the Company at the
Closing and (iii) as listed in Exhibit 3.3. Sellers and Purchaser agree to take
all commercially reasonable action before the Closing applicable to each of the
Material Documents to obtain any consents or approvals required so that each
such Material Document may be assigned to Purchaser at the applicable Closing as
contemplated under this Agreement, excepting those Material Documents which are
not to be assigned as set forth with an asterisk on Schedule 1.4(c).
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Section 3.4 Personal Property; Title to Assets. The Company has good and
marketable title to all the Assets, and at Closing the Assets will be free and
clear of all Liens. All items of personal property at the Locations and used in
the Car Wash Business, except for the Excluded Assets used in the Car Wash
Business, are included among the Assets described in Section 1.4 hereof and will
be transferred to Purchaser at Closing free and clear of all Liens. All items of
personal property and all buildings and structures owned by the Sellers are
being transferred "as is" with no warranty as to condition or suitability of the
Assets for the current use of the Assets.
Section 3.5 Real Property.
(a) The Company has good, marketable and insurable title to the Real
Property, except for the Permitted Exceptions and debt that the Company will
fully pay at the Closing.
(b) To Sellers' knowledge, except as set forth in Schedule 3.5(b) attached
hereto and incorporated herein, the Real Property is currently licensed,
permitted and authorized for the operation of the Car Wash Business conducted on
it under all applicable federal, state and local statutes, laws, rules,
regulations, orders, permits (including, without limitation, zoning
restrictions, land use requirements and environmental laws) (collectively, the
"Applicable Laws"). Except as set forth in Schedule 3.5(b) or Schedule 3.5(d) or
3.5(e), Sellers have not received any written notice of the material violation
of any Applicable Laws with respect to the Real Property which has not been
satisfied or resolved. To Sellers' knowledge except as set forth on Schedule
3.5(d) or 3.5(e), no claims have been threatened by any governmental agency
regarding any existing, pending or threatened investigation, inquiry,
enforcement action or litigation related to alleged violations under any
applicable environmental laws, or regarding any claims for remedial obligations,
response costs or contribution under any applicable environmental laws, or
regarding any claims for remedial obligations, response costs or contribution
under any applicable environmental laws.
(c) The Sellers shall make available upon Purchaser's reasonable request
all engineering, geologic and other similar reports, documentation and maps
relating to the Real Property in the possession or control of the Sellers their
consultants or employed professional firms.
(d) Except as set forth in Schedule 3.5(d) attached hereto and
incorporated herein by reference, neither Sellers nor the Real Property is
currently involved in any litigation or administrative proceeding seeking to
impose fines, penalties or other liabilities or seeking injunctive relief for
violation of any Applicable Laws relating to the environment.
(e) To Sellers' knowledge, no polluting, toxic or hazardous substances
were improperly used, generated, treated, stored, or disposed of at the
Locations. Except as listed in Schedule 3.5(e) no notification of release of a
"hazardous substance", "hazardous waste", pollutant or contaminant regulated
under the Clean Air Act, 42 U.S.C. 7401 et seq.; the Clean Water Act, 33 U.S.C.
1251 et seq., and the Water Quality Act of 1987; the Federal Insecticide,
Fungicide, and Rodenticide Act, 7 U.S.C. 136 et seq.; the Marine Protection,
Research, and Sanctuaries Act, 33 U.S.C. 1401 et seq., the National
Environmental Policy Act, 42 U.S.C. 4321 et seq.; the Noise Control Act, 42
U.S.C. 4901 et seq.; the Occupational Safety and Health Act, 29 U.S.C. 651 et
seq.; the Resource Conservation and Recovery Act, 42 U.S.C. 6901 et seq., as
amended by the Hazardous and Solid Waste Amendments of 1984; the Safe Drinking
Water Act, 42 U.S.C. 300f et seq.; the Comprehensive Environmental Response
Compensation and Liability Act ("CERCLA"), 42 U.S.C. 9601 et seq., as amended by
the Superfund Amendments and Reauthorization Act, and the Emergency Planning,
and Community Right-to-Know Act; the Toxic Substance Control Act, 15 U.S.C. 2601
et seq.; and the Atomic Energy Act, 42 U.S.C. 2011 et seq.; all as may be
amended, with implementing regulations and guidelines, or any state or local
environmental law, regulation or ordinance, has been received by the Sellers.
Except as listed in Schedule 3.5(e), the Real Property is not listed or formally
proposed for listing on the National Priority List promulgated pursuant to
CERCLA or on any state list of hazardous substance sites requiring investigation
or clean-up.
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(f) To Sellers' knowledge, there are no levied special assessments
affecting all or any part of the Real Property owed to any governmental entity.
(g) There are no proceedings or amendments pending, or to Sellers'
knowledge threatened by any third party, which is reasonably likely to result in
a change in the allowable uses of the Real Property, except as set forth in
Schedule 3.5(g) attached hereto and incorporated herein by reference.
Section 3.6 Financial Statements. True and correct copies of the operating
records of the Car Wash Businesses for the twelve months ended December 31, 2005
and December 31, 2006, and the six months ended June 30, 2007 ("Historical
Financial Records") have been provided to Purchaser. The Historical Financial
Records supplied to Purchaser were prepared in accordance with generally
accepted accounting principles and fairly represent in all material respects the
operation of the Car Wash Business for the periods stated in the Historical
Financial Records.
Section 3.7 Changes. From December 31, 2006 to the date of this
Agreement's execution, the Sellers have conducted the Car Wash Business in the
Ordinary Course of the Business and there have not been:
(a) any sale, lease, transfer or assignment of assets of the Car Wash
Business other than in the Ordinary Course of the Business;
(b) any entry into or amendment, modification or waiver of any material
terms of any contract or permit involving or likely to involve payment in excess
of $20,000 individually or $40,000 in the aggregate;
(c) any default under, or violation or acceleration of any contract or
permit, or any termination, modification or cancellation of, any contract or
permit other than in the Ordinary Course of the Business;
(d) any creation or imposition of any encumbrance upon any of the assets or
properties of the Car Wash Businesses;
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(e) any capital expenditure (or series of related capital expenditures)
relating to the Car Wash Businesses involving more than $25,000 individually
other than in the Ordinary Course of the Business;
(f) any material increase in prompt payment or pre-payment rebates, most
favored pricing or other price protections or similar programs, or other
material change in the sales, pricing, cash management, billing, payment,
collection, cancellation or Wash Coupon policies or practices of the Car Wash
Business;
(g) any material delay or postponement of accounts payable or any other
liabilities of the Car Wash Business outside of the Ordinary Course of Business;
(h) any grant of any license or sublicense of any material rights or
material modification of any rights under or with respect to, or settlement
regarding any infringement, misappropriation or alleged infringement or
misappropriation of rights in any of the Intellectual Property of the Car Wash
Business outside of the Ordinary Course of the Business;
(i) any cancellation, compromise, waiver or release of any right or claim
(or series of rights and claims) in excess of $5,000 in the aggregate or any
affirmative act by the Companies to accelerate claims, outside of the Ordinary
Course of the Business;
(j) any entry into or termination of employment contracts or collective
bargaining agreements written or oral, to the extent relating to the Car Wash
Business, or material modifications of the terms of any existing employment
contract or collective bargaining agreement relating to the Car Wash Business;
or
(k) any commitment with respect to any of the foregoing.
Section 3.8 Legal Authority and Compliance. The Sellers have the right,
power, legal capacity and authority to enter into, and perform their respective
obligations under this Agreement, and, except as set forth in Schedule 3.8, no
approvals or consents of any other persons or entities are necessary in
connection with the transactions contemplated by this Agreement. The execution,
delivery and performance of this Agreement have been duly authorized by the
board of directors of the Sellers. The execution and performance of this
Agreement will not result in a material breach of or constitute a material
default or result in the loss of any material right or benefit under:
(a) Any charter, by-law, agreement or other document to which the Sellers
are a party or by which the Sellers or any of their properties are bound; or
(b) Any decree, order or rule of any court or governmental authority which
is binding on the Sellers on any property of the Sellers.
To the knowledge of Sellers, except as set forth in the Schedules set
forth in Disclosure Binder, Sellers have complied in all material respects with
all Applicable Laws with respect to the operation of the Car Wash Business.
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Section 3.9 Transaction Intermediaries. No agent or broker or other person
acting pursuant to the authority of any Sellers is entitled to any commission or
finder's fee in connection with the transactions contemplated by this Agreement.
Section 3.10 Disclosure. The representations and warranties of the Sellers
contained in this Article III or in any Exhibit or Schedule or other document
delivered by the Sellers pursuant hereto, do not contain any untrue statement of
a material fact, or omit any statement of a material fact necessary to make the
statements contained not misleading. If, prior to Closing, the Sellers become
aware of any factual change, inaccuracy, misrepresentation or omission in any of
the Schedules, they shall immediately advise Purchaser in writing of the factual
change inaccuracy, misrepresentation or omission and Sellers shall have the
right, subject to the provisions of Section 10.14, to update the Disclosure
Binder accordingly, it being understood that such updated disclosure shall not
have the effect of curing the breach of any representation and warranty and
Purchaser shall be entitled to terminate this Agreement under Section 1.8(d)(ii)
but will not be entitled to indemnification therefore following the Closing
under Article IX hereof.
Section 3.11 Litigation. All material pending or, to Sellers' knowledge,
material threatened litigation, administrative or judicial proceedings or
investigations by any governmental agency or officials involving the Company,
the Real Property, or the Assets that could have a Material Adverse Effect,
together with a description of each such proceeding, is set forth on Schedule
3.11 attached.
Section 3.12 Employees. Within five (5) days after the date of this
Agreement, the Company shall supply the Purchaser a true and correct list of
their employees and independent contractors as appearing from their records for
the most recent date the information can be printed from a computer file. The
list shall contain the information kept by the Company in their computer
records. After the date of this Agreement, Purchaser may inspect the employment
files of the Companies' employees and files of independent contractors. There
are no written employment agreements which will affect the Purchaser after the
Closing Date other than as listed on Schedule 3.12. Further, other than as
listed on Schedule 3.12, there are no employment cases or administrative
proceedings currently pending against the Company, or to Sellers' knowledge,
threatened, with respect to any employees. Except as set forth in the employment
records of the Company which have been made available to Purchaser for
inspection, none of such employees are on maternity leave or absent on grounds
of disability or other long term leave of absence or have given notice to
terminate their employment. All Persons with whom the Company have engaged as
independent contractors are properly classified as independent contractors for
Tax purposes. The Company is not subject to any collective bargaining agreement.
No unresolved unfair labor practice charge has been brought against the Company
with respect to the operation of the Car Wash Business, and there has been no
work stoppage or strike by their employees. The Companies have complied in all
material respects with all applicable laws relating to the employment of labor,
including, without limitation, those relating to wages, hours and collective
bargaining. No audits, investigative or other administrative proceedings or
court proceedings are presently pending or, to Sellers' knowledge, threatened,
with regard to any obligation of the Company as an employer.
Section 3.13 Employee Benefits Matters. Schedule 3.13 lists each Employee
Benefit Plan that Sellers maintains or to which Sellers contributes. With
respect thereto, (i) each such Employee Benefit Plan (and each related trust,
insurance contract, or fund) has been maintained, funded and administered in
accordance with the terms of such Employee Benefit Plan and complies in form and
in operation in all respects with the applicable requirements of ERISA and the
Code; and (ii) no action or investigation with respect to the administration or
the investment of the assets of any such Employee Benefit Plan (other than
routine claims for benefits) is pending.
15
Section 3.14 Insurance. Sellers has made available to Purchaser for
examination true and complete copies of all liability, property, workers'
compensation and other insurance policies currently in effect that insure the
Car Wash Businesses, or the Assets. Each such insurance policy is valid and
binding and in full force and effect, all premiums currently due thereunder have
been paid and the Company has not received any notice of cancellation or
termination in respect of any such policy or is in default thereunder. The
Sellers have no knowledge of any notice or request from any insurance company
requesting the performance of any work or alteration with respect to the Assets.
The Sellers have not received notice from any insurance company concerning, nor
are there, to Sellers' knowledge, any defects or inadequacies in the Assets,
which, if not corrected, would result in the termination of insurance coverage
or increase its cost.
Section 3.15 Tax Returns; Taxes. The Company has filed, will timely file
or has filed for extension requests for all federal, state and local Tax Returns
and Tax reports required by such authorities to be filed by the Company
pertaining to the Car Wash Business. The Company has paid all Taxes,
assessments, governmental charges, penalties, interest and fines due or claimed
to be due by any federal, state or local authority. There is no pending Tax
examination or audit of, nor any, suit, or claim asserted or, to Sellers'
knowledge, threatened against the Company by any federal, state or local
authority pertaining to the Car Wash Business; and the Company has not been
granted any extension of the limitation period applicable to any Tax claims.
Section 3.16 Intellectual Property. Schedule 3.16 contains a description
of the material Intellectual Property included in the Assets. (i) To Sellers'
knowledge, Sellers' conduct of the Car Wash Business does not infringe upon or
misappropriate any third party rights, (ii) to Sellers' knowledge, none of the
Intellectual Property is being infringed or misappropriated by any third party,
(iii) the Intellectual Property is not the subject of any pending or, to
Sellers' knowledge, threatened legal proceedings claiming infringement,
unauthorized use or violation by Sellers, and (iv) Sellers have not received any
written notice that its use of the Intellectual Property at any Location is
unauthorized or violates or infringes upon the rights of any other person or
challenging the ownership, use, validity or enforceability of any Intellectual
Property. Except as set forth on Schedule 3.16, to Sellers' knowledge, the
Company owns or has the right to use the Intellectual Property free and clear of
Liens. Sellers have made the filings and registrations listed on Schedule 3.16,
if any, with respect to the Intellectual Property listed thereon.
Section 3.17 No Undisclosed Liabilities. There are no liabilities or
obligations of Sellers that will be binding upon Purchaser after the Closing
other than the Assumed Liabilities.
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ARTICLE IV
Representations and Warranties of Purchaser
With knowledge that Sellers are relying upon the representations,
warranties and covenants herein contained, the Purchaser represents and warrants
to Sellers and makes the following covenants for the Sellers' benefit, at and as
of the date hereof and the date of Closing.
Section 4.1 Organization and Good Standing. The Purchaser is duly
organized and legally existing in good standing under the laws of the state of
Delaware.
Section 4.2 Authorization to Proceed with this Agreement. Purchaser has by
proper corporate proceedings duly authorized the execution, delivery and
performance of this Agreement and each other agreement contemplated to be
entered into and no other corporate action is required by law or the Articles of
Organization or by-laws of Purchaser. Purchaser has the right, power, legal
capacity and authority to enter into, and perform its obligations under this
Agreement, and neither the execution nor performance of this Agreement will
result in a material breach of or constitute a material default or result in the
loss of any material right or benefit under:
(a) Any charter, by-law, agreement or other document to which Purchaser is
a party or by which Purchaser or any of its property is bound; or
(b) Any decree, order or rule of any court or governmental authority which
is binding on Purchaser or on any property of the Purchaser.
Section 4.3 Absence of Intermediaries. No agent, broker, or other person
acting pursuant to Purchaser's authority will be entitled to make any claim
against the Sellers for any commission or finder's fee in connection with the
transactions contemplated by this Agreement.
ARTICLE V
Additional Agreements of Sellers
The parties hereto covenant and agree with the other, as applicable, as
follows:
Section 5.1 Payment of Expenses. Sellers will pay all expenses (including
legal fees) incurred by them in connection with the negotiation, execution and
performance of this Agreement. MSI, in addition to its other expenses, shall pay
at Closing all premiums for a standard Title Policy on the Real Estate The
parties agree that all transfer taxes, excise fees, documentary stamps and
recording fees associated with the transfer and conveyance of the Real Property
and the Assets, and all closing, escrow and other fees charged by the Escrow
Agent will be apportioned between the parties based upon the local custom and
practice in the respective counties in which the Real Property and Assets are
located.
Section 5.2 Access to Records. The Sellers will give Purchaser and its
representatives, from the date hereof until eighteen (18) months after the
Closing Date, full access during normal business hours upon reasonable notice,
to all of the properties, books, contracts, customer lists, documents and
records of the Sellers that pertain to the Real Property, the Assets or the Car
Wash Business, and to make available to Purchaser and its representatives,
experts and advisers all additional financial information of and with respect to
the Car Wash Business, Real Property or the Assets that Purchaser may reasonably
request. Purchaser and its representatives shall have the right to copy any
information or documentation the Purchaser is entitled to inspect under this
Section 5.2. In the event that this transaction is not consummated for any
reason, all documents and due diligence materials provided to Purchaser by
Sellers shall be returned to MSI, and all documents and due diligence materials
provided to Sellers by Purchaser shall be returned to Purchaser.
17
Section 5.3 Continuation of Business. The Sellers will operate the Car
Wash Business until the Closing in the Ordinary Course of the Business, and will
not take any of the actions listed in Section 3.7, so as to preserve its value
intact, and to preserve for Purchaser the relationships of the Company with
suppliers, customers, and others.
Section 5.4 Continuation of Insurance. The Company shall keep in existence
all policies of insurance insuring the Real Property, and the Assets and the
operation thereof against liability and property damage, fire and other casualty
through the Closing, consistent with the policies currently in effect.
Section 5.5 Standstill Agreement. Until the Closing Date, unless and until
this Agreement is earlier terminated pursuant to the provisions hereof, Sellers
will not, directly or indirectly solicit offers for the Car Wash Business, Real
Property, or the Assets.
Section 5.6 Employment of Employees of the Businesses. The Sellers have
provided Purchaser with information on the employees of the Car Wash Business
(collectively, the "Employees"). Upon the request of Purchaser, the Companies
shall provide an updated list of Employees to Purchaser. The Purchaser shall
offer at will employment to the Employees beginning as of the Closing Date, on
such terms and provisions as Purchaser determines at its sole discretion.
Section 5.8 Regulatory and Other Authorizations; Notices and Consents.
(a) Sellers and Purchaser shall cooperate with each other and use their
respective commercially reasonable efforts to obtain all approvals,
authorizations and consents required to be obtained to consummate the
transaction set forth in this Agreement, including, without limitation, the
approval of every regulatory agency of federal, state, or local government that
may be required in the reasonable opinion of either Purchaser or Sellers.
Further, if Purchaser in its reasonable discretion deems Sellers' assistance to
be useful, and at Purchaser's request, Sellers will assist and cooperate with
Purchaser (such assistance excludes hiring of third parties, the expenditure of
money or the assumption of any obligations) to obtain any approvals,
authorizations and consents required to be obtained to allow Purchaser to
operate any of the car wash businesses (and other related revenue generating
sources including petroleum sales, where applicable) in substantially the same
manner as currently being operated by Sellers, including, without limitation,
the approval of any regulatory agency of federal, state, or local government
that are required.
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(b) Notwithstanding anything to the contrary set forth in this Agreement
or in any ancillary agreements, nothing contained in this Agreement or in any of
the Collateral Documents shall be construed as, or constitute, an attempt,
agreement or other undertaking to transfer or assign to Purchaser any asset,
property or right that would otherwise constitute an Asset, but that by its
terms is not transferable or assignable to Purchaser pursuant to this Agreement
without the consent, waiver, approval, authorization, qualification or other
order of one or more third parties and such consent, waiver, approval,
authorization, qualification or other order is not obtained prior to or
subsequent to the Closing (each, a "Non-Transferable Asset").
Section 5.9 No Solicitation or Negotiation.
(a) From and after the execution and delivery of this Agreement until the
earlier to occur of the Closing or termination of this Agreement pursuant to its
terms, MSI shall not, nor will it authorize or permit any of its directors,
officers or other employees, controlled Affiliates or any investment banker,
attorney or other advisor, representative or agent retained by it to, directly
or indirectly, (i) solicit, initiate, encourage or induce the making, submission
of a transaction (whether in the form of a merger, consolidation, asset sale or
other form of transaction) for the acquisition of any Locations or the Car Wash
Business (an "Acquisition Transaction") by any Person other than Purchaser, (ii)
participate or engage in any discussions or negotiations with any such Person
regarding an Acquisition Transaction, (iii) furnish to any such Person any
information relating to the Companies or the Assets, or afford access to the
business, properties, assets, books or records of the Companies to any such
Person that has made or could reasonably be expected to make an Acquisition
Transaction, or (iv) take any other action intended to assist or facilitate any
inquiries or the making of any proposal that constitutes, or could reasonably be
expected to lead to, an Acquisition Transaction, (v) approve, endorse or
recommend an Acquisition Transaction, or (vi) enter into any letter of intent or
similar agreement contemplating or otherwise relating to an Acquisition
Transaction.
ARTICLE VI
Additional Agreements of Purchaser
The parties hereto covenant and agree with the other, as applicable, as
follows:
Section 6.1 Payment of Expenses. Purchaser will pay all expenses
(including legal fees) incurred by it in connection with the negotiation,
execution and performance of this Agreement. Purchaser, in addition to its other
expenses, shall pay (i) all of the additional premium required for an extended
Title Policy, (ii) the costs of any survey updates or environmental reports
prepared at Purchaser's request and (iii) the application fees for any
governmental approvals required for Purchaser to operate the business following
the Closing. The parties agree that all transfer taxes, excise fees, documentary
stamps and recording fees associated with the transfer and conveyance of the
Real Property and the Assets, and all closing, escrow and other fees charged by
the Escrow Agent will be apportioned between the parties based upon the local
custom and practice in the respective counties in which the Real Property and
Assets are located.
Section 6.2 Books and Records. From the Closing Date to eighteen months
after the Closing Date, the Purchaser shall allow the Sellers and their
professional advisers reasonable access upon prior notice to all business
records and files of the Car Wash Business and Company pertaining to the
operation of the Car Wash Business which were delivered by Sellers to the
Purchaser in accordance with this Agreement ("Records"). Access to the Records
shall be during normal working hours at the location where such Records are
stored. The Sellers shall have the right, at their own expense, to make copies
of any Records provided, however, that any such access or copying shall be had
or done in such a manner so as not to interfere unreasonably with the normal
conduct of the Purchaser's business. For a period of eighteen months after the
Closing Date, the Purchaser shall not dispose of or destroy any material Records
without first providing written notice to the Sellers at least 30 days prior to
the proposed date of such disposition or destruction.
19
Section 6.3 Accounts Receivable of the Company. The Sellers has accounts
receivables generated by the Car Wash Business prior to Closing ("Accounts
Receivable"). Sellers have not conveyed the Accounts Receivable to Purchaser.
Purchaser agrees that if it receives any payments on the Accounts Receivable, it
shall promptly remit the payments to MSI. Purchaser further agrees, at the
reasonable request of Sellers, to provide updated contact information on current
customers of Purchaser who are also account debtors on the Accounts Receivable.
ARTICLE VII
Conditions to Purchaser's Obligations
Section 7.1 Conditions of Closing. The obligations of Purchaser to effect
the transactions contemplated by this Agreement shall be subject to the
fulfillment at or prior to the time of Closing of each of the following items
which are conditions to Closing. Purchaser in its sole discretion may waive any
of the following conditions by written notice to MSI of Purchaser's decision to
waive such condition to the Closing, referring specifically to this Agreement
and the condition being waived.
(a) The Sellers shall have performed and complied in all material respects
with all obligations and conditions required by this Agreement to be performed
or complied with by Sellers prior to or at the Closing Date. All representations
and warranties of Sellers contained in this Agreement shall be true and correct
at and as of the Closing Date, with the same force and effect as though made at
and as of the Closing Date, except for changes expressly permitted by this
Agreement, and Purchaser shall have received a Certificate duly executed by an
executive officer of MSI, on behalf of MSI, to the foregoing. Any failure of a
representation and warranty to be true and correct in any material respect at
and as of the Closing Date, shall be deemed a failure of this condition
precedent.
(b) There shall be no actual or threatened action by or before any court
or governmental agency which seeks to restrain, prohibit or invalidate the
transaction contemplated by this Agreement.
ARTICLE VIII
Conditions to Sellers' Obligations
Section 8.1 Conditions of Closing The obligations of the Sellers to
transfer the Assets, and the Real Property in accordance with this Agreement
shall be subject to the fulfillment at or prior to the time of Closing of each
of the following conditions:
20
(a) The Purchaser shall have performed and complied in all material
respects with all obligations and conditions required by this Agreement to be
performed or complied with by Purchaser prior to or at the Closing Date. All
representations and warranties of Purchaser contained in this Agreement shall be
true and correct at and as of the Closing Date, with the same force and effect
as though made at and as of the Closing, except for changes expressly permitted
by this Agreement.
(b) There shall be no actual or threatened action by or before any court
or governmental agency which seeks to restrain, prohibit or invalidate the
transaction contemplated by this Agreement.
ARTICLE IX
Indemnification
Section 9.1 Indemnification by Sellers. Each of MSI and the Company agree
jointly and severally to indemnify, defend, protect and hold harmless Purchaser
and its officers, shareholders, directors, divisions, subdivisions, affiliates,
subsidiaries, parent, agents, employees, legal representatives, successors and
assigns, as applicable, from and against all claims, damages, actions, suits,
proceedings, demands, assessments, adjustments, penalties, costs and expenses
whatsoever (including specifically, but without limitation, reasonable
attorneys' fees and expenses of investigation) whether equitable or legal,
matured or contingent, known or unknown to Sellers, foreseen or unforeseen,
ordinary or extraordinary, patent or latent, whether arising out of occurrences
prior to, at, or after the date of this Agreement, as a result of or incident
to: (a) any breach of, misrepresentation, untruth or inaccuracy in the
representations and warranties by Sellers, set forth in this Agreement or in the
Exhibits or the Schedules attached to this Agreement or in the Collateral
Documents; (b) nonfulfillment or nonperformance of any agreement, covenant or
condition on the part of Sellers made in this Agreement or in the Collateral
Documents and to be performed by Sellers before or after the Closing Date; (c)
the imposition upon, claim against or payment by Purchaser of any liability or
obligation of Sellers other than the Assumed Liabilities; (d) violation of the
requirements of any governmental authority relating to the reporting and payment
of federal, state, or other income tax of Sellers arising or accrued prior to
the Closing Date; (e) all claims, liabilities or obligations arising out of the
operation of the Car Wash Business prior to Closing (other than the Assumed
Liabilities), including but not limited to litigation (including that set forth
on Schedule 3.11), claims for customer vehicle damage, property damage or
personal injury, other than Assumed Liabilities; and (f) any claim by a third
party that, if true, would mean that a condition for indemnification set forth
in subsections (a), (b), (c), (d) or (e) of this Section 9.1 of this Agreement
has occurred. For purposes of this section, to the extent that any claims can
reasonably be deemed to be made under one or more of the provisions of
subsections (a)-(f), the Indemnified Party (as hereinafter defined) may elect
which subsection or subsections under which to bring its claim.
Section 9.2 Indemnification by Purchaser. Purchaser agrees that it will
indemnify, defend, protect and hold harmless Sellers and their officers,
members, directors, divisions, subdivisions, affiliates, subsidiaries, parents,
agents, employees, legal representatives, successors and assigns, as applicable,
from and against all claims, damages, actions, suits, proceedings, demands,
assessments, adjustments, penalties, costs and expenses whatsoever (including
specifically, but without limitation, reasonable attorneys' fees and expenses of
investigation) whether equitable or legal, matured or contingent, known or
unknown to the Purchaser, foreseen or unforeseen, ordinary or extraordinary,
patent or latent, whether arising out of occurrences prior to, at, or after the
date of this Agreement, as a result of or incident to: (a) any breach of,
misrepresentation in, untruth in or inaccuracy in the representations and
warranties of Purchaser set forth in this Agreement or in the Exhibits or the
Schedules attached to this Agreement or in the Collateral Documents; (b)
nonfulfillment or nonperformance of any agreement, covenant or condition on the
part of Purchaser made in this Agreement and to be performed by Purchaser after
the Closing Date; (c) the imposition upon, claim against, or payment by the
Company or Sellers of any of the Assumed Liabilities because of the Purchaser's
failure to pay the Assumed Liabilities; (d) violation of the requirements of any
governmental authority relating to the reporting and payment of federal, state,
local or other income, sales, use, franchise, excise, payroll or property Tax
Liabilities of the Purchaser accrued after the Closing Date; (e) all claims,
liabilities or obligations arising out of the operation of the car wash business
at the Locations by Purchaser after the Closing; and (f) any claim by a third
party that, if true, would mean that a condition for indemnification set forth
in subsections (a), (b), (c), (d) or (e) of this Section 9.2 has occurred. For
purposes of this section, to the extent that any claims can reasonably be deemed
to be made under one or more of the provisions of subsections (a)-(f), the
Indemnified Party (as hereinafter defined) may elect which subsection or
subsections under which to bring its claim.
21
Section 9.3 Procedure for Indemnification with Respect to Third Party
Claims.
(a) If any third party shall notify a party to this Agreement (the
"Indemnified Party") with respect to any matter (a "Third Party Claim") that may
give rise to a claim for indemnification against any other party to this
Agreement (the "Indemnifying Party") under this Article IX, then the Indemnified
Party shall promptly notify each Indemnifying Party thereof in writing;
provided, however, that no delay on the part of the Indemnified Party in
notifying any Indemnifying Party shall relieve the Indemnifying Party from any
obligation hereunder unless (and then solely to the extent) the Indemnifying
Party is thereby prejudiced. Such notice shall state the amount of the claim (to
the extent known) and the relevant details thereof.
(b) Any Indemnifying Party will have the right to defend the Indemnified
Party against the Third Party Claim with counsel of its choice reasonably
satisfactory to the Indemnified Party so long as the Indemnifying Party notifies
the Indemnified Party in writing within thirty (30) business days after the
Indemnified Party has given notice of the Third Party Claim that the
Indemnifying Party will indemnify the Indemnified Party, pursuant to the
provisions of Article IX.
(c) So long as the Indemnifying Party is conducting the defense of the
Third Party Claim in accordance with Section 9.3(b) above, (i) the Indemnified
Party may retain separate co-counsel at its sole cost and expense and
participate in (but not control) the defense of the Third Party Claim, (ii) the
Indemnified Party will not consent to the entry of any judgment or enter into
any settlement with respect to the Third Party Claim without the prior written
consent of the Indemnifying Party (which will not be unreasonably withheld), and
(iii) the Indemnifying Party will not consent to the entry of any judgment or
enter into any settlement with respect to the Third Party Claim without the
prior written consent of the Indemnified Party (which will not be unreasonably
withheld). In the case of (c)(ii) or (c)(iii) above, any such consent by the
Indemnified Party to judgment or settlement shall include, as an unconditional
term thereof, the release of the Indemnifying Party from all liability in
connection therewith.
22
(d) If any condition set forth in Section 9.3(b) above is or becomes
unsatisfied, (i) the Indemnified Party may defend against, and consent to the
entry of any judgment or enter into any settlement with respect to, the Third
Party Claim and any matter it may deem appropriate and the Indemnified Party
need not consult with, or obtain any consent from, any Indemnifying Party in
connection therewith, (ii) the Indemnifying Party will reimburse the Indemnified
Party promptly and periodically for the cost of defending against the Third
Party Claim (including reasonable attorneys' fees and expenses), and (iii) the
Indemnifying Party will remain responsible for any adverse consequences the
Indemnified Party may suffer resulting from, arising out of, relating to, in the
nature of, or caused by the Third Party Claim to the fullest extent provided in
this Article IX.
Section 9.4 Procedure for Non-Third Party Claims. If Purchaser or Sellers
wish to make a claim for indemnity under Section 9.1 or Section 9.2, as
applicable, and the claim does not arise out of a third party notification which
makes the provisions of Section 9.3 applicable, the party desiring
indemnification ("Indemnified Party") shall deliver to the parties from which
indemnification is sought ("Indemnifying Party") a written demand for
indemnification ("Indemnification Demand"). The Indemnification Demand shall
state: (a) the amount of losses, damages or expenses which the Indemnified Party
has incurred or has suffered or is expected to incur or suffer to which the
Indemnified Party is entitled to indemnification pursuant to Section 9.1 or
Section 9.2, as applicable; and (b) the nature of the event or occurrence which
entitles the Indemnified Party to receive payment under Section 9.1 or Section
9.2, as applicable. If the Indemnifying Party wishes to object to an
Indemnification Demand, the Indemnifying Party must send written notice to the
Indemnified Party stating the objections and the grounds for the objections
("Indemnification Objection"). If no Indemnification Objection is sent within
forty-five (45) days after the Indemnification Demand is sent, the Indemnifying
Party shall be deemed to have acknowledged the correctness of the claim or
claims specified in the Indemnification Demand and shall pay the full amount
claimed in the Indemnification Demand within sixty (60) days of the day the
Indemnification Demand is dated. If for any reason the Indemnifying Party does
not pay the amounts claimed in the Indemnification Demand, within sixty days of
the Indemnification Demand's date, the Indemnified Party may institute legal
proceedings to enforce payment of the indemnification claim contained in the
Indemnification Demand and any other claim for indemnification that the
Indemnified Party may have.
Section 9.5 Survival of Claims.
(a) All of the respective representations and warranties of the parties to
this Agreement shall survive consummation of the transactions contemplated by
this Agreement for eighteen months from the Closing Date and shall thereafter
expire and be of no force and effect; provided, however, that the
representations and warranties in Sections 3.1 (Organization), 3.2
(Authorization), the first sentence of Section 3.4 (Title to Assets), 3.15
(Taxes), 4.1 (Organization) and 4.2 (Authority) shall survive until the
expiration of the applicable statute of limitations.
23
(b) Notwithstanding the provisions of Section 9.5(a) above, which provide
that representations and warranties expire after certain stated periods of time,
if within the stated period of time, an indemnification demand is given, or a
suit or action based upon representation or warranty is commenced, the
Indemnified Party shall not be precluded from pursuing such claim or action, or
from recovering from the Indemnifying Party (whether through the courts or
otherwise) on the claim or action, by reason of the expiration of the
representation or warranty.
Section 9.6 Prompt Payment. In the event that any party is required to
make any payment under this Article IX, such party shall promptly pay the
Indemnifying Party the amount so determined. If there should be a dispute as to
the amount or manner of determination of any indemnity obligation owed under
this Article IX, the Indemnifying Party shall, nevertheless, pay when due such
portion, if any, of the obligation as shall not be subject to dispute. The
portion in dispute shall be paid upon a final and non-appealable resolution of
such dispute. Upon the payment in full of any claim, the Indemnifying Party
shall be subrogated to the rights of the Indemnified Party against any person
with respect to the subject matter of such claim.
Section 9.7 Limitation of Liability.
(a) Notwithstanding anything in this Agreement to the contrary, the
liability and obligations of Sellers and of Purchaser for the indemnification
obligations set forth in Section 9.1 and 9.2, respectively, shall be limited to
Three Million Dollars ($3,000,000).
(b) The amount of any losses for which indemnification is provided under
this Article IX shall be net of any amounts actually recovered or recoverable by
the Indemnified Party under insurance policies or otherwise with respect to such
losses. The Indemnified Party shall use its commercially reasonable efforts to
mitigate any losses and recover under insurance policies or otherwise for any
losses.
(c) Losses subject to indemnification or reimbursement under Article IX
shall not include any incidental or consequential damages, including lost or
anticipated profits, except to the extent such damages are payable by an
Indemnified Party to a third party.
(d) From and after Closing, except for claims involving fraud or criminal
misconduct, the sole and exclusive remedy for any breach, or alleged breach, of
any representation or warranty or any covenant or agreement in this Agreement,
shall be indemnification in accordance with this Article IX.
(e) Upon making any payment for losses of an Indemnified Party under this
Article IX, the Indemnifying Party will, to the extent of such payment, be
subrogated to all rights of the Indemnified Party against any third party with
respect to the loss for which the payment relates. In addition to any other
obligation under this Agreement, the Indemnified Party agrees to duly execute
and deliver, upon request of the Indemnifying Party, all instruments reasonably
necessary to evidence and perfect the subrogation and subordination rights
granted pursuant to this Section 9.7(e)
24
Section 9.8 Casualty and Condemnation.
(a) The risk of loss or damage to the Assets until the day of closing is
retained by Sellers. If any damage occurs to the Assets prior to closing,
Purchaser may proceed to closing and, if not repaired by Sellers prior to
Closing, deduct from the Purchase Price the amount which will be required to
repair such damage less the insurance proceeds turned over to Purchaser at
Closing. Notwithstanding the foregoing, if damage to the Assets of a value in
excess of Two Hundred Thousand ($200,000) occurs before Closing, the Purchaser
shall have the option of terminating this Agreement under Section 1.8(d)(iv) of
this Agreement.
(b) If any eminent domain or condemnation proceeding pertaining to all or
any portion of the Locations is threatened or commenced prior to closing
(including, but not limited to those listed on Schedule 3.5(g)), there shall be
no disposition or settlement thereof without the prior written consent of
Purchaser, and Purchaser at its sole option may elect to proceed to Closing and
the proceeds to be received by Sellers from such condemnation or eminent domain
proceeding shall be turned over or assigned to Purchaser. Sellers shall make no
settlement of, nor enter into any agreements relating to, eminent domain or
condemnation proceedings following execution of this Agreement, without
Purchaser's consent. Notwithstanding the foregoing, if a condemnation or taking
of the Assets of a value in excess of Two Hundred Thousand ($200,000) occurs
before Closing, the Purchaser shall have the option of terminating this
Agreement under Section 1.8d(iv) of this Agreement.
ARTICLE X
Other Provisions
Section 10.1 Nondisclosure by Purchaser. Purchaser recognizes and
acknowledges that it has in the past, currently has, and prior to the Closing
Date, will have access to certain confidential information of Sellers, such as
lists of customers, operational policies, and pricing and cost policies that are
valuable, special and unique assets of the Sellers. Purchaser agrees that, for a
period of one (1) year from the date hereof, it will not utilize such
information in the business or operation of Purchaser, or any of its affiliates
or disclose such confidential information to any person, firm, corporation,
association, or other entity for any purpose or reason whatsoever, unless (i)
such information becomes known to the public generally through no fault of
Purchaser or any of its affiliates, (ii) Purchaser is compelled to disclose such
information by a governmental entity or pursuant to a court proceeding, or (iii)
Closing takes place (provided, however, that after Closing Purchaser will abide
by any legally binding contractual duties of non-disclosure owed to third
parties from whom Assets were purchased by the Company to the extent such
contracts were provided to Purchaser). In the event of a breach or threatened
breach by Purchaser of the provisions of this Section 10.1, Sellers shall be
entitled to an injunction restraining Purchaser from utilizing or disclosing, in
whole or in part, such confidential information. Nothing contained herein shall
be construed as prohibiting Sellers from pursuing any other available remedy for
such breach or threatened breach, including, without limitation, the recovery of
damages.
Section 10.3 Assignment; Binding Effect; Amendment. Except as otherwise
specifically set forth in this Agreement, this Agreement and the rights and
obligations of the parties hereunder may not be assigned. This Agreement shall
be binding upon and shall inure to the benefit of the parties hereto, and the
successors of Purchaser and the Sellers. It is understood and agreed that
Purchaser may assign all or part of its rights hereunder to one or more
affiliates, provided that such assignment shall not relieve Purchaser of its
obligations hereunder. This Agreement, upon execution and delivery, constitutes
a valid and binding agreement of the parties hereto enforceable in accordance
with its terms and may be modified or amended only by a written instrument
executed by all parties hereto.
25
Section 10.4 Entire Agreement. This Agreement (including the Schedules) is
the final, complete and exclusive statement and expression of the agreement
among the parties hereto with relation to the subject matter of this Agreement,
it being understood that there are no oral representations, understandings or
agreements covering the same subject matter as the Agreement. The Agreement
supersedes, and cannot be varied, contradicted or supplemented by evidence of
any prior or contemporaneous discussions, prior correspondence, oral agreements
or written agreements of any kind, which shall remain in full force and effect.
The parties to this Agreement have relied on their own advisors for all legal,
accounting, Tax or other advice whatsoever with respect to the Agreement and the
transactions contemplated hereby.
Section 10.5 Counterparts. This Agreement may be executed simultaneously
in one or more counterparts, each of which shall be deemed an original and all
of which together shall constitute but one and the same instrument.
Section 10.6 Notices. All notices or other communications required or
permitted hereunder shall be in writing and may be given by facsimile or by
depositing the same in United States mail, addressed to the party to be
notified, postage prepaid and registered or certified with return receipt
requested, by overnight courier or by delivering the same in person to such
party. "Overnight Courier" shall be deemed for purposes of this Section 10.6 to
include, without limitation, the Express Mail service of the U.S. Postal
Service.
(a) If to Sellers, addressed to them at:
General Counsel
Xxxx Security International, Inc.
000 Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xx 00000
Facsimile: 000-000-0000
with a copy to:
Xxxxxx X. Xxxxxxxx, Esq.
Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx, LLP
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000-00.
26
(b) If to Purchaser, addressed to it at:
Xxxxxxx X. Xxxxxxxx, President
Wash Depot Holdings, Inc.
00 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Facsimile: 000-000-0000
With a copy to
Xxxxx Lord Xxxxxxx & Xxxxxxx LLP
000 Xxxxx Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxxx
Facsimile: 312-443-0336
(c) If to Escrow Agent, addressed to it at:
Holland & Knight LLP
000 Xxxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attn: Xxxxx X. Park III
Facsimile: 000-000-0000
Notice shall be deemed given and effective on the earliest of the day personally
delivered, or one business day after being sent by Overnight Courier, or three
business days after the deposit in the U.S. mail of a writing addressed as above
and sent first class mail, certified, return receipt requested, or when actually
received, if earlier. Any party may change the address for notice by notifying
the other parties of such change in accordance with this Section 10.6.
Section 10.7 Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of Florida, without
giving effect to any choice or conflict of law provision or rule (whether of the
State of Florida or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of Florida.
Section 10.8 No Waiver. No delay of, or omission in, the exercise of any
right, power or remedy accruing to any party as a result of any breach or
default by any other party under this Agreement shall impair any such right,
power or remedy, nor shall it be construed as a waiver of or acquiescence in any
such breach or default, or in any similar breach or default occurring later; nor
shall any waiver of any single breach or default be deemed a waiver of any other
breach of default occurring before or after that waiver.
27
Section 10.9 Captions. The headings of this Agreement are inserted for
convenience only, and shall not constitute a part of this Agreement or be used
to construe or interpret any provision hereof.
Section 10.10 Severability. In case any provision of this Agreement shall
be invalid, illegal or unenforceable, it shall, to the extent possible, be
modified in such manner as to be valid, legal and enforceable but so as most
nearly to retain the intent of the parties. If such modification is not
possible, such provision shall be severed from this Agreement. In either case
the validity, legality and enforceability of the remaining provisions of this
Agreement shall not in any way be affected or impaired thereby.
Section 10.11 Construction. The parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties and no presumption or burden of proof shall
arise favoring or disfavoring any party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state, local or
foreign statute shall be deemed to refer to all rules and regulations
promulgated thereunder, unless the context requires otherwise. The word
"including" means included, without limitation.
Section 10.12 Extension or Waiver of Performance. Either Sellers or
Purchaser may extend the time for or waive the performance of any of the
obligations of the other, waive any inaccuracies in the representations or
warranties by the other, or waive compliance by the other with any of the
covenants or conditions contained in this Agreement, provided that any such
extension or waiver shall be in writing and signed by the party granting or
approving such extension or waiver.
Section 10.13 Liabilities of Third Parties. Nothing in this Agreement,
whether expressed or implied, is intended to confer any rights or remedies under
or by reason of this Agreement on any persons other than the parties to it and
their respective successors, heirs, legal representative and assigns, nor is
anything in this Agreement intended to relieve or discharge the obligation or
liability of any third persons to any party to this Agreement, nor shall any
provisions give any third person any rights of subrogation or action over or
against any party to this Agreement.
Section 10.14 Disclosure on Schedules. The parties to this Agreement shall
have the obligation to supplement or amend the Schedules being delivered
concurrently with the execution of this Agreement and attached hereto or
incorporated herein with respect to any matter hereafter arising or discovered
which, if existing or known at the date of this Agreement, would have been
required to be set forth or described in the Schedules, it being understood that
such updated disclosure shall not have the effect of curing the breach of any
representation and warranty and Purchaser shall be entitled to terminate this
Agreement under Section 1.8(d)(ii) but will not be entitled to indemnification
therefore following the Closing under Article IX hereof.. The obligations of the
parties to amend or supplement the Schedules shall terminate on the consummation
of the transaction contemplated by this Agreement at the Closing, or on the date
of termination of this Agreement if Closing does not occur.
28
Section 10.16 Further Assurances and Cooperation. From time to time at the
request of a party to this Agreement and without further consideration, the
other party will execute and deliver such documents and take such action as may
reasonably be requested in order to consummate more effectively the transactions
contemplated by this Agreement. Purchaser hereby agrees that in connection with
any exemption from any Tax otherwise payable in respect of a bulk transfer of
assets that Sellers wish to obtain, upon Sellers' request, Purchaser will
provide to Sellers the appropriate form issued by the appropriate State Division
of Taxation. Purchaser and Sellers agree to use good faith efforts to structure
and implement the transactions contemplated by this Agreement in a tax-efficient
manner.
Section 10.17 No Third Party Beneficiaries. This Agreement shall be
binding upon and inure solely to the benefit of the parties hereto and their
permitted assigns and nothing herein, express or implied, is intended to or
shall confer upon any other Person, including, without limitation, any union or
any employee or former employee of Sellers, any legal or equitable right,
benefit or remedy of any nature whatsoever, including, without limitation, any
rights of employment for any specified period, under or by reason of this
Agreement.
Section 10.18 Computation of Time. Any time period specified in this
Agreement which would otherwise end on a non-Business Day shall automatically be
extended to the immediately following Business Day.
Section 10.19 Bulk Sales. Purchaser and Sellers hereby waive compliance
with the bulk transfer provisions of the Uniform Commercial Code and all similar
laws and agree that neither party shall have any liability to the other with
respect thereto.
[The balance of this page intentionally left blank.]
29
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first above written.
PURCHASER:
Wash Depot Holdings, Inc.
By: /s/ Xxxxxxx Xxxxxxxx
--------------------
Name: Xxxxxxx Xxxxxxxx
----------------
Title: President
---------
SELLERS:
Xxxx Security International, Inc.
By: /s/ Xxxxxx X. Xxxxxx
--------------------
Name: Xxxxxx X. Xxxxxx
----------------
Title: Executive Vice President
------------------------
Eager Beaver Car Wash, Inc.
By: /s/ Xxxxxx X. Xxxxxx
--------------------
Name: Xxxxxx X. Xxxxxx
----------------
Title: Executive Vice President
------------------------
ESCROW AGENT:
Holland & Knight LLP
By:__________________________
Name:________________________
Title:_______________________
30
Appendix A
Defined Terms
Through out the Agreement certain capitalized terms are defined. In
addition to the definitions that are throughout the Agreement, the terms set
forth in this Appendix A have the meanings given them for purposes of the
Agreement.
"Acquisition Transaction" is defined in Section 5.9 of the Agreement.
"Additional Locations" means both of the car washes located at the
addresses below and an "Additional Location" means the individual car washes
located at the addresses of 0000 00xx Xxxxxx, Xxxx Xxxxxxxxx, Xxxxxxx and 0000
X. Xxxxxxxxxx Xxxx., Xxxxxxxx, Xxxxxxx.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
when used with respect to any specified Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise, and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Applicable Laws" means applicable federal, state and local statutes,
laws, rules, regulations, orders, permits (including, without limitation, zoning
restrictions, land use requirements and environmental laws).
"Assets" is defined Section 1.4 of the Agreement.
"Assumed Liabilities" are defined in Section 1.6 of the Agreement.
"Business Day" means a day other than Saturday, Sunday or other day when
commercial banks in the State of Florida are authorized or required by law to
close.
"Car Wash Business" means the car wash business and related services
offered by the Company at the Locations.
"Closing" means the acts and deliveries set forth in Sections 1.9 and 1.10
of this Agreement.
"Closing Date" is defined in Section 1.2 of the Agreement.
"Collateral Documents" means the agreements and documents to be executed
and delivered at Closing under this Agreement.
"Company" means Eager Beaver Car Wash, Inc.
"Current Surveys" means the most recent existing surveys of the Locations
to which Sellers have access.
"Current Title Policies" means the most recent existing title policy of
the Locations to which Sellers have access.
"Deposit" means the Five Hundred Thousand Dollars ($500,000) that
Purchaser is to deposit with Escrow Agent as set forth in Section 1.3(c) of the
Agreement.
"Employee Benefit Plan" means any employee benefit plan or compensation
plan, agreement or arrangement covering present or former employees of the
Companies (including those within the meaning of ERISA Section 3(3)), stock
purchase plan, stock option plan, fringe benefit plan, change in control plan,
severance plan, bonus plan, pension plan and any other deferred compensation
agreement or plan or funding arrangement.
"Encumbrance" means any lien, pledge, option, charge, easement, security
interest, right-of-way or similar restriction or encumbrance.
"Escrow" means the Deposit.
"Escrow Agent" means Holland & Knight LLP.
"Excluded Assets" means those items of personal property that are not
being conveyed or transferred to the Purchaser as set forth in Section 1.5 of
this Agreement.
"Historical Financials" means the operating statements of for the Car Wash
Business for the twelve months ended December 31, 2005 and December 31, 2006.
"Locations" means the car wash locations listed on Schedule 1.1 of the
Agreement.
"MSI" means Xxxx Security International, Inc., a Delaware Corporation.
"Ordinary Course of the Business" means a manner consistent with past
business practices as evidenced by historical events, trends and customary
approach.
"Permitted Exceptions" is defined in Section 2.1 of the Agreement.
"Person" means any individual, partnership, corporation, association,
joint stock company, trust, joint venture, unincorporated organization or
governmental entity (or any department, agency or political subdivision
thereof).
"Purchaser" is defined in the first paragraph of the Agreement.
"Purchase Price" is defined in Section 1.3 of the Agreement.
"Real Property" means the real property having the common street addresses
of the Locations as set forth on Schedule 1.1 and as further legally described
in the Title Commitments to be obtained, as set forth in Section 2.2 of this
Agreement, and shall also include (i) all of the Company's right, title and
interest in and to all easements, rights-of-way, privileges and appurtenances
thereto, including, without, limitation, all water and water rights, ditch and
ditch rights, all coal, oil, gas, and other minerals thereon or there under,
(ii) all of Company's right, title and interest in and to the beds of all
streets, roads, avenues or highways, open or proposed, abutting the Real
Property, and (iii) all of Company's right, title and interest, if any, in and
to any award in condemnation, or damages of any kind, to which Company may have
become entitled or may hereafter be entitled, by reason of any exercise of the
power of eminent domain with respect to the Real Property or any other right,
title or interest to be sold hereunder or any part thereof.
"Sellers" mean MSI and the Company.
"Tax" means any federal, state, local or foreign income, gross receipts,
license, excise, severance, stamp, occupation, premium, windfall profits,
capital gain, intangible, custom duties, capital stock, franchise, foreign
withholding, unemployment, disability, transfer, value added, registration,
alternative or add on minimum, or estimated tax, including any interest,
penalties or additions to taxes in respect of the foregoing, whether disputed or
not, and any obligation to indemnify, assume or succeed to the liability of any
other Person in respect of the foregoing, and the term "Tax Liability" shall
mean any liability (whether known or unknown, whether absolute or contingent,
whether liquidated or unliquidated, and whether due or to become due) with
respect to Taxes.
"Tax Return" means any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
"Title Commitments" means the title commitments to be obtained as set
forth in Section 2.2 of this Agreement.
"Title Insurer" means Chicago Title Insurance Company.
