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EXHIBIT 10.1
AMENDMENT #2 TO ASSET PURCHASE AGREEMENT
THIS AMENDMENT #2, dated as of August 31, 1998 (the "Amendment"), is to
the ASSET PURCHASE AGREEMENT, dated as of April 13, 1998 (the "Agreement"), as
amended by AMENDMENT #1, dated as of August 11, 1998, by and among SPEEDY
MUFFLER KING INC., an Ontario corporation ("Parent"), SPEEDY (U.S.A.), INC., a
Delaware corporation ("Speedy U.S.A."), BLOOR AUTOMOTIVE INC., a Delaware
corporation ("Bloor"), SPEEDY CAR-X INC., a Delaware corporation ("Car-X", and
together with Bloor, "Sellers"), SPEEDY HOLDING CORP., a Delaware corporation
("Purchaser"), and MONRO MUFFLER BRAKE, INC., a New York corporation ("Monro").
WITNESSETH:
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WHEREAS, Parent, Speedy U.S.A., Sellers, Purchaser and Monro desire to
amend the Agreement on the terms and conditions hereinafter set forth;
WHEREAS, any capitalized term used and not defined herein shall have
the same meaning as set forth in the Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. A new Section 2.8 to Article 2 of the Agreement is hereby added
to read in its entirety as follows:
"Section 2.8 PRORATIONS. The following prorations relating to the
Assets will be made as of the Closing Date, with Sellers liable to the extent
such items relate to any time period up to and including the Closing Date and
Purchaser liable to the extent such items relate to periods subsequent to the
Closing Date, in each case if not already taken into account on the Statement of
Net Assets. Except as otherwise specifically provided herein, the net amount of
all such prorations will be settled and paid by the applicable party on the date
the Adjusting Payment is made pursuant to Section 2.5 hereof:
(a) Personal property taxes, real estate taxes and assessments, and
other taxes, if any, on or with respect to the Assets, but excluding all
Transfer Taxes which are imposed as a result of the transactions contemplated
hereby;
(b) Rents, additional rents, taxes and other items payable by Sellers
under any lease, license, permit, contract or other agreement or arrangement to
be assigned to or assumed by Purchaser;
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(c) The amount of charges for sewer, water, fuel, telephone,
electricity and other utilities; and
(d) All other items normally adjusted in connection with similar
transactions.
If the actual expense of any of the above items for the billing period within
which the Closing Date falls is not known on the date the Adjusting Payment is
made, the proration shall be made based on (i) the actual expense incurred in
the previous billing period, for expenses billed less often than quarterly, and
(ii) the average expense incurred in the preceding three billing periods, for
expenses billed quarterly or more often. Each party agrees to furnish all other
parties hereto with such documents and other records as shall be reasonably
requested in order to confirm all proration calculations."
2. Paragraph (a) of Section 3.5 of the Agreement is hereby amended
by adding a new paragraph at the end of such paragraph as follows:
"Sellers acknowledge that Purchaser's acceptance or knowledge of deeds
delivered pursuant to Section 6.2(h) hereof containing an exception relating to
"zoning, building and other laws and ordinances of general application" shall
not constitute a waiver of any alleged breach of any representation or warranty
of Parent or Sellers contained in this Agreement; provided, that this paragraph
shall not give Purchaser or Monro any additional rights not otherwise
contemplated herein."
3. The last two sentences of Section 3.19 of the Agreement are
hereby amended to read in their entirety as follows:
Except as set forth in Schedule 3.19(v), no written, or, to the
knowledge of Sellers, oral claims are pending against or have been delivered to
Sellers or any of their Affiliates by any person with respect to the use of any
Intellectual Property or challenging or questioning the validity or
effectiveness of any license or agreement relating to the same, and the current
use by Sellers of the Intellectual Property does not infringe in any material
respect on any trademark, service xxxx, trade name, copyright, trade secret,
right of privacy or right of publicity of any third party. Schedule 3.19(v) sets
forth a list of all states in which Sellers are operating the Business under a
trade name, and each jurisdiction in which any such trade name is registered.
4. The next to last sentence of Section 5.15 of the Agreement is
hereby amended to read in its entirety as follows: "The cost of such title
insurance shall be shared equally by Purchaser and Sellers up to an aggregate
coverage of $52 million (with Sellers bearing one-half of the pro rata portion
of the total premium, with Purchaser bearing the balance of the premium if
Purchaser purchases aggregate coverage in excess of $52 million); provided, that
Sellers shall bear the cost of any of the corrective actions required under
Section 5.17."
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5. Paragraph (d) of Section 6.1 of the Agreement is hereby amended
to read in its entirety as follows:
"Section 6.1. CONDITION TO EACH PARTY'S OBLIGATIONS. The respective
obligations of each party to effect the transactions contemplated hereby shall
be subject to the fulfillment at or prior to the Closing of each of the
following conditions:
(d) TITLE INSURANCE. Purchaser shall have obtained good and valid title
insurance policies or, in final form, irrevocable title insurance binders, dated
as of the Closing Date, conforming to the specifications set forth in Section
5.15, with respect to all Real Property and Leased Real Property, other than
Unpermitted Exceptions having a cost to cure of $500,000 or less, provided that
if a title policy with respect to a parcel of Real Property or Leased Real
Property is unable to be issued, the allocated value of such property shall be
used in lieu of the cost to cure; PROVIDED, FURTHER, HOWEVER, that the cost to
cure exceptions related to Real Property and Leased Real Property referred to on
Schedule 9.10(a)(i) shall not count towards the $500,000 threshold referred to
in this paragraph."
6. Paragraph (d) of Section 8.1 of the Agreement is hereby amended
to read in its entirety as follows:
"Section 8.1. TERMINATION. This Agreement may be terminated at any time
at or prior to the Closing (the "Termination Date"):
(d) by notice from either Monro or Parent to the other if the
Acquisition shall not have been consummated on or before (i) July 13,
1998, if the Sellers have caused the condition set forth in Section
6.1(c) to be satisfied on or before June 22, 1998, and otherwise (ii)
20 days after the Sellers have caused the condition set forth in
Section 6.1(c) to be satisfied, but in no event later than September
17, 1998 (unless in any case the failure to consummate the Acquisition
by such date shall be due to the action or failure to act of the party
or its Affiliate seeking to terminate this Agreement, including,
without limitation, any breach of its obligations under Section 5.4)."
7. The reference in paragraph (i) of Section 9.1 of the Agreement
to "Section 3.3(b)" is corrected to refer to "Section 3.5(b)".
8. A new Section 9.10 of Article 9 is hereby added to read in its
entirety as follows:
"Section 9.10. SPECIFIC INDEMNIFICATION.
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Notwithstanding anything to the contrary contained in Sections 9.1, 9.4
and the first sentence of 9.5 hereof:
(a) Sellers, Speedy U.S.A. and Parent, jointly and severally shall
indemnify, defend and hold harmless the Purchaser Indemnified Parties from all
Losses arising or relating to:
(i) the failure of Sellers, Speedy U.S.A. and Parent to cure
(which shall include the title company insuring over an exception) any exception
referred to on Schedule 9.10(a)(i); provided, however, that this indemnification
shall not apply to any Losses by the Purchaser Indemnified Parties arising or
relating to the recordation by Purchaser, Monro or any assignee of Purchaser or
Monro of any lease or memorandum of lease with respect to any Leased Real
Property located in the State of Maryland conveyed by Sellers pursuant to the
Agreement; and
(ii) the failure of Sellers, Speedy U.S.A. and Parent to
obtain and deliver non-disturbance agreements, as described in Section 5.4(f)
hereof, and/or mortgage releases, for the Leased Real Property listed on
Schedule 9.10(a)(ii)
(b) The Claims Period with respect to Purchaser Losses described in
Section 9.10(a)(i) above relating to Real Property shall terminate on the five
year anniversary of the Closing Date.
(c) The Claims Period with respect to Purchaser Losses described in
Section 9.10(a)(i) above relating to Leased Real Property shall terminate on
the earlier of (a) the later of 18 months after the Closing Date and the
expiration of the Real Property Lease (in accordance with its current terms and
without giving effect to the exercise of any option to extend or renew
thereunder) for the respective Leased Real Properties, and (b) the five year
anniversary of the Closing Date.
(d) The Claims Period with respect to Purchaser Losses described in
Section 9.10(a)(ii) shall terminate on the five year anniversary of the Closing
Date.
(e) For purposes of this Article IX, "Purchaser Losses" shall include
the Losses of the Purchaser Indemnified Parties described in this Section 9.10
as to which the Purchaser Indemnified Parties are entitled to indemnification.
Notwithstanding anything to the contrary contained herein, the Seller's
indemnification obligations with respect to this Section 9.10 relating to a
particular parcel of Real Property or Leased Real Property shall be limited to
an amount equal to the maximum amount of title insurance coverage obtained on
such parcel as contemplated by Section 6.1, or, if no such coverage has been
obtained, an amount equal to the allocated value of such property on Schedule
6.1(c)(i) or (ii).
9. Section 10.11 is hereby amended by replacing "Closing
Date" in the first sentence with "Delivery Date."
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10. CONTROLLING LAW. This Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of New
York without reference to New York's choice of law rules.
11. SEVERABILITY. Any provision hereof which is prohibited or
unenforceable in any jurisdiction will, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in
any jurisdiction will not invalidate or render unenforceable such provision in
any other jurisdiction. To the extent permitted by law, the parties hereto
waive any provision of law which renders any such provision prohibited or
unenforceable in any respect.
12. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, and it shall not be
necessary in making proof of this Agreement or the terms hereof to produce or
account for more than one of such counterparts.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed, as of the date first above written.
SMK SPEEDY INTERNATIONAL INC.
(formerly known as SPEEDY MUFFLER KING INC.)
By: /s/ Xxxx Xxxx Xxxxx
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Name: Xxxx Xxxx Xxxxx
Title: Treasurer
BLOOR AUTOMOTIVE INC.
By: /s/ Xxxx Xxxx Xxxxx
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Name: Xxxx Xxxx Xxxxx
Title: Controller
SPEEDY CAR-X INC.
By: /s/ Xxxx Xxxx Xxxxx
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Name: Xxxx Xxxx Xxxxx
Title: Controller
SPEEDY (U.S.A.), INC.
By: /s/ Xxxx Xxxx Xxxxx
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Name: Xxxx Xxxx Xxxxx
Title: Controller
SPEEDY HOLDING CORP.
By: /s/ Xxxxxxxxx X'Xxxxx
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Name: Xxxxxxxxx X'Xxxxx
Title: Secretary
MONRO MUFFLER BRAKE, INC.
By: /s/ Xxxxxxxxx X'Xxxxx
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Name: Xxxxxxxxx X'Xxxxx
Title: Chief Financial Officer
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SCHEDULE 9.10(a)(i)
Shop No.
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Gaps in Chain of Title - 1915
2931
0663
2070
Encroachments - 3108 New York - parking encroaches onto adjacent
property
4503 Virginia - Speedy's bldg. encroaches onto
adjacent property 3.89 feet
0676 Connecticut - underground storm drain
running under bldg.
3440 Ohio - 10' storm sewer easement running
under bldg.
2106 Michigan - Speedy's parking encroaches onto
adjacent property
3461 Ohio - Easement running under property
Encumbrances - 3739 termination of previous lease of record
2004 termination of previous lease of record
Judgments - 3751 Judgments against Fee Owner and Goodyear
$60,006.89 plus interest & penalties
Failure to record a
Memorandum of Lease of
each of the following
Maryland sites - 1903
1905
1908
1909
1912
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SCHEDULE 9.10(a)(ii)
Shops at which SNDAs are required from private mortgage holders:
1913
1915
1918
3752
3141
2070
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