EXHIBIT 99.1
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ASSET PURCHASE AGREEMENT
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THIS ASSET PURCHASE AGREEMENT (this "Agreement") is entered into and
executed as of this 30th day of April, 2004 (the "Closing"), by and among
AUTOMOTIVE INTERNATIONAL, INC., an Ohio corporation ("Seller"), PICKUPS PLUS,
INC., a Delaware corporation ("Purchaser") and XXXXXXX XXXXXXXX ("Stockholder"
or "Xxxxxxxx");
WHEREAS, Seller is the owner of certain assets used by Seller in
connection with the operation of a division of Seller's business known as AUTO
PRESERVATION (the "Business"), and
WHEREAS, Purchaser wishes to acquire and Seller wishes to sell and
transfer to Purchaser all of those assets as set forth below.
NOW, THEREFORE, in consideration of the mutual exchange of promises
and in consideration of the payments to be made hereunder and of the covenants
performed and to be performed, Purchaser, Seller and Xxxxxxxx AGREE AS FOLLOWS:
1. Conveyance of Assets
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Seller hereby sells, assigns, transfers and conveys to Purchaser the
following assets (the "Assets") used in connection with the operation of the
Business:
A. All current AUTO PRESERVATION dealer, detailer, car wash, body shop
and golf course accounts within the existing AUTO PRESERVATION
territory (within a one hundred (100)-mile radius of Cincinnati,
Ohio) presently belonging to Seller. (It is further agreed that
Seller and Purchaser will work together in the development of a
marketing plan so as not to compete with each other within the United
States.) It is understood and acknowledged by Purchaser that all
current U.S. distributors and all current export distributors,
dealers, detailers, jobbers, government contracts and vendor
agreements, shall at all times remain the property of Seller. It is
further understood that all auto manufacture and OEM relationships
presently belonging to Seller in both private label products and
products using the Valugard name, shall remain the property of
Seller;
B. All right, title and interest to computer software and hardware,
customer lists, equipment, furniture and fixtures related to the
Business, including, without limitation, those listed on Schedule 1
hereto;
C. A non-exclusive, perpetual, royalty-free license for the use of the
Valugard name within the United States and such other trademarks
listed on Schedule 1(c) hereto used in connection with the
distribution of the Products (as defined herein), it being understood
that Seller shall also have the right to exploit the name "Valugard"
and to sell Valugard products to distributors enlisted by Seller.
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D. All right, title and interest to those vehicles as specifically
described in Schedule 1 attached hereto and incorporated herein by
reference.
E. All right, title and interest to Seller's inventory of Valugard
products as of the date of closing.
2. Purchase Price
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The total purchase price for the sale of the Assets shall be paid as
follows:
A. Ten Thousand Dollars and no/100 ($10,000.00) previously
paid by Purchaser to Seller, the receipt of which is hereby
acknowledged;
B. Five Hundred Ninety Thousand Dollars and no/100
($590,000.00) in cash at the time of Closing;
C. A certificate for five million two hundred thirty-eight
thousand and ninety-five (5,238,095) validly issued and
fully paid for common shares (the "Shares") in the Delaware
corporation known as PICKUPS PLUS, INC. at the time of
Closing
3. Exclusions
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A. EXCLUDED ASSETS. The parties acknowledge all existing
accounts receivable, money market accounts checking accounts and contracts with
O'gara, Xxxx & Xxxxxxxxx, are excluded from the assets that are a part of this
transaction. Likewise, Seller acknowledges that all existing accounts payable
and existing tax liabilities attributable to the Business as of the date of
Closing shall be the sole responsibility of Seller.
B. EXCLUDED LIABILITIES. Purchaser shall not assume and shall
not be responsible for any liability, obligation, or commitment of Seller (or
any affiliate thereof), including, without limitation, all liabilities relating
to the operations of the Business or the Assets prior to the Closing, whether
such liability arises before or after the Closing.
4. Continued Cooperation
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Seller and Purchaser agree to work together to create a pricing model
that insures that Purchaser can maintain a reasonable margin on all Valugard
product sales.
5. Consultants
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Purchaser agrees to retain XXXXXXX X. XXXXXXXX, XX. and XXXXX XXXXXXX
as consultants to the business operation of AUTO PRESERVATION for a period of at
least one (1) year, with XXXXXXX X. XXXXXXXX, XX. to be compensated in the
amount of One Thousand Dollars and no/100 ($1,000.00) for each franchise or
distributorship sold by Purchaser. For at least one (1) year following the
closing, XXXXX XXXXXXX ("XXXXXXX") shall be paid a consulting fee of One
Thousand Dollars and no/100 ($1,000.00) per month for his services to the
Business.
This Agreement shall not be construed as creating an agency,
partnership, joint venture or any other form of association, for tax purposes or
otherwise, between Purchaser and Xxxxxxxx or Besuden; and each of Xxxxxxxx and
Xxxxxxx shall at all times be and remain an independent contractor. Except as
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expressly agreed by the parties in writing, neither party shall have any right
or authority, express or implied, to assume or create any obligation of any
kind, or to make any representation or warranty, on behalf of the other party or
to bind the other party in any respect whatsoever. Neither party shall have any
obligation or duty to the other party except as expressly and specifically set
forth herein, and no such obligation or duty shall be implied by or inferred
from this Agreement or the conduct of the parties hereunder. Neither Xxxxxxxx
nor Besuden shall be entitled to any of the benefits that Purchaser may make
available to its employees, such as group health, life, disability or worker's
compensation insurance, profit-sharing or retirement benefits, and Purchaser
shall not withhold or make payments or contributions therefor or obtain such
protection for Xxxxxxxx or Xxxxxxx. Xxxxxxxx and Xxxxxxx shall be solely
responsible for all tax returns and payments required to be filed with or made
to any federal, state or local tax authority with respect to their respective
performance of services and receipt of fees under this Agreement.
6. Continuation of Employment
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Purchaser agrees that Purchaser shall hire as employees the following
four (4) employees (the "Hired Employees") currently in the employ of Seller:
1. Xxxxxxx Xxxxx
2. Xxxxxxx X. Xxxxxxxx, III
3. Xxxxxx Xxxx
4. Xxxx Xxxxxx
Said terms and conditions of employment for the above four (4)
employees shall continue at the same rate for a period of one (1) year under
similar terms and conditions as other key employees that are presently employed
by Purchaser.
7. Representations and Warranties of Seller
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Seller hereby represents and warrants to and for the benefit of
Purchaser as follows:
A. ORGANIZATION AND STANDING. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Ohio and has all corporate power and authority to carry on the Business and to
own and use the properties owned and used by it, including the Assets.
B. AUTHORITY; BINDING NATURE OF AGREEMENTS. Seller has the
absolute and unrestricted right, power and authority to enter into and perform
its obligations under this Agreement, and the execution and delivery hereof by
Seller have been duly authorized by all necessary corporate action on the part
of Seller. No approval of the stockholders of Seller is required for the
execution of and performance by Seller of this Agreement. This Agreement
constitutes a legal, valid and binding obligation of Seller, enforceable against
it in accordance with its terms, except as enforcement may be limited by
equitable principles limiting the right to obtain specific performance or other
equitable remedies, or by applicable bankruptcy or insolvency laws and related
decisions affecting creditors' rights generally.
C. NON-CONTRAVENTION; CONSENTS. None of the execution and
delivery of this Agreement, nor the consummation or performance of any of the
transactions contemplated hereby, will directly or indirectly (with or without
notice or lapse of time):
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(i) contravene, conflict with or result in a violation of (a)
any of the provisions of Seller's certificate of incorporation or bylaws, or (b)
any judgment, order, injunction, decree, regulation, ruling of any court or
governmental authority or any contract or agreement, written or oral, to which
Seller is subject or which the Assets are bound;
(ii) cause Purchaser or any affiliate of Purchaser to become
subject to, or to become liable for the payment of, any tax, other than sales
taxes, use taxes or transfer taxes;
(iii) give any Person the right to (a) declare a default or
exercise any remedy under any Acquired Contract or any material Contract by
which the Assets are bound, (b) accelerate the maturity or performance of any
Acquired Contract or any material Contract by which the Assets are bound, or (c)
cancel, terminate or modify any Acquired Contract or any material Contract by
which the Assets are bound; or
(iv) result in the imposition or creation of any Encumbrance
upon or with respect to any Asset.
No filing, notice, consent or other authorization is required to be
obtained from any Person in connection with the execution and delivery of this
Agreement or the consummation or performance of the Transaction contemplated
hereby.
D. TITLE TO ASSETS. Seller owns, and has good and marketable
title to, all of the Assets, free and clear of all liens, pledges, liabilities,
encumbrances, rights or any other impairment of title ("Encumbrances"). The
Assets (excluding those Excluded Assets listed in Section 3a above) constitute,
as of the Closing, all of the properties, rights, interests and other tangible
and intangible assets: (i) necessary to conduct the Business as the Business has
been conducted by Seller prior to the Closing Date; (ii) currently used in the
Business, whether or not necessary to conduct the Business; and (iii)
constituting products developed by Seller for future sale in the Business or
proprietary rights and processes and intellectual property developed by Seller
for use in future products of the Business. Seller does not own any real
property or any interest in real property necessary to conduct the Business as
the Business has been conducted by Seller prior to the Closing Date or currently
used in the Business, except for the leaseholds created under the real property
leases identified on "Schedule 7(d)" (the "Real Property Leases"). "Schedule
7(d)" provides an accurate and complete description of the premises covered by
said leases and the facilities located on such premises. Seller enjoys peaceful
and undisturbed possession of such premises. All vehicles, equipment and
furniture are accepted by Purchaser in, as is condition.
E. CONTRACTS.
(i) Seller has no written contracts. Seller has delivered to
Purchaser accurate and complete, agreements and understandings (written or oral)
included in the Assets, including all amendments thereto (the "Acquired
Contracts"). Each Acquired Contract is valid and in full force and effect and
neither Seller nor, to Seller's knowledge, any other party thereto, has violated
or breached any Acquired Contract.
(ii) No event has occurred, and no circumstance or condition
exists, that might (with or without notice or lapse of time) (a) result in a
violation or breach by Seller of any of the provisions of any Acquired Contract,
(b) give any person the right to declare a default or exercise any remedy under
any Contract, or (c) give any person the right to accelerate the maturity or
performance of or cancel, terminate or modify any Acquired Contract.
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G. EMPLOYMENT AND LABOR MATTERS.
(i) Schedule 7(g) accurately sets forth, with respect to each
Hired Employee: (a) the full name and title of such employee; (b) the aggregate
compensation payable to each such employee by Seller on an annualized basis as
of the date of this Agreement (including wages, salary, commissions, bonuses,
profit-sharing payments and other payments); and (c) a general description of
fringe benefits applicable to each such employee.
(ii) No Hired Employee is a party to or is bound by any
confidentiality agreement, noncompetition agreement or other Contract with any
person that may have an adverse effect on (a) the performance by such employee
of any of his or her duties or responsibilities as an employee of Purchaser, or
(b) the business of Purchaser.
H. BENEFIT PLANS; ERISA.
Each employee benefit plan maintained by Seller in connection
with the Business shall remain the sole responsibility of Seller from and after
the Closing Date, and Purchaser shall not be responsible for any liabilities or
obligations in connection with any employee benefit plan of Seller.
I. PURCHASE ENTIRELY FOR OWN ACCOUNT. Seller is acquiring the
Shares to be received in the transaction's contemplated by this Agreement (the
"Transactions") for investment for Seller's own account, not as a nominee or
agent and not with a view to the resale or distribution of any part thereof, and
Seller has no present intention of selling, granting any participation in, or
otherwise distributing the same.
J. DISCLOSURE OF INFORMATION. Seller has received all the
information it considers necessary or appropriate for deciding whether to obtain
the Shares as consideration in this Transaction. Seller has had an opportunity
to ask questions and receive answers from Purchaser regarding the rights,
preferences and privileges under the Shares and the business, properties,
prospects and financial condition of Purchaser.
K. INVESTMENT EXPERIENCE. Seller acknowledges that it is able to
fend for itself, can bear the economic risk of owning the Shares, and has such
knowledge and experience in financial or business matters that it is capable of
evaluating the merits and risks of owning the Shares. Seller acknowledges that
its ownership of the Shares involves a high degree of risk and that Seller is
able, without materially impairing its financial condition, to hold the Shares
for an indefinite period of time and to suffer a complete loss of its
investment.
L. ACCREDITED INVESTOR. Seller is an "accredited investor"
within the meaning of Rule 501 of Regulation D promulgated under the Securities
Act of 1933, as amended (the "Securities Act").
M. RESTRICTED SECURITIES. Seller understands that the Shares are
characterized as "restricted securities" under the federal securities laws in
that they are being acquired from Purchaser in a transaction not involving a
public offering and that under such laws and applicable regulations such Shares
may be resold without registration under the Securities Act only in certain
limited circumstances. SELLER UNDERSTANDS AND ACKNOWLEDGES HEREIN THAT AN
INVESTMENT IN PURCHASER'S SHARES INVOLVES AN EXTREMELY HIGH DEGREE OF RISK AND
MAY RESULT IN A COMPLETE LOSS OF ITS INVESTMENT. Seller understands that the
Shares have not been and will not be registered under the Securities Act and
have not been and will not be registered or qualified in any state in which they
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are offered, and thus Seller will not be able to resell or otherwise transfer
its Shares unless they are registered under the Securities Act and registered or
qualified under applicable state securities laws, or an exemption from such
registration or qualification is available or unless sold pursuant to Rule 144
of the Securities Act. Seller has no immediate need for liquidity in connection
with this investment, does not anticipate that Seller will be required to sell
its Shares in the foreseeable future.
N. LEGENDS. It is understood that the certificates evidencing
the Shares may bear one or all of the following legends:
(i) "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT
WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED."
(ii) Any legend required by the Bylaws of Purchaser or
applicable state securities laws.
O. RELIANCE BY PURCHASER. Seller understands that the
representations, warranties, covenants and acknowledgements set forth in this
Section 7 constitute a material inducement to Purchaser to enter into this
Agreement.
P. NO RELIANCE ON OTHERS. Seller acknowledges that it is not
relying upon any person, firm or corporation, other than Purchaser and its
officers and directors, in making its investment or decision to invest in
Purchaser.
8. Representations and Warranties of Purchaser
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Purchaser hereby represents and warrants to and for the benefit of
Seller that Purchaser is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware, and that Purchaser has
all corporate power and authority to enter into and consummate this Agreement.
9. Purchase Option of Automotive International, Inc.
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A. PURCHASE OPTION. Stockholder hereby grants to Purchaser an
exclusive, irrevocable option, exercisable at any time after the second
anniversary of this Agreement and prior to 5 p.m. (New York time) on the thirty
month anniversary of this Agreement (the "Expiration Time") to purchase all of
the capital stock of Seller owned by Stockholder now or hereafter (the "Purchase
Option") at the Option Price set forth herein.
B. OPTION PRICE. "Option Price" shall mean, with respect to
the Option Shares, in the aggregate: (i) $1,300,000 cash at closing and (ii)
14,285,714 shares of Purchaser's common stock at closing, par value $-- per
share.
C. EXERCISE PROCEDURE. If Purchaser elects to exercise the
Purchase Option, Stockholder and Seller shall receive written notice (the
"Purchase Election Notice") of such election from Purchaser. Within sixty (60)
days following such notice, Purchaser shall purchase all, but not less all, of
the Option Shares from Stockholder for the Option Price and the Stockholder
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shall sell all, but not less than all, of the Option Shares to Purchaser at the
Option Price.
D. CLOSING. As a condition to the closing of the transactions
contemplated by this Section 9, Purchaser and Stockholder shall enter into an
agreement providing for the stock purchase, which will exclude existing accounts
receivable, current inventory, money market accounts, checking accounts,
accounts payable, and any tax liability attributable to the business; which
agreement shall contain, among other things, customary representations and
warranties comparable to those contained in acquisitions of private companies
and, among other things, the following additional terms: (i) terms and
conditions of employment for the key employees for a period of two (2) years
under similar terms and conditions as other key employees that are presently
employed by Purchaser; (ii) Xxxxxxxx shall execute a 3 year non-compete
prohibiting him, worldwide, from competing with the Business or the Automotive
International business, including, without limitation the manufacture of
products similar to the Products (as defined herein) and the recruiting of
distributors; and (iii) Xxxxxxxx shall be offered a three (3) year contract for
employment which shall include health insurance, company auto expense, vacation
of sixteen (16) weeks per year, at a salary to be determined similar to that of
other key employees. Prior to closing any such transaction, Purchaser may revoke
its exercise of the Purchase Option in the event that there has been a material
adverse change in the condition (financial or otherwise) of Seller or a material
breach of such transaction agreement(s).
E. PUT RIGHT. Immediately prior to the closing of the stock
purchase following the exercise of the Purchase Option, Seller shall have the
right to require Purchaser to purchase the Shares issued pursuant to this
Agreement for a total consideration of $1,100,000 payable in cash (or by wire
transfer of immediately available funds). Seller shall notify Purchaser in
writing of its intent to exercise its rights pursuant to this Section 9(E)
within ten (10) days of the Purchase Election Notice.
F. COVENANTS.
(i) Stockholder may not, until the Expiration Time, sell,
give, assign, hypothecate, pledge, encumber, grant a security interest in or
otherwise dispose of (whether by operation of law or otherwise) (each, a
"transfer") any Option Shares without Purchaser's prior written consent, which
consent may be withheld in Purchaser's sole discretion. Any attempt to transfer
any Option Shares or any rights thereunder in violation of the preceding
sentence shall be null and void ab initio.
(ii) Until the Expiration Time, Seller shall not issue any
shares of capital stock of Seller or any options, warrants or other rights to
acquire capital stock of Seller without Purchaser's prior written consent, which
consent may be withheld in Purchaser's sole discretion.
G. REPRESENTATION OF STOCKHOLDER. Stockholder represents and
warrants that he has and, upon the transfer or sale of the Option Shares to
Purchaser, will have good and valid titled to the Option Shares free and clear
of any lien, claim, security interest or other encumbrances or restrictions
(other than applicable securities laws), and has full right, power and authority
to enter into this Agreement. Stockholder further represents and warrants that
all consents, approvals, orders or authorizations on the part of Stockholder
required in connection with the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been made.
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H. LEGEND. Any certificates evidencing Option Shares shall
bear a legend in substantially the following form:
"THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
CERTAIN RESTRICTIONS WITH RESPECT TO THE SALE AND TRANSFER OF THE SHARES,
INCLUDING A PURCHASE OPTION HELD BY PICKUPS PLUS, INC. TO PURCHASE SUCH SHARES
AT A PURCHASE PRICE DETERMINED PURSUANT TO AN OPTION AGREEMENT. COPIES OF THE
OPTION AGREEMENT ARE AVAILABLE AT THE PRINCIPAL PLACE OF BUSINESS OF THE COMPANY
AND SHALL BE FURNISHED TO THE HOLDER HEREOF UPON WRITTEN REQUEST WITHOUT COST."
10. Appointment as Authorized Company Distributor.
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A. APPOINTMENT. Subject to the terms of this Agreement, Seller
appoints Purchaser, and Purchaser accepts such appointment, as an independent
distributor of the Products in the United States (the "Territory"). Purchaser
agrees to buy from Seller, and Seller agrees to sell to Purchaser, the products
listed in Schedule 10(a) (the "Products") in accordance with the terms of this
Agreement. This Agreement does not in any way create the relationship of
principal and agent, or any similar relationship, between Purchaser and Seller
and (i) Purchaser has no authority to bind Seller in any way, or to transact
business on behalf of Seller pursuant to this Agreement; and (ii) Purchaser
covenants and warrants that it will not act or represent itself directly or by
implication as agent for Seller and will not attempt to create any obligation,
or make any representation, on behalf or in the name of Seller.
B. AMOUNT AND PAYMENT OF PURCHASE PRICE
(i) Amount of Purchase Price for Products. The price (the
"Purchase Price)" for the Products purchased pursuant to this Agreement shall be
as set forth on Schedule 10(a) hereto.
(ii) Adjustment of Purchase Price. Seller agrees that in
the event Seller shall have entered into or shall hereafter enter into any
distributor agreement, or shall have modified or shall modify any existing
distributor agreement, covering the Products, providing for a lower or more
advantageous Purchase Price or for any other terms or conditions more favorable
to the distributor than herein set forth, then and thereafter, Purchaser shall
have the benefit of such lower or more advantageous terms, conditions or
Purchase Price.
(iii) Payment. Purchaser shall pay to Seller the Purchase
Price for the Products within 30 days after the delivery of such Products.
C. SHIPPING AND OTHER CHARGES. All prices are F.O.B, Seller
and are exclusive of all federal, state and local excise, sales, use and similar
taxes, and all import, export or customs duties, tariffs or like charges, all of
which shall be the responsibility of Purchaser, except for any taxes related to
the income or profits of Seller.
D. SELLER'S EXCLUSIVITY AND OBLIGATIONS TO SUPPLY FACILITIES
AND STAFF.
(i) Except as provided below, Purchaser agrees that Seller
shall be Purchaser's exclusive supplier of [describe Products]. Seller shall use
good faith and commercially reasonable efforts to maintain facilities and staff
for the timely production and fulfillment of Purchaser's requirements. Seller
shall not be considered in default of its supply obligation under this Agreement
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unless and until it fails for thirty (30) consecutive days to supply the
Products ordered by Purchaser pursuant to this Agreement.
(ii) Seller agrees to provide Purchaser Distributors,
Applicators and Jobbers training at its facility and using its standard training
program at the following rates: $500 for each new Distributor trained; $300 for
each new Applicator or Jobber trained. These fee will be payable within 30 days
of performing the training and invoicing from Seller.
E. OBLIGATIONS TO SELL AND PROMOTE PRODUCTS. Purchaser shall
use commercially reasonable efforts to:
(i) advertise, market and promote the Products in the
Territory;
(ii) refrain from discrediting either the Products or
Seller; and
(iii) include in all advertising and promotional materials
all applicable copyright and trademark notices as they appear on the Products.
F. COSTS AND EXPENSES. Except as expressly provided herein or
agreed to in writing by Purchaser and Seller, Purchaser will pay all costs and
expenses incurred in the performance of Purchaser's obligations under this
Agreement.
X. XXXXX OF RIGHT TO APPOINT SUBDISTRIBUTORS. Subject to the
terms and conditions of this Agreement, Seller hereby grants to Purchaser the
non-exclusive right during the term of this Agreement to appoint subdistributors
within the Territory, provided that each such subdistributor enters into an
agreement with Purchaser whereby such subdistributor agrees to act in accordance
with the terms and conditions of this Agreement and the Purchaser submits such
names to Seller for Consent, which will not be unreasonably withheld.
H. TERM. The distributorship relationship established hereby
shall continue until the third anniversary hereof, and shall thereafter
automatically renew for successive one year terms.
I. WARRANTY. Seller warrants the Products to End Users
pursuant to the terms and conditions of the Seller's standard warranties as of
the date hereof. Seller represents, warrants and covenants to Purchaser that:
(i) Seller has the right to grant the rights and licenses contemplated by this
Agreement, without the need for any licenses, releases, consents, approvals or
immunities not yet granted; (ii) the Products delivered to Purchaser shall be
free from material defects in workmanship and materials; (iii) the Products
shall operate in accordance with the documentation and other specifications
therefor, and at a level of quality at least as high as that of Seller's other
products and services; (iv) neither the Products nor Purchaser's exercise of its
rights under this Agreement infringe, misappropriate or violate any intellectual
property rights, privacy or publicity rights, or other rights of any third
party, or any law, rule or regulation promulgated by any government or
regulatory body; and (v) Seller has not made and shall not make any commitments
inconsistent with Pickup's rights under this Agreement.
11. Non-Compete.
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A. For a period of 5 years from the date hereof, neither Seller
nor Stockholder shall, directly or indirectly: (i) conduct or be involved in any
business relating to the application of warranty chemicals or automotive
accessories; (ii) solicit any customer or vendor of Purchaser or the Business,
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or induce any customer or vendor of Purchaser or the Business to discontinue or
alter its relationship therewith; or (iii) recruit, solicit or hire any employee
or induce or attempt to induce any employee to terminate or alter its
relationship with Purchaser and/or the Business (except for Xxxx Xxxxxx and
Xxxxx Xxxxxxx, who the Purchaser acknowledges will continue to work for both the
Seller and Purchaser). This paragraph shall not prevent you from owning shares
of any competitor of Purchaser so long as such shares (i) do not constitute more
than 1% of the outstanding equity of such competitor; and (ii) are regularly
traded on a recognized exchange or listed for trading by NASDAQ in the
over-the-counter market. Nor will this paragraph prevent you from signing up
other Distributors, Dealers, Applicators, Jobbers or OEM's to purchase Products
from Seller as long as Seller complies with the terms of Section (c) hereof.
B. EXCLUSIVE AREAS. Seller shall not, for the term of this
Agreement, enter into an agreement relating to the Products with any
Distributor, Dealer, Detailer, or Jobber located within the Territory and within
a 100 mile radius of any location maintained by Purchaser, such locations listed
on Schedule 11(b) hereto. Purchaser may update Schedule 11(b) from time to time
and shall provide notice to Seller of any such updates.
C. RIGHT OF FIRST OFFER. Prior to entering into any agreement
relating to the Products with any new Distributor, Dealer, Detailer, or Jobber
located within the Territory (a "New Opportunity"), Seller shall disclose all
material information relating to such New Opportunity to Purchaser and Purchaser
shall have the exclusive right to enter into an agreement relating to the
Products with such New Opportunity for a period of 30 days after such
disclosure.
12. Indemnification
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A. Purchaser will indemnify, defend and hold harmless Seller,
its affiliates, directors, officers, employees and agents (each, a
"Representative") from and against all claims, damages, losses liabilities,
suits, actions, demands, proceedings (whether legal or administrative) and
expenses (including but not limited to reasonable attorneys' fees)
(collectively, "Losses") asserted against, imposed upon or otherwise incurred by
Seller or its Representatives arising out of or relating to the inaccuracy as of
the Closing of any of Purchaser's representations and warranties contained
herein.
B. Seller will indemnify, defend and hold harmless Purchaser
and its Representatives from and against all Losses asserted against, imposed
upon or otherwise incurred by Purchaser or its Representatives arising out of or
relating to (a) the inaccuracy as of the Closing of any of Seller's
representations and warranties contained herein, (b) the breach by Seller, or
any failure by Seller, to carry out or perform its covenants, agreements or
obligations set forth in this Agreement or (c) any liabilities arising out of
circumstances or events occurring prior to the Closing Date.
13. Binding Effect
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This Agreement shall be binding upon the parties hereto, their heirs,
successors and assigns.
14. Applicable Law
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This Agreement shall be governed by the laws of the State of Ohio.
15. No Commission
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The parties hereto acknowledge and agree that neither is represented
by an agent in this transaction, and that no person shall be entitled to any
commission or brokerage fee as a result of this transaction.
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IN WITNESS WHEREOF, Seller and Purchaser have entered into this
Agreement and set their respective hands on the day and year first
above-written.
AUTOMOTIVE INTERNATIONAL, INC.
"SELLER"
BY:/s/ Xxxxxxx X. Xxxxxxxx
____________________________________
XXXXXXX X. XXXXXXXX, XX., PRESIDENT
PICKUPS PLUS, INC.
"PURCHASER"
BY:/s/ Xxxxxxx Xxxxxx
___________________________________
XXXXXXX XXXXXX, PRESIDENT AND CFO
STOCKHOLDER
/s/ Xxxxxxx X. Xxxxxxxx, Xx.
--------------------------------
XXXXXXX X. XXXXXXXX, XX.
12
SCHEDULE 1
ASSETS
------
13
SCHEDULE 1(C)
TRADEMARKS
----------
14
SCHEDULE 7(D)
REAL PROPERTY LEASES
--------------------
15
SCHEDULE 7(G)
EMPLOYMENT TERMS
----------------
16
SCHEDULE 10(A)
PRODUCTS AND PRICING
--------------------
17
SCHEDULE 11(B)
EXCLUSIVE AREAS
---------------
Cincinnati, Ohio
18
