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Exhibit 2(r)
AGREEMENT
PURCHASE AND SALE OF BUSINESS ASSETS
This Purchase Agreement is made on October 21, 1996, between:
Seller: Xxxxx Distribution Services, Inc.
0000 Xxxxx 00xx Xxxxxx
Xxxxx, XX 00000
and
Purchaser: United Magazine Company
0000 Xxxx Xxxx
Xxxxxx, XX 00000
(collectively referred to as the "parties")
RECITALS
This Purchase Agreement is made with reference to the following facts and
circumstances:
A. Seller owns and desires to sell a certain trucking business and certain
assets used in connection with the business ("Business"), with principal
offices situated at 0000 Xxxxx 00xx Xxxxxx, Xxxxx, XX ("Location") operated
under the name of Xxxxx Distribution Services, Inc., at the Location,
consisting of the assets described in Exhibit A.
B. Purchaser desires to purchase Seller's interest in the business as a going
concern.
C. The parties have agreed to set forth their agreement in writing.
The parties agree as follows:
AGREEMENT
1. AGREEMENT TO PURCHASE AND SELL
1.1 SALE. Seller agrees to sell and Purchaser agrees to purchase the entire
interest of Seller in the following:
A. The customer contracts, accounts receivable, 6 trailers and other assets
owned by Seller, as set forth in Exhibit A.
B. Customer lists and all files, and records of or pertaining to Seller's
business used by Seller in connection with the business (except those
items, if any, required to be retained by law).
C. Good will of the business as a going concern, all telephone numbers and
yellow page advertisements, and the right to the use of the name: Xxxxx
Distribution Services (to preclude Seller from engaging in business under
that name); for this purpose, Seller shall cease using that name at the
closing.
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1.2 RESERVED.
2. PURCHASE PRICE. The purchase price for the assets shall be One Dollar
($1.00), together with the assumption of the contracts and liabilities set
forth in Exhibit B, which liabilities Purchaser assumes and agree to pay in
accordance with the terms thereof and shall indemnify and hold Seller
harmless with respect to such contracts and indebtedness.
3. TERMS OF PAYMENT. The purchase price shall be paid in full at closing.
4. ADJUSTMENTS
At the closing, the following shall be adjusted or apportioned:
4.1 TAXES ON PERSONALTY. Purchaser shall pay all taxes and assessments that may
be levied on any assets being purchased and sold, which become due after
the date of the closing, and, further, Seller shall pay for taxes that may
be due prior to and including the date of the closing; furthermore, there
shall be no reimbursement for any prorated portion of any tax year on the
personalty between Purchaser and Seller.
4.2 MISCELLANEOUS BUSINESS TAXES. All social security, sales, use,
unemployment, withholding, and single business taxes for all years up to
and including the last completed tax year and all quarters for the current
tax year immediately preceding the date of the closing shall be paid in
full by Seller.
4.3 MISCELLANEOUS. Adjustments shall be made at the closing for any of the
following, if applicable: Payroll and any other prepaid items, and any
unpaid taxes. The net amount of any of the adjustments shall either be an
increase or decrease in the obligations to be assumed at the closing.
5. BULK TRANSFERS ACT COMPLIANCE
5.1 AGREEMENT OF PAYMENT. If:
A. Any indebtedness or liability of Seller (not assumed by Purchaser)
pertaining to the personal property conveyed pursuant to this Agreement
(property) becomes a lien upon the property, and
B. Seller has a legal obligation to pay for such indebtedness;
Seller, on written notice given by Purchaser to Seller, shall pay for the
same and/or obtain the release of any lien on the property within six
months or before the seizure of the property, if earlier.
5.2 WAIVER. Purchaser has agreed to waive compliance (before the closing) with
any applicable provisions of Article VI of the Uniform Commercial Code, as
adopted within the state of Michigan, regarding bulk sales (Bulk Transfers
Act), based on the representations of Seller set forth within this
Agreement. BY THIS WAIVER, NEITHER PARTY ACKNOWLEDGES THE APPLICABILITY OF
THE BULK TRANSFERS ACT TO THIS TRANSACTION AND NEITHER PARTY CONFERS ON ANY
THIRD PARTY ANY RIGHT TO ASSERT THE PROVISIONS OF THE BULK TRANSFERS ACT IF
NOT OTHERWISE INAPPLICABLE TO THIS TRANSACTION.
6. REPRESENTATIONS, COVENANTS, AND WARRANTIES OF SELLER
Seller represents, covenants, and warrants the following to be true:
6.1 ORGANIZATION AND STANDING OF SELLER. Seller (sometimes referred to in this
Agreement as "Company") is a corporation duly organized, validly existing,
and in good standing under the laws of the State of Michigan.
6.2 CONDUCT OF BUSINESS OF COMPANY. The business shall remain open for business
and shall be
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conducted by Company in a normal and regular manner until and including the
date of the closing.
6.3 CONDITION OF ASSETS OF COMPANY. The following representations are made with
respect to Company assets being purchased and sold:
A. The assets shall be in the same condition, ordinary use excepted, as of
the date of the closing;
B. The assets are presently operating and have been regularly maintained
and will be in the same working condition as of the date of the
closing;
C. There are no known defects, hidden or otherwise, that have not been
disclosed to Purchaser; and
D. There are no outstanding citations issued by any governmental agency
(including OSHA) having jurisdiction over the operation of Company's
assets and business.
6.4 NO VIOLATION OR BREACH OF COMPANY. The performance of this Agreement will
not be in violation of any laws, statutes, local ordinances, state or
federal regulations, court or administrative order, or ruling, nor is the
performance of this Agreement in violation of any loan document's
conditions or restrictions in effect for financing, whether secured or
unsecured.
6.5 RELIANCE. The foregoing representations and warranties are made with the
knowledge and expectation that Purchaser is placing complete reliance on
them.
7. REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents, covenants, and warrants the following to be true:
7.1 STATUS OF PURCHASER. Purchaser is an Ohio corporation, duly incorporated
and validly existing in good standing under the laws of the state of Ohio.
7.2 AUTHORITY. Purchaser has the power and authority to enter into and perform
Purchaser's obligation under this Agreement.
7.3 ASSETS. Purchaser acknowledges that Purchaser has had an opportunity to
inspect and is familiar with the assets of Company and agrees to accept
same "AS IS," subject to the representations of Seller, including any
representations regarding the condition of the assets.
7.4 RELIANCE. The foregoing representations and warranties are made by
Purchaser with the knowledge and expectation that Seller is placing
complete reliance on them.
8. ACCESS AND INFORMATION
8.1 RELEASE OF INFORMATION. Seller shall cause Company to provide to Purchaser
and to Purchaser's agents full access, during normal business hours,
throughout the period before the closing, to all of Company's properties,
books, contracts, commitments, and records and shall furnish to Purchaser
during that period all the information concerning Company's affairs that
Purchaser may reasonably request.
8.2 CONFIDENTIALITY. Purchaser acknowledges that, pursuant to the right to
inspect Company's books, records, and other documents and material,
Purchaser may become privy to confidential information of Company, and that
communication of such confidential information to third parties (whether or
not such communicated information is authorized by Purchaser) could injure
Company's business in the event that this transaction is not completed.
Purchaser agrees to take reasonable steps to ensure that such information
about Company, obtained by Purchaser, shall remain confidential and shall
not be
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disclosed or revealed to outside sources, and further agrees not to
solicit any customers of Company disclosed from such confidential
information. As used in this Agreement, CONFIDENTIAL INFORMATION
includes information ordinarily known only to Company personnel, an
information such as customer lists, supplier lists, trade secrets,
channels of distribution, pricing policy and records, inventory records,
and other information normally understood to be confidential or
designated as such by Company.
9. CONDUCT OF BUSINESS PENDING CLOSING. Seller also covenants that
from the effective date to the date of the closing Company's business
will be conducted only in the ordinary course of business and no
contract or commitment will be entered into by or on behalf of Company
extending beyond the closing, except normal commitments made in the
ordinary course of business.
10. BROKER
Each party represents and warrants that all negotiations
related to this Agreement have been carried on by the parties without the
intervention of any broker, and each party shall indemnify and hold the other
party harmless against and in respect to any claim for any brokerage or other
commissions related to this Agreement.
11. NOTICES
All notices, requests, demands, and other communications under this
Agreement shall be in writing and shall be deemed to have been duly given if
delivered or mailed, first-class postage prepaid, to Seller, at Seller's
address given in this Agreement, or to Purchaser, at Purchaser's address given
in this Agreement, or to any other address that Purchaser or Seller shall
designate in writing.
12. EXECUTION OF DOCUMENTS
Purchaser and Seller mutually agree that each shall take all steps
reasonably necessary to facilitate the purchase and sale contemplated in this
Agreement and to execute any other documents reasonably necessary to carry out
and put into effect the terms of this Agreement.
13. FIRE OR OTHER CASUALTY/RISK OF LOSS
13.1 ASSUMPTION OF RISK. Seller assumes all risks of destruction, loss,
or damage due to any casualty, including any liability arising out of
ownership of the subject matter of this Agreement, up to the time of the
closing, excluding any of the foregoing caused by Purchaser's
negligence.
13.2 RIGHT TO TERMINATE AGREEMENT. If the subject matter of this
Agreement is materially damaged at any time before the actual time of
the closing, and the damages cannot reasonably be repaired on payment of
the sums available by insurance settlement or from any sums to be paid
by Purchaser to Seller at the closing, Purchaser, at Purchaser's option,
shall have the right to terminate this Agreement and, upon giving notice
of such election, Purchaser shall immediately receive a refund of any
deposit in full termination of the rights under this Agreement. This
paragraph shall not apply if damages are caused by Purchaser's
negligence.
14. LIEN SEARCH. Seller shall provide Purchaser with a financing
statement search, certified to a date later than the date of this
Agreement.
14.1 OBJECTION. If objection to title is made based on a written
opinion of Purchaser's attorney that the title is not in the condition
as required for performance under this Agreement, Seller shall have 10
days from the date Seller is notified in writing of the particular
defects
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claimed, either (1) to remedy the title or arrange to remedy the title
at the closing, or (2) on written demand made by Purchaser to refund any
deposit in full termination of this Agreement if unable to remedy the
title. Purchaser may elect to complete the purchase and sale and reserve
any right to recover any damages arising out of the defect in title.
15. INDEMNIFICATION
Except as set forth in this Agreement, Seller shall indemnify and
hold Purchaser harmless at all times against and in respect to:
A. All Company's liabilities, including tax liabilities, of
any nature, whether accrued, absolute, contingent, or otherwise,
whether known or unknown, and whether expressed in or omitted
from financial statements of Company existing as of the date
of the closing;
B. All liabilities of or claims against Company arising out of the
conduct of Company before the closing date;
C. Any damage or deficiency resulting from any misrepresentation,
breach of covenant, or nonfulfillment of any agreement on the
part of Seller; and
D. All actions, suits, proceedings, demands, assessments, or
judgements, including costs and expenses incident to any of the
foregoing, pertaining to Company before the closing date.
16. DEFAULT
16.1 DEFAULT BY PURCHASER. If Purchaser defaults, and the default is not cured
within a reasonable period, Seller may elect any remedy allowed by law.
16.2 DEFAULT BY SELLER. If Seller defaults, and the default is not cured
within a reasonable period, Purchaser may, by written notice, elect to
enforce the terms of this Agreement, or elect any other remedy allowed
by law.
17. CLOSING
17.1 EFFECTIVE DATE. The effective date of the closing shall be ,1996
("Closing Date"); however, the parties may complete the execution of
documents on any date no later than , 1996.
17.2 DOCUMENTS. At the closing and any time after it, the parties shall
execute all documents necessary to put into effect the terms of this
Agreement.
18. MISCELLANEOUS
18.1 AMENDMENT. This Agreement shall not be amended, altered, or terminated
except by a writing executed by each party.
18.2 GOVERNING LAW. This Agreement shall be governed in all respects by the
laws of the state of Michigan.
18.3 HEADINGS. The paragraph headings used in this Agreement are included
solely for convenience.
18.4 ENTIRE AGREEMENT. This Agreement sets forth the entire
understanding of the parties; further, this Agreement shall supersede
and/or replace any oral or written Agreement(s) relating to this subject
matter entered into by the parties before the date of this Agreement.
18.5 WAIVER. The waiver by any party of any breach or breaches of any
provision of this Agreement shall not operate as or be construed to be a
waiver of any subsequent breach of any provision of this Agreement.
18.6 BINDING EFFECT. This Agreement, inclusive of its terms and provisions,
shall survive the
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closing and shall be binding on and inure to the benefit of, and be
enforceable by, the respective heirs, legal representatives, successors,
and assigns of the parties. Purchaser and Seller have executed this
Agreement on the following dates:
Seller:
Dated: Oct. 21, 1996 Xxxxx Distribution Services, Inc.
By: /s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx, President
Purchaser:
Dated: Oct. 21, 0000 Xxxxxx Xxxxxxxx Company
By: /s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx, Chairman
090396
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EXHIBIT A
ASSETS PURCHASED: VALUE 6/30/96
ICC Certificate $10
1995 Utility Trailer (appraisal to be obtained)
1993 Utility Trailer (appraisal to be obtained)
1986 Utility Trailer (appraisal to be obtained)
1986 Utility Trailer (appraisal to be obtained)
1984 Great Dane Trailer (appraisal to be obtained)
Truck Power Washer 2,000
Answering Machine 100
Fax Machine 100
Office Furniture 1,000
Personal Computer 1,500
Printer 200
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TOTAL ASSETS PURCHASED $
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EXHIBIT B
LIABILITIES ASSUMED (TO BE ADJUSTED TO EQUAL ASSETS):
1st Source Bank Note $41,872
Orix Credit Note 6,858
Orix Credit Note 10,117
FMB Note 19,255
Accrued Expenses
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TOTAL LIABILITIES ASSUMED $
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NET OF TRANSACTION -0-
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Also included in the transaction is the assumption of the Ford Credit lease for
the six Kenworth tractors and other contracts to which Xxxxx Distribution is a
party, including Xxxxxx Xxxxx employment agreement and Upjohn transportation
contract.
