Exhibit 10.36
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "AGREEMENT") is made this 25th day
of November, 1998 by and among SONIC AUTOMOTIVE, INC., a Delaware corporation
("BUYER"), GLOBAL IMPORTS, INC., a Georgia corporation (the "SELLER"), and
XXXXXXX XXXXXX XXXXXXXX (the "STOCKHOLDER").
WITNESSETH:
WHEREAS, Seller is engaged in a BMW automobile and motorcycle dealership
business located at 550 and 000 Xxxxxxxxxx Xxxxx Xxxxxxx, X.X., Xxxxxxx, Xxxxxxx
00000 (the "BUSINESS"); and
WHEREAS, Seller desires to sell and Buyer desires to buy, or to cause
one or more subsidiaries or affiliates of Buyer to buy, certain assets
pertaining to the Business, subject to the terms and conditions of this
Agreement; and
WHEREAS, contemporaneously with the execution of this Agreement, Buyer
has entered into a Contract to Purchase and Sell Property (the "REAL PROPERTY
PURCHASE AGREEMENT") with the Stockholder, Xxxxx Xxxxxxxx Xxx, Xxxxxx Xxxxx
Xxxxxxxx, Xxxx Xxxxx Xxxxxxxx, Xxxx Xxxxxxxx Xxxxxxx, and Xxxxx Xxxxxxx Xxxxxxxx
(the foregoing being, collectively, the "OWNER"), whereby Buyer has agreed to
buy, and the Owner has agreed to sell, the property at 550 and 000 Xxxxxxxxxx
Xxxxx Xxxxxxx, X.X., Xxxxxxx, Xxxxxxx 00000 (the "REAL PROPERTY"); and
WHEREAS, the consummation of the transactions contemplated by this
Agreement is subject to the consummation of the transactions contemplated by the
Real Property Purchase Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter contained, the receipt and legal sufficiency of which are hereby
acknowledged, and intending to be legally bound, the parties hereby agree as
follows:
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ARTICLE I
CERTAIN DEFINITIONS
1.1 "ASSETS" shall mean: the New Vehicles (as defined in Section 3.1);
the Demonstrators (as defined in Section 3.2); the Used Vehicles (as defined in
Section 3.5), if any; the Parts (as defined in Section 4.3); the Miscellaneous
Inventories (as defined in Section 5.1); the Work in Progress and Prepaid
Expenses (both as defined in Section 5.3); the Fixtures and Equipment (which
includes leasehold improvements) (as defined in Section 5.4); the Miscellaneous
Assets (as defined in Section 5.5); and the goodwill of the Business.
1.2 "CLOSING DATE" shall mean the date, not sooner than January 1, 1999
and not later than the Closing Date Deadline (as hereinafter defined), of the
closing of the purchase and sale of the Assets (the "CLOSING") which shall be a
date designated by Buyer not later than fifteen (15) days after receipt by Buyer
of the approvals, and the satisfaction of the other conditions, set forth in
Sections 8.8 and 8.13 or such other date as is mutually agreed upon by the
parties hereto. The Closing shall be held at the offices of Xxxxx, Xxxxxxxx &
Xxxxxxx, LLP, Suite 3100, Promenade II, 0000 Xxxxxxxxx Xxxxxx, X.X., Xxxxxxx,
Xxxxxxx 00000-0000 at 9:00 a.m. on the Closing Date.
1.3 "CLOSING DATE DEADLINE" shall mean January 4, 1999; provided,
however, if, as of such date, any of the conditions set forth in Sections 8.8 or
8.13 shall not have been satisfied or audited financial statements contemplated
by Section 8.19 shall not have been completed, Buyer may elect to extend the
Closing Date Deadline for up to an additional thirty (30) days.
1.4 "INVENTORY DATE" shall mean the close of business on the date of
completion of the Inventory (as defined in Section 4.1), which date shall not be
more than three (3) days prior to the Closing Date, or such later date prior to
the Closing as is mutually agreed by Seller and Buyer.
1.5 "LIABILITIES" shall mean: (i) all obligations of Seller, arising in
the ordinary course of business after the Closing Date, and not as a result of
any breach or default prior to the Closing Date, under (A) all contracts and
leases of Seller that are set forth on Annex A of Schedule 2.4 attached hereto,
and (B) all other contracts and leases of Seller that are entered into in
connection with the Business in the ordinary course of business at any time
after the date hereof and on or prior to the Closing Date, but only if Buyer has
agreed to assume such other contracts or leases pursuant to the Assumption
Agreement (as defined in Section 2.4 below); (ii) Seller's obligations under all
unfilled retail orders assigned to Buyer pursuant to Section 3.1 below; (iii)
Seller's obligations with respect to open purchase orders as of the Closing Date
for new vehicles, parts, accessories, miscellaneous assets, inventories and
similar items ordered in the ordinary course of business which are not included
in New Vehicles or Parts and which are delivered after the Closing Date; and
(iv) the Inducement Fee as provided in Section 2.5 hereof.
1.6 "MANUFACTURER" shall mean BMW of North America, Inc.
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ARTICLE II
SALE AND PURCHASE OF THE ASSETS
2.1 SALE AND PURCHASE; PURCHASE PRICE.
(a) Upon the terms and subject to the conditions hereinafter set
forth, at the Closing, Seller will sell, transfer and convey the Assets to Buyer
and Buyer will purchase the Assets from Seller for the consideration set forth
in this Agreement. The sale, transfer and conveyance of the Assets will be made
by execution and delivery at the Closing of a xxxx of sale in a form reasonably
satisfactory to Buyer's counsel (the "XXXX OF SALE") and such other instruments
of assignment, transfer and conveyance as Buyer shall reasonably request. The
Assets will be sold to Buyer free and clear of all Encumbrances (as defined in
Section 7.4 below), except for ad valorem personal property taxes not yet due
and payable, liens securing the claims or demands of materialmen, mechanics,
carriers, warehousemen, landlords and other like persons for labor, materials,
supplies or rentals incurred in the ordinary course of business where payment
thereof is not yet required, and liens and security interests which secure only
the Liabilities (the foregoing exceptions being, collectively, the "Permitted
Encumbrances"). To the extent that the Assets include Seller's rights to the
name "Global Imports," such rights will also be transferred subject to the
rights, if any, of third parties to use such name outside of the Atlanta
Standard Metropolitan Statistical Area (as determined by the United States
Office of Management and Budget) or to use such name within such Standard
Metropolitan Statistical Area in any business other than an automobile
dealership business. Except to the extent specifically included within the
Assets, Seller will not sell, and Buyer will not purchase, any other tangible or
intangible assets of Seller.
(b) The aggregate purchase price to be paid for the Assets (the
"PURCHASE PRICE" shall consist of the Initial Purchase Price (as defined in
Section 2.2 below) and the Contingent Purchase Price (as defined in Section 2.3
below).
2.2 INITIAL PURCHASE PRICE.
(a) The aggregate purchase price (the "PURCHASE PRICE") to be
paid for the Assets shall consist of Twelve Million Three Hundred Thousand
Dollars ($12,300,000), as the purchase price for the Business and intangible
assets included in the Assets (the "BUSINESS AND INTANGIBLE ASSETS PURCHASE
PRICE"), plus the sum of: (a) the New Vehicle Purchase Price (as defined in
Section 3.1); (b) the Demonstrator Purchase Price (as defined in Section 3.2);
(c) the Used Vehicle Purchase Price (as defined in Section 3.5), if applicable;
(d) the Parts Purchase Price (as defined in Section 4.3); (e) the Miscellaneous
Inventories Purchase Price (as defined in Section 5.1); (f) the Work in Progress
and Prepaid Expenses Purchase Price (as defined in Section 5.3); and (g) the
Fixtures and Equipment Purchase Price (as defined in Section 5.4). The parties
acknowledge that the New Vehicle Purchase Price, the Parts Purchase Price, and
the Miscellaneous Inventories Purchase Price will be based upon information
contained in Schedule 3.1 and the Inventory (as defined in Section 4.1), both of
which are to be delivered prior to the Closing Date. The parties also
acknowledge that adjustments to those categories of Assets will have to be made
to reflect ordinary course increases
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or decreases in those assets between the time of delivery of such Schedule 3.1
and the Inventory and the Closing Date, and that the related components of the
Purchase Price will have to be adjusted to reflect any such adjustments to those
Assets. All of the foregoing adjustments (with appropriate payments by the
parties) will be made as promptly as possible after the Closing. Each party will
use the Purchase Price allocation described in Schedule 2.2 hereto in all
reporting to, and tax returns filed with, the Internal Revenue Service and other
state and local taxing authorities.
(b) At the Closing, Buyer shall deliver to Seller by a certified
check or by wire transfer to an account or accounts designated by Seller one day
prior to Closing, in an amount equal to Four Million One Hundred Fifty Thousand
Dollars ($4,150,000) plus the sum of: (i) the New Vehicle Purchase Price; (ii)
the Demonstrator Purchase Price; (iii) the Used Vehicle Purchase Price; (iv) the
Parts Purchase Price; (v) the Miscellaneous Inventories Purchase Price; (vi) the
Work in Progress and Prepaid Expenses Purchase Price; and (vii) the Fixtures and
Equipment Purchase Price.
(c) At the option of Seller, exercisable by written notice to
Buyer no later than fifteen (15) days after the Closing (the "STOCK COMPONENT
NOTICE"), Seller shall elect to receive payment of the balance of the Initial
Purchase Price (such balance being called the "STOCK COMPONENT") by one of two
methods, as follows:
(i) Seller may elect to receive the Stock Component by
the issuance and delivery by Buyer to Seller of 452,778 shares (the "REGISTERED
COMMON SHARES") of Buyer's Class A Common Stock, $.01 par value per share (the
"COMMON STOCK"), which Registered Common Shares shall have been registered
pursuant to a "shelf" registration under the Securities Act of 1933, as amended
(the "SECURITIES ACT"), and shall be subject to the filing and effectiveness of
any required post-effective amendment to such "shelf" registration with respect
to Seller which amendment Buyer agrees to file within five (5) business days
after the Common Stock is delivered to Seller and to diligently endeavor to
cause such post-effective amendment to be declared effective; or
(ii) Seller may elect to receive the Stock Component by
the issuance and delivery by Buyer to Seller of that number of whole shares of
Buyer's Class A Convertible Preferred Stock, Series III (the "PREFERRED STOCK"),
obtained by (A) multiplying 452,778 by the Market Price (as defined in the
Statement of Rights and Preferences of the Preferred Stock attached hereto as
Exhibit A (the "STATEMENT OF RIGHTS AND PREFERENCES")) as of the Closing Date,
and (B) dividing the product obtained from such multiplication by $1,000. No
fractional shares of Preferred Stock shall be issued; any such fraction of a
share of Preferred Stock shall be paid in cash at the rate of $1,000 per whole
share of Preferred Stock. The Preferred Stock shall have such rights and
preferences as are set forth in the Certificate of Designation, Preferences and
Rights of Class A Convertible Preferred Stock referred to in the Statement of
Rights and Preferences.
(iii) If Seller shall elect to receive the Stock Component
in shares of Preferred Stock, Buyer's sole obligation with respect to the
Preferred Stock and the shares of Common Stock issuable upon conversion of the
Preferred Stock (the "COMMON SHARES") shall be (A) to use its best reasonable
efforts to make available current public information with respect to
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Buyer within the meaning of Subsection (c)(1) of Rule 144 ("RULE 144")
promulgated by the Securities and Exchange Commission (the "SEC") to the extent
necessary to facilitate public resales by the Seller of the Common Shares,
pursuant to Rule 144, (B) to remove stop transfer instructions and restrictive
legends, as provided in subsection (vi) below, and (C) to use its best
reasonable efforts to provide "piggyback" registration rights with respect to
the Common Shares in the event that Buyer shall undertake a registered public
offering of the Common Stock utilizing a registration statement on SEC Forms S-1
or S-3 (or any successor form thereto). In such case, the provisions of
subsection (iv) immediately below shall be applicable. Furthermore, such
piggyback registration rights shall be subject to customary provisions,
including those regarding expenses (which shall be paid by Buyer except for the
fees of separate counsel, if any, engaged by Seller, underwriter discounts and
allowances for the sale of such shares, and blue sky fees to the extent
applicable state laws require payment by Seller), underwriter cut-backs and
pro-rations with other holders of registration rights, and shall terminate at
such time as the holder of such piggyback registration rights shall be free to
sell all of such holder's Common Shares under Rule 144.
(iv) If requested by the managing or lead managing
underwriter for any registration of shares of Common Stock which includes the
Common Shares on a piggyback basis and which is an underwritten registered
public offering, Seller and the Stockholder shall execute and deliver an
underwriting agreement with the managing or lead managing underwriter in such
form as is customarily used by such underwriter with any modifications as the
parties thereto shall agree. In connection with any such registration, Seller
and the Stockholder shall supply to Buyer such information as may be reasonably
requested by Buyer in connection with the preparation and filing of a
registration statement with the SEC. Seller and the Stockholder shall not supply
any information to Buyer for inclusion in such registration statement that will,
taken as a whole, at the time the registration statement becomes effective under
the Securities Act, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading.
(v) The Stock Component shall be paid to Seller by the
issuance and delivery to Seller, not later than fifteen (15) days after the
receipt by Buyer of the Stock Component Notice, of the Registered Common Shares
or the Preferred Stock, as the case may be.
(vi) Buyer shall remove any and all stop transfer
instructions and shall remove any restrictive legend on the certificates with
respect to the Preferred Stock and any Common Shares then owned by Seller to the
extent that either (A) such Preferred Stock or Common Shares may hereafter be
registered under the Securities Act of 1933, as amended, and under any
applicable state securities or blue sky laws, or (B) Buyer has received an
opinion of counsel, in form and substance reasonably satisfactory to the Buyer,
that such registration is not required. Upon receipt of reasonable evidence that
the requirements of Rule 144(k) have been complied with (including an opinion of
counsel reasonably satisfactory to Buyer to such effect), Buyer shall remove any
and all stop transfer instructions and shall remove any restrictive legend on
such certificates.
2.3 CONTINGENT PURCHASE PRICE.
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(a) As used in this Agreement, (i) the term "CONTINGENT PURCHASE
PRICE" shall mean an amount, not to exceed an aggregate total of $1,000,000,
equal to five (5) times the Earnings Before Taxes of Buyer, or any successor to
or assignee of Buyer, between $2,800,000 and $3,000,000 during the Overall
Calculation Period, as more fully provided in paragraph (b) below, (ii) the term
"SUBJECT BUSINESS" shall mean the business of the Seller acquired pursuant to
this Agreement, (iii) the term "CALCULATION PERIOD" shall mean each of the three
consecutive twelve calendar month periods which collectively comprise the
Overall Calculation Period; (iv) the "OVERALL CALCULATION PERIOD" shall mean the
thirty-six consecutive calendar month period beginning with the first full
calendar month after the Closing Date, (v) the term "EARNINGS BEFORE TAXES"
shall mean the combined earnings before taxes of Buyer or any successor to or
assignee of Buyer from the Subject Business, as more fully provided in paragraph
(d) below; and (vi) the term "QUALIFIED EARNINGS BEFORE TAXES" shall mean, for
any Calculation Period, Earnings Before Taxes for such Calculation Period of
$2,800,000 up to and including $3,000,000.
(b) Not later than 120 days after each of the first through the
third anniversaries of the Closing Date, Buyer shall pay to Seller an
installment of the Contingent Purchase Price, calculated as follows:
(i) The installment of Contingent Purchase Price
for the first Calculation Period shall be calculated based upon the excess, if
any, of Qualified Earnings Before Taxes, for such Calculation Period over
$2,800,000, but less than $3,000,000 (any such excess being called the "FIRST
PERIOD EXCESS");
(ii) The installment of Contingent Purchase Price
for the second Calculation Period shall be calculated based upon the excess, if
any, of Qualified Earnings Before Taxes for such Calculation Period over the sum
of (A) $2,800,00 plus (B) the First Period Excess, but less than $3,000,000 (any
such excess being called the "SECOND PERIOD EXCESS"); and
(iii) The installment of Contingent Purchase Price
for the third Calculation Period shall be calculated based upon the excess, if
any, of Qualified Earnings Before Taxes for such Calculation Period over the sum
of (A) $2,800,000 plus (B) the First Period Excess, plus (C) the Second Period
Excess, but less than $3,000,000 (any such excess being called the "THIRD PERIOD
EXCESS");
provided, however, the Contingent Purchase Price payable in respect of all three
Calculation Periods shall not exceed an aggregate total of $1,000,000.
(c) In the event that the Earnings Before Taxes for any
Calculation Period exceed $3,000,000, Buyer shall make a one-time payment to
Seller of $1,000,000, less the amount of any installments of Contingent Purchase
Price which have already been paid to Seller, and Buyer shall have no further
obligations to make any current or future payments of Contingent Purchase Price
to Seller.
An amount equal to 100% of each installment of the Contingent Purchase
Price (if any) shall
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be paid to Seller in cash by wire transfer of immediately available funds to the
account of Seller, which shall be designated by Seller in writing at least one
(1) Business Day prior to the date of payment.
(d) For purposes of calculating Earnings Before Taxes, the
following rules shall apply:
(i) no deduction shall be taken for federal and state
income taxes owed by the Subject Business;
(ii) no deduction shall be taken for any interest expense
of the Subject Business other than floor plan financing interest attributable to
the Subject Business;
(iii) Earnings Before Taxes shall be determined before (A)
any expense chargeable with respect to the Non-Competition Agreement (as defined
in Section 2.7 below) or (B) any management fee expense allocation from Buyer in
respect of management fees payable to Buyer or any affiliate of Buyer;
(iv) no deduction shall be taken for any amortization of
goodwill included in the Initial Purchase Price;
(v) overhead expenses or other expenses which have been
incurred by the Subject Business which are allocated to the Subject Business but
which do not directly relate to the operation of the Subject Business, shall not
be deducted in determining Earnings Before Taxes;
(vi) Earnings Before Taxes shall be determined without
reference to any income or expense attributable to business operations of the
Business other than the Subject Business; and
(vii) no deduction shall be taken for rent payable in
respect of any leases of real property at the Subject Business in excess of an
aggregate total of $105,000 a month.
At the time of, and with the payment of, the Contingent Purchase Price,
Buyer shall deliver to Seller a statement in writing setting forth in reasonable
detail the manner in which the Contingent Purchase Price was determined. Seller
shall have a period of thirty (30) days from the date of delivery of Buyer's
statement of the Contingent Purchase Price to object in writing to the
calculation of the Contingent Purchase Price set forth therein; failing such
objection within such period by Seller Seller shall be deemed to have accepted
Buyer's calculation of the Contingent Purchase Price. If Seller shall have
timely objected to Buyer's calculation of the Contingent Purchase Price, the
parties shall negotiate in good faith in an effort to resolve any dispute
regarding the Contingent Purchase Price. If the parties are unable to resolve
such dispute within a period of thirty (30) days after Buyer's receipt of
Seller's objection, the matter shall be submitted to a "big five" accounting
firm mutually acceptable to the parties, which shall be instructed to resolve
such dispute as promptly as possible. The costs and expenses of such accounting
firm shall be shared equally between Buyer
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and Seller. Upon the final determination of the Contingent Purchase Price, Buyer
or Seller, as the case may be, shall make appropriate payment to the other, as
the case may be, in the amount of the Contingent Purchase Price as finally
determined. The party making the payment shall also pay interest on the amount
of such payment at an amount of such payment at an annual rate of interest equal
to Buyer's floor plan financing rate from time to time in effect from the
original date of payment of the Contingent Purchase Price by Buyer to the date
of such payment.
2.4 ASSUMPTION OF LIABILITIES. At the Closing, Seller will assign to
Buyer and Buyer will assume and agree to perform and discharge the Liabilities
pursuant to an assignment and assumption agreement in a form reasonably
acceptable to Seller's counsel (the "ASSUMPTION AGREEMENT"). Notwithstanding
anything herein to the contrary, except as expressly provided in this Section
2.4 and in Section 2.5 and in the Assumption Agreement, Buyer does not and will
not assume or become liable for any obligations or liabilities of Seller, of any
kind whatsoever, fixed or contingent, known or unknown (collectively, the
"RETAINED LIABILITIES"). Seller shall retain and agrees to satisfy and discharge
all of the Retained Liabilities, including, without limitation, any Retained
Liabilities which are secured by Permitted Encumbrances and the Retained
Liabilities set forth on Part II of Schedule 2.4.
2.5 INDUCEMENT FEE. As an inducement to Buyer to negotiate and enter
into this Agreement and to undertake the further cost and expense of conducting
its due diligence investigation and preparing to satisfy its obligations at the
Closing, Seller hereby agrees to pay to Buyer not later than April 30, 1999 the
sum of $500,000 (the "INDUCEMENT FEE"). The Inducement Fee will be included in
the Liabilities and will become an obligation of Buyer or any other person
(including any holder of a right of first refusal, preemptive right or other
similar right), with respect to any of the Assets who purchases the Assets, or
any portion thereof, as a result of the execution and delivery by Seller of this
Agreement. The Inducement Fee will be canceled if this Agreement is terminated
for any reason other than the exercise of a right of first refusal, preemptive
right or other similar right, by an applicable automobile manufacturer or
distributor or any person claiming by, through or under it.
2.6 EMPLOYMENT AGREEMENT. At the Closing, Buyer and Xxxxxx Xxxxx
Xxxxxxxx shall enter an employment agreement in substantially the form of
Exhibit B attached hereto (the "EMPLOYMENT AGREEMENT").
2.7 NON-COMPETITION AGREEMENT. At the Closing, Xxxxxxx Xxxxxx Xxxxxxxx
shall enter into a non-competition agreement with Buyer in substantially the
form of Exhibit C attached hereto (the "NON-COMPETITION AGREEMENT"). $10,000 of
the Business and Intangible Assets Purchase Price shall be allocated to the
non-compete covenant set forth in the Non-Competition Agreement.
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ARTICLE III
NEW VEHICLES; DEMONSTRATORS AND USED VEHICLES
3.1 NEW VEHICLES. At the Closing, Buyer shall purchase all of Seller's
untitled new 1999 and 1998 BMW automobiles and motorcycles in Seller's stock and
unsold by Seller as of the Closing Date and which are listed on Schedule 3.1
hereto, which Seller shall deliver to Buyer not more than three (3) days prior
to the Closing (all such BMW automobiles and motorcycles are collectively
referred to hereinafter as the "NEW VEHICLES"). The purchase price to be paid by
Buyer for each New Vehicle shall be the price at which the New Vehicle was
invoiced to Seller by the Manufacturer, as adjusted pursuant to this Article III
(the sum of all such amounts to be paid for New Vehicles as determined by this
Article III is herein referred to as the "NEW VEHICLE PURCHASE PRICE"). Schedule
3.1 shall set forth the model, invoice cost, and all other information necessary
to calculate the New Vehicle Purchase Price with respect to each New Vehicle
listed in such Schedule 3.1. At the Closing, Seller shall assign to Buyer,
without any additional consideration therefor, by appropriate documents
reasonably satisfactory to Buyer, all unfilled retail orders and deposits made
thereon. Any profits or proceeds derived from such unfilled retail orders shall
belong to Buyer. Notwithstanding the foregoing, however, Buyer agrees to refund
deposits for all retail buyer orders that are terminated for any reason
consistent with reasonable business practice of Seller as of the Closing.
3.2 DEMONSTRATORS. At the Closing, Buyer shall purchase all of Seller's
untitled 1999 and 1998 BMW automobiles and motorcycles in Seller's stock and
unsold by Seller as of the Closing Date which are used in the ordinary course of
business for the purpose of demonstration and that are listed on Schedule 3.2,
which Seller shall deliver to Buyer no more than three (3) days prior to the
Closing (all such BMW automobiles and motorcycles are collectively referred to
herein as the "DEMONSTRATORS"). For purposes of this Agreement, any motor
vehicle with more than 6,000 miles on its odometer shall be deemed to be "used"
rather than a "Demonstrator." The purchase price to be paid by Buyer for each
Demonstrator shall be the price at which the Demonstrator was invoiced to Seller
by the Manufacturer, as adjusted pursuant to this Article III, and as reduced by
an amount equal to ten cents ($.10) multiplied by the total mileage on such
odometer in excess of 1,000 miles (the sum of all such amounts to be paid for
Demonstrators hereunder is herein referred to as the "DEMONSTRATOR PURCHASE
PRICE"). Schedule 3.2 shall set forth each Demonstrator's model, invoice cost,
odometer reading and all other information necessary to calculate the
Demonstrator Purchase Price with respect to such Demonstrator.
3.3 ADJUSTMENT OF NEW VEHICLE AND DEMONSTRATOR PURCHASE PRICE. The
purchase price paid for each New Vehicle and each Demonstrator purchased under
this Article III shall be: (a) increased by the dealer cost (parts and labor) of
any equipment and accessories which have been installed by Seller; and (b)
decreased by (i) the dealer cost (parts and labor) of any equipment and
accessories which have been removed from such vehicles, and (ii) all paid or
unpaid rebates, discounts, holdback for dealer account and other factory
incentives (including without limitation rebates applied for and paid but not
earned, incentive monies claimed on pre-reported units and carryover allowances
on 1998 models), and (iii) all refundable advertising allowances, if any. Seller
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shall be entitled to retain all such rebates, discounts, holdback, factory
inventories, carryovers refundable advertising allowances, and incentive monies
claimed on pre-reported units and carryovers.
3.4 DAMAGED OR REPAIRED NEW VEHICLES AND DEMONSTRATORS. In the event any
New Vehicle or Demonstrator shall have been damaged prior to the Closing Date,
Seller and Buyer will attempt to agree on the cost to cover such repairs or some
other equitable reduction in value to reflect such condition, which amount shall
be deducted from the price to be paid for such New Vehicle or Demonstrator. In
the event Buyer and Seller cannot agree on the cost of repairs or the amount of
reduction, Buyer shall have no obligation to purchase, and Seller shall have no
obligation to sell, any such damaged New Vehicle or Demonstrator. With respect
to any New Vehicle or Demonstrator which shall have been damaged and repaired
prior to the Closing Date, Seller and Buyer will attempt to agree on an
adjustment to the price to reflect the decrease, if any, in the wholesale value
of such New Vehicle or Demonstrator resulting from such damage and repair, which
amount shall be deducted from the price to be paid for such New Vehicle or
Demonstrator. In the event Buyer and Seller cannot agree on such adjustment,
Buyer shall have no obligation to purchase, and Seller shall have no obligation
to sell, such New Vehicle or Demonstrator. Seller shall notify Buyer on or prior
to the Closing Date if any New Vehicles or Demonstrators shall have suffered any
damage which is not reflected on Schedules 3.1 and 3.2.
3.5 USED VEHICLES. Buyer shall have no obligation to purchase any
vehicle from Seller other than its obligation hereunder to purchase the New
Vehicles and the Demonstrators. Seller and Buyer shall perform an inventory of
Seller's motor vehicles (including motorcycles) that are not New Vehicles or
Demonstrators as of the Inventory Date and, in connection with such inventory,
Seller and Buyer shall attempt to assign a mutually agreed price to each such
vehicle owned by Seller as of the Closing Date. Any such vehicles as to which
Seller or Buyer are unable to agree upon a price as of the Closing Date shall
not be purchased by Buyer in connection herewith. Any such vehicles as to which
Seller and Buyer shall agree upon a price are collectively referred to herein as
the "USED VEHICLES" and shall be purchased by Buyer at the Closing. The sum of
all prices assigned to such Used Vehicles to be purchased by Buyer pursuant to
the terms of this Section 3.5 shall be referred to herein as the "USED VEHICLE
PURCHASE PRICE."
ARTICLE IV
PARTS/ACCESSORIES
4.1 THE INVENTORY. Buyer and Seller shall engage a mutually acceptable
third party engaged in the business of appraising, valuing and preparing
inventories for automobile dealerships (hereinafter referred to as the
"INVENTORY SERVICE") to prepare an inventory list (the "INVENTORY") of the Parts
(as defined in Section 4.3 below), as well as the Miscellaneous Inventories (as
defined in Section 5.1 below), owned by, and either used or held for use by,
Seller in the Business. The Inventory (insofar as it relates to Parts) shall be
posted to the Manufacturer's approved system of inventory control. The cost of
the Inventory shall be borne one-half by Buyer and one-half by
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Seller. Buyer shall have the right to deduct Seller's portion of such expense
from the consideration to be paid to Seller under the terms of this Agreement
and in such event shall promptly remit such sum directly to the Inventory
Service. The Inventory shall be completed by the Inventory Date. The Inventory
shall identify each Part and each item of Miscellaneous Inventory and its
purchase price.
4.2 RETURNABLE AND NONRETURNABLE PARTS AND ACCESSORIES. The Inventory
shall classify parts and accessories as "returnable" or "nonreturnable." For
purposes of this Agreement, the terms "returnable parts" and "returnable
accessories" shall describe and include only those new parts and new accessories
for vehicles which are listed (coded) in the latest current Master Parts Price
List Suggested List Prices and Dealer Prices, or other applicable similar price
lists, of the Manufacturer, with supplements or the equivalent in effect as of
the Inventory Date (the "MASTER PRICE LIST"), as returnable to the Manufacturer
at not less than the purchase price reflected in the Master Price List. The
purchase price for each "returnable part" and "returnable accessory" will be the
price listed in the Master Price List. All parts and accessories listed (coded)
in the Master Price List as non-returnable to the Manufacturer shall be
classified as "nonreturnable." The purchase price for each "nonreturnable" part
and accessory, of which type Seller has made no sales during the ninety (90) day
period prior to the Inventory Date, shall be sixty percent (60%) of the price
listed therefor in the Master Price List. The purchase price for each
"nonreturnable" part and accessory, of which type Seller has made retail sales
to one or more customers during the ninety (90) day period prior to the
Inventory Date, shall be one hundred percent (100%) of the price therefor listed
in the Master Price List. The purchase price for all "Jobber" and/or "NPN" parts
shall be equal to Seller's original cost of such parts. The purchase price for
all nuts, bolts and any other parts not addressed in this Section 4.2 shall
equal the fair market value thereof as determined by the Inventory Service.
4.3 PARTS; PARTS PURCHASE PRICE.
(a) At the Closing, Buyer shall purchase all parts and
accessories owned by Seller at the Closing Date and listed on the Inventory (the
"PARTS") provided, however, that Buyer shall not be obligated to purchase any
damaged parts or accessories, parts and accessories with component parts
missing, superseded or obsolete parts or accessories, or used parts or
accessories. Seller agrees that if parts and accessories that Buyer is not
obligated to purchase hereunder are not removed from the Real Property within
sixty (60) days after the Closing Date, they shall become the property of Buyer
without the payment of any consideration in addition to the consideration
otherwise provided herein. Buyer agrees to provide access to Seller for the
purpose of removing such property during such sixty (60) day period.
(b) The purchase price for the Parts will equal the value of such
items shown on the Inventory (the "PARTS PURCHASE PRICE").
4.4 PARTS RETURN PRIVILEGE. Seller shall assign to Buyer at Closing any
net parts return privileges under the Manufacturer's Parts Return Plans that may
have accrued to Seller prior to the Closing in respect of the Parts (and any
other special parts return authorizations in respect of the Parts which may have
been granted to Seller by the Manufacturer).
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ARTICLE V
MISCELLANEOUS INVENTORIES; WORK IN PROGRESS; FIXTURES
AND EQUIPMENT; LEASEHOLD IMPROVEMENTS.
5.1 MISCELLANEOUS INVENTORIES. At the Closing, Buyer shall purchase all
useable gas, oil and grease, all undercoat material and body materials in
unopened cans, drums or other unopened containers and such other miscellaneous
useable and saleable articles in unbroken lots which (i) are on the dealership
premises, (ii) are owned by Seller on the Closing Date, (iii) were purchased
during the thirty (30) day period prior to the Closing Date, and (iv) are
identified in the Inventory taken by the Inventory Service on the Inventory Date
(collectively referred to herein as the "MISCELLANEOUS INVENTORIES"). The
purchase price for the Miscellaneous Inventories shall be equal to the
replacement cost of the Miscellaneous Inventories as determined by the Inventory
Service and set forth on the Inventory (the sum of all prices of the
Miscellaneous Inventories pursuant to the terms of this Section 5.1 shall be
referred to herein as the "MISCELLANEOUS INVENTORIES PURCHASE PRICE").
5.2 MISCELLANEOUS ITEMS NOT INCLUDED IN THE INVENTORY. Buyer shall have
no obligation to purchase any such miscellaneous items that are not included in
the Miscellaneous Inventories. Seller agrees that any miscellaneous items that
are not included in the Miscellaneous Inventories and are not removed from the
Real Property within sixty (60) days after the Closing Date shall become the
property of Buyer without the payment of any consideration in addition to the
consideration otherwise provided herein. Buyer agrees to provide access to
Seller for the purpose of removing such property during such sixty (60) day
period.
5.3 WORK IN PROGRESS AND PREPAID EXPENSES.
(a) At the Closing, Buyer shall buy at Seller's actual cost for
parts and labor such shop labor and sublet repairs as Seller shall have caused
to be performed on any repair orders which are in process at the close of
business on the Closing Date for which there are adequate credit arrangements
(the "WORK IN PROGRESS") (the sum of all costs of Seller for the Work in
Progress pursuant to the terms of this Section 5.3(a) and the book value of all
Prepaid Expenses (as defined in Subsection 5.3(b) below) shall be referred to
herein as the "WORK IN PROGRESS AND PREPAID EXPENSES PURCHASE PRICE"). Buyer
shall complete such repair work and shall be entitled to the entire proceeds to
be collected for such services.
(b) At the Closing, Buyer shall purchase from Seller, at Seller's
book value therefor, all bona fide prepaid expenses of Seller with respect to
obligations to non-affiliated parties in the ordinary course of business, as set
forth in Schedule 5.3 hereto to be delivered to Buyer not later than five (5)
days prior to the Closing (the "PREPAID EXPENSES").
5.4 FIXTURES AND EQUIPMENT; LEASEHOLD IMPROVEMENTS. At the Closing,
Buyer shall purchase all leasehold improvements, fixtures, machinery, equipment
(including special tools and
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shop equipment), furniture and all signs and office equipment owned by Seller
and used or held for use in connection with the Business (but excluding the
Stockholder's office furniture) listed on Schedule 5.4 hereto, which Seller
shall deliver to Buyer not later than five (5) days prior to the Closing
(collectively referred to herein as the "FIXTURES AND EQUIPMENT"). The purchase
price for the Fixtures and Equipment shall be Seller's depreciated book value
thereof, as reflected in said Schedule 5.4 attached hereto (the "FIXTURES AND
EQUIPMENT PURCHASE PRICE").
5.5 MISCELLANEOUS ASSETS. At the Closing, and without payment of any
additional consideration (other than the assumption of liabilities, if any,
associated therewith), Buyer shall purchase all of Seller's (i) unused shop
repair orders, parts sales tickets, accounting forms, binders, office and shop
supplies and such shop reference manuals, parts reference catalogs,
non-accounting file copies for all sales of Seller for the three (3) years
preceding the Closing Date, (ii) copies of new and used car sales records and
specifically wholesale parts sales records, new and used parts sales records,
and service sales records for the three (3) years preceding the Closing Date,
(iii) product sales training material and reference books on hand as of the
Closing Date, (iv) customer and registration lists pertaining to the sale of
motor vehicles, service files, repair orders, owner follow-up lists and similar
records relating to the operation of the Business, (v) telephone numbers and
listings used by Seller in connection with the Business, (vi) names and
addresses of Seller's service customers and prospective purchasers, (vii) all
lawfully transferrable licenses and permits of the Business, (viii) Seller's
rights to the tradename "Global Imports," and any similar variation, and (ix)
rights under contracts, leases, and agreements included in the Liabilities (the
foregoing being collectively referred to herein as the "MISCELLANEOUS ASSETS").
5.6 CERTAIN RECORDS OF THE SELLER. Seller shall retain all corporate
records, financial records and correspondence which are not necessary for the
continued operation of the Business by Buyer.
5.7 WARRANTY OBLIGATIONS OF THE SELLER. To the extent that Seller may
have issued warranties on the vehicles sold by Seller on or prior to the Closing
Date, Buyer shall have no responsibility to perform any services required under
such warranties, unless authorized in writing by Seller accompanied by
arrangements in writing satisfactory to Buyer to assure Buyer of payment for all
work performed by Buyer, and, if such warranty services are so authorized by
Seller, Seller shall reimburse Buyer for all of Buyer's costs for parts and
labor in connection therewith at dealer cost for parts and labor. At the Closing
Date, Seller shall supply Buyer with a list to which such warranties and
guaranties, if any, are applicable, which list shall include the names of the
purchasers, the make and year model of the vehicles purchased and the date of
purchase. Seller shall also supply to Buyer at or prior to the Closing Date an
address for and a designation of the person who will be responsible for
authorizing Buyer to perform any services under such warranties, if any, issued
by Seller on vehicles sold by it on or prior to the Closing Date. Seller shall
reimburse Buyer promptly upon demand for all sums due or payable by Seller to
Buyer hereunder.
5.8 ACCOUNTS RECEIVABLE. Seller shall retain all accounts receivable
arising out of the operation of the Business by Seller prior to the Closing Date
and Buyer shall retain all accounts receivable arising out of sales and/or
services of the Business after the Closing Date. After the
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Closing Date, Buyer shall cooperate with Seller and shall use reasonable efforts
to assist Seller in Seller's efforts to collect Seller's accounts receivable for
a period of six (6) months after the Closing. Buyer shall accept payment of
Seller's accounts receivable, at no charge to Seller for a period of six (6)
months after the Closing, and shall forward to Seller, promptly upon receipt,
all the money so received on said accounts. Notwithstanding anything to the
contrary, Buyer shall have no responsibility to actually collect any of Seller's
accounts receivable.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller and the Stockholder as follows:
6.1 ORGANIZATION; POWER AND AUTHORITY; AUTHORIZATION. Buyer is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware, is duly qualified to do business and is in good
standing in every jurisdiction in which the nature of its business makes such
qualification necessary and has full corporate power and authority to own or use
the properties it purports to own and use and to carry on its business as now
being conducted. The Board of Directors of Buyer has duly approved this
Agreement, all other agreements, certificates and documents executed or to be
executed by Buyer in connection herewith, and the transactions contemplated
hereby and thereby. Buyer has full corporate power and authority to execute and
deliver this Agreement and all other agreements, certificates and documents
executed or to be executed by Buyer in connection herewith, to consummate the
transactions contemplated hereby and thereby and to perform its obligations
hereunder and thereunder. This Agreement, and all other agreements, certificates
and documents executed or to be executed by Buyer in connection herewith,
constitute or, when executed and delivered, will constitute legal, valid and
binding agreements of Buyer enforceable against Buyer in accordance with their
respective terms, except as may be otherwise limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws now or hereafter in effect affecting
creditors' rights generally and equitable relief may be subject to equitable
defenses and the discretion of any court before which any proceeding may be
brought.
6.2 NON-VIOLATION; CONSENTS. Except as set forth on Schedule 6.2
attached hereto, the execution and delivery of this Agreement, the consummation
of the transactions contemplated by this Agreement and compliance with the
provisions hereof do not and will not: (a) conflict with or violate any of the
provisions of Buyer's restated certificate of incorporation or by-laws, each as
amended, or any resolution of the Board of Directors or the stockholders of
Buyer, (b) violate any law, ordinance, rule or regulation or any judgment,
order, writ, injunction or decree or similar command of any court,
administrative or governmental agency or other body applicable to Buyer, (c)
violate or conflict with or result in a breach of, or constitute a default
under, any material instrument, agreement or indenture or any mortgage, deed of
trust or similar contract to which Buyer is a party or by which Buyer is bound
or affected, or (d) (other than clearance under the HSR Act, as defined in
Section 10.18 below) require the consent, authorization or approval of, or
notice to, or filing or registration with, any governmental body or authority,
or any other third party.
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6.3 LITIGATION. There are no actions, suits or proceedings pending, or,
to the knowledge of Buyer, threatened against or affecting Buyer which might
adversely affect the power or authority of Buyer to carry out the transactions
to be performed by it hereunder.
6.4 BROKER'S AND FINDER'S FEES. Buyer has not incurred any liability to
any broker, finder or agent or any other person or entity for any fees or
commissions with respect to the transactions contemplated by this Agreement,
other than for fees or expenses regarding Presidio Strategies (as more
specifically provided in a letter agreement between Presidio Strategies and
Buyer) and Buyer hereby agrees to assume all liability to Presidio Strategies,
as provided in such letter.
6.5 FINANCING. As of the date hereof and as of the Closing Date, Buyer
has and will have sufficient funds, or sources of financing available to it, to
enable it to perform its obligations at the Closing.
6.6 STOCK COMPONENT. All shares of the Common Stock or the Preferred
Stock to be furnished by Buyer to Seller as consideration under this Agreement,
as well as any of the Common Shares issuable upon conversion of any of the
Preferred Stock have been duly authorized and when issued in accordance with the
terms of this Agreement will be fully paid and nonassessable and will be
transferred and issued to Seller free and clear of all Encumbrances other than
any restriction on the resale of the Common Stock, the Preferred Stock or the
Common Shares imposed by applicable federal and state securities laws and
regulations.
6.7 CAPITALIZATION. The authorized capital stock of Buyer consists of:
(a) 3,000,000 shares of Preferred Stock, par value $0.10 per
share, of which 300,000 shares are designated Class A Convertible Preferred
Stock and are, in turn, divided into 100,000 shares of Series I (the "SERIES I
PREFERRED STOCK"), 100,000 shares of Series II (the "SERIES II PREFERRED STOCK")
and 100,000 shares of Series III (the "SERIES III PREFERRED STOCK"); as of
October 15, 1998, approximately 19,500 shares of Series I Preferred Stock are
issued and outstanding and/or are committed to be issued by Buyer, approximately
13,910 shares of Series II Preferred Stock are issued and outstanding and/or are
committed to be issued by Buyer, and approximately 31,248 shares of Series III
Preferred Stock are issued and outstanding and/or are committed to be issued by
Buyer;
(b) 50,000,000 shares of Class A Common Stock, par value $0.01
per share, of which 5,588,888 shares are issued and outstanding; and
(c) 15,000,000 shares of Class B Common Stock, par value $0.01
per share, of which 6,200,000 shares are issued and outstanding.
All outstanding capital stock of Buyer is duly authorized, validly issued, fully
paid and non assessable and has been issued in conformity with all applicable
federal and state securities laws.
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6.8 DELIVERY OF PUBLIC INFORMATION. Buyer has delivered to Seller copies
of (i) the Prospectus dated November 10, 1997 (the "PROSPECTUS"), (ii) Buyer's
Annual Report on Form 10-K for the Fiscal Year ended December 31, 1997, (iii)
Buyer's Quarterly Report on Form 10-Q for the three-month period ended March 31,
1998, June 30, 1998, and September 30, 1998 and (iv) any Current Reports on Form
8-K, filed in 1998, each in the form (excluding exhibits) filed with the SEC
(collectively, such Forms 10-K, 10-Q and 8-K being hereinafter referred to as
its "REPORTS"). Neither the Prospectus nor any of the Reports contained, at the
time of filing thereof with the SEC, any untrue statement of any material fact
or omitted to state a material fact required to be stated therein or necessary
to make the statements made therein, in light of the circumstances in which they
were made, not misleading.
6.9 LITIGATION. There are no actions, suits, claims, investigations or
legal or administrative or arbitration proceedings pending or, to Buyer's
knowledge, threatened or probable of assertion, against Buyer before any court,
governmental or administrative agency or other body relating to this Agreement
and/or the transactions contemplated hereby. Buyer is not now under any
judgment, order, writ, injunction, decree or other similar command of any court,
administrative agency or other governmental agency which relate to this
Agreement and/or the transactions contemplated hereby.
6.10 MISSTATEMENTS AND OMISSIONS. To the knowledge of Buyer, no
representation or warranty made by Buyer in this Agreement, and no statement
contained in any agreement, instrument, certificate or schedule furnished or to
be furnished by Buyer pursuant hereto, contains or will contain any untrue
statement of a material fact or omits or will omit to state a material fact
necessary in order to make such representation or warranty or such statement not
misleading.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF SELLER AND THE STOCKHOLDER
Seller and the Stockholder, jointly and severally, represent and warrant
to Buyer, as follows:
7.1 ORGANIZATION; POWER AND AUTHORITY; AUTHORIZATION. Seller is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Georgia, is duly qualified to do business and is in good
standing in every jurisdiction in which the nature of its business makes such
qualification necessary and has full corporate power and authority to own or use
the properties it purports to own and use and to carry on its business as now
being conducted. The Stockholder is the only person or entity owning shares of
Seller. Seller has full corporate power and authority to execute and deliver
this Agreement and all other agreements, certificates and documents executed or
to be executed by Seller in connection herewith, to consummate the transactions
contemplated hereby and thereby and to perform its obligations hereunder and
thereunder. This Agreement, and all other agreements, certificates and documents
executed or to be executed by Seller in connection herewith, have been duly
authorized by all necessary corporate action and constitute or, when executed
and delivered, will constitute legal, valid and binding
17
agreements of Seller enforceable against Seller in accordance with their
respective terms, except as may be otherwise limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws now or hereafter in effect affecting
creditors' rights generally and equitable relief may be subject to equitable
defenses and the discretion of any court before which any proceeding may be
brought. This Agreement, and all other agreements, certificates and documents
executed or to be executed by the Stockholder in connection herewith, constitute
or, when executed and delivered, will constitute legal, valid and binding
agreements of the Stockholder enforceable against the Stockholder in accordance
with their respective terms, except as may be otherwise limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws now or hereafter in
effect affecting creditors' rights generally and equitable relief may be subject
to equitable defenses and the discretion of any court before which any
proceeding may be brought. Seller has never operated the Business under any
tradenames other than the tradenames listed in Section 5.5.
7.2 NO VIOLATION; CONSENTS. Except as set forth in Schedule 7.2 attached
hereto, the execution and delivery of this Agreement, the consummation of the
transactions contemplated by this Agreement and compliance with the provisions
hereof do not and will not: (a) conflict with or violate any of the provisions
of Seller's Articles of Incorporation or Bylaws, each as amended, or any
resolution of the Directors of Seller, (b) violate any law, ordinance, rule or
regulation or any judgment, order, writ, injunction or decree or similar command
of any court, administrative or governmental agency or other body applicable to
any of Seller, the Assets, the Business or the Liabilities, (c) violate or
conflict with or result in a breach of, or constitute a default under, or an
event giving rise to a right of termination of, any Contract (as defined in
Section 7.10), any material instrument, agreement or indenture or any mortgage,
deed of trust or similar contract to which Seller or Stockholder is a party or
by which any of Seller, the Stockholder or any of the Assets are bound or
affected, (d) result in the creation or imposition of any Encumbrance upon any
of the Assets, or (e) require the consent, authorization or approval of, or
notice to, or filing or registration with, any governmental body or authority,
or any other third party (other than clearance under the HSR Act).
7.3 LITIGATION. Except as disclosed on Schedule 7.3 hereto, there are no
actions, suits or proceedings pending or, to the knowledge of Seller and the
Stockholder, threatened against Seller or Stockholder which might adversely
affect the power or authority of any of them to carry out the transactions to be
performed by such party hereunder. There are no actions, suits or proceedings
pending, or, to the knowledge of Seller and the Stockholder, threatened against
or affecting Seller, other than those adequately covered by insurance, and those
disclosed on Schedule 7.3 attached hereto, and none of the actions, suits or
proceedings described on Schedule 7.3, if determined adversely to Seller could
reasonably be expected to have, a material adverse effect upon the Assets or the
Liabilities or the business, prospects, properties, earnings, results of
operations or condition (financial or otherwise) of the Business.
7.4 TITLE TO ASSETS; ENCUMBRANCES. Except as disclosed on Schedule 7.4
attached hereto, Seller has good title to the Assets, free and clear of all
liens (including tax liens), security interests, encumbrances, actions, claims,
payments or demands of any kind and character (collectively, "ENCUMBRANCES"),
except Encumbrances disclosed on Schedule 7.4 hereto and Encumbrances for ad
valorem personal property taxes not yet due and payable. All of the Assets
18
to be transferred hereunder conform, as to condition and character, to the
descriptions of such Assets contained herein and will be transferred at the
Closing free and clear of all Encumbrances, except for Permitted Encumbrances
and the rights, if any, of third parties to use the name "Global Imports"
outside of the Atlanta Standard Metropolitan Statistical Area or to use such
name within such Standard Metropolitan Statistical Area in any business other
than an automobile dealership business. To the knowledge of Seller and the
Stockholder (i) no person uses the name "Global Imports" in the Atlanta Standard
Metropolitan Statistical Area, and (ii) the ownership and use of the Assets
(including, without limitation, Seller's use of the name "Global Imports"), and
the operation of the Business, do not infringe upon the intellectual property
rights of any other person or entity.
7.5 PERMITS AND APPROVALS. Except as disclosed on Schedule 7.5 attached
hereto, there are no material permits or material approvals used or obtained for
use by Seller which are required under applicable law in connection with the
ownership or operation of the Business.
7.6 FINANCIAL STATEMENTS. Seller has delivered to Buyer the financial
statements of Seller described in Schedule 7.6(a) attached hereto (the
"FINANCIAL STATEMENTS"). The Financial Statements (i) are in accordance with the
books and records of Seller, which books and records are true, correct and
complete, (ii) fully and fairly present the financial condition and results of
the operations of Seller as of and for the periods indicated, and (iii) have
been prepared in accordance with generally accepted accounting principles
consistently applied, except as set forth on Schedule 7.6(b). Seller has no
outstanding material claims, liabilities, obligations or indebtedness of any
nature, fixed or contingent, except as set forth in the Financial Statements, or
in the Schedules to this Agreement, and except for liabilities incurred in the
ordinary course of business and of the kind and type reflected in the Financial
Statements. To the knowledge of Seller and the Stockholder, the Financial
Statements contain adequate reserves for all reasonably anticipated claims
relating to matters with respect to which Seller is self-insured.
7.7 BROKERS AND FINDERS. Neither Seller nor Stockholder has engaged any
broker or any other person or entity who would be entitled to any brokerage
commission or finder's fee in respect of the execution of this Agreement and/or
the consummation of the transactions contemplated hereby, other than such fee or
commission the entire cost of which will be borne by Seller. This representation
and warranty does not apply to the fees of Presidio Strategies to the extent
such fees are specified in the letter agreement between Buyer and Presidio
Strategies referred to in Section 6.4 above.
7.8 COMPLIANCE WITH LAWS.
(a) Except as set forth on Schedule 7.8 (a) attached hereto, the
Assets and the Real Property comply in all material respects with, and the
Business has been conducted in all material respects in compliance with, all
laws, rules and regulations (including all worker safety and all Environmental
Laws (as hereinafter defined)) applicable zoning and other laws, ordinances,
regulations and building codes, and neither Seller nor the Stockholder have
received any notice of any material violation thereof which has not been
remedied.
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(b) Except as set forth on Schedule 7.8(b) attached hereto, (i)
Seller has not at any time generated, used, treated or stored Hazardous
Materials (as hereinafter defined) on, or transported Hazardous Materials to or
from, the Real Property or any property adjoining or adjacent to the Real
Property and, to the knowledge of Seller and the Stockholder, no party other
than Seller has taken such actions on or with respect to the Real Property,
provided, however, certain petroleum products are stored and handled by Seller
in the ordinary course of business in compliance in all material respects with
all Environmental Laws, (ii) Seller has not at any time released or disposed of
Hazardous Materials on the Real Property or any property adjoining or adjacent
to the Real Property, and, to the knowledge of Seller and the Stockholder, no
party other than Seller has taken any such actions on the Real Property, (iii)
Seller has at all times been in compliance with all Environmental Laws and the
requirements of any permits issued under such Environmental Laws with respect to
the Real Property, the Assets and the operation of the Business, except where
failure to comply has not had and could not reasonably be expected to have, a
material adverse effect on the Assets or the Liabilities or the prospects,
properties, earnings, results of operations or condition (financial or
otherwise) of the Business, (iv) there are no pending or, to the knowledge of
Seller and the Stockholder, threatened environmental claims against Seller, the
Real Property, the Assets or the Business, (v) to the knowledge of Seller and
the Stockholder, there are no facts or circumstances, conditions or occurrences
regarding Seller, the Real Property, the Assets or the Business that could
reasonably be anticipated to form the basis of an environmental claim against
Seller, the Real Property, the Assets or the Business or to cause the Real
Property, the Assets or the Business to be subject to any restrictions on its
ownership, occupancy, use or transferability under any environmental law, (vi)
there are not now and, to the knowledge of Seller and the Stockholder, there
never have been any underground storage tanks located on the Real Property,
(vii) Seller has not transported or arranged for the transportation of any
Hazardous Materials to any site other than the Real Property and (viii) except
as set forth on Schedule 7.8(b), neither Seller nor the Stockholder has operated
the Business at any location other than the Real Property. As used herein, the
term "ENVIRONMENTAL LAWS" means all present and future federal, state and local
laws, statutes, regulations, rules, ordinances and common law, and all
judgments, decrees, orders, agreements or permits, issued, promulgated, approved
or entered thereunder by any governmental authority relating to pollution or
Hazardous Materials or protection of human health or the environment, including,
but not limited to, the Comprehensive Environmental Response, Compensation and
Liability Act (CERCLA), as amended. As used herein, the term "HAZARDOUS
MATERIALS" means any waste, pollutant, chemical, hazardous substance, toxic
substance, hazardous waste, special waste, solid waste petroleum or
petroleum-derived substance or waste, or any constituent or decomposition
product of any such pollutant, material, substance or waste, regulated under or
as defined by any environmental law.
(c) Neither Seller nor the Stockholder or any director, officer,
agent or employee of Seller or, to the knowledge of Seller and the Stockholder,
any other person or entity associated with or acting for or on behalf of Seller,
has, directly or indirectly: made any contribution, gift, bribe, rebate, payoff,
influence payment, kickback, or other payment to any person or entity,
regardless of form, whether in money, property or services: (i) to obtain
favorable treatment in securing business, (ii) to pay for favorable treatment
for business secured or (iii) to obtain special concessions or for special
concessions already obtained, for or in respect of Seller.
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7.9 FIXTURES AND EQUIPMENT. Except as set forth on Schedule 7.9 attached
hereto, the Fixtures and Equipment are in good condition, ordinary wear and tear
excepted, and constitute all of the fixtures, machinery, equipment, furniture,
signs and office equipment used or intended for use by Seller in the Business.
All Demonstrators have been operated in the ordinary course of business, are
operated with dealer tags and have not had certificates of title issued with
respect to them.
7.10 CONTRACTS. Seller has in all material respects performed all of its
obligations required to be performed by it to the date hereof, and is not in
default or alleged to be in default in any material respect, under any contract
or lease to be assigned to Buyer hereunder (collectively, the "CONTRACTS"),
including without limitation the contracts and leases set forth on Part I of
Schedule 2.4 and there exists no event, condition or occurrence which, after
notice or lapse of time or both, would constitute such a default by Seller. To
the knowledge of Seller and the Stockholder, no other party to any Contract is
in default in any respect of any of its obligations thereunder. Each of the
Contracts is valid and in full force and effect and enforceable against Seller
in accordance with their respective terms, and, to the knowledge of Seller and
the Stockholder, enforceable against the other parties thereto in accordance
with their respective terms.
7.11 ADEQUACY OF ASSETS. Except for Seller's cash and accounts
receivable, any used vehicles, miscellaneous inventories or parts which Buyer
elects not to purchase, and Seller's rights under its dealership agreements with
the Manufacturer, the Assets, together with the Real Property and the Contracts
(including all equipment leased pursuant to the equipment leases included in the
Contracts), comprise all of the assets, properties, contracts, leases and rights
necessary for Buyer to operate the Business substantially in the manner operated
by Seller prior to the Closing.
7.12 TAXES. Except as set forth on Schedule 7.12, Seller has filed all
federal, state and local governmental tax returns required to be filed by it in
accordance with the provisions of law pertaining thereto and has paid all taxes
and assessments (including, without limitation of the foregoing, income, excise,
unemployment, social security, occupation, franchise, property and import taxes,
duties or charges and all penalties and interest in respect thereof) required by
such tax returns to have been paid to date.
7.13 EMPLOYEES. Schedule 7.13 attached hereto discloses, as of the date
hereof, all of Seller's employees, as well as each employee's compensation
(including, separately, base pay and any incentive or commission pay), title,
length of employment, employment contract, if any, and accrued vacation time.
Except as disclosed on Schedule 7.13, Seller has no "employee benefit plan"
("EMPLOYEE BENEFIT PLAN") (as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA")), including without
limitation, any bonus, deferred compensation, pension, profit-sharing, stock
option, employee stock purchase, secrecy agreement or covenant not to compete
with any employee. Seller is neither currently nor has ever been a party to any
collective bargaining agreement or other labor contract, and there has not been
nor is there pending or, to the knowledge of Seller and the Stockholder,
threatened any union organizational drive or application for certification of a
collective bargaining agent. Seller has been and is now in material compliance
with the "COBRA" health care continuation coverage requirements of Section 4980B
of the Internal Revenue Code of 1986, as amended, and Sections 601-608 of ERISA
and any
21
applicable state health care continuation coverage requirements. Seller has
neither made any promises nor incurred any liability, pursuant to an Employee
Benefit Plan or otherwise, to provide medical or other welfare benefits to
retired or former employees of the Seller (other than COBRA or state mandated
continuation coverage, where applicable). Except as disclosed on Schedule 7.13,
none of Seller's employees or former employees has elected COBRA continuation
coverage or has incurred a COBRA qualifying event since January 1, 1997.
7.14 [INTENTIONALLY LEFT BLANK]
7.15 MISSTATEMENTS AND OMISSIONS. No representation or warranty made by
Seller or the Stockholder in this Agreement, and no statement contained in any
agreement, instrument, certificate or schedule furnished or to be furnished by
Seller or the Stockholder pursuant hereto, contains or will contain any untrue
statement of a material fact or omits or will omit to state a material fact
necessary in order to make such representation or warranty or such statement not
misleading.
ARTICLE VIII
CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS
The obligations of Buyer to perform this Agreement at the Closing are
subject to the following conditions precedent which shall be fully satisfied at
or before the Closing, unless waived in writing by Buyer.
8.1 REPRESENTATIONS AND WARRANTIES. All of the representations and
warranties of Seller and the Stockholder herein contained shall be true and
correct in all material respects on and as of the Closing Date as if made on and
as of the Closing Date, and Buyer shall have received a certificate from the
Stockholder and a duly authorized officer of Seller, dated the Closing Date, to
such effect.
8.2 COMPLIANCE WITH AGREEMENTS. Each of the agreements or obligations
required by this Agreement to be performed or complied with by Seller or the
Stockholder at or before the Closing shall have been duly performed or complied
with in all material respects, and Buyer shall have received a certificate from
the Stockholder and a duly authorized officer of Seller, dated the Closing Date,
to such effect.
8.3 NO LITIGATION. No action, suit or proceeding shall have been
instituted by a governmental agency or any other third party to prohibit or
restrain the sale contemplated by this Agreement or otherwise challenge the
power and authority of the parties to enter into this Agreement or to carry out
their obligations hereunder or the legality or validity of the sale contemplated
by this Agreement.
8.4 INVENTORY. The Inventory shall have been completed to the reasonable
satisfaction of Buyer.
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8.5 CORPORATE ORGANIZATION; ENCUMBRANCES. Seller shall have furnished to
Buyer: (a) a certificate of good standing of Seller issued by the Secretary of
State of the State of Georgia dated no earlier than 15 business days prior to
the Closing Date; (b) a copy of the Articles of Incorporation of Seller
certified by the Secretary of State of the State of Georgia dated no earlier
than 15 business days prior to the Closing Date; (c) a certificate of Seller,
dated the Closing Date, in form and substance reasonably satisfactory to Buyer,
certifying as to (i) no amendments to the Articles of Incorporation of Seller
since the date of the certificate delivered in accordance with Section 8.5(b);
(ii) the Bylaws of Seller; and (iii) the incumbency and signatures of the
officers of Seller executing this Agreement and any other agreements,
instruments or documents to be executed by Seller in connection herewith; and
(d) UCC-11 search reports or other evidence reasonably satisfactory to Buyer and
its counsel that the Assets are free and clear of all Encumbrances other than
Permitted Encumbrances.
8.6 BOARD RESOLUTIONS. Seller shall have furnished to Buyer a copy of
the resolutions duly adopted by the Board of Directors and shareholders of
Seller authorizing the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby, certified by an authorized
officer of Seller as of the Closing Date.
8.7 NO DAMAGE. There shall have been no material adverse change or
development in the Assets, the Liabilities or in the prospects, properties,
earnings, results of operations or condition (financial or otherwise) of the
Business, and no event shall have occurred or circumstance shall exist that may,
or could reasonably be expected to, result in such a material adverse change.
8.8 MOTOR VEHICLE LICENSES. Buyer shall have been licensed as a Motor
Vehicle Dealer under applicable Georgia motor vehicle dealer registration laws
and shall have obtained all other authorizations, consents, licenses and permits
from applicable governmental agencies having or asserting jurisdiction, which
Buyer deems necessary or appropriate to conduct business as an automobile dealer
at each dealership location included in the Real Property.
8.9 CONSENTS AND APPROVALS. Seller shall have obtained all other
authorizations, consents and approvals from third persons and entities as are
(a) required to assign those material contracts and leases that Buyer is to
assume at Closing or (b) otherwise required of Seller to consummate the
transactions contemplated hereby.
8.10 CERTIFICATES OF ORIGIN; ETC. Seller shall have transferred to Buyer
certificates of title or origin for all New Vehicles, Demonstrators and, if
applicable, Used Vehicles and all of its registration lists, owner follow-up
lists and service files on hand as of the Closing Date with respect to the
Business.
8.11 TERMINATION OF SELLER'S AGREEMENT WITH MANUFACTURER. Seller shall
have terminated in writing Seller's dealer agreement and any other applicable
sales and service agreements with the Manufacturer.
8.12 XXXX OF SALE; ETC. Seller and the Stockholder shall have
executed, as appropriate, and
23
delivered to Buyer the Xxxx of Sale, other documents of transfer of title
contemplated hereby and any and all other documents necessary or desirable in
connection with the transfer of the Assets, which documents shall warrant title
to Buyer consistent with this Agreement and shall in all respects be in such
form as may be reasonably required by Buyer and its counsel.
8.13 MANUFACTURE APPROVAL. The Manufacturer shall have approved Buyer or
Buyer's affiliate as an authorized dealer of automobiles and motorcycles and O.
Xxxxxx Xxxxx or O. Xxxxxx Xxxxx'x designee, as the authorized Dealer Operator,
and the Manufacturer shall have executed a dealer agreement, and any other
applicable sales and service agreements, on terms reasonably satisfactory to
Buyer.
8.14 REAL PROPERTY PURCHASE AGREEMENT. All conditions to Buyer's
obligations under the Real Property Purchase Agreement shall have been satisfied
or fulfilled unless waived in writing by Buyer and the closing of such
transaction shall take place simultaneously with the Closing.
8.15 CHANGE OF NAMES. Seller shall have delivered to Buyer all
documents, including, without limitation, resolutions of the Board of Directors
and the Stockholder of Seller, necessary to effect a change of name of Seller
after the Closing to names other than the corporate name and trade names
referred to in Section 5.5 hereof or any variation thereof.
8.16 HSR ACT. All applicable waiting periods, if any, under the HSR Act
(as defined in Section 10.18 below) shall have expired without any indication by
the Antitrust Division (as defined in Section 10.18 below) or the FTC (as
defined in Section 10.18 below) that either of them intends to challenge the
transactions contemplated hereby or, if any such challenge or investigation is
made or commenced, there shall have occurred the conclusion of such challenge or
investigation which permits the transactions contemplated hereby in all material
respects.
8.17 EMPLOYMENT AGREEMENT. Xxxxxx Xxxxx Xxxxxxxx shall have executed and
delivered the Employment Agreement to Buyer.
8.18 NON-COMPETITION AGREEMENT. Seller and Xxxxxxx Xxxxxx Xxxxxxxx shall
have executed and delivered the Non-Competition Agreement to Buyer.
8.19 FINANCIAL STATEMENTS. Buyer shall have completed (at Buyer's
expense) preparation of such audited financial statements of Seller as may be
required by applicable regulations of the SEC or by Buyer's lenders.
ARTICLE IX
CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER AND THE STOCKHOLDER
The obligations of Seller and the Stockholder to perform this Agreement
at the Closing are subject to the following conditions precedent which shall be
fully satisfied at or before the Closing, unless waived in writing by Seller:
24
9.1 REPRESENTATIONS AND WARRANTIES. All of the representations and
warranties of Buyer herein contained shall be true and correct in all material
respects on and as of the Closing Date as if made on and as of the Closing Date,
and Seller shall have received a certificate from a duly authorized officer of
Buyer, dated the Closing Date, to such effect.
9.2 COMPLIANCE WITH AGREEMENTS. Each of the agreements or obligations
required by this Agreement to be performed or complied with by Buyer at or
before the Closing shall have been duly performed or complied with in all
material respects, and Seller shall have received a certificate from a duly
authorized officer of Buyer, dated the Closing Date, to such effect.
9.3 NO LITIGATION. No action, suit or proceeding shall have been
instituted by a governmental agency or any third party to prohibit or restrain
the sale contemplated by this Agreement or otherwise challenge the power and
authority of the parties to enter into this Agreement or to carry out their
obligations hereunder or the legality or validity of the sale contemplated by
this Agreement.
9.4 INVENTORY. The Inventory shall have been completed to the reasonable
satisfaction of Seller.
9.5 CORPORATE ORGANIZATION; BOARD RESOLUTIONS. Buyer shall have
furnished to Seller and the Stockholder: (a) a certificate of good standing of
Buyer issued by the Secretary of State of the State of Delaware dated no earlier
than 15 business days prior to the Closing Date; (b) a copy of the Articles of
Incorporation of Buyer, certified by the Secretary of State of the State of
Delaware dated no earlier than 15 business days prior to the Closing Date; (c) a
certificate of Buyer, dated the Closing Date, in form and substance reasonably
satisfactory to Seller, certifying as to (i) no amendments to the Articles of
Incorporation of Buyer since the date of the certificate delivered in accordance
with Section 9.5(b); (ii) the Bylaws of Buyer; and (iii) the incumbency and
signatures of the officers of Buyer executing this Agreement and any other
agreements, instruments or documents to be executed by Buyer in connection
herewith; and (d) a copy of the resolutions duly adopted by the Board of
Directors of Buyer authorizing the execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby, certified by an
officer of Buyer as of the Closing Date.
9.6 INITIAL PURCHASE PRICE. Buyer shall have tendered to Seller the
Initial Purchase Price in accordance with Section 2.2 and shall have executed
and delivered the Assumption Agreement to Seller.
9.7 REAL PROPERTY PURCHASE AGREEMENT. All conditions to the obligations
of the Owner under the Real Property Purchase Agreement shall have been
satisfied or fulfilled, unless waived in writing by the Owner and the closing of
such transaction shall take place simultaneously with the Closing.
9.8 BOARD RESOLUTIONS. Buyer shall have furnished to Seller a copy
of the resolutions duly adopted by the Board of Directors of Buyer authorizing
the execution and delivery of this
25
Agreement and the consummation of the transactions contemplated hereby,
certified by an authorized officer of Buyer as of the Closing Date.
9.9 HSR ACT. All applicable waiting periods, if any, under the HSR Act
shall have expired without any indication of the Antitrust Division or the
Federal Trade Commission that either of them intends to challenge the
transactions contemplated hereby, or, if any such challenge or investigation is
made or commenced, there shall have occurred the conclusion of such challenge or
investigation which permits the transactions contemplated hereby in all material
respects.
9.10 EMPLOYMENT AGREEMENT. Buyer shall have executed and delivered the
Employment Agreement to Xxxxxx Xxxxx Xxxxxxxx.
9.11 MOTOR VEHICLE LICENSES. Buyer shall have been licensed as a Motor
Vehicle Dealer as contemplated by Section 8.8.
9.12 MANUFACTURER APPROVAL. Buyer shall have obtained Manufacturer
approval as contemplated by Section 8.13.
9.13 CONSENTS & APPROVALS. Seller shall have obtained all
authorizations, consents and approvals as are (a) required to assign those
contracts and leases that Buyer is assuming at Closing or (b) otherwise required
of Seller to consummate the transactions contemplated hereby; provided, however,
that, with respect to any such authorization, consent or approval not obtained,
the obtaining thereof shall not be a condition pursuant to this Section 9.13 if
Buyer elects to waive in writing the requirement that such authorization,
consent or approval be obtained; in such event, Buyer shall have no claim for
liability against Seller or the Stockholder for failing to obtain such
authorization, consent or approval and such waiver shall constitute Buyer's
agreement that any such contract or lease requiring such authorization, consent
or approval shall be included in the Liabilities, notwithstanding the failure to
obtain such authorization, consent or approval.
9.14 LIABILITIES. Buyer shall have agreed to assume Seller's obligations
under all contracts and agreements entered into by Seller in the ordinary course
of business between the date hereof and the Closing and which relate to the
Business; provided, however, that Buyer shall not be obligated to assume any
such contract or agreement which involves the payment of more than $50,000
during the life of such contract or agreement unless Buyer shall have given its
written consent thereto prior to Seller's entering into such contract or
agreement.
ARTICLE X
COVENANTS AND AGREEMENTS
10.1 ADDITIONAL INFORMATION. Seller and Buyer shall each furnish to the
other such additional information with respect to any matters or events arising
or discovered subsequent to the date hereof which, if existing or known on the
date hereof, would have rendered any representation
26
or warranty made by Seller or Buyer, as the case may be, or any information
contained in any Schedule hereto or any other information supplied in connection
herewith by Seller or Buyer, as the case may be, then inaccurate or incomplete.
The receipt of such additional information by Buyer or Seller, as the case may
be, shall not operate as a waiver by Buyer or Seller, as the case may be, of the
obligation of Seller or Buyer, as the case may be, to satisfy the conditions to
Closing set forth in Section 8.1 or Section 9.1, as the case may be, hereof;
provided, however, if such information shall be furnished to Buyer or Seller, as
the case may be, in a writing which shall also specifically refer to one or more
representations and warranties of Seller or Buyer, as the case may be, contained
herein which in the absence of such information is inaccurate or incomplete,
then if Buyer or Seller, as the case may be, waives the condition to Closing set
forth in Section 8.1 or Section 9.1, as the case may be, hereof and elects to
close the transactions contemplated hereunder, the furnishing of such additional
information shall be deemed to have amended as of the Closing any such
representation and warranty so specifically referred to by Seller or Buyer, as
the case may be.
10.2 FURTHER ASSURANCES. Seller and the Stockholder agree that they
will, at any time and from time to time, after the Closing, upon request of
Buyer, do, execute, acknowledge and deliver all such further acts, deeds,
assignments, transfers, conveyances, powers of attorney and assurances, in a
form reasonably satisfactory to Buyer's counsel, as may be reasonably required
to convey and transfer to and vest in Buyer, and protect its rights, title and
interest in and enjoyment of, all the Assets.
10.3 SATISFACTION OF CLOSING CONDITIONS. The parties hereto shall use
their reasonable best efforts to obtain, and to cooperate with each other in
obtaining, at or prior to the Closing, all authorizations, approvals, licenses,
permits and other consents contemplated by Articles VIII and IX, and otherwise
shall use their reasonable best efforts to cause the conditions to their
obligations at Closing, insofar as such conditions are within their control, to
be satisfied at or prior to the Closing.
10.4 NO MATERIAL ADVERSE CHANGES. During the period from the date of
this Agreement through the Closing Date, Seller will operate the Business only
in the ordinary course of business and in accordance with past practices. Seller
shall promptly notify Buyer of any material adverse change or development in the
Assets, the Liabilities or in the prospects, properties, earnings, results of
operations or condition (financial or otherwise) of the Business, and of the
occurrence of any event or circumstance that will, or could reasonably be
expected to, result in such a material adverse change.
10.5 ACCESS; ENVIRONMENTAL AUDIT. Until the Closing Seller shall afford
to Buyer, its attorneys, accountants and such other representatives of Buyer as
Buyer shall designate to Seller, free and full access at all reasonable times,
and upon reasonable prior notice, to the Assets and the properties, books and
records of Seller, and to interview personnel, suppliers and customers of
Seller, in order that Buyer may have full opportunity to make such due diligence
investigation as it shall reasonably desire of the Assets, the Liabilities and
the Business. Seller and the Stockholder shall, promptly after the date hereof,
furnish to Buyer the due diligence materials set forth in Schedule 10.5 hereto.
Seller shall allow an environmental consulting firm selected by Buyer (the
27
"ENVIRONMENTAL AUDITOR") to have prompt access to the Real Property in order to
conduct an environmental investigation satisfactory to Buyer in scope and
reasonably acceptable to Seller (such scope being sufficient to result in a
Phase I environmental audit report and a Phase II environmental audit report, if
desired by Buyer) of, and to prepare a report with respect to, the Real Property
(the "ENVIRONMENTAL AUDIT"). Seller shall provide to the Environmental Auditor:
(a) reasonable access to all of its existing records concerning the matters
which are the subject of the Environmental Audit; and (b) reasonable access to
the employees of Seller and the last known addresses of former employees of
Seller who are most familiar with the matters which are the subject of the
Environmental Audit (Seller agreeing to use reasonable efforts to have such
former employees respond to any reasonable requests or inquiries by the
Environmental Auditor). The Environmental Auditor shall coordinate all visits to
the Real Property and conversations with employees of Seller with the
Stockholder or his designee and shall use reasonable efforts to minimize any
disruption of Seller's business in performing such investigations. Seller shall
otherwise cooperate with the Environmental Auditor in connection with the
Environmental Audit. Buyer and Seller shall each bear 50% of the costs, fees and
expenses in connection with the Environmental Audit. Buyer shall bear 100% of
the costs, fees and expenses in connection with any financial audit.
10.6 INDEMNIFICATION BY SELLER AND STOCKHOLDER. All representations and
warranties of Seller and the Stockholder contained herein, or in any agreement,
certificate or document executed by Seller or the Stockholder in connection
herewith, shall survive the Closing for a period of two years, except for the
representations and warranties contained in Section 7.12, which shall survive
the Closing for the applicable tax statutes of limitation plus 60 days, and the
representations and warranties contained in Section 7.4 which shall survive for
the applicable statute of limitations for the breach thereof. The foregoing
limitations of survival shall not in any way reduce Seller's obligations with
respect to the Retained Liabilities. All information contained in Schedules 3.1,
3.2, 5.3 and 5.4 furnished hereunder by Seller shall be deemed a representation
and warranty by Seller and the Stockholder made in this Agreement as to the
accuracy of such information. Subject to the provisions of this Agreement,
Seller and the Stockholder, jointly and severally, agree to indemnify and hold
harmless Buyer and its stockholders, officers, directors, employees and agents,
and their respective successors and assignees (the "SELLER INDEMNITEES"), from
and against any and all losses, damages, liabilities, obligations, assessments,
suits, actions, proceedings, claims or demands, including costs, expenses and
fees (including reasonable attorneys' fees and expert witness fees)
(collectively, "LOSSES") incurred in connection therewith, suffered by any of
them or asserted against any of them or the Assets, arising out of or based upon
(a) the breach or failure of any representation or warranty of Seller or the
Stockholder contained herein, or in any agreement, certificate or document
executed by Seller or the Stockholder in connection herewith, to be true and
correct, (b) the breach of any covenant or agreement of Seller or the
Stockholder contained in this Agreement, (c) Seller's failure to discharge the
Retained Liabilities, (d) the parties' failure to comply with applicable bulk
sales laws, or (e) any arrangements or agreements made or alleged to have been
made by Seller or the Stockholder with any broker, finder or other agent in
connection with the transactions contemplated hereby (except as with regard to
Buyer's obligations to Presidio Strategies referred to in Section 6.4 above).
10.7 INDEMNIFICATION BY BUYER. All representations and warranties
of Buyer contained
28
herein, or in any agreement, certificate or document executed by Buyer in
connection herewith, shall survive the Closing for a period of two years except
for the representations and warranties in Section 6.6 which shall survive for
the applicable statute of limitations. The foregoing limitation of survival
shall not in any way reduce Buyer's obligations with respect to the Liabilities.
Buyer agrees to indemnify and hold harmless Seller, the Stockholder, and
Seller's officers, directors, employees, agents, and their respective heirs
and/or personal representatives, as the case may be, and successors and assigns
(the "BUYER INDEMNITEES"), from and against any and all Losses incurred in
connection with, suffered by any of them, or asserted against any of them,
arising out of or based upon (a) the breach or failure of any representation or
warranty of Buyer contained herein, or in any agreement, certificate or document
executed by Buyer in connection herewith, to be true and correct, (b) the breach
of any covenant or agreement of Buyer contained in this Agreement, (c) Buyer's
failure to discharge the Liabilities, or (d) any arrangements or agreements made
or alleged to have been made by Buyer with any broker, finder or other agent in
connection with the transactions contemplated hereby.
10.8 INDEMNIFICATION PROCEDURES. If any party to this Agreement becomes
aware of or receives notice of any third party claim or the commencement of any
third party action or proceeding with respect to which another party (the
"INDEMNITOR") is obligated to provide indemnification under this Article X, the
party entitled to indemnification (the "INDEMNITEE") shall promptly give the
Indemnitor notice thereof. Such notice shall not be a condition precedent to any
liability of the Indemnitor under the provisions for indemnification contained
in this Agreement, unless (and only to the extent that) failure to give such
notice materially prejudices the rights of the Indemnitor with respect to such
claims, actions, or proceedings. The Indemnitor may compromise or defend, at the
Indemnitor's own expense, and by the Indemnitor's own counsel, any such matter
involving the asserted liability of the Indemnitee; provided, however, that no
compromise or settlement thereof may be effected by the Indemnitor without the
Indemnitee's prior written consent (which shall in any event not be unreasonably
withheld or delayed); and further provided that an Indemnitor may not undertake
the defense of any such third party claim (including any compromise or
settlement thereof) unless (i) the claim is solely for monetary damages, and
(ii) the Indemnitor confirms in writing to the Indemnitee, prior to undertaking
such defense or prior to making such compromise or settlement, that the matter
is indemnifiable by the Indemnitor. If the Indemnitor elects not to compromise
or defend such matter, then the Indemnitee, at the Indemnitor's expense and by
the Indemnitee's own counsel, may defend such matter, but regardless of whether
or not the Indemnitor elects to assume the defense of any such matter the
Indemnitee may not compromise the defense thereof without the prior written
consent of the Indemnitor, which consent shall not be unreasonably withheld or
delayed. In any event, the Indemnitee, the Indemnitor and the Indemnitor's
counsel (and, if applicable, the Indemnitee's counsel) shall cooperate in the
compromise of, or the defense against, any such asserted liability. If the
Indemnitor chooses to defend any claim, the Indemnitee shall make available to
the Indemnitor any books, records, or other documents within its control that
are reasonably necessary or appropriate for such defense. The foregoing
indemnity procedures shall not be read as a limitation on either party's right
to seek indemnification under this Article X for matters other than third party
initiated claims or demands.
10.9 PAYMENT. The Indemnitor shall promptly pay the Indemnitee any
amount due under
29
this Article X, which payment may be accomplished in whole or in part, at the
option of the Indemnitee, by the Indemnitee setting off against any amount owed
to any Indemnitor by the Indemnitee. To the extent set-off is made by an
Indemnitee in satisfaction or partial satisfaction of an indemnity obligation
under this Article X that is disputed by the Indemnitor, upon a subsequent
determination by final judgment not subject to appeal that all or a portion of
such indemnity obligation was not owed to the Indemnitee, the Indemnitee shall
pay the Indemnitor the amount which was set off and not owed together with
interest from the date of set-off until the date of such payment at an annual
rate equal to the Buyer's floor plan financing rate as in effect from time to
time. Upon judgment, determination, settlement or compromise of any third party
claim, the Indemnitor shall pay promptly on behalf of the Indemnitee, and/or to
the Indemnitee in reimbursement of any amount theretofore required to be paid by
it, the amount so determined by judgment, determination, settlement or
compromise and all other claims of the Indemnitee with respect thereto, unless
in the case of a judgment an appeal is made from the judgment. If the Indemnitor
desires to appeal from an adverse judgment, then the Indemnitor shall post and
pay the cost of the security or bond to stay execution of the judgment pending
appeal. Upon the payment in full by the Indemnitor of such amounts, the
Indemnitor shall succeed to the rights of such Indemnitee, to the extent not
waived in settlement, against the third party who made such third party claim,
but shall continue to defend and indemnify the Indemnitee in any subsequent
proceedings against such third party.
10.10 LIMITATIONS ON INDEMNIFICATION.
(a) Notwithstanding anything herein to the contrary, but subject
to paragraph (c) below, the aggregate liability of Seller and the Stockholder
under Section 10.6 to all Seller Indemnitees shall not exceed the Purchase
Price.
(b) No Indemnitee pursuant to Section 10.6 or 10.7, as the case
may be, shall be entitled to any recovery for any Losses suffered by such
Indemnitee as a result of a breach of a representation and warranty hereunder by
the Indemnitor, unless and until the aggregate amount of all Losses suffered by
such Indemnitee as a result of all breaches of representations and warranties
hereunder by the Indemnitor exceeds $100,000 (the "BASKET"), in which event the
Losses may be claimed, but only to the extent that they exceed the Basket. For
purposes of this Section, the Seller Indemnitees shall be considered as one
Indemnitee and the Buyer Indemnitees shall be considered as one Indemnitee.
(c) Absent a showing of fraud by a party, and assuming the
Closing has occurred, the obligation of a party under this Article X shall be
the sole remedy of any other party against such party for monetary damages for
breach of any representation or warranty or covenant contained in this
Agreement. Nothing herein shall limit a party's right to seek injunctive or
other equitable relief in connection with the enforcement of this Agreement.
10.11 CERTAIN TAXES. Personal property, use and intangible taxes and
assessments and utility charges with respect to the Assets shall be prorated on
a per diem basis and apportioned
30
between Seller and Buyer as of the date of the Closing. Seller shall be liable
for that portion of such taxes and assessments relating to, or arising in
respect of, periods on or prior to the Closing Date, and Buyer shall be liable
for that portion of such taxes and assessments relating to, or arising in
respect of, any period after the Closing Date. Any taxes attributable to the
sale or transfer of the Assets to Buyer hereunder shall be paid by Seller.
10.12 NO PUBLICITY. Except as may be required by law or the rules of the
New York Stock Exchange or as necessary in connection with the transactions
contemplated hereby, no party hereto shall (a) make any press release or other
public announcement relating to this Agreement or the transactions contemplated
hereby, without the prior approval of the other parties hereto or (b) otherwise
disclose the existence and nature of the transactions contemplated hereby to any
person or entity other than such party's accountants, attorneys, agents and
representatives, all of whom shall be subject to this nondisclosure obligation
as agents of such party. The parties shall cooperate with each other in the
preparation and dissemination of any public announcements of the transactions
contemplated by this Agreement.
10.13 NO NEGOTIATIONS OR DISCUSSIONS. Neither Seller nor the Stockholder
shall, directly or indirectly, at any time on or prior to the Closing Date or
termination of this Agreement (as provided herein), pursue, initiate, encourage
or engage in, any negotiations or discussions with, or provide any information
to, any person or entity (other than Buyer and its representatives and
affiliates) regarding the sale or possible sale to any such person or entity of
any of the Assets or capital stock of Seller or any merger or consolidation or
similar transaction involving Seller.
10.14 MANUFACTURER. Seller shall promptly notify the Manufacturer
regarding the transactions contemplated by this Agreement. Buyer shall promptly
apply to the Manufacturer for, or cause an affiliate of Buyer to apply to the
Manufacturer for, the issuance of franchises to operate automobile dealerships
upon the Real Property. Effective as of the Closing, Seller shall terminate its
Dealer Sales and Service Agreements with the Manufacturer. Seller shall fully
cooperate with Buyer, and take all reasonable steps to assist Buyer, in Buyer's
efforts to obtain its own similar Dealer Sales and Service Agreements with the
Manufacturer. The parties acknowledge that Buyer's Dealer Agreements are subject
to the approval of the Manufacturer and that Buyer would be unable to obtain its
own, similar Dealer Sales and Service Agreements absent Seller's termination of
its agreements.
10.15 SELLER'S EMPLOYEES. Buyer shall have the right, but not the
obligation, to employ any or all of Seller's employees; provided, however, Buyer
agrees to offer employment to a sufficient number of Seller's employees to avoid
triggering any notice requirements under the Worker Adjustment Retraining
Notification Act, 29 U.S.C. ss. 2101 et seq. If permitted by law and applicable
regulations, Seller shall, in consideration for the sale of substantially all of
such Seller's assets in bulk, assign and transfer to Buyer, without additional
charge therefor, the amount of reserve in such Seller's State Unemployment
Compensation Fund with respect to the Subject Business and the corresponding
experience rate.
10.16 TERMINATION
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(a) Notwithstanding any other provision herein contained to the
contrary, this Agreement may be terminated at any time prior to the Closing:
(i) by the written mutual consent of the parties hereto
prior to the Closing Date Deadline;
(ii) by Buyer prior to the Closing Date Deadline in the
event of any breach by Seller or the Stockholder of any of their respective
material representations, warranties, covenants or agreements contained herein;
(iii) by Seller prior to the Closing Date Deadline in the
event of any breach by Buyer of any of Buyer's material representations,
warranties, covenants or agreements contained herein;
(iv) at any time after the Closing Date Deadline, by
written notice by Buyer or Seller (subject to Buyer's option to elect to extend
the Closing Date Deadline in accordance with Section 1.3) to the other parties
hereto if the Closing shall not have occurred on or before the Closing Date
Deadline (as the same may have been extended in accordance with Section 1.3);
(v) by Buyer, not later than January 11, 1999 if Buyer is
not satisfied, in its sole discretion, with the results of its due diligence
investigation; provided, however, if Seller has not complied in all material
respects with its obligations under Section 10.5 by December 5, 1998, such
January 4, 1999 date shall be extended by one day for each day after December 5,
1998 until Seller has so complied.
(vi) by Buyer, by written notice to Seller, or by Seller
by written notice to Buyer in the event that the Manufacturer, or any other
person claiming by, through or under the Manufacturer, shall exercise any right
of first refusal, preemptive right or other similar right, with respect to any
of the Assets; or
(vii) by Buyer, by written notice to Seller if, after any
initial HSR Act filing, the FTC makes a "second request" for information, or if
the FTC or the Antitrust Division challenges the transactions contemplated
hereby;
provided, however, no party may terminate this Agreement pursuant to clauses
(ii), (iii), or (iv) above if such party is in breach of any of its material
representations, warranties, covenants or agreements contained herein.
(b) In the event of termination of this Agreement pursuant to
Section 10.16(a), this Agreement shall be of no further force or effect;
provided, however, that any termination pursuant to Section 10.16(a) shall not
relieve: (i) Buyer of any liability under Section 10.16(c) below; (ii) Seller
and the Stockholder of any liability under Section 2.5 above or Section 10.16(d)
below; or (iii) subject to Section 10.16(e) below, any party hereto of any
liability for breach of any
32
representation, warranty, covenant or agreement hereunder occurring prior to
such termination.
(c) If this Agreement is terminated by Seller pursuant to Section
10.16(a)(iv) hereof and the failure to complete the Closing on or before the
Closing Date Deadline (as the same may have been extended pursuant to Section
1.3) shall have been due to the Buyer's breach of its material representations,
warranties, covenants or agreements under this Agreement, then Buyer shall, upon
demand of Seller, promptly pay to Seller in immediately available funds, as
liquidated damages for the loss of the transaction, a termination fee of
$2,000,000 (the "BUYER TERMINATION FEE").
(d) If this Agreement is terminated by Buyer pursuant to Section
10.16(a)(iv) hereof and the failure to complete the Closing on or before the
Closing Date Deadline (as the same may have been extended pursuant to Section
1.3) shall have been due to the Stockholder's or Seller's breach of any of their
respective material representations, warranties, covenants or agreements under
this Agreement, then Seller and the Stockholder, jointly and severally, shall,
upon demand of Buyer, promptly pay to Buyer in immediately available funds, as
liquidated damages for the loss of the transaction, a termination fee of
$2,000,000 (the "SELLER TERMINATION FEE").
(e) In the case of termination of this Agreement pursuant to
Section 10.16(a)(iv) hereof, the rights of the terminating party to be paid the
Seller Termination Fee or the Buyer Termination Fee, as the case may be, shall
be such party's sole and exclusive remedy for damages; in the event of such
termination by either party, such party shall have no right to equitable relief
for any breach or alleged breach of this Agreement, other than for specific
performance for the payment of the Seller Termination Fee or the Buyer
Termination Fee, as the case may be. Nothing contained in this Agreement shall
prevent any party from electing not to exercise any right it may have to
terminate this Agreement and, instead, seeking any equitable relief (including
specific performance) to which it would otherwise be entitled in the event of
breach of any other party hereto.
(f) Seller and the Stockholder acknowledge and agree that Buyer's
due diligence investigation of Seller and the Business, including without
limitation, its review of the Schedules attached hereto and the information and
documentation received from Seller, shall not constitute a waiver of, or
otherwise modify, Buyer's right to terminate this Agreement under Section
10.16(a)(v) hereof.
10.17 REAL PROPERTY PURCHASE AGREEMENT. The parties hereto acknowledge
and agree that the consummation of the transactions contemplated by this
Agreement is subject to the consummation of the transactions contemplated by the
Real Property Purchase Agreement, and the parties intend that the closings of
both such transactions shall occur contemporaneously.
10.18 HSR ACT. Subject to the mutual determination by Buyer and Seller
that compliance by Seller and Buyer with the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended (the "HSR ACT"), is not required, Seller
and Buyer shall each prepare and file with the Federal Trade Commission (the
"FTC") and the Antitrust Division of the Department of Justice (the "ANTITRUST
DIVISION"), and respond as promptly as practicable to all inquiries received
from the FTC or the
33
Antitrust Division for additional information or documentation. Buyer shall pay
any HSR Act filing fee. The parties shall request early termination of the
applicable waiting period.
ARTICLE XI
MISCELLANEOUS
11.1 ASSIGNMENT. Except as provided in this Section, this Agreement
shall not be assignable by any party hereto without the prior written consent of
the other parties. Buyer may assign this Agreement, without the consent of the
other parties hereto, to a corporation, partnership, limited liability company
or other entity controlled by Buyer, including a corporation, partnership,
limited liability company or other entity to be formed at any time prior to the
Closing Date, and to any person or entity who shall acquire all or substantially
all of the assets of Buyer or of such corporation, partnership, limited
liability company or other entity, controlled by Buyer (including any such
acquisition by merger or consolidation); provided said assignment shall be in
writing and the assignee shall assume all obligations of Buyer hereunder,
whereupon the assignee shall be substituted in lieu of Buyer named herein for
all purposes, provided, however, that Buyer originally named herein shall
continue to be liable with respect to its obligations hereunder. Buyer may
assign this Agreement, without the consent of the other parties hereto, as
collateral security, and the other parties hereto agree to execute and deliver
any acknowledgment of such assignment by Buyer as may be required by any lender
to Buyer. No provision of this Agreement, including this Section 11.1, shall be
construed to limit the right of Seller or Stockholder to assign any of his or
its rights under this Agreement, including, without limitation, all rights to
indemnification under Article X, at any time after Closing; provided, however,
that no such assignment shall be construed as relieving Seller or Stockholder of
any obligations under this Agreement.
11.2 GOVERNING LAW. The interpretation and construction of this
Agreement, and all matters relating hereto, shall be governed by the laws of the
State of Georgia.
11.3 ACCOUNTING MATTERS. Except as specifically contemplated by this
Agreement, all accounting matters required or contemplated by this Agreement
shall be in accordance with generally accepted accounting principles.
11.4 FEES & EXPENSES. Except as otherwise specifically provided in this
Agreement, each of the parties hereto shall be responsible for the payment of
such party's fees, costs and expenses incurred in connection with the
negotiation and consummation of the transactions contemplated hereby.
11.5 AMENDMENTS; MERGER CLAUSE. This Agreement, including the schedules
and other documents referred to herein which form a part hereof, contains the
entire understanding of the parties hereto with respect to the subject matter
contained herein and therein. This Agreement may not be amended except by a
writing executed by all of the parties hereto. This Agreement supersedes all
prior agreements and understandings between the parties with respect to such
subject
34
matter.
11.6 WAIVER. To the extent permitted by applicable law, no claim or
right arising out of this Agreement or the documents referred to in this
Agreement can be discharged by one party, in whole or in part, by a waiver or
renunciation of the claim or right unless in writing signed by the other party.
Any waiver by a party hereto of a breach of any provision of this Agreement
shall not operate or be construed as a waiver of any subsequent breach of such
provision or any other provision of this Agreement. Neither the failure nor any
delay by any party hereto in exercising any right or power under this Agreement
or the documents referred to in this Agreement will operate as a waiver of such
right or power, and no single or partial exercise of any such right or power
will preclude any other or further exercise of such right or power or the
exercise of any other right or power.
11.7 NOTICES. All notices, claims, certificates, requests, demands and
other communications hereunder shall be given in writing and shall be delivered
personally or sent by facsimile or by a nationally recognized overnight courier,
postage prepaid, and shall be deemed to have been duly given when so delivered
personally or by confirmed facsimile or one (1) business day after the date of
deposit with such nationally recognized overnight courier. All such notices,
claims, certificates, requests, demands and other communications shall be
addressed to the respective parties at the addresses set forth below or to such
other address as the person to whom notice is to be given may have furnished to
the others in writing in accordance herewith.
If to Buyer, to:
Sonic Automotive, Inc.
0000 X. Xxxxxxxxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Telecopy No.: (000) 000-0000
Attention: Chief Financial Officer
With a copy to:
Parker, Poe, Xxxxx & Xxxxxxxxx L.L.P.
0000 Xxxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx, Xx.
35
If to Seller or the Stockholder, to:
Xxxxxxx Xxxxxx Xxxxxxxx
0000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
With a copy to:
Xxxxx, Xxxxxxxx & Xxxxxxx, XXX
Xxxxx 0000, Xxxxxxxxx XX
0000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000-0000
Telecopy No.: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, Xx.
11.8 COUNTERPARTS. This Agreement may be executed in any number of
counterparts. Each such counterpart hereof shall be deemed to be an original
instrument, and all such counterparts together shall constitute but one
agreement.
11.9 KNOWLEDGE. Whenever any representation or warranty of Seller or the
Stockholder contained herein or in any other document executed and delivered in
connection herewith is based upon the knowledge of Seller or the Stockholder,
(a) such knowledge shall be deemed to include (i) the best actual knowledge,
information and belief of Seller and the Stockholder and (ii) any information
which the Stockholder would reasonably be expected to be aware of in the prudent
discharge of his duties in the ordinary course of business (including
consultation with legal counsel) as an officer of Seller, and (b) the knowledge
of the Stockholder shall be deemed to be the knowledge of Seller.
11.10 ARBITRATION.
(a) Any dispute, claim or controversy arising out of or relating
to this Agreement or the interpretation or breach hereof shall be resolved by
binding arbitration under the commercial arbitration rules of the American
Arbitration Association (the "AAA RULES") to the extent such AAA Rules are not
inconsistent with this Agreement. Judgment upon the award of the arbitrators may
be entered in any court having jurisdiction thereof or such court may be asked
to judicially confirm the award and order its enforcement, as the case may be.
The demand for arbitration shall be made by any party hereto within a reasonable
time after the claim, dispute or other matter in question has arisen, and in any
event shall not be made after the date when institution of legal proceedings,
based on such claim, dispute or other matter in question, would be barred by the
applicable statute of limitations. The arbitration panel shall consist of three
(3) arbitrators, one of whom shall be appointed by each of Buyer and Stockholder
within thirty (30) days after any request for arbitration hereunder. The two
arbitrators thus appointed shall choose the third arbitrator within thirty (30)
days after their appointment; provided, however, that if the two arbitrators are
unable to agree on the appointment of the third arbitrator within thirty (30)
days after their appointment, either
36
arbitrator may petition the American Arbitration Association to make the
appointment. The place of arbitration shall be Atlanta, Georgia. The arbitrators
shall be instructed to render their decision within sixty (60) days after their
selection and to allocate all costs and expenses of such arbitration (including
legal and accounting fees and expenses of the respective parties) to the parties
in the proportions that reflect their relative success on the merits (including
the successful assertion of any defenses).
(b) Nothing contained in this Section 11.10 shall prevent any
party hereto from seeking any equitable relief to which it would otherwise be
entitled from a court of competent jurisdiction.
11.11 PERMITTED SUCCESSORS; ASSIGNS; NO THIRD PARTY BENEFICIARIES.
Subject to Section 11.1, this Agreement shall be binding upon, inure to the
benefit of and be enforceable by the respective successors heirs, personal
representatives and permitted assigns of the parties hereto. Nothing in this
Agreement, expressed or implied, is intended or shall be construed to confer
upon or give to any employee of Seller, or any other person, firm, corporation
or legal entity, other than the parties hereto and their heirs, personal
representatives, successors and permitted assigns, any rights, remedies or other
benefits under or by reason of this Agreement.
11.12 HEADINGS. The article headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. This Agreement shall be construed without
regard to the degree to which any of the parties hereto has participated in the
drafting of this Agreement.
11.13 SEVERABILITY. In the event that any provision, or part thereof, of
this Agreement shall be held to be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions, or parts
thereof, shall not in any way be affected or impaired thereby.
11.14 ASSISTANCE IN WINDING UP. Buyer shall provide to Seller and the
Stockholder reasonable assistance in connection with Seller's winding up its
affairs after the Closing. The foregoing assistance shall include, without
limitation, reasonable access to computer records through employees of Buyer,
and otherwise making available, at Seller's reasonable expense, the appropriate
employees of Buyer who were employees of Seller prior to the Closing.
11.15 DEMONSTRATORS; STOCKHOLDER'S OFFICE FURNITURE. Buyer will furnish,
at Buyer's expense, the Stockholder with the use of two demonstrator vehicles,
one VII series BMW and one V series BMW, for a period of three years after the
Closing. The Stockholder shall also be entitled to keep his office furniture
identified on Schedule 11.15.
[SIGNATURES ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the day and year first above written.
BUYER: SONIC AUTOMOTIVE, INC.
/s/ O. Xxxxxx Xxxxx
-----------------------------------
By: O. Xxxxxx Xxxxx
Its: Chief Executive Officer
SELLER: GLOBAL IMPORTS, INC.
/s/ Xxxxxxx Xxxxxx Xxxxxxxx
-----------------------------------
By: Xxxxxxx Xxxxxx Xxxxxxxx
Its: President
THE STOCKHOLDER: /s/ Xxxxxxx Xxxxxx Xxxxxxxx (SEAL)
---------------------------
Xxxxxxx Xxxxxx Xxxxxxxx
38
