IWI Final Purchase Proposal
To: Universal Manufacturing/VIP
Revised: 6/24/02
I. ACDELCO INVENTORY
IWI will purchase Universal Manufacturing/VIP's ACDelco inventory
through ACDelco. ACDelco will credit VIP for the purchase amount of [up
to] $500,000 and then xxxx XXX. XXX understands and acknowledges that
ACDelco is not a party to this agreement and that Universal cannot
guarantee any action of ACDelco including actions relating to the
purchase of Universal Manufacturing/VIP's inventory. The restrictions
on the ACDelco inventory IWI will purchase are as follows:
A. Non-Battery ACDelco Products:
IWI will purchase up to $500,000 of ACDelco products from
Universal Manufacturing/VIP. There are two (2) restrictions on
the product we will buy, they are:
1. Each part needs to be in the current price sheet, and
2. They need to be classified as A, B, or C part number(s).
B. ACDelco Batteries:
IWI will only purchase those ACDelco batteries that are a
maximum of nine (9) months old. All batteries older than nine
(9) months are to be returned to ACDelco at Universal
Manufacturing/VIP's cost.
All consignment batteries are to be picked up in the field and
returned to the local warehouse.
Upon closing, Universal Manufacturing/VIP will transfer to IWI
ACDelco inventory free and clear of all liens, UCC agreements,
etc.; provided, however, IWI understands and acknowledges that
any liens or UCC agreements on the ACDelco inventory held by
ACDelco may not be released until Universal Manufacturing/VIP
closes out its ACDelco account.
II. OTHER INVENTORY
IWI will purchase up to $500,000 of non-ACDelco or "other" inventory at
75% of IWI's net, net purchase price. Net, net price being defined as
buying group and 2% cash discounts taken off of the price before
calculating 75% of IWI's cost. Payment will be made to Universal
Manufacturing/VIP weekly on inventory transferred to the IWI-Dubuque
location. Any remaining balance will be paid on the date of closing.
IWI will offer to purchase an additional $250,000 (for a total not to
exceed $750,000) of Universal Manufacturing/VIP's "Other" inventory
for 90 days after the close of the sale. After 90 days, the price of
any "other inventory" over and above the agreed upon total of $750,000
will need to be renegotiated. Universal Manufacturing/VIP is encouraged
to return and/or sell as much product as possible before IWI takes
possession on July 1, 2002.
Upon execution of this Agreement, Universal Manufacturing/VIP will
supply IWI with a list of their current ACDelco and Other inventories
in EXCEL formatted files. Attached is a list of lines that Universal
Manufacturing is now carrying, please indicate which lines will be
turned over and when.
Upon closing, Universal Manufacturing/VIP will transfer "other"
inventory free and clear of all liens, UCC agreements, etc.
III. OFFICE EQUIPMENT
The following office/computer/telephone equipment will be sold to IWI:
A. Computer Equipment:
IWI will purchase the computer equipment listed under "office
equipment" in the attached EXCEL spreadsheet. Total purchase
price is $7,880. Equipment in Freeport and Rockford will
remain there. Equipment in Dubuque will be delivered to
IWI-Dubuque by June 25, 2002. Please see the attached list for
a breakdown of each item to be purchased.
B. Telephone Equipment:
The telephone system in Freeport will remain there and is
included in the purchase price of $7,880 listed above. The
telephone equipment located in Dubuque will remain property of
Universal Manufacturing/VIP. The
telephone equipment in Rockford (owned by Rainbo Oil Company)
will be leased to IWI for $100/month for a period of three (3)
months.
Upon closing, IWI will legally own the local and/or toll-free
telephone numbers used during the course of business in
Freeport, IL; Rockford, IL; and Dubuque, IA. Universal
Manufacturing/VIP will keep all of these numbers up and
running and answered during the transition period between now
and July 1, 2002.
IV. PRODUCT SHELVING
IWI will purchase the following shelving from VIP:
Location Amount at Location Purchase Price
-------- ------------------ --------------
Freeport All $4,000
-----
Total $4,000
XXX is not interested in purchasing the shelving in Dubuque or
Rockford. However, XXX will rent the shelving in Rockford for
$1,000/month for a minimum of five (5) months. This will result in a
minimum "rental" fee of $5,000 from IWI to Universal Manufacturing/VIP.
V. SHOP EQUIPMENT
IWI will purchase Universal Manufacturing/VIP's shop equipment located
in Dubuque, IA, Freeport and Rockford, IL outlined in the May 8, 2002
email for $14,500. The list of the equipment can be found in the
attachment. In Rockford, Rainbo Oil Company will allow IWI to use the
fork truck. The cost for the use of the fork truck is included in the
$100/month expense for the telephone system in III, B above.
VI. DELIVERY VEHICLES
IWI will purchase the following vehicles from Universal
Manufacturing/VIP:
#95 Battery truck 1998 GMC for $36,500.
#303 1998 Ford E350 box van (Dubuque) for $12,000.
#195 1997 Geo Metro (Dubuque) for $3,200.
#175 1995 Chevy S-10 (Freeport) for $2,950.
#304 1994 Ford Escort Wagon (Freeport) $2,300.
Total vehicle purchase price: $56,950. The remaining vehicles will be
kept/sold by Universal Manufacturing/VIP.
VII. CUSTOMER LISTS
At the execution of this sales agreement, Universal Manufacturing/VIP
will turn over a list of their customers serviced out of the Dubuque,
Freeport and Rockford, IL markets. Every reasonable effort will be made
by Universal Manufacturing/VIP to show customer name, address,
telephone number, contact person, annual purchases, discounts, contact
names, inventory stocking levels, payment history, etc.
VIII. BUILDING LEASES
A. Freeport-Rockford, IL:
IWI will honor the existing leases for Freeport and Rockford.
Furthermore, the Rockford lease will be extended at
$1,850/month on a month-by-month basis until the landlord is
contacted with a 30 day written termination notice by XXX.
Upon closing, Universal Manufacturing/VIP will have no future
liability for such leases.
B. Dubuque, IA:
The Dubuque, IA location/lease will not be continued by IWI.
IX. NON-COMPETE AGREEMENT
A. Universal/VIP/Xxx Xxxxxx:
It is agreed, for a period of five (5) consecutive years,
beginning on July 1, 2002, and remaining in effect until July
31, 2007, that Xxxxxx X. Xxxxxx, and/or Universal Mfg. Co.,
and/or Universal Distribution LLC, and/or Value Independent
Parts, and/or any current business relationship will not
engage in competitive activity located in Dubuque, IA,
Freeport, IL, and Rockford, IL sales territories. It is
understood that Universal Mfg. Co. and Universal distribution
LLC will continue current business activities and may expand
such activities if such activities do not compete with IWI's
current automotive parts distribution business activities.
B. Rainbo Oil Company/VIP/Xxxx Xxxxx:
It is agreed, for a period of five (5) consecutive years,
beginning on July 1, 2002, and remaining in effect until July
31, 2007, that Xxxx Xxxxx, and/or Rainbo Oil Company, will not
re-enter the wholesale parts business. This is defined as
handling lines such as ACDelco, Motorcraft, Raybestos, etc.
X. INTERIM PRODUCT PURCHASING
IWI will sell ACDelco and "other" products to Universal
Manufacturing/VIP between now and the date of closing at a cost of
jobber less 25%. In return, Universal Manufacturing/VIP will also sell
products to IWI between now and the closing date for jobber less 25%.
XI. DATE OF SALE
A. Closing Date:
The closing date of this proposal is July 1, 2002.
B. Good Faith Offer:
Upon acceptance of this proposal, but before the closing date,
IWI will pay Universal Manufacturing/VIP a sum of $5,000 to be
applied as a payment towards the purchase of inventory.
C. Inventory Payments:
IWI will pay Universal Manufacturing weekly for inventory,
which has been delivered to IWI.
D. Notice of Sale/Purchase of Business:
Universal Manufacturing/VIP needs to complete form NUC-542-A,
notice of sales/purchase of business assets for the state of
Illinois. Any penalties for non-compliance will be the
responsibility of Universal Manufacturing/VIP.
XII. EMPLOYEE BENEFITS
Universal Manufacturing/VIP is going to extend the benefits for their
employee's through the month of July. IWI will offer benefits to those
former Universal Manufacturing/VIP employees who come to work for us
beginning in August.
It is the intention of both parties to execute this agreement in good faith and
agree to all conditions outlined in this purchase proposal. This proposal is
subject to the release of all liens, UCC's, etc.
/s/ X. Xxxxxxx Xxxxx June 24, 2002
----------------------------- -------------
X. Xxxxxxx Xxxxx Date
IWI Motor Parts
/s/ Xxxxxx X. Xxxxxx June 26, 2002
----------------------------- -------------
Xxxxxx X. Xxxxxx Date
Universal Manufacturing/VIP
/s/ Xxxxxx X. Xxxxxx June 26, 2002
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Xxxxxx X. Xxxxxx Date
Rainbo Company LLC
/s/ Xxxx Xxxxx June 29, 2002
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Xxxx Xxxxx Date
Rainbo Oil Company
