ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "AGREEMENt") is made and entered into
as of this 7th day of July, 1998, by and among SONIC AUTOMOTIVE, INC., a
Delaware corporation (the "BUYER"), and HMC FINANCE CORPORATION, INC. a Florida
corporation ("HMC"), HALIFAX FORD-MERCURY, INC., a Florida corporation
("HALIFAX"), XXXXXXXXXXXX AUTOMOBILES, INC., a Florida corporation ("HAI"),
XXXXXXXXXXXX CHEVROLET-OLDSMOBILE, INC., a Florida corporation ("HCO"), and
SUNRISE AUTO WORLD, INC., a Florida corporation ("SUNRISE" and, together with
HMC, HALIFAX, HAI, and HCO, collectively, the "SELLERS" and each, individually,
a "SELLER"), and XXXXXX X. XXXXXXXXXXXX (the "STOCKHOLDER").
WITNESSETH:
WHEREAS, the Sellers are the owners of certain assets used in connection
with the Sellers' automobile dealership businesses (collectively, the
"BUSINESSES" and, individually as to each Seller, as applicable, the
"BUSINESS"), operated at the Real Property (as defined below);
WHEREAS, the Sellers desire to sell and the Buyer desires to buy, or to
cause one or more subsidiaries or affiliates of the Buyer to buy, certain assets
pertaining to the Businesses, subject to the terms and conditions of this
Agreement;
WHEREAS, contemporaneously with the execution of this Agreement, the Buyer
has entered into Contracts to Purchase and Sell Real Property (the "REAL
PROPERTY PURCHASE AGREEMENTS") with the various owners thereof named therein
(the "OWNERS"), whereby the Buyer has agreed to buy, and the Owners have agreed
to sell, the land, buildings and improvements located at the Real Property (as
defined in the respective Real Property Purchase Agreements); and
WHEREAS, the consummation of the transactions contemplated by each of this
Agreement and the Real Property Purchase Agreements is subject to the
consummation of the transactions contemplated by each of such other Agreements;
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:
ARTICLE I
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CERTAIN DEFINITIONS
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"ASSETS" shall mean: the New Vehicles (as defined in Section 3.1
hereof); the Demonstrators (as defined in Section 3.2 hereof); the Used Vehicles
(as defined in Section 3.5
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hereof); the Parts (as defined in Section 4.3 hereof); the Miscellaneous
Inventories (as defined in Section 5.1 hereof); the Work in Progress (as defined
in Section 5.3 hereof); the Fixtures and Equipment (as defined in Section 5.4
hereof); the Miscellaneous Assets (as defined in Section 5.5 hereof); the HMC
Receivables (as defined in Section 5.9 hereof); and all goodwill of the
Businesses.
"CLOSING DATE" shall mean the date, 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 the Buyer not
later than fifteen (15) days after the approvals set forth in Section 8.13
hereof and all other conditions precedent set forth in Articles VIII and IX have
been satisfied (or waived by the Buyer or the Sellers, as applicable), or such
other date as is mutually agreed upon by the parties hereto. The Closing shall
be held at the offices of Xxxx, Xxxx & Xxxx, 000 Xxxxxxxx Xxxxxx, Xxxxxxx Xxxxx,
Xxxxxxx, at 9:00 a.m. on the Closing Date.
"CLOSING DATE DEADLINE" shall mean September 1, 1998; provided,
however, if as of August 20, 1998, any of the approvals set forth in Section
8.13 hereof shall not have been obtained and/or the audited financial statements
contemplated by Section 10.14 hereof shall not have been completed, the Buyer
may, by written notice to the Sellers' Agent not later than August 25, 1998,
elect to extend the Closing Date Deadline for up to an additional thirty (30)
days.
"INVENTORY DATE" shall mean the date of completion of the Inventory
(as defined in Section 4.1 hereof), which shall be not sooner than five (5) days
prior to the Closing Date, or such later date prior to the Closing as is
mutually agreed by the Sellers' Agent and the Buyer.
"LIABILITIES" shall mean (i) all continuing obligations of the
Sellers, arising in the ordinary course of business after the Closing Date and
not as a result of any breach or default, under those contracts and leases of
Sellers set forth in Part I of Schedule 2.4 attached hereto, (ii) the HMC
Payable as defined and described in Section 2.5 hereof, and (iii) the Inducement
Fee as provided for in Section 2.7 hereof.
"MANUFACTURERS" shall mean Ford Motor Company, the Chevrolet Motor
Division of General Motors Corporation, Mercedes-Benz of North America, Inc.,
and American Honda Motor Co., Inc.
"RETAINED LIABILITIES" shall have the meaning assigned to it in
Section 2.4 hereof.
"SELLERS' AGENT" shall mean Xxxxxx X. Xxxxxxxxxxxx, as agent for the
Sellers hereunder.
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ARTICLE II
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SALE AND PURCHASE OF THE ASSETS
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2.1 Upon the terms and subject to the conditions hereinafter set forth, at
the Closing, the Sellers will sell, transfer and convey the Assets to the Buyer
and the Buyer will purchase the Assets from the Sellers 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 bills of sale in
substantially the form of Exhibit A hereto (the "BILLS OF SALE") and such other
instruments of assignment, transfer and conveyance as the Buyer shall reasonably
request. Except to the extent specifically included within the Assets or as
mutually agreed between the Buyer and the Sellers, the Sellers will not sell,
and the Buyer will not purchase, any other tangible or intangible assets of the
Sellers.
2.2 The aggregate purchase price (the "PURCHASE PRICE") to be paid for the
Assets shall consist of Eighteen Million Seven Hundred Thousand Dollars
($18,700,000), as the purchase price for the Businesses and intangible assets
included in the Assets (the "BUSINESS AND INTANGIBLE ASSETS PURCHASE PRICE"),
which shall be allocated among the Sellers in accordance with Part I of Schedule
2.2 hereto, plus the sum of: (i) the New Vehicle Purchase Price (as defined in
Section 3.1 hereof); (ii) the Demonstrator Purchase Price (as defined in Section
3.2 hereof); (iii) the Used Vehicle Purchase Price, (as defined in Section 3.5
hereof); (iv) the Parts Purchase Price (as defined in Section 4.3 hereof); (v)
the Miscellaneous Inventories Purchase Price (as defined in Section 5.1 hereof);
(vi) the Work in Progress Purchase Price (as defined in Section 5.3 hereof);
(vii) the F&E Purchase Price (as defined in Section 5.4 hereof); and (viii) the
HMC Receivables Purchase Price (as defined in Section 5.9 hereof). Each of the
components of the Purchase Price, other than the Business and Intangible Assets
Purchase Price, shall be allocated among the Sellers in accordance with their
respective Assets hereto, upon which such components are based, as reflected in
a revised Part I of Schedule 2.2 hereto, to be completed by the Buyer and the
Sellers at least three (3) days prior to the Closing Date. The parties
acknowledge that the New Vehicle Purchase Price, the Parts Purchase Price and
the Miscellaneous Inventories Purchase Price, and the HMC Receivables Purchased
Price will be based upon information contained in Schedule 3.1, the Inventory
(as defined in Section 4.1) and Schedule 5.9, respectively, all 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 or decreases in those assets between the time of
delivery of such Schedules 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 and Liabilities allocations
described in Part II of Schedule 2.2 hereto in all reporting to, and tax returns
filed with, the Internal Revenue Service and other state and local taxing
authorities.
2.3 Upon the terms and subject to the conditions hereinafter set forth, at
the Closing, the Buyer shall pay the Purchase Price as follows:
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(a) At the Closing, the Buyer shall wire transfer to an account or
accounts designated by the Sellers' Agent at least one (1) day prior to the
Closing, an amount equal to the Purchase Price minus Eight Million Two Hundred
Fifty Thousand Dollars ($8,250,000), such amount to be allocated to the Sellers
in the respective amounts set forth opposite their names on Part III of Schedule
2.2 hereto, to be delivered to the Buyer by the Sellers' Agent at least three
(3) days prior to the Closing Date.
(b) (1) At the Closing, the Buyer shall issue and deliver to the
Sellers, in the respective amounts set forth opposite their names on Part III of
Schedule 2.2 hereto, to be delivered by the Sellers' Agent at least three (3)
days prior to the Closing Date, 8,250 shares (the "PREFERRED SHARES") of the
Buyer's Class A Convertible Preferred Stock, Series III (the "PREFERRED STOCK").
The Preferred Shares shall have such rights and preferences as are set forth in
the Statement of Rights and Preferences of Preferred Stock attached hereto as
Exhibit B (the "STATEMENT OF RIGHTS AND PREFERENCES").
(2) At the option of the Sellers' Agent, exercisable by
written notice to the Buyer within thirty (30) days after the closing (the
"REGISTRATION NOTICE"), the Buyer shall be obligated to use its reasonable best
efforts to register under the Securities Act of 1933, as amended (the
"SECURITIES ACT"), on or before December 31, 1998, that percentage (up to and
including 100%) of the shares of Class A Common Stock (the "COMMON SHARES")
which are issuable upon conversion of the Preferred Shares as specified in the
Registration Notice (such percentage of the Common Shares being hereinafter
called the "REGISTRABLE COMMON SHARES").
(3) If requested by the managing or lead managing underwriter
for any such registration which is an underwritten registered public offering,
the Sellers 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, the Sellers and
the Stockholder shall supply to the Buyer such information as may be reasonably
requested by the Buyer in connection with the preparation and filing of a
registration statement with the Securities and Exchange Commission. The Sellers
and the Stockholder shall not supply any information to the 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. Provided
that the Buyer shall have timely completed such registration, the Sellers shall
promptly convert the applicable number of the Preferred Shares into the
Registrable Common Shares.
(4) In the event that the Buyer fails to timely complete the
registration contemplated by the preceding paragraph, the Sellers and the
Stockholder shall be entitled to have "piggyback" registration rights with
respect to the Registrable Common Shares. In such case, the provisions of
paragraph (3) immediately above shall be applicable. Furthermore, such piggyback
registration rights shall be subject to customary provisions, including those
regarding expenses and
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underwriter cut-backs, and shall terminate at such time as the holder of such
registration rights shall be free to sell all of such holder's Registrable
Common Shares under Rule 144 (as defined in paragraph (5) below).
(5) In the event that the Sellers' Agent does not timely
deliver a Registration Notice, the Buyer shall have no obligation to register
any of the Common Shares. Notwithstanding the foregoing, the Buyer shall use its
reasonable best efforts to make available current public information with
respect to the Buyer within the meaning of Subsection (c)(1) of Securities and
Exchange Commission Rule 144 ("RULE 144") to the extent necessary to facilitate
public resales by the Sellers or the Stockholder of the Common Shares, pursuant
to Rule 144. The Buyer shall remove any and all stop transfer instructions and
shall remove any restrictive legend on the certificates with respect to any
Common Shares then owned by the Sellers or the Stockholder to the extent that
either (i) such Common Shares may hereafter be registered under the Securities
Act and under any applicable state securities or blue sky laws, or (ii) the
Buyer has received an opinion of counsel reasonably satisfactory to the Buyer,
in form and substance reasonably satisfactory to the Buyer, that such
registration is not required for the sale of such Common Shares under Rule 144.
2.4 At the Closing, the Sellers will assign to the Buyer and the Buyer
will assume and agree to perform and discharge the Liabilities pursuant to
separate assignment and assumption agreements with the respective Sellers in a
form reasonably satisfactory to the Sellers' counsel (the "ASSUMPTION
AGREEMENTS"). Notwithstanding anything herein to the contrary, except as
expressly provided in this Section 2.4 and in Sections 2.5 and 2.7 and in the
Assumption Agreements, the Buyer does not and will not assume or become liable
for any obligations or liabilities of the Sellers of any kind whatsoever, fixed
or contingent, known or unknown (collectively, the "RETAINED LIABILITIES"), as a
result of the transactions contemplated by this Agreement. The Sellers shall
retain, and hereby agree to satisfy and discharge, all of the Retained
Liabilities, including those set forth on Part II of Schedule 2.4.
2.5 At the Closing, the Buyer will pay in full all amounts outstanding as
of the Closing under that certain promissory note from HMC to Xxxxxx X.
Xxxxxxxxxxxx, a copy of which is attached as Schedule 2.5 hereto (the "HMC
PAYABLE"). HMC hereby represents and warrants that as of the date of this
Agreement, the HMC Payable totals, and as of the Closing will not exceed, Two
Million Eight Hundred Fifty-Seven Thousand Seven Hundred Ninety-Two Dollars
($2,857,792).
2.6 At the Closing, (a) each of the Sellers and Xxxxxx X. Xxxxxxxxxxxx
shall enter into a non-competition agreement with the Buyer in substantially the
form of Exhibit C hereto (the "NON-COMPETITION AGREEMENT"), and (b) the Buyer
and Xxxxxx X. Xxxxxxxxxxxx will enter into an Employment Agreement in
substantially the form of Exhibit D hereto (the "EMPLOYMENT AGREEMENT").
2.7 As an inducement to the Buyer to negotiate and enter into this
Agreement and to undertake the further cost and expense of conducting its due
diligence investigation and preparing
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to satisfy its obligations at the Closing, the Sellers hereby agree, jointly and
severally, to pay to the Buyer not later than November 1, 1998, the sum of
$500,000 (the "INDUCEMENT FEE"). The Inducement Fee will be included in the
Liabilities and will become an obligation of the 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 the Sellers 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.
ARTICLE III
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NEW VEHICLES; DEMONSTRATORS AND USED VEHICLES
---------------------------------------------
3.1 At the Closing, the Buyer shall purchase all of the Sellers' untitled
new 1998 motor vehicles, and up to five (5) 1997 new Chevrolet motor vehicles,
in the Sellers' inventories as of the Closing Date and which are listed on
Schedule 3.1 hereto, which the Sellers' Agent shall deliver to the Buyer not
later than three (3) days prior to the Closing (all such vehicles 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 the respective Seller by the applicable 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 each New Vehicle's
model, invoice cost, odometer reading and all other information necessary to
calculate the New Vehicle Purchase Price with respect to such New Vehicle. At
the Closing, the Sellers shall assign to the Buyer, without any additional
consideration therefor, by appropriate documents reasonably satisfactory to the
Buyer, all unfilled retail orders and deposits made thereon.
3.2 At the Closing, the Buyer shall purchase all of the Sellers' untitled
new 1998 motor vehicles in Sellers' inventories as of the Closing Date which are
used in the ordinary course of business for the purpose of demonstration and
which are listed on Schedule 3.2 hereto, which the Sellers' Agent shall deliver
to the Buyer not later than three (3) days prior to the Closing (all such
vehicles are collectively referred to herein as the "DEMONSTRATORS"). For
purposes of this Agreement, any motor vehicle with more than 9,000 miles on its
odometer shall be deemed to be "used" rather than a "Demonstrator". The purchase
price to be paid by the Buyer for each Demonstrator shall be the price at which
the Demonstrator was invoiced to the respective Seller by the applicable
Manufacturer, as adjusted pursuant to this Article III and as reduced as
follows: if such Demonstrator's odometer reflects total mileage of more than six
thousand (6,000) miles but less than nine thousand (9,000) miles, an amount
equal to ten cents ($.10) multiplied by the total mileage on such odometer (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.
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3.3 The purchase price paid for each New Vehicle and each Demonstrator
purchased under this Article III shall be (a) increased by the respective
Seller's actual cost of (i) dealer-installed equipment and accessories and (ii)
any "VIP" package added to such New Vehicle or Demonstrator, and (b) decreased
by (i) the Seller's actual cost 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 unearned, incentive monies claimed
on pre-reported units and carryover allowances on 1997 models).
3.4 In the event any New Vehicle or Demonstrator shall have been damaged
prior to the Inventory Date, or is otherwise in a condition such that it cannot
reasonably be presented as being in a first-class saleable condition, the
Sellers' Agent and the 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 that the Buyer and the Sellers' Agent cannot agree on
the cost of repairs or the amount of reduction, the Buyer shall have no
obligation to purchase any such damaged New Vehicle or Demonstrator. With
respect to any New Vehicle or Demonstrator which has been damaged and repaired
prior to the Inventory Date, the Sellers' Agent and the Buyer will attempt to
agree on an adjustment to the price to reflect any decrease in the wholesale
value of such New Vehicle or Demonstrator resulting from such damage and repair.
In the event that the Buyer and the Sellers' Agent cannot agree on such
adjustment, the Buyer shall have no obligation to purchase such New Vehicle or
Demonstrator.
3.5 The Sellers' Agent and the Buyer shall perform an inventory of the
Sellers' used vehicles as of the Inventory Date and, in connection with such
inventory, the Sellers' Agent and the Buyer shall attempt to assign a mutually
agreed price to each used vehicle owned by the Sellers as of the Inventory Date.
All such used vehicles as to which the Sellers' Agent and the Buyer shall agree
upon a price are collectively referred to herein as the "USED VEHICLES." At the
Closing, the Buyer shall purchase from the Sellers all Used Vehicles owned by
the Sellers as of the Closing Date. The sum of all prices assigned to such Used
Vehicles purchased by the Buyer pursuant to the terms of this Section 3.5 shall
be referred to herein as the "USED VEHICLE PURCHASE PRICE".
ARTICLE IV
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PARTS/ACCESSORIES
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4.1 The Buyer and the Sellers' Agent 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
and accessories, as well as the Miscellaneous Inventories, used by the Sellers
in the Businesses. The Inventory (insofar as it relates to parts and
accessories) shall be posted to the respective Manufacturers' approved systems
of inventory control. The cost of the Inventory shall be borne entirely by the
Buyer. The Inventory shall be completed by the Inventory Date.
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4.2 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 respective Manufacturers, with any
applicable supplements, in effect as of the Inventory Date (as applicable to
each Manufacturer, the "MASTER PRICE LIST") as returnable to the respective
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 not falling within the definition of "returnable" shall be
classified as "nonreturnable". The purchase price for each "nonreturnable" part
and accessory, of which type a 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 most recent applicable price list in which such
part appears. The purchase price for each "nonreturnable" part and accessory, of
which type a 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 most recent applicable price list in
which such part appears. The purchase price for all "Jobber" and/or "NPN" parts
shall be equal to the respective 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 At the Closing, the Buyer shall purchase all parts and accessories
owned by the respective Sellers 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. The Sellers agree that if parts and accessories that the Buyer is
not obligated to purchase hereunder are not removed from the Real Property
within thirty (30) days after the Closing Date, they shall become the property
of the Buyer without the payment of any consideration in addition to the
consideration otherwise provided herein. The purchase price for the Parts will
equal the value of such items shown on the Inventory (the "PARTS PURCHASE
PRICE").
4.4 The Sellers shall assign to the Buyer at the Closing any net parts
return privileges under the respective Manufacturers' parts return plans that
may have accrued to the Sellers prior to the Closing (and any other special
parts return authorizations which may have been granted to the Sellers by the
respective Manufacturers).
ARTICLE V
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MISCELLANEOUS INVENTORIES; WORK IN PROGRESS; FIXTURES
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AND EQUIPMENT
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5.1 At the Closing, the Buyer shall purchase all useable gas, oil and
grease, all undercoat material and body materials in unopened cans and such
miscellaneous useable and saleable articles in unbroken lots which (i) are on
the Sellers' dealership premises, (ii) are owned by the Sellers on
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the Closing Date, and (iii) 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 The Buyer shall have no obligation to purchase any such miscellaneous
items that are not included in the Miscellaneous Inventories. The Sellers agree
that any miscellaneous items that are not included in the Miscellaneous
Inventories and are not removed from the Real Property within the thirty (30)
days after the Closing Date, shall become the property of the Buyer without the
payment of any consideration in addition to the consideration otherwise provided
herein.
5.3 At the Closing, the Buyer shall buy at the Sellers' cost for parts and
labor such shop labor and sublet repairs as the respective Sellers shall have
caused to be performed on any repair orders which are in process at the close of
business on the Closing Date (the "WORK IN PROGRESS") (the sum of all costs of
the Sellers for the Work in Progress pursuant to the terms of this Section 5.3
shall be referred to herein as the "WORK IN PROGRESS PURCHASE PRICE"). The Buyer
shall complete such repair work and shall be entitled to the entire proceeds to
be collected for such services.
5.4 At the Closing, the Buyer shall purchase all fixtures, machinery,
equipment (including special tools and shop equipment), furniture, signs and
office equipment owned by the Sellers as of the Closing Date and used or held
for use in connection with the Businesses, including the items listed on the
Book Depreciation Schedule included as Schedule 5.4 hereto, which the Sellers'
Agent shall deliver to the Buyer not later than five (5) days prior to the
Closing (collectively referred to herein as the "FIXTURES AND EQUIPMENT"). The
purchase price for each item of Fixtures and Equipment shall equal the
depreciated book value of such item, determined in accordance with generally
accepted accounting principles, and based upon Schedule 5.4 (the sum of all
prices assigned to the Fixtures and Equipment pursuant to the terms of this
Section 5.4 shall be referred to herein as the "F&E PURCHASE PRICE").
5.5 At the Closing, and without payment of any additional consideration,
the Buyer shall acquire all of the Sellers' (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 the Sellers 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 Businesses, (v) telephone numbers and listings used by the
Sellers in connection with the Businesses, (vi) names and addresses of the
Sellers' service customers and prospective purchasers, (vii) the Sellers' rights
to the Sellers' names and to the trade names "Car Mart" and "Truck Mart," or any
similar variation of any thereof, and (viii) such other licenses, contracts,
agreements, files, instruments and papers
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as are required for the conduct of the Businesses (all the foregoing items
collectively referred to herein as the "MISCELLANEOUS ASSETS").
5.6 The Sellers may retain all original Florida Department of Revenue
blanket resale certificates (but shall provide copies thereof to the Buyer) and
all other corporate records, financial records and correspondence which are not
necessary for the continued operation of the Businesses by the Buyer, and all
derivations and extensions thereof.
5.7 The Buyer shall have no responsibility to perform any services
required under any warranties issued by the Sellers on the vehicles sold by the
Sellers on or prior to the Closing Date, unless authorized in writing by the
respective Sellers accompanied by arrangements in writing satisfactory to the
Buyer to assure the Buyer of payment for all work performed by the Buyer, and,
if so authorized by a Seller, such Seller shall reimburse the Buyer for all of
the Buyer's costs for parts and labor in connection therewith at established
internal rates for parts and labor. At the Closing Date, the Sellers shall
supply the Buyer with a list to which such warranties and guaranties 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. The Sellers shall
also supply to the Buyer at or prior to the Closing Date an address for and a
designation of the person or persons who will be responsible for authorizing
Buyer to perform any services under any warranties issued by the Sellers on
vehicles sold by them prior to the Closing Date. The respective Sellers shall
reimburse the Buyer promptly upon demand for all sums due or payable by the
respective Sellers to the Buyer hereunder.
5.8 Except as provided in Section 5.9 below, the Sellers shall retain all
accounts receivable of the Sellers as of the Closing Date and the Buyer shall
retain all accounts receivable arising out of sales and/or services of the
Businesses from and after the Closing Date. The Buyer shall send out the
invoices for, and otherwise reasonably assist the Sellers with respect to the
invoicing of, the Seller's accounts receivable arising out of sales and/or
services of the Business prior to the Closing Date, based upon information
supplied by the Sellers. Otherwise, except for the additional accounting
assistance contemplated in Section 11.14, the Buyer shall have no
responsibilities or obligations with respect to the documentation or collection
of the Sellers' accounts receivable, except that the Buyer, on the Sellers'
behalf, shall accept payment of the Sellers' accounts receivable arising out of
the operation of the Businesses prior to the Closing Date, at no charge to the
Sellers, and the Buyer shall forward to the Sellers' Agent, or to such of the
Sellers designated by him, from time to time, all of the money so accepted on
said accounts receivable.
5.9 (a) At the Closing, the Buyer shall purchase from HMC all of HMC's
trade accounts receivable as of the Closing Date (other than those receivable
from employees of the Sellers and their affiliates, and their respective
officers, directors or shareholders) and which are listed on Schedule 5.9
hereto, which HMC shall deliver to the Buyer not later than one (1) day prior to
the Closing (collectively, the "HMC RECEIVABLES"). The purchase price for the
HMC Receivables (the "HMC RECEIVABLES PURCHASE PRICE") shall be (a) the
aggregate face amount of the HMC Receivables, as reflected on said Schedule 5.9,
less a reserve for doubtful accounts of
10
fifteen percent (15%) of such aggregate face amount (the "HMC RESERVE"), MINUS
(b) the amount of the HMC Payable paid by the Buyer pursuant to Section 2.5
hereof.
ARTICLE VI
----------
REPRESENTATIONS AND WARRANTIES OF THE BUYER
-------------------------------------------
The Buyer represents and warrants to the Sellers as follows:
6.1 The Buyer is a corporation duly organized and 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 the corporate power to
own its properties and to carry on its business as now being conducted. The
Board of Directors of the Buyer has duly approved this Agreement, all other
agreements, certificates and documents executed or to be executed by the Buyer
in connection herewith, and the transactions contemplated hereby and thereby.
The 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 the 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 the Buyer in connection herewith, constitute or,
when executed and delivered, will constitute legal, valid and binding agreements
of the Buyer enforceable against the Buyer in accordance with their respective
terms.
6.2 Except as set forth on Schedule 6.2 attached hereto, the consummation
of the transactions contemplated by this Agreement and compliance with the
provisions hereof will not conflict with or result in a breach of the terms,
conditions or provisions of, or constitute a breach or default under, any
provision of law, any order of any court or other agency of government, the
charter or bylaws of the Buyer or any note, debenture, mortgage, loan agreement
or other instrument to which the Buyer is a party or by which it or any of its
properties or assets is bound.
6.3 There are no actions, suits or proceedings pending, or, to the
knowledge of the Buyer, threatened against or affecting the Buyer which might
adversely affect the power or authority of the Buyer to carry out the
transactions to be performed by it hereunder.
6.4 The issuance of the Preferred Shares, as well as the Common Shares
issuable upon conversion of the Preferred Shares, has been duly authorized by
all necessary corporate action of the Buyer. Upon the issuance of the Preferred
Shares pursuant to this Agreement, and upon the issuance of Common Shares upon
conversion of any of the Preferred Shares, such Preferred Shares and/or Common
Shares, as the case may be, shall be validly issued, fully paid and
non-assessable.
6.5 The authorized capital stock of the Buyer consists of:
11
(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 June 1,
1998, approximately [19,125] shares of Series I Preferred Stock are issued and
outstanding and/or are committed to be issued by the Buyer, approximately
[10,000] shares of Series II Preferred Stock are issued and outstanding and/or
are committed to be issued by the Buyer, and approximately [6,500] shares of
Series III Preferred Stock are issued and outstanding and/or are committed to be
issued by the Buyer;
(b) 50,000,000 shares of Class A Common Stock, par value $0.01 per
share, of which 5,000,000 shares are issued and outstanding; and
(c) 15,000,000 shares of Class B Common Stock, par value $0.01 per
share, of which 6,250,000 shares are issued and outstanding.
All outstanding capital stock of the 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.
6.6 The Buyer has delivered to the Sellers' Agent copies of (i) the
Prospectus dated November 10, 1997 (the "PROSPECTUS"), (ii) the Buyer's Annual
Report on Form 10-K for the Fiscal Year ended December 31, 1997, (iii) the
Buyer's Quarterly Report on Form 10-Q for the three-month period ended March 31,
1998, and (iv) any Current Reports on Form 8-K, filed in 1998, each in the form
(excluding exhibits) filed with the Securities and Exchange Commission ("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.
ARTICLE VII
-----------
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
---------------------------------------------
The Sellers, jointly and severally, represent and warrant to the Buyer as
follows:
7.1 Each Seller is a corporation duly organized and existing and in good
standing under the laws of the State of Florida, 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 the corporate power to
own its properties and to carry on its business as now being conducted. Except
as set forth on Schedule 7.1 attached hereto, the Stockholder is the only person
owning shares of the Sellers. The Board of Directors and the shareholders of
each Seller have duly approved this Agreement, all other agreements,
certificates and documents executed or to be executed by such
12
Seller in connection herewith, and the transactions contemplated hereby and
thereby. Each 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 such 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 each Seller in connection herewith,
constitute or, when executed and delivered, will constitute legal, valid and
binding agreements of such Seller enforceable against such Seller in accordance
with their respective terms. 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.
7.2 Except as set forth in Schedule 7.2 attached hereto, the consummation
of the transactions contemplated by this Agreement and compliance with the
provisions hereof will not conflict with or result in a breach of the terms,
conditions or provisions of, or constitute a breach or default under, any
provision of law, any order of any court or other agency of government, the
charter or bylaws of any Seller or any note, debenture, mortgage, loan agreement
or other instrument to which any Seller or the Stockholder is a party, or by
which any Seller or the Stockholder, or any of their respective properties or
assets, are bound, or result in the creation or imposition of any Encumbrance of
any kind whatsoever on the Assets.
7.3 There are no actions, suits or proceedings pending or, to the
knowledge of the Seller and the Stockholder, threatened against any Seller or
the 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 the
Sellers and the Stockholder, threatened, against or affecting any 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 any Seller, would have a material
adverse effect on the business, assets or financial condition of such Seller.
7.4 Except as disclosed on Schedule 7.4 attached hereto, the Sellers have
good title to the Assets, free and clear of all liens (including tax liens),
encumbrances, actions, claims, payments or demands of any kind and character
(collectively, "ENCUMBRANCES"), except Encumbrances for ad valorem personal
property taxes not yet due and payable and Encumbrances which secure only the
Liabilities. All of the Assets 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
Encumbrances for ad valorem personal property taxes not yet due and payable and
Encumbrances which secure only the Liabilities.
7.5 Except as disclosed on Schedule 7.5 attached hereto, there are no
permits or approvals used or obtained for use by any of the Sellers which are
required under applicable law in connection with the ownership or operation of
its Businesses.
13
7.6 Each of the Sellers 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 it to
have been paid to date.
7.7 Except as disclosed on Schedule 7.7, the Sellers have no bonus,
deferred compensation, pension, profit-sharing, stock option, employee stock
purchase or other employee benefit plan (all of the foregoing being the
"EMPLOYEE PLANS"), or any secrecy agreements or covenants not to compete with
any employee.
7.8 (a) The Sellers have delivered to the Buyer the following financial
statements of the Sellers (the "FINANCIAL STATEMENTS"): (a) the balance sheets
of the respective Sellers as of December 31, 1997, and the related statements of
income and stockholder's equity for the years then ended, in each case with an
unaudited reviewed opinion by Xxxxx Xxxxxxxx & Company, P.A., and (b) the
unaudited balance sheets of the respective Sellers as of May 31, 1998 and the
related unaudited statements of income and stockholder's equity for the five (5)
month period then ended. The Financial Statements have been prepared in
accordance with generally accepted accounting principles consistently applied.
The balance sheet of each Seller included in the Financial Statements fairly
presents the financial condition of such Seller as of the date thereof, and the
related statement of income of each Seller included in the Financial Statements
fairly presents the results of the operations of such Seller and the changes in
its financial position for the period indicated, all in accordance with
generally accepted accounting principles consistently applied.
(b) Each of the Sellers 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 the Sellers 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.
7.9 None of the Sellers or the 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.
7.10 Except as set forth on Schedule 7.10 attached hereto, the Assets
comply 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, rules and regulations), applicable zoning and other
laws, ordinances, regulations and building codes, and none of the Sellers or the
Stockholder has received any notice of any violation thereof which has not been
adequately remedied.
7.11 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
14
or intended for use by the Sellers in the Businesses. All Demonstrators have
been operated in the ordinary course of business with dealer tags and have not
had certificates of title issued with respect to them.
7.12 Except for the Sellers' cash and accounts receivable and Sellers'
rights under their respective dealership agreements with the Manufacturers, the
Assets, together with the Real Property and the contracts and leases set forth
on Part I of Schedule 2.4 hereto, comprise all of the assets, properties and
rights necessary for the Buyer to operate the Businesses substantially in the
manner operated by the Sellers prior to the Closing.
7.13 The representations and warranties of the Owners contained in the
Real Property Purchase Agreements are true and correct as of the date hereof.
ARTICLE VIII
------------
CONDITIONS PRECEDENT TO THE BUYER'S OBLIGATIONS
-----------------------------------------------
The obligations of the 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 the Buyer.
8.1 All of the representations and warranties of the Sellers 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 (except to the extent that
any such representation and warranty, by its terms, relates to a stated date),
and the Buyer shall have received a certificate from a duly authorized officer
of each of the Sellers, dated the Closing Date, to such effect.
8.2 Each of the agreements or obligations required by this Agreement to be
performed or complied with by the Sellers or the Stockholder at or before the
Closing shall have been duly performed or complied with, and the Buyer shall
have received a certificate from a duly authorized officer of each of the
Sellers and the Stockholder, dated the Closing Date, to such effect.
8.3 No action, suit or proceeding shall have been instituted by a
governmental agency or any other third party (a) 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, or (b) which would have a materially adverse effect on the
conduct of an automobile dealership business by the Buyer at any of the Real
Property.
8.4 The Inventory shall have been completed.
8.5 The Sellers shall have furnished to the Buyer (a) evidence to the
reasonable satisfaction of the Buyer and its counsel with respect to the
corporate organization and existence of
15
the Sellers, and (b) UCC-11 search reports or other evidence reasonably
satisfactory to the Buyer and its counsel that the Assets are free and clear of
all Encumbrances.
8.6 Each of the Sellers shall have furnished to the Buyer a copy of the
resolutions duly adopted by such Seller's Board of Directors and the Stockholder
authorizing the execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby, certified by an authorized officer of such
Seller as of the Closing Date.
8.7 As of the Closing Date, there shall not have been any fire, accident
or other casualty or any labor disturbance, civil commotion, riot, act of God or
the public enemy, or any change in the Businesses or the Assets or which would
have a material adverse effect on the conduct of an automobile dealership
business using the Assets at any of the Real Property or which would interfere
with the use by the Buyer of such Assets in connection with the conduct of an
automobile dealership business at any of the Real Property.
8.8 The Buyer shall have been licensed as a Motor Vehicle Dealer under
applicable Florida 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 the
Buyer deems necessary or appropriate to conduct business as an automobile dealer
at the Real Property; provided, however, this Section 8.8 shall only be a
condition to the Buyer's obligations so long as the Buyer is using its
reasonable best efforts to obtain such authorizations, consents, licenses and
permits.
8.9 The Sellers shall have obtained all other authorizations, consents and
approvals from third persons and entities as are required to assign those
contracts and leases that are included in the Liabilities at the Closing.
8.10 The Sellers shall have transferred to the Buyer certificates of title
or origin for all New Vehicles, Demonstrators and Used Vehicles, and all of
their respective registration lists, owner follow-up lists and service files on
hand as of the Closing Date with respect to the Businesses.
8.11 The Sellers shall have terminated in writing the Sellers' respective
Dealer Agreements with the Manufacturers.
8.12 The Sellers and the Stockholder shall have executed, as appropriate,
and delivered to the Buyer the Bills 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 the Buyer consistent with this Agreement and shall in all respects be
in such form as may be reasonably required by the Buyer and its counsel.
8.13 Each of the Manufacturers shall have approved the Buyer or the
Buyer's affiliate as an authorized dealer at each parcel of the Real Property
and O. Xxxxxx Xxxxx or O. Xxxxxx Xxxxx'x designee, as the authorized Dealer
Operator, and the respective Manufacturers shall have executed
16
Dealer Agreements on terms which are not less favorable to the Buyer than the
respective Dealer Agreements of the Sellers.
8.14 All conditions to Buyer's obligations under the Real Property
Purchase Agreements shall have been satisfied or fulfilled unless waived in
writing by the Buyer hereunder.
8.15 The Buyer shall have received an opinion of Xxxx Xxxx & Xxxx, counsel
to the Sellers and the Stockholder, dated the Closing Date, in form and
substance reasonably satisfactory to the Buyer and its counsel.
8.16 The Buyer shall have received the Non-Competition Agreement, duly
executed by the parties thereto other than the Buyer, and the Employment
Agreement, duly executed by Xxxxxx X. Xxxxxxxxxxxx.
8.17 The Sellers shall have delivered to the Buyer all documents,
including, without limitation, resolutions of the respective Board of Directors
and the shareholders of each of the Sellers, necessary to effect a change of
names of each of the Sellers after the Closing to names other than the corporate
names and the trade names referred to in Section 5.5 hereof or any variation
thereof.
8.18 There shall have been no material adverse change or development in
the business, prospects, properties, earnings, results of operations or
financial condition of any of the Sellers or any of the Assets or the
Liabilities.
8.19 The form of all instruments, certificates and documents to be
executed and delivered by the Sellers to the Buyers pursuant to this Agreement
and all legal matters in respect of the transactions as herein contemplated
shall be reasonably satisfactory to the Buyer and its counsel, none of whose
approval shall be unreasonably withheld or delayed.
8.20 All applicable waiting periods under the HSR Act (as defined in
Section 10.13 hereof) shall have expired without any indication by the Antitrust
Division or the FTC (each as defined in Section 10.13 hereof) that either of
them intends to challenge the transactions contemplated hereby or, if any such
challenge or investigation is made or commenced, the conclusion of such
challenge or investigation permits the transactions contemplated hereby in all
material respects.
8.21 The Buyer shall have completed preparation of such audited financial
statements of the Sellers as may be required by applicable regulations of the
Securities and Exchange Commission.
8.22 Subject to payment by the Buyer of the HMC Payable in accordance with
Section 2.5 hereof, Xxxxxx X. Xxxxxxxxxxxx shall have delivered to the Buyer the
promissory note which evidences the HMC Payable.
17
ARTICLE IX
----------
CONDITIONS PRECEDENT TO THE SELLERS' OBLIGATIONS
------------------------------------------------
The obligations of the Sellers to perform this Agreement at the Closing
are subject to the following conditions precedent which shall be fully satisfied
on or before the Closing, unless waived in writing by the Sellers' Agent:
9.1 All of the representations and warranties of the 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 (except to the extent that
any such representation and warranty, by its terms, relates to a stated date),
and the Sellers shall have received a certificate from a duly authorized officer
of the Buyer, dated the Closing Date, to such effect.
9.2 Each of the agreements or obligations required by this Agreement to be
performed or complied with by the Buyer at or before the Closing shall have been
duly performed or complied with, and the Sellers shall have received a
certificate from a duly authorized officer of the Buyer, dated the Closing Date,
to such effect.
9.3 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 The Inventory shall have been completed.
9.5 The Buyer shall have furnished the Sellers and the Stockholder with
(a) evidence to the reasonable satisfaction of the Sellers' Agent and its
counsel with respect to the corporate organization and existence and (b) a copy
of the resolutions duly adopted by the Board of Directors of the Buyer
authorizing the execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby, certified by an officer of the Buyer as of
the Closing Date.
9.6 The Buyer shall have (a) tendered to the Sellers the cash portion of
the Purchase Price and the Preferred Shares, (b) duly executed and delivered to
the respective Sellers the Assumption Agreements, and (c) paid in full the HMC
Payable, based upon a certificate of Xxxxxx X.
Xxxxxxxxxxxx as to its amount as of the Closing Date.
9.7 All conditions to the obligations of the Owners under the Real
Property Purchase Agreements shall have been satisfied or fulfilled, unless
waived in writing by the Sellers' Agent.
9.8 The Sellers shall have received an opinion of Parker, Poe, Xxxxx &
Xxxxxxxxx L.L.P., counsel to the Buyer, dated the Closing Date, in form and
substance reasonably satisfactory to the Sellers and their counsel.
18
9.9 The form of all certificates, instruments and documents to be executed
and/or delivered by the Buyer to the Sellers pursuant to this Agreement and all
legal matters in respect of the transactions as herein contemplated shall be
reasonably satisfactory to the Sellers and its counsel, none of whose approval
shall be unreasonably withheld or delayed.
9.10 The Sellers' Agent shall have received the Employment Agreement, duly
executed by the Buyer.
9.11 All applicable waiting periods under the HSR Act shall have expired
without any indication by the Antitrust Division or the FTC that either of them
intends to challenge the transactions contemplated hereby, or, if any such
challenge or investigation is made or commenced, the conclusion of such
challenge or investigation permits the transactions contemplated hereby in all
material respects.
9.12 Xxxxxx X. Xxxxxxxxxxxx shall have been released from his personal
guarantees of those Liabilities specified in Schedule 9.12 hereto, or the Buyer
shall have made provision reasonably satisfactory to Xxxxxx X. Xxxxxxxxxxxx to
protect and indemnify him from and against any liabilities he may have under
such guarantees.
ARTICLE X
---------
COVENANTS AND AGREEMENTS
------------------------
10.1 Each of the Sellers agrees that it will, at any time and from time to
time, after the Closing, upon request of the Buyer, do, execute, acknowledge and
deliver all such further acts, deeds, assignments, transfers, conveyances,
powers of attorney and assurances as may be reasonably required to convey and
transfer to and vest in the Buyer and protect its rights, title and interest in
and enjoyment of all the Assets.
10.2 The parties hereto shall use their reasonable best efforts to obtain,
and to cooperate with each other in obtaining, all authorizations, approvals,
licenses, permits and other consents contemplated by Articles VIII and IX.
10.3 During the period from the date of this Agreement through the Closing
Date, the Sellers will conduct the operation of their respective Businesses in
the ordinary course and in accordance with past practices.
10.4 From the date hereof until the Closing, each of the Sellers shall
afford to the Buyer, its attorneys, accountants and such other representatives
of the Buyer as the Buyer shall designate to such Seller, free and full access
at all reasonable times, and upon reasonable prior notice, to the Assets and the
properties, books and records of such Seller, and to interview personnel,
suppliers and customers of such Seller, in order that the Buyer may have full
opportunity to make such due diligence investigation as it shall reasonably
desire of the Assets, the Liabilities and the Businesses.
19
10.5 In connection with the Buyer's due diligence investigation, the
Sellers shall allow an environmental consulting firm selected by the Buyer (the
"ENVIRONMENTAL AUDITOR") to have prompt access to the Real Property in order to
conduct an environmental investigation, satisfactory to the Buyer in scope (such
scope being sufficient to result in a Phase I environmental audit report and a
Phase II environmental audit report, if desired by the Buyer), of, and to
prepare a report with respect to, the Real Property (the "ENVIRONMENTAL AUDIT").
Each of the Sellers shall provide to the Environmental Auditor: (i) reasonable
access to all of its existing records concerning the matters which are the
subject of the Environmental Audit; and (ii) reasonable access to the employees
of such Seller and the last known addresses of former employees of such Seller
who are most familiar with the matters which are the subject of the
Environmental Audit (such Seller agreeing to use reasonable efforts to have such
former employees respond to any reasonable requests or inquiries by the
Environmental Auditor). The Sellers shall otherwise cooperate with the
Environmental Auditor in connection with the Environmental Audit. The Buyer, on
the one hand, and the Sellers, on the other hand, shall each bear 50% of the
costs, fees and expenses in connection with the Environmental Audit.
10.6 All representations and warranties of the Sellers (which shall
include all statements contained in any schedule or certificate furnished or
delivered by the Sellers) shall survive the Closing for a period of three (3)
years, except for the representations and warranties in Sections 7.4, 7.6,
7.8(b) and 7.10 which shall survive the Closing until the expiration of the
applicable statutes of limitation. The Sellers and the Stockholder, jointly and
severally, agree to indemnify and hold harmless the Buyer and its officers,
directors, employees and agents, and their respective successors and assignees,
from and against any and all losses, liabilities, obligations, assessments,
suits, actions, proceedings, claims or demands, including costs, expenses and
fees (including reasonable attorneys' fees and expert witness fees) incurred in
connection therewith, suffered by any of them or asserted against any of them or
the Assets (collectively, "BUYER'S DAMAGES"), arising out of or based upon: (a)
the failure of any representation or warranty of the Sellers contained herein,
or in any agreement, certificate, schedule or document executed by the Sellers
or the Stockholder in connection herewith, to be true and correct in all
material respects as of the Closing Date; provided, however, the Sellers and the
Stockholder shall have no obligation to pay Buyer's Damages pursuant to this
subsection 10.6(a) unless and until (and only to the extent that) all claims in
respect of Buyer's Damages exceed a cumulative aggregate total of Fifty Thousand
Dollars ($50,000); (b) the breach of any covenant or agreement of the Sellers or
the Stockholder contained in this Agreement; (c) any liability or obligation of
the Sellers or the Stockholder not expressly assumed by the Buyer pursuant to
this Agreement; or (d) any arrangements or agreements made or alleged to have
been made by the Sellers or the Stockholder with any broker, finder or other
agent in connection with the transactions contemplated hereby; provided,
further, that the aggregate amount of Buyer's Damages required to be paid by the
Seller and the Stockholder shall not exceed Twenty-Five Million Dollars
($25,000,000).
10.7 All representations and warranties of the Buyer (which shall include
all statements contained in any schedule or certificate furnished or delivered
by the Buyer) shall survive the Closing for a period of three (3) years. The
Buyer agrees to indemnify and hold harmless each of the Sellers and its
Stockholder, officers, directors, employees and agents, and their respective
20
successors and assignees, from and against any and all losses, liabilities,
obligations, assessments, suits, actions, proceedings, claims or demands,
including costs, expenses and fees (including reasonable attorneys' fees and
expert witness fees) incurred in connection therewith, suffered by any of them,
or asserted against any of them, arising out of or based upon (a) the failure of
any representation or warranty of the Buyer contained herein, or in any
agreement, certificate or document executed by the Buyer in connection herewith,
to be true and correct in all material respects as of the Closing Date, (b) the
breach of any covenant or agreement of the Buyer contained in this Agreement,
(c) the Liabilities, or (d) any arrangements or agreements made or alleged to
have been made by the Buyer with any broker, finder or other agent in connection
with the transactions contemplated hereby.
10.8 Personal property, use and intangible taxes and assessments with
respect to the Assets shall be prorated on a per diem basis and apportioned
between the Sellers and the Buyer as of the date of the Closing. The Sellers
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 the Buyer
shall be liable for that portion of such taxes and assessments relating to, or
arising in respect of, any period after the Inventory Date. Any sale or transfer
taxes attributable to the sale or transfer of the Assets to the Buyer hereunder
shall be paid by the Sellers.
10.9 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 (i) 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 (ii) otherwise
disclose the existence and nature of negotiations regarding 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.
10.10 None of the Sellers or the Stockholder shall pursue, initiate,
encourage or engage in, any negotiations or discussions with, or provide any
information to, any person or entity (other than the 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 any of the Sellers or
any merger or consolidation or similar transaction involving any of the Sellers.
10.11 The Sellers shall promptly notify the Manufacturers regarding the
transactions contemplated by this Agreement. The Buyer shall promptly apply to
the Manufacturers for, or cause an affiliate of the Buyer to apply to the
Manufacturers for, the issuance of franchises to operate the respective
automobile dealerships upon the Real Property. Effective as of the Closing, each
of the Sellers shall terminate its Dealer Sales and Service Agreements with the
Manufacturers. The Sellers shall fully cooperate with the Buyer, and take all
reasonable steps to assist the Buyer, in the Buyer's efforts to obtain its own
similar Dealer Sales and Service Agreements with the Manufacturers. The parties
acknowledge that the Buyer's Dealer Agreements are subject to the approval of
the Manufacturers and that the Buyer would be unable to obtain its own, similar
Dealer Sales and
21
Service Agreements absent the Sellers' termination of their respective
agreements with the Manufacturers.
10.12 The Buyer shall have the right, but not the obligation, to employ
any or all of the Sellers' employees. If permitted by law and applicable
regulations, each Seller shall, in consideration for the sale of substantially
all of such Sellers' assets in bulk, assign and transfer to the Buyer, without
additional charge therefor, the amount of reserve in such Seller's State
Unemployment Compensation Fund with respect to the Businesses and the
corresponding experience rate.
10.13 Subject to the determination by the Buyer that any of the following
actions is not required, the Sellers and the Buyer shall promptly prepare and
file Notification and Report Forms under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended (the "HSR ACT") 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 Antitrust Division for additional
information or documentation.
10.14 The Sellers shall allow, cooperate with and assist the Buyer's
accountants, and shall instruct the Sellers' accountants to cooperate, in the
preparation of audited financial statements of the Sellers as necessary for any
required filings by the Buyer with the Securities and Exchange Commission or
with the Buyer's lenders; provided, however, that the expense of such audit
shall be borne by the Buyer.
10.15 Termination.
(a) Notwithstanding any other provision herein contained to the
contrary, this Agreement may be terminated at any time prior to the Closing
Date:
(i) By written consent of the Buyer and the Sellers' Agent;
(ii) At any time after the Closing Date Deadline (as the same
may have been extended pursuant to Article I hereof), by written notice by the
Buyer or the Sellers to the other party(ies) hereto if the Closing shall not
have been completed on or before the Closing Date Deadline (as the same may have
been extended pursuant to Article I hereof); provided, however, no party may
terminate this Agreement pursuant to this Section 10.15(a)(ii) if such party is
in breach of any material representation, warranty or covenant of such party
contained in this Agreement;
(iii) By the Buyer if, after any initial HSR Act filing, the
FTC makes a "second request" for information, or the FTC or the Antitrust
Division challenges the transactions contemplated hereby; provided that the
Buyer delivers a written notice to the Sellers of its termination hereunder
within 30 days of the Buyer's receipt of such second request or of notice of
such challenge;
(iv) [intentionally left blank]
22
(v) Subject to the last paragraph of this Section 10.15(a), by
the Buyer, by written notice to the Sellers' Agent, in the event that approval
by any applicable automobile manufacturer or distributor of the transactions
contemplated by this Agreement is not received prior to the Closing Date
Deadline; or
(vi) Subject to the last paragraph of this Section 10.15(a),
by the Buyer, by written notice to the Sellers' Agent, in the event that any
Manufacturer shall exercise any right of first refusal, preemptive right or
other similar right, with respect to any of the Assets.
Notwithstanding the provisions of Subsections 10.15(a)(v) and (vi) above,
the Buyer and the Sellers' Agent may elect to terminate this Agreement only as
to the Assets and Liabilities with respect to the dealership franchise from the
Manufacturer referred to in such Subsection; in such event, the Business and
Intangible Assets Purchase Price shall be reduced by the applicable amount
opposite the name of the applicable Seller on Schedule 2.2 hereto and the other
components of the Purchase Price shall be appropriately reduced.
(b) In the event of termination of this Agreement pursuant to
Section 10.15(a), this Agreement shall be of no further force or effect;
provided, however, that any termination pursuant to Section 10.15(a) shall not
relieve (a) the Buyer of any liability under Section 10.15(c) below, (b) the
Sellers of any liability under Section 10.15(d) below, or (c) any party hereto
of any liability for breach of any representation and warranty, covenant or
agreement hereunder occurring prior to such termination. In addition, in the
event of any such termination, all filings, applications and other submissions
made pursuant to this Agreement or prior to the execution of this Agreement in
contemplation thereof shall, to the extent practicable, be withdrawn from the
agency or other entity to which made.
(c) If this Agreement is terminated by the Sellers pursuant to
Section 10.15(a)(ii) above and the failure to complete the Closing on or before
the Closing Date Deadline shall have been due to the Buyer's breach of its
material representations and warranties or its material covenants or obligations
under this Agreement, then the Buyer shall, upon demand of the Sellers, promptly
pay to the Sellers in immediately available funds, as liquidated damages for the
loss of the transaction, a termination fee of $500,000 (the "BUYER'S TERMINATION
FEE").
(d) If this Agreement is terminated by the Buyer pursuant to Section
10.15(a)(ii) above and the failure to complete the Closing on or before the
Closing Date Deadline shall have been due to the Sellers' breach of any of their
material representations and warranties or any of their material covenants or
obligations under this Agreement, then the Sellers, jointly and severally,
shall, upon demand of the Buyer, promptly pay to the Buyer in immediately
available funds, as liquidated damages for the loss of the transaction, a
termination fee of $500,000 (the "SELLERS' TERMINATION FEE").
(e) The respective rights of the parties to terminate this Agreement
under Section 10.15(a)(ii) and to be paid the Sellers' Termination Fee or the
Buyer's Termination Fee, as the case may be, shall be the respective parties'
sole and exclusive remedies for damages; in the event of
23
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 Sellers' Termination Fee or the
Buyer's 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 by any other party hereto.
10.16 The Buyer agrees to provide to Xxxxxx X. Xxxxxxxxxxxx and members of
his immediate family (for personal use and not for commercial resale) the right
to purchase, during each year of the seven years after the termination of his
employment with the Buyer, an aggregate total of four vehicles (including
trucks), as selected by Xxxxxx X. Xxxxxxxxxxxx (or, in the event of his death or
disability, by a single person representing his family), from the Buyer or one
or more of the Buyer's wholly-owned subsidiaries at the Buyer's or such
subsidiaries' actual cost (equal to factory invoice less (i) factory holdback,
(ii) dealer rebates, and (iii) any other factory incentive).
ARTICLE XI
----------
MISCELLANEOUS
-------------
11.1 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. The Buyer may assign this Agreement, without the consent of the other
parties hereto, to a corporation, partnership or limited liability company
controlled by the Buyer, including a corporation, partnership or limited
liability company 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 the
Buyer or of such corporation, partnership or limited liabilities company
controlled by the Buyer (including any such acquisition by merger or
consolidation); provided said assignment shall be in writing and the assignee
shall assume all obligations of the Buyer hereunder, whereupon the assignee
shall be substituted in lieu of the Buyer named herein for all purposes,
provided, however, that the Buyer originally named herein shall continue to be
liable with respect to its obligations hereunder. The 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 the Buyer as may be required by any lender
to the Buyer.
11.2 The interpretation and construction of this Agreement, and all
matters relating hereto, shall be governed by the laws of the State of Florida.
11.3 All accounting matters required or contemplated by this Agreement
shall be in accordance with generally accepted accounting principles.
11.4 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.
24
11.5 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 matter.
11.6 Any party to this Agreement may, by written notice to the other
parties hereto, waive any provision of this Agreement from which such party is
entitled to receive a benefit. The waiver by any 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.
11.7 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 the 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.
25
If to the Sellers or the Stockholder, to:
Xxxxxx X. Xxxxxxxxxxxx
Xxxxxxxxxxxx Management, Inc.
X.X. Xxx 000
000 Xxxxxxxxx Xxxxx
Xxx Xxxxxx Xxxxx, Xxxxxxx 00000
Telecopy No.: (000) 000-0000
With a copy to:
Xxxx, Xxxx & Xxxx
P.O. Box 2491
000 Xxxxxxxx Xxxxxx
Xxxxxxx Xxxxx, Xxxxxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxx X. Xxxxx
11.8 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 Whenever any representation or warranty of the Sellers contained
herein or in any other document executed and delivered in connection herewith is
based upon the knowledge of the Sellers, (a) such knowledge shall be deemed to
include (i) the best actual knowledge, information and belief of any of the
Sellers or the Stockholder, and (ii) any information which any Stockholder would
reasonably be expected to be aware of in the prudent discharge of his or her
duties in the ordinary course of business (including consultation with legal
counsel) on behalf of any Seller, and (ii) the knowledge of any Seller or
Stockholder shall be deemed to be the knowledge of all of the Sellers.
11.10 (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 the Buyer and the
Sellers within thirty (30) days after any request for arbitration hereunder. The
two arbitrators thus appointed shall choose the third arbitrator
26
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 30 days after their appointment, either arbitrator may petition the
American Arbitration Association to make the appointment. The place of
arbitration shall be Charlotte, North Carolina. 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 Subject to Section 11.1 hereof, this Agreement shall be binding
upon, inure to the benefit of and be enforceable by the respective successors
and 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 the Sellers, or any other person, firm, corporation or legal entity,
other than the parties hereto and their successors and permitted assigns, any
rights, remedies or other benefits under or by reason of this Agreement.
11.12 The article, section and paragraph headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
11.13 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 For a period of three (3) years after the Closing Date, the Buyer
agrees to provide to the Sellers full cooperation and assistance relative to
accounting matters in connection with the Businesses including, but not limited
to, assistance in connection with any Florida Department of Revenue sales tax
audit, filing of all final payroll and sales tax returns, filing of final W-2's
for all employees for the calendar year ended December 31, 1998, assistance in
the termination or roll-over of the qualified pension plan, accounting
assistance in the paying of accounts payable, accounting assistance relative to
the finalization of all factory accounts, accounting assistance relative to the
collection of all receivables, accounting assistance relative to the year end
accounting necessary to prepare the Sellers' corporate tax returns, and
accounting assistance in the event of an Internal Revenue Service audit.
27
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day, month and year first above written.
THE BUYER: SONIC AUTOMOTIVE, INC.
By: /s/ O. XXXXXX XXXXX
-------------------------------
Name:
Title:
Federal Taxpayer I.D.: 00-0000000
THE SELLERS: HMC FINANCE CORPORATION, INC.
By: /s/ XXXXXX X. XXXXXXXXXXXX
-------------------------------
Name:
Title:
Federal Taxpayer I.D.: 00-0000000
HALIFAX FORD-MERCURY, INC.
By: /s/ XXXXXX X. XXXXXXXXXXXX
-------------------------------
Name:
Title:
Federal Taxpayer I.D.: 00-0000000
XXXXXXXXXXXX AUTOMOBILES, INC.
By: /s/ XXXXXX X. XXXXXXXXXXXX
-------------------------------
Name:
Title:
Federal Taxpayer I.D.: 00-0000000
XXXXXXXXXXXX CHEVROLET-OLDSMOBILE, INC.
By: /s/ XXXXXX X. XXXXXXXXXXXX
-------------------------------
Name:
Title:
Federal Taxpayer I.D.: 00-0000000
28
SUNRISE AUTO WORLD, INC.
By: /s/ XXXXXX X. XXXXXXXXXXXX
-------------------------------
Name:
Title:
Federal Taxpayer I.D.: 00-0000000
THE SHAREHOLDER: /s/ XXXXXX X. XXXXXXXXXXXX
-------------------------- (SEAL)
XXXXXX X. XXXXXXXXXXXX
29
INDEX OF SCHEDULES AND EXHIBITS
TO
ASSET PURCHASE AGREEMENT
Schedules
---------
Schedule 2.2 Part I - Allocation of Purchase Price Among Sellers(1)
Part II - Allocation of Purchase Price and Liabilities to
Assets
Part III - Payment of Purchase Price(2)
Schedule 2.4 Part I - Liabilities
Part II - Retained Liabilities
Schedule 2.5 Promissory Note from HMC to Xxxxxx X. Xxxxxxxxxxxx
Schedule 3.1 New Vehicles(2)
Schedule 3.2 Demonstrators(2)
Schedule 5.4 Fixtures and Equipment (Book Depreciation Schedule)(3)
Schedule 5.9 HMC Receivables(4)
Schedule 6.2 Compliance re: Buyer
Schedule 7.1 Stockholders
Schedule 7.2 Compliance re: Seller and Stockholder
Schedule 7.3 Pending or Threatened Actions, Suits or Proceedings
Schedule 7.4 Encumbrances on the Assets
Schedule 7.5 Permits and Approvals
Schedule 7.7 Employees
Schedule 7.10 Compliance with Laws
Schedule 9.12 Personal Guarantees by Xxxxxx X. Xxxxxxxxxxxx
Exhibits
--------
A Form of Bills of Sale
B Statement of Rights and Preferences
C Form of Non-Competition Agreement
D Form of Employment Agreement - Xxxxxx Xxxxxxxxxxxx
-----------------------
(1) As to Business and Intangible Assets Purchase Price only; revised Schedule
with all Purchase Price Components delivered 3 days prior to Closing
(2) 3 days prior to Closing
(3) 5 days prior to Closing
(4) 1 day prior to Closing
30
