EXHIBIT 2.11
ASSET PURCHASE AGREEMENT
BETWEEN
APS HOLDING CORPORATION AND CERTAIN SUBSIDIARIES
OF APS HOLDING CORPORATION,
AS DESCRIBED ON SCHEDULE A HERETO
AS SELLER
AND
AUTO PARTS EXPRESS, LLC
AS PURCHASER
DATED AS OF JANUARY 11, 1999
TABLE OF CONTENTS
PAGE NO.
ARTICLE I. DEFINITIONS.....................................................2
Section 1.1. Definitions.................................................2
Section 1.2. Accounting Terms and Determinations........................14
ARTICLE II. PURCHASE AND SALE OF PURCHASED ASSETS AND ASSUMPTION OF
ASSUMED LIABILITIES.....................................14
Section 2.1. Purchase and Sale of Purchased Assets......................14
Section 2.2. Assumption of Obligations and Liabilities..................14
Section 2.3. Purchase Price; Payment of Purchase Price..................15
Section 2.4. Limitations on Purchase of Inventory and Atlanta DC
Inventory..............................................16
Section 2.5. Physical Inventory; Inventory True-Up.......................16
Section 2.6. Accounts Receivable True-Up................................17
Section 2.7. Condition of Purchased Assets; Return of Rejected
Inventory; Inventory in Transit........................18
Section 2.8. Allocation of Purchase Price...............................18
Section 2.9. Sale at Closing Date.......................................19
Section 2.10. Apportionments.............................................19
Section 2.11. Use of Office Space........................................20
Section 2.12. Lease for Xxxxxx Corners Store.............................20
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF SELLER......................21
Section 3.1. Authority of Seller........................................21
Section 3.2. No Conflict or Violation...................................21
Section 3.3. Compliance with Law........................................21
Section 3.4. Permits....................................................22
Section 3.5. Ownership of Purchased Assets..............................22
Section 3.6. Assigned Contracts.........................................22
Section 3.7. Labor Relations............................................22
Section 3.8. Litigation.................................................22
Section 3.9. Brokers....................................................22
Section 3.10. Disclaimer of Additional Representations and
Warranties; Schedules..................................23
Section 3.11. Disclaimer of Additional Representations and
Warranties; Schedules..................................23
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF PURCHASER....................24
Section 4.1. Authority of Purchaser.....................................24
Section 4.2. No Conflict or Violation...................................24
Section 4.3. Consents and Approvals.....................................24
Section 4.4. Availability of Funds......................................25
Section 4.5. Litigation.................................................25
Section 4.6. Brokers....................................................25
Section 4.7. Adequate Assurances Regarding Executory Contracts..........25
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Section 4.8. Management Employees' Knowledge and Control................25
Section 4.9. Xxxx-Xxxxx-Xxxxxx..........................................26
ARTICLE V. CERTAIN COVENANTS OF SELLER.....................................26
Section 5.1. Consents and Approvals.....................................26
Section 5.2. Further Assurances.........................................26
Section 5.3. Assignment of Contracts....................................26
Section 5.4. Transfer of Technology and Services to be Provided
by Seller..............................................26
Section 5.5. Cure of Defaults...........................................27
Section 5.6. Bankruptcy Actions.........................................27
Section 5.7. Indemnification for Access.................................27
Section 5.8. Indemnification for Access.................................27
ARTICLE VI. CERTAIN COVENANTS OF PURCHASER.................................27
Section 6.1. Consents and Approvals.....................................27
Section 6.2. Adequate Assurances Regarding Executory Contracts..........27
Section 6.3. Performance under Assigned Contracts.......................28
Section 6.4. Further Assurances.........................................28
Section 6.5. Purchaser Financing........................................28
Section 6.6. Indemnification for Access.................................28
Section 6.7. Indemnification for Access.................................29
Section 6.8. Certain Agreements and Indemnification Related to
the POS System and Autopoint...........................29
Section 6.9. Transfer of Technology and Services to be Provided
by Seller..............................................31
Section 6.10. Procedures With Respect to Trademarks......................31
ARTICLE VII. CONDITIONS TO SELLER'S OBLIGATIONS............................32
Section 7.1. Representations and Warranties.............................32
Section 7.2. Compliance with Agreement..................................32
Section 7.3. Consents...................................................33
Section 7.4. Purchaser's Closing Deliveries and Obligations.............33
Section 7.5. Entry of the Order.........................................33
ARTICLE VIII. CONDITIONS TO PURCHASER'S OBLIGATIONS........................33
Section 8.1. Representations and Warranties.............................33
Section 8.2. Compliance with Agreement..................................33
Section 8.3. Consents...................................................33
Section 8.4. Seller's Closing Deliveries and Obligations................34
Section 8.5. Entry of the Order.........................................34
ARTICLE IX. THE CLOSING; OTHER BIDS; TERMINATION...........................34
Section 9.1. The Closing................................................34
Section 9.2. Other Bids; Fees...........................................36
Section 9.3. Termination................................................38
Section 9.4. Effects of Termination.....................................39
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Section 9.5. Effects of Purchaser Default..............................39
ARTICLE X. TAXES 38
Section 10.1. Taxes Related to Purchase of Assets.......................40
Section 10.2. Proration of Real and Personal Property Taxes.............40
Section 10.3. Cooperation...............................................41
ARTICLE XI. EMPLOYEES AND EMPLOYEE BENEFIT PLANS...........................41
Section 11.1. Employment................................................41
Section 11.2. Employee Welfare Benefit Plans............................42
Section 11.3. COBRA.....................................................43
Section 11.4. A.P.S., Inc. Partnership Plan.............................43
ARTICLE XII. MISCELLANEOUS PROVISIONS......................................44
Section 12.1. Representations and Warranties............................44
Section 12.2. Notices...................................................44
Section 12.3. Amendments................................................45
Section 12.4. Assignment................................................45
Section 12.5. Announcements.............................................45
Section 12.6. Expenses..................................................45
Section 12.7. Entire Agreement..........................................46
Section 12.8. Descriptive Headings......................................46
Section 12.9. Counterparts..............................................46
Section 12.10. Governing Law; Jurisdiction...............................46
Section 12.11. Construction..............................................46
Section 12.12. Severability..............................................47
Section 12.13. Confidentiality...........................................47
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SCHEDULE
LETTER/NUMBER SCHEDULE NAME
Schedule A Certain Affiliates
Schedule B AFCO Notes
Schedule C Assigned Leases
Schedule D Corporate Assets
Schedule E Fixed Assets
Schedule F Intentionally Omitted
Schedule G In-transit Inventory
Schedule H Other Contracts
Schedule I Purchased Locations
Schedule J Warehouse Notes
Schedule K Big-A Stores
Schedule L Trademarks
Schedule M Xxxx Arnley / Hy-Test Inventory
Schedule N Deposits and Prepaid Expenses
Schedule O Owned Vehicles
3.3 Compliance with Laws
3.4 Permits
3.7 Collective Bargaining Agreements
3.8 Litigation
4.4 Purchaser Capitalization
EXHIBIT EXHIBIT NAME
A Assignment and Assumption Agreement
B Xxxx of Sale and Assumption Agreement
C Technology Transfer Agreement
D Lease Assignment and Assumption Agreement
E Order
F Services Agreement
G Bidding Protections Order
H Trademark Assignment Agreement
I Merchandise Purchase Agreement
J Accounting Services Agreement
K Trademark License Agreement
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ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (the "AGREEMENT") is made and entered
into as of January 11, 1999 by and among APS HOLDING CORPORATION, a Delaware
corporation ("APS") and a debtor and debtor-in-possession in a case pending
under chapter 11 of the Bankruptcy Code, the subsidiaries of APS set forth on
SCHEDULE A hereto (together with APS, "SELLER"), which subsidiaries are debtors
and debtors-in-possession in cases pending under chapter 11 of the Bankruptcy
Code, and AUTO PARTS EXPRESS, LLC, a Delaware limited liability company
("PURCHASER").
RECITALS
WHEREAS, Seller is engaged in the business of selling and
distributing automotive replacement parts, accessories and supplies and conducts
its business through a network of company-owned stores ("STORES"), installers
service warehouses ("ISWS") and distribution centers ("DCS");
WHEREAS, on February 2, 1998, Seller filed voluntary petitions with
the Bankruptcy Court initiating cases under chapter 11 of the Bankruptcy Code
and has continued in the possession of its assets and in the management of its
business pursuant to sections 1107 and 1108 of the Bankruptcy Code;
WHEREAS, Purchaser desires to purchase from Seller, and Seller
desires to sell to Purchaser, certain of the assets associated with the Seller's
corporate offices and with operations at certain Stores, ISWs and DCs, and
certain intellectual property owned by Seller, subject to certain liabilities,
all on the terms and subject to the conditions set forth herein;
WHEREAS, in connection with its contemplated purchase of assets,
Purchaser desires (i) to conduct business at certain Stores, DCs and ISWs and
offer employment to certain employees of Seller, (ii) to obtain, for a limited
time from and after the Closing Date, access to Seller's Parts Information
Management System and certain other technology and services from Seller, and
(iii) to have Seller assign certain real property lease agreements and other
material agreements to Purchaser, all on the terms and subject to the conditions
set forth herein and in the Ancillary Agreements.
NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants and agreements herein contained, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
SECTION 1.1. DEFINITIONS. Unless otherwise defined herein, the terms
defined in the introductory paragraph and the Recitals to this Agreement shall
have the respective meanings specified therein, and the following terms shall
have the meanings specified below:
"ACCOUNTING SERVICES AGREEMENT" means the agreement substantially in
the form attached hereto as EXHIBIT J, pursuant to which Seller will
provide Purchaser with certain accounting services for a limited period of
time after the Closing Date.
"ACCOUNTS RECEIVABLE" means the accounts receivable (including all
rights to xxxx customers for products shipped or services rendered on or
prior to the Effective Date) which are allocable to Seller's business
operations conducted at the Purchased Locations, at the Hartford DC, and
associated with the Atlanta DC which have not otherwise been transferred
to the Charlotte DC. In determining the amount of any Account Receivable
hereunder, the amount of any unearned advertising fee or other similar
charge allocable thereto shall be excluded.
"ADDITIONAL INVENTORY" means Dirty Core Inventory and Two Year
Inventory.
"AFCO NOTES" means the notes owned by Autoparts Finance Company,
Inc., a subsidiary of Seller, and identified as AFCO Notes on SCHEDULE B
attached hereto, together with all security for the payment of such notes
and all documents and agreements evidencing such security.
"AFFILIATE" means "affiliate" as defined in Rule 405 promulgated
under the Securities Act of 1933, as amended.
"AGREEMENT" has the meaning set forth in the introductory paragraph
and shall include all Schedules and Exhibits hereto.
"ANCILLARY AGREEMENTS" means, collectively, the Lease Assignment and
Assumption Agreement, the Assignment and Assumption Agreement, the Xxxx of
Sale and Assumption Agreement, the Accounting Services Agreement, the
Technology Transfer Agreement, the Services Agreement, the Trademark
License Agreement, the Trademark Assignment Agreement and the Merchandise
Purchase Agreement.
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"APPORTIONMENT DATE" has the meaning set forth in SECTION 2.10.
"APS" has the meaning set forth in the introductory paragraph.
"ASSIGNED CONTRACTS" means the Assigned Leases and the Other
Contracts relating to the Purchased Locations to be assigned by Seller to
Purchaser, excluding any repurchase agreements with Associate Jobbers.
"ASSIGNED LEASES" means those leases to be assigned to Purchaser at
Closing, a schedule of which is attached hereto as SCHEDULE C.
"ASSIGNMENT AND ASSUMPTION AGREEMENT" means the Assignment and
Assumption Agreement to be executed at Closing for the Other Contracts, in
substantially the form attached hereto as EXHIBIT A.
"ASSOCIATE JOBBER ELIGIBLE ACCOUNTS" means Eligible Accounts
Receivable which arise out of sales to Associate Jobbers.
"ASSOCIATE JOBBERS" means the independent auto parts jobbing
customers of the DCs that are included in the Purchased Locations.
"ASSUMED LIABILITIES" has the meaning set forth in SECTION 2.2.
"AUTHORIZED OCCUPANTS" has the meaning set forth in SECTION 2.11.
"BANKRUPTCY CODE" means The Bankruptcy Reform Act of 1978, as
heretofore and hereafter amended, and codified as 11 U.S.C. Section
101, ET SEQ.
"BANKRUPTCY COURT" means the United States Bankruptcy Court for the
District of Delaware, or any other court, having jurisdiction over the
Cases from time to time.
"XXXX ARNLEY/HY-TEST INVENTORY" means all items of automotive
inventory owned by Seller and on hand at or on consignment from the
Purchased Locations on the Closing Date, and from each of the product
lines identified on SCHEDULE M attached hereto.
"BID" has the meaning set forth in SECTION 9.2(B).
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"BIDDERS" has the meaning set forth in SECTION 9.2(B) hereof.
"BIG A STORES" means the Stores listed on SCHEDULE K attached
hereto.
"XXXX OF SALE AND ASSUMPTION AGREEMENT" means the Xxxx of Sale and
Assumption Agreement to be executed at Closing by Purchaser and Seller in
substantially the form attached hereto as EXHIBIT B.
"BLACKSTONE" has the meaning set forth in SECTION 9.2(B).
"BREAKUP FEE" has the meaning set forth in SECTION 9.2(D).
"BUSINESS DAY" means a day, other than a Saturday or a Sunday, on
which commercial banks are not required or authorized to close in The City
of New York.
"BUSINESS EMPLOYEES" means employees of Seller whose duties relate
primarily to Seller's business operations at the Purchased Locations or at
Seller's corporate offices, subject to the letter agreement between
A.P.S., Inc. and Purchaser to be entered into promptly after the date
hereof, but in any event no later than the Closing.
"CASES" means the chapter 11 cases of Seller pending in the
Bankruptcy Court and being jointly administered for procedural purposes
as IN RE APS HOLDING CORPORATION, ET. AL., Case No. 98-197 (PJW).
"CLOSING" has the meaning set forth in SECTION 9.1.
"CLOSING DATE" has the meaning set forth in SECTION 9.1.
"CLOSING DATE PAYMENT" has the meaning set forth in SECTION
2.3(B).
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMMITTED FINANCING" means funds available pursuant to a written
commitment letter of a U.S.-based bank acceptable to Seller, or a standby
letter of credit confirmed by a U.S.-based bank acceptable to Seller,
providing for financing for Purchaser sufficient to allow it to pay the
Purchase Price and perform its other obligations under this
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Agreement and the Ancillary Documents, a copy of which letter or other
documentation has been delivered to Seller prior to the date hereof.
"CORPORATE ASSETS" means the furniture, furnishings and equipment
set forth on SCHEDULE D hereto.
"DC" has the meaning set forth in the Recitals hereto.
"DEPOSITS AND PREPAID EXPENSES" means all of Seller's deposits and
prepaid expenses relating to the Purchased Locations and to the Assigned
Contracts, other than utility deposits, a list of which Deposits and
Prepaid Expenses is to be attached hereto at the Closing as SCHEDULE N.
"DIP LENDERS" means the financial institutions from time to time
party to the Revolving Credit, Term Loan and Guarantee Agreement.
"DIRTY CORE INVENTORY" means items of used cores returned by
customers and on hand at the Purchased Locations on the Effective Date.
"DISCOUNT PERCENTAGE" means:
(a) 60% with respect to Eligible Inventory
(b) 30% with respect to the Xxxx Arnley/Hy-Test Inventory;
(c) 80% with respect to Dirty Core Inventory;
(d) 37.5% with respect to Two Year Inventory;
(e) 75% with respect to Associate Jobber Eligible Accounts
which are current or deferred;
(f) 60% with respect to Associate Jobber Eligible Accounts
which are aged up to and including sixty days;
(g) 50% with respect to Store Customer Eligible Accounts;
(h) 30% with respect to the Fixed Assets;
(i) 85% with respect to the AFCO Notes;
(j) 85% with respect to the Warehouse Notes; and
(k) 30% with respect to the Owned Vehicles.
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"DONLEN BOOK VALUE" means the fair market value of the Owned
Vehicles, calculated by Seller with reference to prices realized by The
Donlen Corporation, in wholesale sales of vehicles of similar age, make,
model, and / or condition leased previously by Seller from Donlen
Corporation.
"EFFECTIVE DATE" has the meaning set forth in SECTION 2.3(A)
hereof.
"EFFECTIVE DATE ACCOUNTS RECEIVABLE STATEMENT" has the meaning set
forth in SECTION 2.6(A) hereof.
"ELIGIBLE ACCOUNTS RECEIVABLE" means all Accounts Receivable arising
from sales on or prior to the Effective Date in the normal course of
business, excluding Accounts Receivable (i) arising from sales to
customers which are not customers of Seller on the Effective Date, and
(ii) arising from sales to a customer whose total Accounts Receivable
dollar balance on the Effective Date includes twenty-five percent (25%) or
more Accounts Receivable which are ninety-one (91) days or more past due.
For purposes of this Agreement, "customers which are not customers of
Seller on the Effective Date" shall mean all historical customers of
Seller which at that date (i) have not purchased products from Seller
during the preceding 90 days, (ii) have ceased business operations, or are
in the process of liquidation, (iii) have had a receiver appointed for
their business or assets, (iv) are the subject of an order for relief
filed under the Bankruptcy Code, or (v) have otherwise notified Seller
that they have terminated their customer relationship with Seller.
"ELIGIBLE INVENTORY" means items of automotive inventory, other than
Additional Inventory, Warranty Inventory and Xxxx Arnley/Hy-Test
Inventory, in good and salable condition, including core charges
associated with such inventory, if applicable, owned by Seller and on hand
at or on consignment from the Purchased Locations on the Effective Date,
excluding (i) all inventory which is the subject of a claim against GKN
PLC, (ii) items whose part numbers do not appear in the relevant
manufacturer's most recently published catalogs and price sheets, and
(iii) obsolete items.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"ESTIMATED ACCOUNTS RECEIVABLE" means the total Eligible Accounts
Receivable estimated by Seller to be outstanding, as to DCs, on the
Effective Date, and as to
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Stores and ISWs, on the Business Day prior to the Effective Date.
"EXECUTORY CONTRACTS" means all Assigned Contracts entered into by
or assigned to Seller before February 2, 1998 and which are executory or
unexpired as of the Closing Date.
"EXPENSE REIMBURSEMENT" has the meaning set forth in SECTION
9.2(D).
"FINAL INVENTORY SCHEDULE" has the meaning set forth in SECTION
2.5.
"FIXED ASSETS" means (i) all of the machinery, equipment, furniture,
fixtures, and computers, located at the Purchased Locations or used
primarily in the operation of the business at the Purchased Locations on
the Closing Date and which are owned by Seller, a list of which Fixed
Assets, with the Fixed Asset Book Value allocated by item or groups of
items as of the date of this Agreement (the "FIXED ASSETS SCHEDULE"), is
attached hereto as SCHEDULE E, which Fixed Assets Schedule shall be
updated to reflect acquisitions, dispositions and depreciation as of the
Closing Date; and (ii) to the extent assignable, any rights of Seller to
the warranties, licenses and other similar rights with respect thereto,
PROVIDED that Fixed Assets shall not include any leasehold improvements
or Owned Vehicles.
"FIXED ASSET BOOK VALUE" means the book value net of accumulated
depreciation of the Fixed Assets as of the Closing Date as determined in
accordance with the Fixed Assets Schedule.
"FORM AGREEMENT" has the meaning set forth in SECTION 9.2(B).
"GAAP" has the meaning set forth in SECTION 1.2.
"GOVERNMENTAL AGENCY" means (a) any federal, state, county, local or
municipal governmental or administrative agency or political subdivision
thereof, (b) any governmental authority, board, bureau, commission,
department or instrumentality and (c) any court or administrative
tribunal.
"HARTFORD DC" means the DC located in Hartford, Connecticut.
"HSR ACT" has the meaning set forth in SECTION 4.9.
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"INTENT TO USE XXXX" has the meaning set forth in SECTION 6.10.
"INTENT TO USE XXXX LICENSE" has the meaning set forth in SECTION
6.10.
"INTENT TO USE REGISTRATION" has the meaning set forth in SECTION
6.10.
"IN-TRANSIT INVENTORY" means automotive inventory subject to open
purchase orders (excluding back orders) of Seller as of the Effective
Date, an estimated list of which In-transit Inventory (with respect to DCs
only) as of the Effective Date is to be attached to this Agreement on the
Closing Date as SCHEDULE G.
"ISW" has the meaning set forth in the Recitals hereto.
"KNOWLEDGE" as applied to Seller means the actual knowledge of
the President, the Chief Executive Officer or the Chief Financial
Officer of APS, and as applied to Purchaser or the Management Employees
for purposes of this Agreement, means the actual knowledge of Xxxxxxx
X. Xxxxxxx, Xxxxx X. Xxxxxxx or E. Xxxxxx Xxxxxx.
"LEASE ASSIGNMENT AND ASSUMPTION AGREEMENT" means the Assignment and
Assumption Agreement to be executed at Closing for the Assigned Leases, in
substantially the form attached hereto as EXHIBIT D.
"LEASE" has the meaning set forth in SECTION 2.11.
"LEASED PREMISES" has the meaning set forth in SECTION 2.11.
"LICENSED SPACE" has the meaning set forth in SECTION 2.11.
"LIEN" means any mortgage, pledge, security interest, charge or
other encumbrance, other than (i) liens on property underlying any of the
Assigned Leases; (ii) any imperfection of title with respect to any asset
which does not materially interfere with the present occupancy, use or
marketability of such asset and the continuation of the present occupancy
or use of such asset; (iii) such covenants, conditions, restrictions,
easements, encroachments or encumbrances that are not created pursuant to
mortgages or other financing or security documents, and any other state of
facts, which do not, individually or in the aggregate, materially
interfere with the present
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occupancy, use or marketability of such asset; and (iv) liens for Taxes
not yet delinquent or which are being contested in good faith through
appropriate proceedings and for which proper reserves have been
established on the books of Seller.
"MANAGEMENT EMPLOYEES" means Xxxxxxx X. Xxxxxxx, Xxxxx X. Xxxxxxx
and E. Xxxxxx Xxxxxx, individually, current and former senior
management employees of Seller and officers and managers of Purchaser.
"NON-COVERED ASSETS " has the meaning set forth in SECTION 9.2(C).
"ORDER" means an order of the Bankruptcy Court, in substantially the
form attached hereto as EXHIBIT E, which order, as of the Closing Date,
shall not have been stayed, vacated or otherwise rendered ineffective,
authorizing, among other things, the sale of the Purchased Assets to
Purchaser, the assignment of the Assigned Contracts to, and the assumption
of the Assigned Contracts by, Purchaser, the transactions contemplated by
the Ancillary Agreements and all other transactions and agreements
contemplated hereby.
"OTHER CONTRACTS" means the contracts which are listed on SCHEDULE H
attached hereto.
"OWNED VEHICLES" means the cars and trucks owned by Seller and
listed on SCHEDULE O attached hereto.
"PERMIT" means any permit, approval, authorization, license,
variance or permission required by a Governmental Agency under any
applicable law.
"PERSON" means any individual, partnership, corporation, trust,
association, limited liability company, Governmental Agency or other
entity.
"PHYSICAL INVENTORY PERIOD" has the meaning set forth in SECTION
2.5.
"PIMS" means the Parts Information Management System, the
information management system used in operating the business carried on at
the Purchased Locations, access to which is to be granted to Purchaser
pursuant to and subject to the conditions of the Services Agreement.
"PIMS INVENTORY VALUE" means the invoice cost to Seller per item of
inventory as shown on PIMS as of the Effective Date.
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"POS SYSTEMS" has the meaning set forth in SECTION 6.8.
"PURCHASE PRICE" has the meaning set forth in SECTION 2.3(A).
"PURCHASED ASSETS" means all of the Seller's right, title and
interest as of the Closing Date in and to the following:
(a) all automotive inventory, including, without limitation,
the Eligible Inventory, Additional Inventory, Warranty
Inventory and Xxxx Arnley/Hy-Test Inventory on hand at
or on consignment from the Purchased Locations on the
Closing Date;
(b) the In-transit Inventory;
(c) the Fixed Assets;
(d) the Corporate Assets;
(e) the Accounts Receivable, together with all related
Security Documents (subject to the limitations set forth
at the end of this definition);
(f) the AFCO Notes, together with all related Security
Documents (subject to the limitations set forth at the
end of this definition);
(g) the Warehouse Notes, together with all related Security
Documents (subject to the limitations set forth at the
end of this definition);
(h) the Assigned Contracts;
(i) all Deposits and Prepaid Expenses;
(j) all brochures, catalogs, price lists, specifications,
manuals, books, records, correspondence, reports,
analyses, summaries and other written or printed
materials relating to the Purchased Assets, and copies
of personnel files for the Purchaser's Employees;
(k) to the extent legally assignable, Permits required to
conduct business at the Purchased Locations as conducted
prior to the Closing Date;
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(l) customer lists and other information and data relating
to third party customers of the Purchased Locations; and
(m) the Trademarks.
With respect to Accounts Receivable whose obligors are also obligors
under any AFCO Notes and/or Warehouse Notes, Security Documents which
secure such Accounts Receivable shall not be included in the Purchased
Assets or otherwise transferred to Purchaser unless all AFCO Notes and/or
Warehouse Notes payable by such Accounts Receivable obligors are purchased
by Purchaser, PROVIDED that Seller will release the liens arising under
such Security Documents when the principal and all accrued interest on
such AFCO Notes and/or Warehouse Notes is paid in full. With respect to
AFCO Notes and/or Warehouse Notes whose obligors are also obligors under
accounts receivable of Seller, which accounts receivable are not included
in the Accounts Receivable purchased by Purchaser, Security Documents
which secure such AFCO Notes and/or Warehouse Notes shall not be included
in the Purchased Assets or otherwise transferred to Purchaser, PROVIDED
that Seller will release the liens arising under such Security Documents
when all amounts under such accounts receivable are paid in full.
"PURCHASED LOCATIONS" means DCs, ISWs and Stores listed on SCHEDULE
I attached hereto.
"PURCHASER" has the meaning set forth in the preamble.
"PURCHASER'S EMPLOYEES" has the meaning set forth in SECTION 11.1.
"QUALIFYING BID" has the meaning set forth in SECTION 9.2(C).
"REVOLVING CREDIT, TERM LOAN AND GUARANTEE AGREEMENT" means the
Revolving Credit, Term Loan and Guarantee Agreement, dated as of February
2, 1998, as the same has been and may be amended, among APS Holding
Corporation and its subsidiaries, the DIP Lenders and The Chase Manhattan
Bank, as agent for the DIP Lenders.
"SECURITY DOCUMENTS" means security agreements, pledge agreements,
UCC financing statements, and other documents and interests securing
Accounts Receivable, AFCO Notes or Warehouse Notes as applicable.
"SCHEDULES" means the various Schedules identified in this Agreement
and delivered separately to Purchaser on or before the date of this
Agreement, except as otherwise
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specified in this Agreement, which schedules shall be corrected by the
Parties prior to the Closing by mutual agreement of Purchaser and Seller.
"SELLER" has the meaning set forth in the preamble.
"SERVICES AGREEMENT" means the Services Agreement to be entered into
by Purchaser and Seller at Closing, pursuant to which Services Agreement
Seller shall provide Purchaser with limited access to and the use of PIMS
and certain other information management systems, and render certain
related services, for a limited time following the Closing Date, which
Services Agreement is to be substantially in the form attached hereto as
EXHIBIT F.
"STORE CUSTOMER ELIGIBLE ACCOUNTS" means Eligible Accounts
Receivable which arise out of Sales by Big-A Stores and ISWs.
"STORES" has the meaning set forth in the Recitals hereto.
"SUPERIOR BID" has the meaning set forth in SECTION 9.2(B).
"TAX RETURN" means any report, return, information return, filing,
claim for refund or other information, including any schedules or
attachments thereto, and any amendments to any of the foregoing required
to be supplied to a taxing authority in connection with Taxes.
"TAXES" means all federal, state, local and foreign taxes, including
income, gross receipts, excise, employment, sales, use, transfer, license,
payroll, franchise, severance, stamp, withholding, Social Security,
unemployment, disability, real property, personal property, registration,
alternative or add-on minimum, estimated or other tax, including any
interest, penalties or additions thereto, whether disputed or not.
"TECHNOLOGY TRANSFER AGREEMENT" means the Technology Transfer
Agreement to be entered into by Purchaser and Seller at Closing, pursuant
to which Technology Transfer Agreement Seller shall transfer certain
management information systems to Purchaser on the date specified in such
Technology Transfer Agreement (subject to certain conditions), which
Technology Transfer Agreement is to be substantially in the form attached
hereto as EXHIBIT C.
"TRADEMARKS" means the trademarks and service marks (registered or
unregistered) and trade names, and all
12
goodwill associated therewith, listed on SCHEDULE L attached hereto.
"TRADEMARK ASSIGNMENT AGREEMENT" means the agreement, substantially
in the form attached hereto as EXHIBIT H, pursuant to which Seller will,
on the Closing Date, sell and assign all of its right, title and interest
in and to the Trademarks to Purchaser, subject to Seller's existing
contractual restrictions and provisions.
"TRADEMARK LICENSE AGREEMENT" means the agreement substantially in
the form attached hereto as EXHIBIT K, pursuant to which Purchaser will,
on the Closing Date, grant Seller and certain of its assignees and
sublicensees a license to use the Trademarks for a limited time after the
Closing Date.
"TRANSACTION TAXES" has the meaning set forth in SECTION 10.1.
"TRUE-UP DATE" means the date which is fifteen (15) days after the
Closing Date.
"TWO YEAR INVENTORY" means inventory within any SKU at any Purchased
Location on January 22, 1999 for which there has been no demand at such
Purchased Location during the 24-month period ending on such date.
"WAREHOUSE DISTRIBUTOR COST" means PIMS Inventory Value (with
respect to inventory not located at Big-A Stores) or other applicable
point-of-sale inventory value (with respect to inventory located at Big-A
Stores), less 4.9%, PROVIDED, HOWEVER, that with respect to inventory
located at Big-A Stores, Warehouse Distributor Cost shall be further
reduced by 13.2%.
"WAREHOUSE NOTES" means the notes receivable from certain customers
of the DCs which are not more than ninety (90) days past due as of the
Effective Date and identified as Warehouse Notes on SCHEDULE J attached
hereto, together with all security for the payment of such notes and all
documents and agreements evidencing such security.
"WARN" has the meaning set forth in SECTION 11.1.
"WARRANTY INVENTORY" means items of warranty inventory returned by
customers and on hand at the Purchased Locations on the Closing Date.
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"WELFARE TYPE PLANS" has the meaning set forth in SECTION 11.2.
SECTION 1.2. ACCOUNTING TERMS AND DETERMINATIONS. All references in
this Agreement to "GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" or "GAAP" shall
mean generally accepted accounting principles in effect in the United States of
America at the time of application thereof. Unless otherwise specified herein,
all accounting terms used herein shall be interpreted, all determinations with
respect to accounting matters hereunder shall be made and all financial
statements and certificates and reports as to financial matters required to be
furnished hereunder shall be prepared, in accordance with generally accepted
accounting principles, consistent with Seller's historical practices, applied on
a consistent basis.
ARTICLE II.
PURCHASE AND SALE OF
PURCHASED ASSETS AND
ASSUMPTION OF ASSUMED LIABILITIES
SECTION 2.1. PURCHASE AND SALE OF PURCHASED ASSETS. On the terms and
subject to the conditions set forth in this Agreement, at the Closing, Purchaser
shall purchase from Seller, and Seller shall sell, transfer, assign, convey and
deliver to Purchaser at the Purchased Locations, all of Seller's right, title
and interest in and to the Purchased Assets, PROVIDED, HOWEVER, that Corporate
Assets shall be delivered at the Corporate Offices and Seller shall be entitled
to retain copies of all books and records, in whatever form, included in the
Purchased Assets.
Purchaser acknowledges that it shall not acquire any right, title or
interest in any property, asset or right of Seller that is not a Purchased
Asset, including rights of Seller to any vendor discounts, credits, or rebates,
and claims of Seller against third parties in respect thereof (other than
warranty claims, indemnity rights and other common law rights relating to the
inventory).
SECTION 2.2. ASSUMPTION OF OBLIGATIONS AND LIABILITIES. On the terms
and subject to the conditions set forth in this Agreement, from and after the
Closing, Purchaser will assume and pay, perform, discharge and be responsible
for all obligations and liabilities of Seller under the Assigned Contracts which
accrue from and after the Effective Date (collectively, the "ASSUMED
LIABILITIES"). Purchaser shall not assume or pay, perform, discharge or be
responsible for any of the obligations or liabilities of Seller of any nature,
whether or not known, presently existing, absolute, accrued, contingent
14
or otherwise, other than the Assumed Liabilities or liabilities assumed,
incurred or created under the Ancillary Agreements.
SECTION 2.3. PURCHASE PRICE; PAYMENT OF PURCHASE PRICE.
(a) On the terms and subject to the conditions set forth in this
Agreement, the purchase price for the Purchased Assets shall be an aggregate
amount equal to the sum of the following, each to be determined as of 11:59 p.m.
January 29, 1999 (the "EFFECTIVE DATE"), except as otherwise provided herein
(the "PURCHASE PRICE"):
(i) the applicable Discount Percentage of the
Warehouse Distributor Cost of the Eligible Inventory;
(ii) the applicable Discount Percentage of the Warehouse
Distributor Cost of the Xxxx Arnley/Hy-Test Inventory determined as
of the close of business on January 22, 1999;
(iii) the applicable Discount Percentage of the Warehouse
Distributor Cost of the Dirty Core Inventory, subject to SECTION
2.4;
(iv) the applicable Discount Percentage of the Warehouse
Distributor Cost of the Two Year Inventory, subject to SECTION 2.4
and determined as of the close of business on January 22, 1999;
(v) the applicable Discount Percentage of the Fixed
Asset Book Value of the Fixed Assets, determined as of the
Closing Date;
(vi) the applicable Discount Percentage of principal amounts
outstanding under the AFCO Notes, plus all interest accrued to the
Effective Date;
(vii) the applicable Discount Percentage of principal amounts
outstanding under the Warehouse Notes, plus all interest accrued to
the Effective Date;
(viii) the applicable Discount Percentage of the outstanding
balance, determined as of the close of business on the Effective
Date of: (A) Associate Jobber Eligible Accounts which are current or
deferred; (B) Associate Jobber Eligible Accounts which are aged up
to and including sixty days; and (C)
Store Customer Eligible Accounts.
(ix) one hundred percent (100%) of the amount of the Deposits
and Prepaid Expenses;
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(x) a fixed amount for the Corporate Assets, in
accordance with SCHEDULE D;
(xi) the applicable Discount Percentage of the Donlen Book
Value of the Owned Vehicles; and
(xii) an amount for the In-transit Inventory determined in
accordance with SECTION 2.7(B).
(b) On the Closing Date, Purchaser shall pay to Seller an amount of
the Purchase Price in cash, by wire transfer of immediately available funds
(pursuant to written instructions to be provided by Seller to Purchaser), equal
to the sum of those portions of the Purchase Price provided for in SECTIONS
2.3(A)(I), 2.3(A)(II), 2.3(A)(III), 2.3(A)(IV), 2.3(A)(V), 2.3(A)(VI),
2.3(A)(VII), 2.3(A)(IX), 2.3(A)(X), 2.3(A)(XI) and an amount for the Eligible
Accounts Receivable determined in accordance with SECTION 2.3(A)(VIII) but based
upon the Estimated Accounts Receivable (the "CLOSING DATE PAYMENT").
The Closing Date Payment shall be adjusted pursuant to SECTION 2.6,
and Purchaser shall pay the remainder of the Purchase Price pursuant to SECTIONS
2.6(B) and 2.7(B).
SECTION 2.4. ADDITIONAL INVENTORY. Purchaser shall purchase all of
the Additional Inventory located at the Purchased Locations at the purchase
prices specified in Sections 2.3(a)(iii) and (iv), PROVIDED that Purchaser shall
not be required to pay more than $2,870,000 in the aggregate for the Additional
Inventory.
SECTION 2.5. PHYSICAL INVENTORY .
Unless otherwise noted, all references in this SECTION 2.5 to
"aggregate dollar amount" mean the aggregate dollar amount based upon 100% of
the Warehouse Distributor Cost. Employees or representatives of Seller and
Purchaser will jointly conduct a physical inventory count of, or other testing
procedures for, the inventory at Purchased Locations, or mutually agree that
Seller's inventory at a Purchased Location is accurate, in accordance with
physical inventory procedures generally used in the industry, which physical
inventory shall take place during the period prior to the Closing Date mutually
agreed to by Purchaser and Seller (the "PHYSICAL INVENTORY PERIOD"). During the
Physical Inventory Period, (i) Purchaser shall identify to Seller those items of
inventory which Purchaser believes do not meet the criteria of Eligible
Inventory, which designation shall be subject to Seller's confirmation, and (ii)
Seller, with the assistance of Purchaser, shall prepare a written, itemized list
of all inventory at Purchased Locations
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(the "FINAL INVENTORY SCHEDULE"), which Final Inventory Schedule shall designate
items of inventory as Eligible Inventory, Additional Inventory, or Xxxx
Arnley/Hy-Test Inventory and identify items of inventory which are not listed on
PIMS, and which shall be completed not later than the Effective Date. The Final
Inventory Schedule shall be adjusted as of the Effective Date by Seller with the
assistance of Purchaser to reflect changes in inventory that occur during the
period commencing immediately after the end of the Physical Inventory Period and
ending on the Effective Date. Purchaser and Seller shall share equally all
actual out-of-pocket expenses associated with the physical inventories taken and
the preparation of schedules pursuant to this SECTION 2.5.
SECTION 2.6. ACCOUNTS RECEIVABLE TRUE-UP
(a) On the True-Up Date, Seller shall prepare and deliver to
Purchaser a final statement of Eligible Accounts Receivable outstanding as of
the close of business on the Effective Date (the "EFFECTIVE DATE ACCOUNTS
RECEIVABLE STATEMENT").
(b) In the event that the Eligible Accounts Receivable shown on the
Effective Date Accounts Receivable Statement are greater than the Estimated
Accounts Receivable, Purchaser shall pay to Seller, on the first Business Day
following the True-Up Date, an amount equal to the applicable Discount
Percentage of such excess. In the event that the Estimated Accounts Receivable
are greater than the Eligible Accounts Receivable shown on the Effective Date
Accounts Receivable Statement, Seller shall refund to Purchaser, on the first
Business Day following the True-Up Date, an amount equal to the applicable
Discount Percentage of such excess.
(c) If any party receives or otherwise acquire funds (including, but
not limited to, rebates, warranty proceeds, incentives, Accounts Receivable,
deposits and asset dispositions, in any form whatsoever), which are properly due
and payable to any other party to this Agreement, the recipient of such funds
shall immediately (and within three business days following the receipt thereof)
forward such funds to the other party at the address provided in SECTION 12.2
hereof.
SECTION 2.7. CONDITION OF PURCHASED ASSETS; INVENTORY IN
TRANSIT; WARRANTY INVENTORY.
(a) Except for the warranty of title set forth in SECTION 3.5, the
Purchased Assets are being sold "AS IS," "WHERE IS" and "WITH ALL FAULTS" and
Seller hereby expressly disclaims any and all other warranties both express and
implied.
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(b) Purchaser shall allow employees or representatives designated by
Seller to be present at each Purchased Location during normal business hours for
a period of thirty (30) Business Days following the Closing Date for the purpose
of confirming items of In-transit Inventory which arrive at the Purchased
Locations during that period. At least five (5) Business Days prior to the
Closing Date, Seller shall present Purchaser with an itemized list of an
estimate of In-transit Inventory. For a period of six (6) months following the
Closing Date, Purchaser shall provide Seller with weekly updates of all
In-transit Inventory received at the Purchased Locations, and shall pay Seller,
by wire transfer within five (5) days after the end of each week in which any
In-transit Inventory is received, one-hundred percent of the PIMS Inventory
Value (or other invoice cost if no PIMS Inventory Value is available) for each
item of In-transit Inventory received.
(c) Purchaser shall return all items of Warranty Inventory to the
manufacturer not later than ninety (90) days after the Closing Date. Commencing
on the second Friday following the Closing Date, and on each Friday thereafter,
Purchaser shall provide Seller with an update of all cash or credits in respect
of Warranty Inventory received during the week ended on the previous Friday, and
shall pay Seller, by wire transfer on each such Friday, the full amount of all
such cash or credits received.
(d) Purchaser shall permit employees and representatives of Seller
to inspect and audit Purchaser's books and records at all reasonable times
during normal business hours with reasonable prior notice to Purchaser and at
Seller's sole cost and expense in order to confirm Purchaser's compliance with
SECTIONS 2.7(B) and 2.7(C).
SECTION 2.8. ALLOCATION OF PURCHASE PRICE. To the extent required by
law from and after the Closing Date, Purchaser and Seller shall prepare and file
those statements or forms (including Form 8594) required by Section 1060 of the
Code and the Treasury regulations thereunder and shall file such statements or
forms with their respective federal income Tax Returns. The parties shall
prepare such statements or forms consistently with any agreed allocation of all
or a portion of the Purchase Price to the Purchased Assets. Each party shall
provide the other party with a copy of such statements or forms as filed. Such
allocation of the Purchase Price will not be binding in the Cases upon the
Seller's creditors or other parties in interest and will not have precedential
value with respect to any allocations of value contained in a plan or plans
under chapter 11 of the Bankruptcy Code involving Seller.
SECTION 2.9. SALE AT CLOSING DATE . The sale, transfer, assignment
and delivery by Seller of the Purchased Assets to Purchaser, and the assumption
by Purchaser of the
18
Assumed Liabilities as herein provided, shall be effected on the Closing Date by
the execution and delivery by Seller and Purchaser of (i) a Lease Assignment and
Assumption Agreement, substantially in the form of EXHIBIT D, for the Assigned
Leases, pursuant to which Lease Assignment and Assumption Agreement Purchaser
shall confirm its assumption of all liabilities and obligations under the
Assigned Leases which accrue from and after the Effective Date; (ii) an
Assignment and Assumption Agreement for the Other Contracts, substantially in
the form of EXHIBIT A; and (iii) a Xxxx of Sale and Assumption Agreement
substantially in the form of EXHIBIT B.
SECTION 2.10. APPORTIONMENTS. The following amounts are to be
apportioned as of 11:59 P.M., New York City time, on the Effective Date (the
"APPORTIONMENT DATE") to the extent such are valid post-petition claims or are
subject to non-avoidable Liens: under the Assigned Leases, (i) water and sewer
charges and real estate taxes, to the extent all or any are due and payable
under the Assigned Leases, and (ii) such other apportionments and adjustments as
are customarily apportioned in transactions of this nature. Except as otherwise
provided herein, all such prorations shall be verified by Purchaser, and shall
be made on the basis of actual bills, to the extent available, or, in the
absence of such actual bills, on good faith estimates of Seller based on the
most recent bills received by Seller.
Prior to the True-Up Date, Seller and Purchaser shall determine,
based on actual bills or other applicable documentation, the actual
apportionment amounts required by this SECTION 2.10. In the event that such
actual apportionment amounts as so determined are greater than the apportionment
amounts paid to Seller on the Closing Date, Purchaser shall pay to Seller, on
the first Business Day after the True-Up Date, the amount of such excess, and,
in the event that the apportionment amounts paid to Seller on the Closing Date
are greater than such actual apportionment amounts as so determined, Seller
shall pay to Purchaser, on the first Business Day after the True-Up Date, the
amount of such excess. The provisions of this paragraph shall also apply to
apportionments pursuant to SECTION 10.2.
SECTION 2.11. USE OF OFFICE SPACE. Seller hereby grants to Purchaser
a non-transferable license, subject to Seller obtaining any applicable required
consents, commencing upon the Closing Date and expiring on February 28, 1999,
for the Authorized Occupants (as hereinafter defined), to use, occupy and access
the Licensed Space (as hereinafter defined) located in the premises currently
leased by Seller at 00000 Xxxx X. Xxxxxxx Xxxxxxxxx, Xxxxxxx, Xxxxx (the "LEASED
PREMISES"). As used herein, "AUTHORIZED OCCUPANTS" means those employees of
Seller to whom Purchaser makes, and who accept, offers of employment with
19
Purchaser. As used herein, "LICENSED SPACE" means those certain offices within
the Leased Premises currently designated for use by the Authorized Occupants.
Purchaser shall have no right to assign such license. In addition, the
Authorized Occupants shall be permitted access to the Leased Premises for the
sole purpose of using the facilities of the Leased Premises, including any
bathroom or kitchen facilities as well as copying machines located therein and
local fax and telephone services, but shall not be entitled to use office
related services (such as long distance fax and telephone and overnight and U.S.
postal mail services) without reimbursing Seller for such services. In no event
shall any or all Authorized Occupants of the Licensed Space permit or create a
default under the existing lease (the "LEASE") for the Leased Premises.
Purchaser represents and warrants that (i) it has received and reviewed the
Lease and that it will advise each Authorized Occupant of the terms and
conditions of the Lease that relate to the use and occupancy of the Leased
Premises and (ii) Purchaser shall cause Seller to be named as an additional
insured on Purchaser's general liability insurance policy so long as any of the
Authorized Occupants occupy the Leased Premises, the limits of which policy
shall be reasonably acceptable to Seller. At the Closing, Purchaser shall
provide Seller with written certification of Purchaser's compliance with the
foregoing sentence. Purchaser shall indemnify, defend and hold Seller harmless
from and against any and all damages incurred by or on behalf of Seller as a
result of any breach of the terms of the license granted hereby, any negligence
or any wrongful acts or omissions of any of the Authorized Occupants in respect
of the Licensed Space or the license granted hereby. On the Closing Date,
Purchaser shall pay to Seller, an amount equal to eight thousand dollars
($8,000.00) in consideration of the license granted hereby,. The parties agree
that it is their express intention that no landlord-tenant relationship is or
shall be deemed to be created by virtue of the license granted hereby.
SECTION 2.12. LEASE FOR XXXXXX CORNERS STORE. Seller shall lease the
Xxxxxx Corners, Virginia Store, which is owned by Seller, to Purchaser pursuant
to a triple net lease which shall provide for total rental payments at
prevailing market rates, plus ordinary and customary expenses, not including
extraordinary repair, and a term of sixty (60) days, and which shall be in a
form to be mutually agreed upon in good faith by Seller and Purchaser.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF SELLER
Subject to SECTION 3.12, Seller represents and warrants to Purchaser
as follows:
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SECTION 3.1. AUTHORITY OF SELLER. APS and its subsidiaries listed on
SCHEDULE A hereto are corporations validly existing and in good standing under
the laws of their respective states of incorporation. Seller has full corporate
power and authority to execute and deliver this Agreement and each of the
Ancillary Agreements, and the execution and delivery by Seller of this Agreement
and the Ancillary Agreements and the consummation of the transactions
contemplated hereby and thereby have been duly and validly authorized by all
necessary corporate action on the part of Seller, and this Agreement
constitutes, and each of the Ancillary Agreements upon its execution will
constitute, the legal, valid and binding obligation of Seller enforceable in
accordance with its terms, subject to the receipt of the Order. Subject to any
necessary authorization from the Bankruptcy Court, Seller has full corporate
power and authority to own its properties and to carry on its business
operations at the Purchased Locations presently being conducted by it, and upon
the entry of the Order, Seller will have all power and authority to take all
actions necessary or appropriate to close the transactions contemplated by this
Agreement.
SECTION 3.2. NO CONFLICT OR VIOLATION. The execution, delivery and
performance by Seller of this Agreement and the Ancillary Agreements do not and
will not violate or conflict with any provision of the Certificate of
Incorporation or By-laws of Seller.
SECTION 3.3. COMPLIANCE WITH LAW. Except as set forth on SCHEDULE
3.3, to Seller's Knowledge, Seller has not received written notice of any
material violation of any law, regulation or order, and is not in default in any
material respect under any order, writ, judgment, award, injunction or decree of
any Governmental Agency, applicable to the Purchased Assets or the Purchased
Locations.
SECTION 3.4. PERMITS. Set forth on SCHEDULE 3.4 is a list of Permits
relating to the operation of Seller's business at the Purchased Locations, which
Permits have been provided or made available to Purchaser by Seller.
SECTION 3.5. OWNERSHIP OF PURCHASED ASSETS. Seller is the owner of
the Purchased Assets existing as of the date hereof. Subject to the issuance of
the Order, Seller will have, and at the Closing Buyer will receive, good and
valid title to the Purchased Assets, free and clear of any Liens.
SECTION 3.6. ASSIGNED CONTRACTS. True and complete copies (including
all modifications and amendments) of the Assigned Contracts have been provided
or made available by Seller to Purchaser. Other than as set forth in motions
filed with the Bankruptcy Court, neither Seller nor, to Seller's Knowledge, any
other party under any of the Assigned Contracts, has commenced
21
any action against the other or given or received any written notice of any
material default or violation under any Assigned Contract which was not
withdrawn or dismissed, except only for those defaults which will be cured in
accordance with the Order (or which need not be cured under the Bankruptcy Code
to permit the assumption and assignment of Executory Contracts).
SECTION 3.7. LABOR RELATIONS. Except as set forth on SCHEDULE 3.7,
Seller is not party to any collective bargaining agreement covering Business
Employees. To Seller's Knowledge, no organizational effort is presently being
made or threatened in writing by or on behalf of any labor union with respect to
Business Employees.
SECTION 3.8. LITIGATION. Other than in connection with the Cases and
except as set forth on SCHEDULE 3.8, there are no actions, causes of action,
claims, suits or proceedings pending or, to Seller's Knowledge, threatened
against Seller which (i) seek to restrain or enjoin the consummation of the
transactions contemplated hereby or (ii) could reasonably be expected to have a
material adverse effect with respect to the Purchased Assets.
SECTION 3.9. BROKERS. All negotiations relative to this Agreement
and the transactions contemplated hereby have been carried on by Seller without
the intervention of any other Person acting on Seller's behalf in such manner as
to give rise to any valid claim by any such Person against Purchaser for a
finder's fee, brokerage commission or other similar payment based on an
arrangement with Seller.
SECTION 3.10. DISCLAIMER OF ADDITIONAL REPRESENTATIONS AND
WARRANTIES; SCHEDULES.
(a) Except as expressly set forth in this Agreement, the Schedules
and Exhibits hereto, the Ancillary Agreements, and any certificate or instrument
delivered pursuant to the terms hereof or thereof, Seller makes no
representations or warranties with respect to its business or its operations,
assets (including, without limitation, the Purchased Assets), liabilities
(including, without limitation, the Assumed Liabilities) or conditions,
including, with respect to the Purchased Assets, any representation or warranty
of merchantability, suitability or fitness for a particular purpose, or quality
as to the Purchased Assets, or any part thereof, or as to the condition or
workmanship thereof, or the absence of any defects therein, whether latent or
patent. Except as provided in this Agreement, the Schedules and Exhibits hereto,
the Ancillary Agreements, and any other certificate or instrument delivered
pursuant to the terms hereof or thereof, the Purchased Assets are to be conveyed
hereunder "AS IS," "WHERE IS," and "WITH ALL FAULTS" on the date hereof and in
their present condition,
22
subject to reasonable use, wear and tear between the date hereof and the Closing
Date, and Purchaser shall rely upon its own examination thereof.
(b) Any item disclosed on any one Schedule shall be deemed to be
disclosed on each Schedule, where relevant. Disclosure of an item on any
Schedule shall not be deemed to be an admission that such item is material.
SECTION 3.11. DISCLAIMER OF ADDITIONAL REPRESENTATIONS AND
WARRANTIES; SCHEDULES. Notwithstanding the foregoing provisions of this Article
III or any provision of this Agreement, Seller shall not have any liability to
Purchaser for or in respect of any representation or warranty made in this
Article III, and the Seller shall not be deemed to have breached or violated any
such representation or warranty, if, as of the date hereof, any of the
Management Employees has Knowledge of the facts or circumstances causing such
representation or warranty not to be true and correct.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller as follows:
SECTION 4.1. AUTHORITY OF PURCHASER. Purchaser is a limited
liability company, validly existing, and in good standing under the laws of the
State of Delaware. Purchaser has full limited liability company power and
authority to execute and deliver this Agreement, and the execution and delivery
by Purchaser of this Agreement and the consummation of the transactions
contemplated hereby have been duly and validly authorized by all necessary
action on the part of Purchaser and its members, and this Agreement constitutes,
and the Ancillary Agreements when executed will constitute, the legal, valid and
binding obligations of Purchaser enforceable in accordance with their terms,
except as such enforcement may be limited by applicable bankruptcy, insolvency,
moratorium, or similar laws from time to time in effect which affect creditors'
rights generally and by legal and equitable limitations on the enforceability of
specific remedies. Purchaser has full limited liability company power and
authority to own its properties and to carry on the business presently being
conducted by it.
SECTION 4.2. NO CONFLICT OR VIOLATION. The execution, delivery and
performance by Purchaser of this Agreement and the Ancillary Agreements do not
and will not violate or conflict with any provision of the Certificate of
Formation or Operating Agreement of Purchaser and do not and will not violate
any provision of law, or any order, judgment or decree of any court
23
or other Governmental Agency applicable to Purchaser, or violate or result in a
material breach of or constitute (with notice or lapse of time or both) a
material default under any loan agreement, mortgage, security agreement,
indenture or other instrument to which Purchaser is a party or by which it is
bound.
SECTION 4.3. CONSENTS AND APPROVALS. The execution, delivery and
performance by Purchaser of this Agreement do not require the consent or
approval of, or filing with, any Governmental Agency or other Person except: (i)
as may be required to effect the transfer to Purchaser of any Permits; and (ii)
such consents, approvals and filings, the failure to obtain or make which would
not, individually or in the aggregate, have a material adverse effect on its
ability to consummate the transactions contemplated hereby.
SECTION 4.4. AVAILABILITY OF FUNDS; PURCHASER'S CAPITALIZATION.
Purchaser has and will have at the Closing the Committed Financing.
Additionally, Purchaser's equity capitalization is as set forth on SCHEDULE 4.4,
and Purchaser shall not distribute or permit to be withdrawn any amounts from
its equity capitalization from the date of this Agreement to the date which is
six months from the Closing Date. Purchaser's equity investors, by signing this
Agreement, agree to be bound by the terms of the second sentence of this SECTION
4.4.
SECTION 4.5. LITIGATION. There are no actions, causes of action,
claims, suits, proceedings, orders, writs, injunctions, or decrees pending or,
to the Knowledge of Purchaser, threatened against Purchaser or any of its
Affiliates at law or in equity or before or by any Governmental Agency, which
seeks to restrain or enjoin the consummation of the transactions contemplated
hereby or that could otherwise materially and adversely affect the ability of
Purchaser to perform its obligations hereunder.
SECTION 4.6. BROKERS. All negotiations relative to this Agreement
and the transactions contemplated hereby have been carried on by Purchaser
without the intervention of any other Person acting on its behalf in such manner
as to give rise to any valid claim by any such Person against Seller or its
Affiliates for a finder's fee, brokerage commission or other similar payment
based on an arrangement with Purchaser.
SECTION 4.7. ADEQUATE ASSURANCES REGARDING EXECUTORY CONTRACTS.
Purchaser is and will be capable of satisfying the conditions contained in
Sections 365(b)(1)(c) and (f) of the Bankruptcy Code with respect to the
Executory Contracts. Purchaser has delivered to Seller prior to the date hereof
true, correct and accurate copies of its balance sheets and other evidence of
its financial condition sufficient to show that
24
Purchaser is and will be able to comply with the representations and warranties
made by it in this SECTION 4.7.
SECTION 4.8. MANAGEMENT EMPLOYEES' KNOWLEDGE AND CONTROL. Purchaser
acknowledges that the Management Employees are or have been senior executives of
Seller and (i) have had full and complete access to information relating to the
Purchased Assets and the transactions contemplated by this Agreement and the
Ancillary Agreements, (ii) overseen the composition, condition and disposition
of the Purchased Assets prior to the date hereof, and (iii) will be in a
position from the date hereof until the Closing Date to oversee and affect the
composition, condition and disposition of the Purchased Assets.
SECTION 4.9. XXXX-XXXXX-XXXXXX. For purposes of the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976 and the rules, regulations,
statements and interpretations promulgated thereunder (collectively, the "HSR
ACT"), in connection with the consummation of the transactions contemplated
hereby: (i) the Purchaser's "total assets" and "annual net sales" are each less
than $10,000,000.00, as such terms are defined in the HSR Act; and (ii) the
Purchaser is its own "ultimate parent entity," as such term is defined in the
HSR Act.
ARTICLE V.
CERTAIN COVENANTS OF SELLER
SECTION 5.1. CONSENTS AND APPROVALS. Subject to SECTION 9.2 and
Seller's right to accept a higher or otherwise better offer, Seller shall use
commercially reasonable efforts to obtain (i) entry of the Order by the
Bankruptcy Court and (ii) the requisite consent or consents of the DIP Lenders
to this Agreement and the transactions contemplated hereby.
SECTION 5.2. FURTHER ASSURANCES. Upon the request of Purchaser at
any time from and after the Closing Date, Seller shall, at Purchaser's expense,
forthwith execute and deliver such documents as Purchaser or its counsel may
reasonably request to effectuate the purposes of this Agreement.
SECTION 5.3. ASSIGNMENT OF CONTRACTS; PHONE NUMBERS. Seller shall
use commercially reasonable efforts to (i) obtain from the Bankruptcy Court an
order authorizing Seller, effective on the Closing Date, to assume, cure all
defaults with respect to and assign the Assigned Contracts to Purchaser and (ii)
assign to Purchaser all of Seller's rights (if any) in and to the telephone and
facsimile numbers and listings for the Purchased Locations, and all voice and
data transmission lines and facilities at the Purchased Locations, including all
contract rights associated therewith.
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SECTION 5.4. TRANSFER OF TECHNOLOGY AND SERVICES TO BE PROVIDED BY
SELLER. On the Closing Date, Seller shall enter into the Technology Transfer
Agreement, the Services Agreement and the Accounting Services Agreement with
Purchaser.
SECTION 5.5. CURE OF DEFAULTS. Seller shall, subject to the
occurrence of the Closing, (i) cure any default in base rental payments arising
under the Lease and outstanding as of the Closing Date; and (ii) use
commercially reasonable efforts to cure any and all other defaults with respect
to the Assigned Contracts, as provided in Section 365 of the Bankruptcy Code, so
that such Assigned Contracts may be assigned to Purchaser in accordance with the
provisions of Section 365 of the Bankruptcy Code.
SECTION 5.6. BANKRUPTCY ACTIONS. No later than five (5) Business
Days after the date hereof, Seller will file a motion with attached proposed
orders, reasonably acceptable to Seller and Purchaser, seeking approval of the
terms of this Agreement.
SECTION 5.7. MERCHANDISE PURCHASE AGREEMENT. On the Closing Date,
Seller shall enter into a Merchandise Purchase Agreement with Purchaser in
substantially the form attached hereto as EXHIBIT I.
SECTION 5.8. ACCOUNTS. After the Closing Date, Seller shall promptly
remit to Purchaser all payments it receives on Accounts Receivable, AFCO Notes
or Warehouse Notes which are included in the Purchased Assets.
ARTICLE VI.
CERTAIN COVENANTS OF PURCHASER
SECTION 6.1. CONSENTS AND APPROVALS. Purchaser shall use
commercially reasonable efforts to assist Seller in obtaining the Order and in
obtaining Bankruptcy Court approval for assignment of the Assigned Contracts,
including providing testimony as required at any hearing before the Bankruptcy
Court.
SECTION 6.2. ADEQUATE ASSURANCES REGARDING EXECUTORY CONTRACTS. With
respect to each Executory Contract, Purchaser shall make commercially reasonable
efforts to provide adequate assurance as required under the Bankruptcy Code of
the future performance of such Executory Contract by Purchaser. Purchaser agrees
that it will promptly take all actions reasonably required by Seller to assist
in obtaining the Bankruptcy Court's entry of the Order, such as furnishing
affidavits, non-confidential financial information or other documents or
information for filing with the Bankruptcy Court and making Purchaser's
employees
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and representatives available to testify before the Bankruptcy Court, with
respect to demonstrating adequate assurance of future performance by Purchaser
under the Executory Contracts.
SECTION 6.3. PERFORMANCE UNDER ASSIGNED CONTRACTS . Purchaser agrees
that from and after the Closing Date it shall (i) assume all obligations and
liabilities of Seller under the Assigned Contracts which accrue from and after
the Effective Date, (ii) take all actions necessary to satisfy its obligations
and liabilities under the terms and conditions of each of the Assigned
Contracts, and (iii) indemnify and hold harmless Seller for any damages, losses
and liabilities arising out of a breach of this covenant.
SECTION 6.4. FURTHER ASSURANCES. Upon the request of Seller at any
time from and after the Closing Date, Purchaser shall, at Seller's expense,
forthwith execute and deliver such documents as Seller or its counsel may
reasonably request to effectuate the purposes of this Agreement.
SECTION 6.5. PURCHASER FINANCING. Purchaser shall, from the date of
this Agreement until and including the Closing Date, maintain the availability
of funds pursuant to the Committed Financing, the adequacy of which Committed
Financing shall be subject to the continuing review of and approval by Seller,
in its sole discretion. Additionally, Purchaser shall at all times from the date
hereof through the date occurring six (6) months following the Closing Date, not
distribute or permit to be withdrawn any amounts from its equity capitalization,
shall notify the Seller if and when it ascertains that Purchaser's equity
capitalization falls below such level, and shall, in any event, provide Seller
with monthly statements setting forth the level and form of Purchaser's equity
capitalization. Purchaser's equity investors, by signing this Agreement, agree
to be bound by the terms of the second sentence of this SECTION 6.5.
SECTION 6.6. INDEMNIFICATION FOR ACCESS. Purchaser shall indemnify,
defend and hold harmless (i) Seller, (ii) the lessors under the Assigned Leases,
and (iii) Seller's and such Lessors' respective Affiliates from and against any
and all claims, demands, causes of action, losses, damages, liabilities, cost
and expenses (including, without limitation, attorneys' fees and disbursements)
suffered or incurred by such Persons in connection with (i) Purchaser's and/or
Purchaser's representatives' entry upon the premises subject to the Assigned
Leases (other than any Management Employee's entry upon such premises in
connection with their current duties with Seller), or (ii) any and all other
activities undertaken by Purchaser or Purchaser's representatives with respect
to the premises subject to the Assigned Leases.
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SECTION 6.7. MERCHANDISE PURCHASE AGREEMENT. On the Closing Date,
Purchaser shall enter into a Merchandise Purchase Agreement with Seller in
substantially the form attached hereto as EXHIBIT I.
SECTION 6.8. CERTAIN AGREEMENTS AND INDEMNIFICATION RELATED TO
THE POS SYSTEMS AND AUTOPOINT.
(a) Purchaser acknowledges that (i) the Fixed Assets located at the
Stores include point-of-sale computer systems, which computer systems are
pre-loaded with various information management software including, but not
limited to "AUTOEASE," "AUTO-LOG/BIG-A TECHNOLOGY," "CCI," "TRIAD," "LODESTAR"
AND "AUTOPOINT" (such software, collectively, the "POS SYSTEMS"); (ii) Seller
does not own the POS Systems (other than Autopoint) and operates the POS Systems
under license, lease agreements or other arrangements with third parties, and,
except as set forth in SECTION 6.8(C), Seller is not transferring or assigning
its rights in the POS Systems to Purchaser.
(b) In connection with its acquisition of the Fixed Assets and its
use of the POS Systems (other than Autopoint), Purchaser:
(i) shall use its best efforts to obtain any requisite
consents from any third party licensor, lessor or developer which
may have any proprietary right, title or interest in or to the POS
Systems, PROVIDED, THAT Seller shall not be required to obtain any
such consent but shall use commercially reasonable efforts to assist
Purchaser in obtaining such consents (provided that such efforts are
at no cost to Seller); and
(ii) hereby acknowledges that Seller shall have no liability
whatsoever in the event that Purchaser is unable to use the POS
Systems due to the failure of Purchaser to obtain any requisite
consents; and
(iii) shall defend, indemnify and hold Seller and its
Affiliates, officers, directors, employees and agents harmless for
any damages, liabilities, costs and expenses (including, but not
limited to, reasonable attorney's fees incurred by Seller) which
arise as a result of all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind whatsoever claimed or recovered by any
third party which may at any time be imposed on, incurred by or
asserted against Seller or its Affiliates, officers, directors,
employees and agents in any way relating to or arising out of the
agreements set forth in this Section 6.8, or
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the transactions contemplated hereby, including, without limitation,
any claim or claims by third parties of infringement or other
violation of their rights in the POS Systems.
(c) With respect to Autopoint, Seller hereby grants Purchaser a
limited royalty-free license to use Autopoint at the Stores which currently use
Autopoint for a period of three (3) years after the Closing Date, provided, THAT
Purchaser:
(i) hereby acknowledges that the know-how and operating
procedures associated with Autopoint are proprietary to and
constitute trade secret information of Seller;
(ii) hereby acknowledges that Seller does not intend to grant,
and Purchaser is not obtaining hereby, any title to or right or
interest in, by way of license or otherwise, Autopoint operating
procedures or know-how, Autopoint software or the source code
underlying such software;
(iii) hereby acknowledges that the limited license granted
hereby entitles only Purchaser and its employees to use Autopoint at
the Stores listed above in this SECTION 6.8(C), and Purchaser shall
not copy Autopoint or allow others to use or have access to
Autopoint, directly or indirectly;
(iv) hereby acknowledges that it shall cease using Autopoint
after the end of the three year license period granted hereby, at
which xxxx Xxxxxx shall be entitled to retrieve the Autopoint
software in Purchaser's possession; and
(v) hereby acknowledges and agrees that notwithstanding
anything to the contrary herein, Seller is not granting, and will
not be in any way obligated to grant: (i) any license or right
whatsoever to use or access Autopoint anywhere at all within Canada;
and (ii) any other right whatsoever in or to Seller's rights in or
to Autopoint anywhere at all within Canada.
SECTION 6.9. TRANSFER OF TECHNOLOGY AND SERVICES TO BE PROVIDED BY
SELLER. On the Closing Date, Purchaser shall enter into the Technology Transfer
Agreement, the Services Agreement and the Accounting Services Agreement with
Seller.
SECTION 6.10. PROCEDURES WITH RESPECT TO TRADEMARKS.
(a) Purchaser and Seller hereby acknowledge and agree that the
Trademarks to be assigned to Purchaser pursuant to the
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Trademark Assignment Agreement shall not include Seller's service xxxx,
"America's Parts ProsSM" and service xxxx application Serial No. 74/591,655 on
the Principal Register of the United States Patent and Trademark Office ("PTO")
pertaining thereto, which Purchaser and Seller acknowledge is an "intent-to-use"
service xxxx application filed at the PTO under 15 U.S.C. 1051(b) (the "Intent
to Use Xxxx"), for which Seller has not previously filed and had accepted an
Amendment to Allege Use under 37 C.F.R. ss. 2.76 or Statement of Use under 37
C.F.R. ss. 2.88 (the "Statement of Use"). After the Closing Date, Seller shall
use commercially reasonable efforts to file with the PTO: (i) a Statement of Use
with appropriate specimens showing use of the Intent to Use Xxxx for the
services contained in the above-identified application and/or (ii) Request(s)
for Extension of Time to File the Statement of Use under 37 C.F.R. ss. 2.89, as
appropriate. Any and all costs and fees associated with the preparation, filing
and acceptance by the PTO of the Statement of Use and Request(s) for Extension
of Time to File the Statement of Use (including attorneys' fees) shall be borne
solely by Purchaser, such that Seller will be permitted under all applicable
laws, rules and regulations, to assign all its right, title and interest in the
Intent to Use Xxxx following the acceptance by the PTO of the Statement of Use.
Anything herein to the contrary notwithstanding, Purchaser hereby agrees and
acknowledges that Seller shall have no liability to Purchaser in connection with
the failure of the PTO to accept the Statement of Use or the inability of Seller
to assign or license the Intent to Use Xxxx to Purchaser for any reason
whatsoever including, but not limited to, any inability of Seller to make any
filing contemplated by this paragraph. At the Closing, Purchaser and Seller
shall execute a non-exclusive royalty-free license, the terms of which license
shall be reached by mutual agreement between Purchaser and Seller (the "Intent
to Use Xxxx License"), pursuant to which Seller shall grant Purchaser a
non-exclusive royalty-free license to use the Intent to Use Marks, within a
defined territory determined by reference to the market areas of the Purchased
Locations, for the period commencing on the Closing Date and ending on the date
on which the Intent to Use Xxxx is assigned to Purchaser. On the Seller's
receipt of any notice from the PTO of the acceptance of the Statement of Use,
Seller shall assign all of its right, title and interest, if any, in and to the
Intent to Use Xxxx to Purchaser, subject to Purchaser's grant-back to Seller of:
(i) an exclusive royalty-free license to use the Intent to Use Xxxx for a
limited period of time; and (ii) a non-exclusive royalty-free license to use the
Intent to Use Xxxx for a limited period of time, all on terms substantially
equivalent in all material respects to the terms of the Trademark Assignment
Agreement and the Trademark License Agreement. On the date of the assignment
contemplated by the immediately previous sentence, the Intent to Use Xxxx
License shall terminate.
(b) Purchaser and Seller hereby acknowledge and agree that, as of
the date hereof, the assignment of the Trademarks to APS Management Services,
Inc. has not been recorded with the PTO,
30
thereby giving rise to potential legal challenges to the ability of such entity
to assign its interest in the Trademarks to Purchaser pursuant to the Trademark
Assignment Agreement, the validity of the Trademarks, as well as the ability of
Purchaser to grant-back exclusive and non-exclusive licenses to use the
Trademarks pursuant to the Trademark License Agreement. Seller shall, at the
sole expense of Purchaser (including attorneys' fees), as soon as practicable
after the date hereof, file appropriate documents with the PTO to record the
assignment of the Trademarks to APS Management Services, Inc. Purchaser hereby
agrees and acknowledges that Seller shall have no liability whatsoever to
Purchaser in connection with Seller's failure to record the assignment of its
interest in the Trademarks to APS Management Services, Inc.
ARTICLE VII.
CONDITIONS TO SELLER'S OBLIGATIONS
The obligations of Seller to consummate the transactions
contemplated by this Agreement are subject to the satisfaction (unless waived in
writing by Seller upon consultation with, and with the consent of, the DIP
Lenders) of each of the following conditions on or prior to the Closing Date:
SECTION 7.1. REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Purchaser contained in this Agreement shall be true in all
material respects on and as of the Closing Date as though such representations
and warranties were made on and as of the Closing Date.
SECTION 7.2. COMPLIANCE WITH AGREEMENT. Purchaser shall have
performed and complied in all material respects (and in all respects in the case
of Article II hereof) with all covenants and conditions to be performed or
complied with by it on or prior to the Closing Date.
SECTION 7.3. CONSENTS. The consent of the DIP Lenders shall
have been obtained and shall be in full force and effect on the Closing Date.
SECTION 7.4. PURCHASER'S CLOSING DELIVERIES AND OBLIGATIONS.
Purchaser shall have delivered all items and satisfied all obligations
pursuant to SECTION 9.1(C).
SECTION 7.5. ENTRY OF THE ORDER. (i) The Bankruptcy Court shall have
entered the Order and (ii) the Order, as entered by the Bankruptcy Court, shall
not be stayed and shall not modify the terms and conditions of this Agreement or
the transactions contemplated hereby in any way that materially and adversely
affects Seller.
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ARTICLE VIII.
CONDITIONS TO PURCHASER'S OBLIGATIONS
The obligation of Purchaser to consummate the transactions
contemplated by this Agreement is subject to the satisfaction (unless waived in
writing by Purchaser) of each of the following conditions on or prior to the
Closing Date:
SECTION 8.1. REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Seller contained in this Agreement shall be true in all material
respects on and as of the Closing Date as though such representations and
warranties were made on and as of the Closing Date.
SECTION 8.2. COMPLIANCE WITH AGREEMENT. Seller shall have performed
and complied in all material respects with all covenants and conditions to be
performed or complied with by it on or prior to the Closing Date.
SECTION 8.3. CONSENTS. The consent of the DIP Lenders shall
have been obtained and shall be in full force and effect on the Closing Date.
SECTION 8.4. SELLER'S CLOSING DELIVERIES AND OBLIGATIONS.
Seller shall have delivered all items and satisfied all obligations pursuant
to SECTION 9.1(B).
SECTION 8.5. ENTRY OF THE ORDER. (i) The Bankruptcy Court shall have
entered the Order and (ii) the Order, as entered by the Bankruptcy Court, shall
not be stayed or modify the terms and conditions of this Agreement or the
transactions contemplated hereby in any way that adversely affects Purchaser.
ARTICLE IX.
THE CLOSING; OTHER BIDS; TERMINATION
SECTION 9.1. THE CLOSING. The Closing of the purchase and sale of
the Purchased Assets (the "CLOSING") shall be held on February 1, 1999, or such
other date as Purchaser and Seller may agree (the "CLOSING DATE"), but shall be
deemed to be effective as of the Effective Date. Representatives of Seller and
Purchaser shall attend the Closing which shall be held at the offices of Xxxxxxx
Xxxx & Xxxxxxxxx, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 or at such other
location as the parties shall agree to in writing. At the Closing, all of the
transactions provided for in ARTICLE II hereof shall be consummated on a
substantially concurrent basis.
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(b) SELLER'S DELIVERIES AT CLOSING. At the Closing, Seller shall
deliver (or cause to be delivered) to Purchaser the following:
(i) a duly executed Lease Assignment and Assumption Agreement
and Assignment and Assumption Agreement for the Assigned Contracts;
(ii) the duly executed Xxxx of Sale and Assumption Agreement;
(iii) the duly executed Technology Transfer Agreement;
(iv) the duly executed Trademark Assignment Agreement;
(v) a certificate, executed by the Secretary of Seller,
certifying that the Board of Directors of Seller has approved and
authorized the transactions contemplated by this Agreement or that
the transactions contemplated by this Agreement have otherwise been
authorized by all requisite corporate action;
(vi) a certificate, executed by a duly authorized officer of
Seller, to the effect that all conditions to closing set forth in
SECTION 8.1 and SECTION 8.2 have been satisfied;
(vii) the duly executed Merchandise Purchase Agreement;
(viii) the duly executed Accounting Services Agreement;
(ix) the duly executed Services Agreement;
(x) the lease for the Xxxxxx Corners, Virginia Store; and
(xi) the duly executed Trademark License Agreement.
(c) PURCHASER'S DELIVERIES AT CLOSING. At the Closing, Purchaser
shall deliver (or cause to be delivered) to Seller the following:
(i) payment by wire transfer of (a) the Purchase Price and
other amounts in accordance with the terms and conditions set forth
in SECTION 2.3(B), (b) any and all amounts due for the Leased
Premises and the lease of the Xxxxxx Corners, Virginia Store, (c)
all apportionment and proration amounts, and (d) any and
33
all other amounts which are due and payable by the Purchaser on the
Closing Date pursuant to this Agreement and the Ancillary
Agreements;
(ii) a duly executed Lease Assignment and Assumption
Agreement and Assignment and Assumption Agreement for the Assigned
Contracts;
(iii) the duly executed Xxxx of Sale;
(iv) the duly executed Technology Transfer Agreement;
(v) the duly executed Trademark Assignment Agreement;
(vi) a certificate, executed by the managing member(s) of
Purchaser, attaching certified resolutions of such managing
member(s) (or all the members if required by Purchaser's certificate
of formation or operating agreement) of Purchaser approving and
authorizing the transactions contemplated by this Agreement;
(vii) a certificate, executed by a duly authorized managing
member of Purchaser, to the effect that all conditions to closing
set forth in SECTION 7.1 and SECTION 7.2 have been satisfied;
(viii) the duly executed Merchandise Agreement;
(ix) the duly executed Accounting Services Agreement;
(x) the duly executed Services Agreement;
(xi) the lease for the Xxxxxx Corners, Virginia store;
(xii) the duly executed Trademark License Agreement;
(xiii) the certification referred to in SECTION 2.11.
SECTION 9.2. OTHER BIDS; FEES.
(a) BANKRUPTCY COURT APPROVAL. Upon the execution of this Agreement,
Seller will seek Bankruptcy Court approval of (i) the definition of "Superior
Bid" set forth in SECTION 9.2(B); (ii) the overbid protections set forth in
SECTION 9.2(C); and (iii) bid incentives and protections set forth in SECTION
9.2(D),
34
and the parties acknowledge that such provisions are subject to any required
approval of the DIP Lenders and to approval of the Bankruptcy Court and that
such provisions shall not be binding and shall have no force or effect unless
and until such Bankruptcy Court approval is obtained. Purchaser acknowledges
that auction rules to be contained in a Bidding Protections Order shall be in
the form set forth in EXHIBIT G, subject to Bankruptcy Court approval.
(b) OTHER BIDS. Purchaser acknowledges that Seller, through The
Blackstone Group L.P. ("BLACKSTONE") as its agent, will solicit bids ("BIDS")
from other prospective purchasers ("BIDDERS")for the sale of the Purchased
Assets (as such or in combination with other assets of Seller) and/or other
assets owned by Seller in accordance with auction procedures to be established
by Blackstone in consultation with Seller's creditor constituencies, subject to
bid incentives and protections set forth in SECTION 9.2(D) and overbid
protections set forth in SECTION 9.2(C). All Bids (other than Bids submitted by
Purchaser) will be submitted with two copies of the Seller's form of purchase
agreement (the "FORM AGREEMENT"), marked to show changes requested by the
Bidder.
Seller shall have the right to select the highest or otherwise
better Bid or Bids (the "SUPERIOR BID"), which will be determined by
considering, among other things, (i) the number, type and nature of any changes
to the Form Agreement requested by each Bidder; (ii) the extent to which such
modifications are likely to delay closing of the sale of Purchased Assets to
such Bidder and the cost to Seller of such modifications or delay; (iii) the
extent to which such Bid covers less than or more than all of the Purchased
Assets; and (iv) the total consideration to be received by Seller. Purchaser
acknowledges that Seller will strongly favor Bids for all of Seller's assets or
for such assets which Seller determines, in its sole discretion, cannot
otherwise be easily sold. Seller reserves the right to accept a Bid or Bids
which contain a purchase price which is less than the Purchase Price set forth
in this Agreement but which, in Seller's sole discretion, otherwise constitutes
a Superior Bid. Seller shall have the right to aggregate separate Bids for
different assets to determine whether one or more combinations of Bids
constitute a Superior Bid.
(c) OVERBID PROTECTION. Seller will seek Bankruptcy Court approval
of the following overbid protections: (i) a higher Bid will not be considered by
Seller unless such Bid is at least $100,000 more than the sum of (x) the
Purchase Price (including any fees under the Services Agreement and the
Accounting Services Agreement) set forth in this Agreement as such amounts are
determined in good faith by Blackstone, (y) the Breakup Fee (as defined in
SECTION 9.2(D)) and (z) the Expense Reimbursement (as
35
defined in SECTION 9.2(D)); and (ii) any bids thereafter must be at least
$50,000 higher than the then existing highest or better bid ((i) and (ii)
constituting, as applicable, a "QUALIFYING BID").
The value of a Bid for purposes of this SECTION 9.2(C) shall be
determined by combining (i) the consideration to be received by Seller pursuant
to such Bid for all assets covered by such Bid and (ii) the value of the
Purchased Assets that are not covered by such Bid ("NON-COVERED ASSETS"), such
value to be determined in good faith by Seller on the basis of, for Purchased
Assets that are covered by other Bids or by proposals reasonably likely to
result in a sale of such Purchased Assets, the proposed consideration payable
pursuant to such other Bid or proposal, and, for other Non-Covered Assets, the
projected value thereof in the context of the most commercially reasonable
disposition of such property.
Seller shall have the right pursuant to this SECTION 9.2(C) to
aggregate separate Bids for different assets in determining whether one or more
combinations of Bids constitute a Qualifying Bid.
(d) EXPENSE REIMBURSEMENT; BREAKUP FEE. In the event that this
Agreement is terminated by Seller in breach of this Agreement, Purchaser shall
be entitled, as its sole and exclusive remedy (except as provided in the
following paragraph) to immediate reimbursement of its actual reasonable and
documented out-of-pocket expenses incurred in connection with the transactions
contemplated by this Agreement, including professional fees, in an amount not to
exceed for this $175,000 (the "EXPENSE REIMBURSEMENT").
If Seller, after consultation with its creditor constituencies,
determines that a Qualifying Bid (or Bids) (which is not Purchaser's Bid) is the
Superior Bid and subsequently consummates an agreement with respect thereto,
Purchaser will receive a break-up fee equal to 2.5% of the Purchase Price (the
"BREAKUP FEE").
SECTION 9.3. TERMINATION. Anything in this Agreement to the
contrary notwithstanding, this Agreement and the transactions contemplated
hereby may be terminated in any of the following ways at any time before the
Closing and in no other manner:
(a) by mutual written consent of Purchaser and Seller;
(b) by Seller, if Seller accepts a Superior Bid;
(c) by Seller if Purchaser is in breach in any material respect of
any of its representations made in this
36
Agreement, or is in violation or default in any material respect of any of its
covenants or agreements in this Agreement, if the breach, violation or default
is not cured within five (5) days after written notice by Seller;
(d) by Purchaser if Seller is in violation or default in any
material respect of any of its covenants or agreements in this Agreement, if the
breach, violation or default is not cured within five (5) Business Days after
written notice by Purchaser;
(e) by Seller, if at any time to and including the Closing Date,
Purchaser does not have available Committed Financing; and
(f) by Seller or Purchaser if the Closing has not occurred on or
before February 8, 1999, unless such failure to close is due to the fault of the
terminating party.
Notwithstanding anything to the contrary in this Agreement, in the event that
Seller uses commercially reasonable efforts to obtain the Order and the
Bankruptcy Court refuses to enter the Order, this Agreement shall terminate
without liability or obligation of Seller to Buyer.
SECTION 9.4. EFFECTS OF TERMINATION. (a) In the event that this
Agreement is terminated pursuant to SECTION 9.3, except as provided in SECTION
9.2 or in this SECTION 9.4, all further obligations of the parties hereunder
shall terminate. If this Agreement is terminated as permitted by SECTION 9.3,
termination shall be without liability of any party (or any stockholder,
director, officer, employee, agent, consultant or representative of such party)
to the other party to this Agreement; PROVIDED, HOWEVER, that (i) if such
termination shall result under SECTION 9.3(C) from the willful failure of
Purchaser to perform a covenant of this Agreement or from a breach of its
representations and covenants contained in SECTION 4.4, Purchaser shall be
liable for any and all losses, damages and expenses incurred or suffered by
Seller as a result of such failure to perform or breach; (ii) if this Agreement
is terminated by Seller pursuant to SECTION 9.3(B), Seller shall pay to
Purchaser the Expense Reimbursement and the Breakup Fee pursuant to the
provisions of SECTION 9.2; (iii) if this Agreement is terminated by Purchaser
pursuant to SECTION 9.3(D), Purchaser shall be entitled, as its sole and
exclusive remedy, to the Expense Reimbursement; and (iv) if this Agreement is
terminated by Seller pursuant to SECTION 9.3(E), Purchaser shall be liable for
any and all losses, damages and expenses incurred or suffered by Seller as a
result of such failure to perform. The provisions of this SECTION 9.4 shall
survive any termination hereof pursuant to SECTION 9.3.
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(b) Except as specifically provided in SECTION 9.4(a), this
SECTION 9.4 shall not limit the rights of the parties hereto to seek specific
performance of any obligation hereunder of any other party.
SECTION 9.5. EFFECTS OF PURCHASER DEFAULT. In the event that
Purchaser fails to make any payment when due or otherwise fails to perform any
of its material obligations or breaches any of its material covenants under this
Agreement or any of the Ancillary Agreements, and such default is not cured
within five (5) Business Days of Seller giving Purchaser notice of such default,
(i) Seller may terminate this Agreement without any liability of Seller, and
(ii) all amounts owing by Purchaser to Seller under this Agreement as of the
date of such default, and all amounts owing by Purchaser to Seller under this
Agreement and under the Ancillary Agreements shall become immediately due and
payable. In the event that Purchaser fails to make any payment payable to Seller
under this Agreement, any of the Ancillary Agreements, or any other agreement
between Seller and Purchaser, in such amounts and at such times as provided for
herein or therein (including any applicable cure periods), then any and all such
amounts payable by Purchaser to Seller under this Agreement, the Ancillary
Agreements and any other agreement between Seller and Purchaser may, without
prejudice to any other rights or remedies Seller may have against Purchaser, be
drawn by Seller from the Services Deposit made by Purchaser with Seller pursuant
to the Accounting Services Agreement (with appropriate invoices sent to
Purchaser pursuant to Section 2.2 of the Accounting Services Agreement) and/or
from any deposit under this Agreement and the Ancillary Agreements.
ARTICLE X.
TAXES
The parties hereto hereby covenant and agree as follows:
SECTION 10.1. TAXES RELATED TO PURCHASE OF ASSETS. The parties
recognize and acknowledge that, because the sale, transfer, assignment and
delivery of the Purchased Assets is being made in connection with Seller's plan
of reorganization, they may be exempt under section 1146(c) of the Bankruptcy
Code and the Order from state and local transfer, recording, stamp or other
similar transfer taxes (collectively "TRANSACTION TAXES") that may be imposed by
reason of the sale, transfer, assignment and delivery of the Purchased Assets;
provided, however, that if Transaction Taxes are assessed for any reason,
Purchaser and Seller shall each pay one-half of such Transaction Taxes along
with any recording and filing fees. Purchaser and Seller agree to cooperate to
determine the amount of Transaction Taxes payable in connection with the
transactions contemplated under this
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Agreement. Transaction Taxes shall not include any Taxes for which Seller is
responsible under SECTION 10.2. At the Closing, Purchaser shall remit to Seller
such properly completed resale exemption certificates and other similar
certificates or instruments as are applicable to claim available exemptions from
the payment of sales, transfer, use or other similar taxes under applicable law.
Purchaser and Seller will cooperate in preparing such forms and will execute and
deliver such affidavits and forms as are reasonably requested by the other
party.
SECTION 10.2. PRORATION OF REAL AND PERSONAL PROPERTY TAXES. Real
and personal property taxes and assessments relating to properties subject to
Assigned Leases or leases of personal property that are assigned to Purchaser
hereunder shall be prorated between Seller and Purchaser as of the Apportionment
Date, provided, however, that Seller shall not be responsible for any increased
assessments on real and personal property resulting from the transactions
contemplated hereby. All such prorations shall be allocated so that items
relating to time periods ending prior to the Effective Date shall be allocated
to Seller and items related to time periods beginning from and after the
Effective Date shall be allocated to Purchaser. The amount of all such
prorations shall be settled and paid on the Closing Date unless, with respect to
Seller's obligations hereunder, otherwise ordered by the Bankruptcy Court or as
otherwise required by applicable bankruptcy law.
SECTION 10.3. COOPERATION. Purchaser and Seller agree to furnish or
cause to be furnished to each other, as promptly as practicable, such
information and assistance relating to the Purchased Assets as is reasonably
necessary for the preparation and filing of any Tax Return, for the preparation
for and proof of facts during any tax audit, for the preparation for any tax
protest, for the prosecution or defense of any suit or other proceeding relating
to tax matters and for the answer of any governmental or regulatory inquiry
relating to tax matters.
Purchaser agrees to retain possession of all files and records
delivered to Purchaser by Seller for a period of at least three years from the
Closing Date. If Purchaser determines to destroy or discard any of such files or
records after the end of such three-year period, Purchaser will give Seller
reasonable notice thereof and will allow Seller to take possession of such files
and records at Seller's expense. In addition, from and after the Closing Date,
Purchaser agrees that it will provide access to Seller and its attorneys,
accountants and other representatives (after reasonable notice and during normal
business hours and without charge) to such files and records as Seller may
reasonably deem necessary to prepare for, file, prove, answer, prosecute or
defend any claim, suit, inquiry or other proceeding, whether related to Taxes or
otherwise.
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ARTICLE XI.
EMPLOYEES AND EMPLOYEE BENEFIT PLANS
SECTION 11.1. EMPLOYMENT. The Business Employees who are offered and
accept employment with Purchaser are referred to herein as "PURCHASER'S
EMPLOYEES". The Purchaser's Employees' employment with Purchaser shall be upon
such terms and conditions as Purchaser, in its sole discretion, shall determine,
and nothing expressed or implied by this Agreement shall confer upon any
Business Employee, or legal representative thereof, any rights or remedies,
including any right to employment, or for any specified period, of any nature or
kind whatsoever, under or by reason of this Agreement.
Purchaser shall be responsible for any obligations or liabilities to
Business Employees under the Worker Adjustment and Retraining Notification Act
and any similar state or local "plant closing" law ("WARN") to the extent WARN
thresholds are exceeded as a result of actions taken by Purchaser on or after
the Closing Date with respect to Business Employees. Seller shall be responsible
for any obligations or liabilities to Business Employees under WARN as a result
of actions taken by Seller prior to the Closing Date.
SECTION 11.2. EMPLOYEE WELFARE BENEFIT PLANS. Except with respect to
any claim that is covered by an Assigned Contract or otherwise constitutes an
Assumed Liability, Seller shall retain responsibility for all hospital, medical,
life insurance, disability and other welfare plan expenses and benefits, and for
all workers' compensation, unemployment compensation and other government
mandated benefits (collectively referred to herein as "WELFARE TYPE PLANS"), in
respect of claims covered by any Welfare Type Plans maintained by Seller and
which are incurred by Purchaser's Employees and their dependents prior to the
Closing Date. Purchaser shall be responsible for all claims incurred on or after
the Closing Date by Purchaser's Employees and their dependents under all Welfare
Type Plans that are maintained by Purchaser for Purchaser's employees generally
and their dependents. For purposes of this SECTION 11.2, claims shall be deemed
to have been incurred:
(a) with respect to all death or dismemberment claims, on the
actual date of death or dismemberment;
(b) with respect to all disability claims, other than for short-term
disability benefits, on the date the claimant became unable to
(i) perform his or her regular duties of employment, in
the case of an employee claimant, or
40
(ii) perform the normal day-to-day responsibilities that would
reasonably be expected of someone of similar age and lifestyle, in
the case of a dependent claimant;
(c) with respect to short-term disability claims, the date the
incident first occurred that gave rise to such claims;
(d) with respect to all medical, drug or dental claims, on the date
the service was received or the supply was purchased by the claimant and, with
respect to a medical claim relating to a claimant's hospitalization, on the date
each hospitalization service was provided to the claimants; and
(e) with respect to workers' compensation claims, on the date the
incident occurred.
SECTION 11.3. COBRA. Purchaser shall have sole responsibility for
"continuation coverage" benefits provided from and after the Closing Date under
Purchaser's group health plans to all Purchaser's Employees, and "qualified
beneficiaries" of Purchaser's Employees, for whom a "qualifying event" has
occurred from and after the Closing Date. Seller shall have sole responsibility
for "continuation coverage" benefits provided under Seller's group health plans
to all employees of Seller, and "qualified beneficiaries" of employees of
Seller, for whom a "qualifying event" has occurred on or prior to the Closing
Date. The terms "continuation coverage," "qualified beneficiaries" and
"qualifying event" shall have the meanings ascribed to them under Section 4980B
of the Code and Sections 601-608 of ERISA.
SECTION 11.4. A.P.S., INC. PARTNERSHIP PLAN. A.P.S., Inc. currently
sponsors and maintains a qualified defined contribution profit sharing plan
known as the A.P.S., Inc. Partnership Plan (the "401(K) PLAN") which provides
certain retirement benefits for certain eligible employees of Seller, including
certain of Purchaser's Employees. Effective as of the Closing Date, Seller and
Purchaser shall take all necessary and appropriate action to cause Purchaser to
assume the sponsorship of the 401(k) Plan, PROVIDED THAT Seller has made such
additional contributions, at its option, as are necessary to fully vest and fund
the account balances of those 401(k) Plan participants that have been affected
by a "partial termination" of the 401(k) Plan, as defined in Section 411(d)(3)
of the Code. Purchaser and Seller agree that the Purchaser shall be deemed the
successor to and assignee of A.P.S., Inc. for purposes of determining the date
on which a termination of employment, separation from service or other similar
event has occurred under the 401(k) Plan. As of the Closing Date, Seller and its
respective Affiliates shall have no liability for the payment of benefits to any
participants accrued under the 401(k) Plan before or after the Closing Date, and
Purchaser shall indemnify and hold Seller and its respective Affiliates harmless
from and against any liability as a result of
41
any claim against Seller or its Affiliates for the payment of benefits under the
401(k) Plan. Nothing contained herein shall interfere with Purchaser's right to
amend or terminate the 401(k) Plan, in accordance with its terms and applicable
law, following its assumption.
ARTICLE XII.
MISCELLANEOUS PROVISIONS
SECTION 12.1. REPRESENTATIONS AND WARRANTIES. The representations
and warranties of the parties to this Agreement made in this Agreement, subject
to the exceptions thereto, will not be affected by any information furnished to,
or any investigation conducted by, any of them or their representatives in
connection with the subject matter of this Agreement. All representations and
warranties contained in this Agreement shall not survive the Closing.
SECTION 12.2. NOTICES. All notices, demands or other communications
to be given or delivered under or by reason of the provisions of this Agreement
shall be in writing and shall be deemed to have been given (a) when delivered
personally to the recipient, (b) when sent to the recipient by telecopy (receipt
electronically confirmed by sender's telecopy machine) if during normal business
hours of the recipient, otherwise on the next Business Day, (c) one (1) Business
Day after the date when sent to the recipient by reputable express courier
service (charges prepaid) or (d) seven (7) Business Days after the date when
mailed to the recipient by certified or registered mail, return receipt
requested and postage prepaid. Such notices, demands and other communications
will be sent to Seller and to Purchaser at the addresses indicated below:
If to Purchaser: Auto Parts Express, LLC
x/x Xxxxxxx X. Xxxxx
X.X. Xxx 0000
Xxxx Xxxxxx, Xxxxxxxx 00000-0000
and
c/o E. Xxxxxx Xxxxxx
22003 Chesterwick
Xxxx, Xxxxx 00000
With a copy Verner, Liipfert, Bernhard,
(which shall not XxXxxxxxx and Hand
constitute notice) to: 0000 Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx Xxxxxxx
Facsimile No.: (000) 000-0000
42
If to Seller: APS Holding Corporation
00000 Xxxx X. Xxxxxxx Xxxx.
Xxxxx 000
Xxxxxxx, Xxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxx
Facsimile No. 000-000-0000
With a copy Xxxxxxx Xxxx & Xxxxxxxxx
(which shall not 000 Xxxxxxx Xxxxxx
constitute notice) to: Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxx Xxxxxx, Esq.
Facsimile No. (000) 000-0000
or to such other address as either party hereto may, from time to time,
designate in writing delivered pursuant to the terms of this Section.
SECTION 12.3. AMENDMENTS. The terms, provisions and conditions
of this Agreement may not be changed, modified or amended in any manner
except by an instrument in writing duly executed by each of the parties
hereto.
SECTION 12.4. ASSIGNMENT. This Agreement is binding upon and inures
to the benefit of the successors and assigns of each party to this Agreement
(including any trustee appointed in respect of Seller under the Bankruptcy
Code), but no rights, obligations or liabilities under this Agreement may be
assigned by either party without the prior written consent of the other party
hereto.
SECTION 12.5. ANNOUNCEMENTS. All press releases, notices to
customers and suppliers and other announcements prior to the Closing Date with
respect to this Agreement and the transactions contemplated by this Agreement
shall be approved by both Purchaser and Seller prior to the issuance thereof;
provided that either party may make any public disclosure that it believes in
good faith is required by law or regulation (in which case the disclosing party
shall advise the other party prior to making such disclosure and provide such
other party an opportunity to review the proposed disclosure).
SECTION 12.6. EXPENSES. Except as otherwise set forth in this
Agreement, each party to this Agreement shall bear all of its own legal,
accounting, investment banking and other expenses incurred by it or on its
behalf in connection with the transactions contemplated by this Agreement,
whether or not such transactions are consummated.
SECTION 12.7. ENTIRE AGREEMENT. This Agreement and the Ancillary
Agreements constitute the entire agreement between the parties hereto with
respect to the subject matter hereof and supersede and are in full substitution
for any and all prior
43
agreements and understandings between them relating to such subject matter,
PROVIDED HOWEVER, that any confidentiality agreements between Seller and
Purchaser shall remain in full force and effect. The Exhibits and Schedules to
this Agreement are hereby incorporated into and made a part hereof and are an
integral part of this Agreement.
SECTION 12.8. DESCRIPTIVE HEADINGS. The descriptive headings of
the several sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the
provisions hereof.
SECTION 12.9. COUNTERPARTS. For the convenience of the parties, any
number of counterparts of this Agreement may be executed by any one or more
parties hereto, and each such executed counterpart shall be, and shall be deemed
to be, an original, but all of which together shall constitute one and the same
instrument.
SECTION 12.10. GOVERNING LAW; JURISDICTION. This Agreement shall be
construed, performed and enforced in accordance with, and governed by, the laws
of the State of Delaware, without giving effect to the conflict or choice of
laws principles thereof. For so long as Seller is subject to the jurisdiction of
the Bankruptcy Court, the parties hereto irrevocably elect as the sole judicial
forum for the adjudication of any matter arising under or in connection with
this Agreement, and consent to the jurisdiction of, the Bankruptcy Court.
SECTION 12.11. CONSTRUCTION. The language used in this Agreement
will be deemed to be the language chosen by the parties to express their mutual
intent, and no rule of strict construction will be applied against either party.
Any references to any federal, state, local or foreign statute or law will also
refer to all rules and regulations promulgated thereunder, unless the context
requires otherwise. Unless the context otherwise requires: (a) a term has the
meaning assigned to it by this Agreement; (b) an accounting term not otherwise
defined herein has the meaning assigned to it by GAAP; (c) the word "or" is not
exclusive; (d) the words "include," "includes" and "including" shall be deemed
to be followed by the words "without limitation"; (e) words in the singular
include the plural and in the plural include the singular; (f) provisions apply
to successive events and transactions; and (g) "$" means the currency of the
United States of America.
SECTION 12.12. SEVERABILITY. In the event that any one or more of
the provisions contained in this Agreement or in any other instrument referred
to herein shall, for any reason, be held to be invalid, illegal or unenforceable
in any respect, then to the maximum extent permitted by law, such invalidity,
illegality or unenforceability shall not affect any other provisions of this
Agreement or any other such instrument.
44
Furthermore, in lieu of any such invalid or unenforceable term or provision, the
parties hereto intend that there shall be added as a part of this Agreement a
provision as similar in terms to such invalid or unenforceable provision as may
be possible and be valid and enforceable.
SECTION 12.13. CONFIDENTIALITY. Seller and Purchaser agree to keep,
and to cause each of their affiliates, directors, officers, and employees to
keep, confidential any and all confidential information of the other party that
either receives in connection herewith or in the course of performing its
obligations hereunder (except that such information may be shared, on a
confidential basis, with the party's attorneys and auditors) and will not,
without the other party's written consent, use any of such confidential
information except as reasonably necessary to perform its duties under this or
another of its agreements with the other party. Upon termination of this
Agreement, each party will return, and will cause its affiliates to return, to
the other party all original documents and copies of the confidential
information which are in its possession. This SECTION 12.13 shall supplement but
shall not supersede, amend or modify any confidentiality agreements previously
entered into by Purchaser, the Management Employees or their representatives,
which prior confidentiality agreements shall remain in effect in accordance with
their respective terms.
45
IN WITNESS WHEREOF, Seller and Purchaser have executed and delivered
this Agreement as of the day and year first written above.
APS HOLDING CORPORATION
By: /s/ XXXXXXX X. XXXXX
Xxxxxxx X. Xxxxx,
Chief Executive Officer
and President
APS, INC.
By: /s/ XXXXXXX X. XXXXX
Xxxxxxx X. Xxxxx,
Chief Executive Officer
and President
AMERICAN PARTS SYSTEM, INC.
By: /s/ XXXXXXX X. XXXXX
Xxxxxxx X. Xxxxx, President
APS MANAGEMENT SERVICES, INC.
By: /s/ XXXXXXX X. XXXXX
Xxxxxxx X. Xxxxx, President
46
APS SUPPLY, INC.
By: /s/ XXXXXXX X. XXXXX _
Xxxxxxx X. Xxxxx, President
AUTOPARTS FINANCE COMPANY, INC.
By: /s/ XXXXXXX X. XXXXX
Xxxxxxx X. Xxxxx, President
BIG A AUTO PARTS, INC.
By: /s/ XXXXXXX X. XXXXX
Xxxxxxx X. Xxxxx, President
INSTALLERS' SERVICE WAREHOUSE, INC.
By: /s/ XXXXXXX X. XXXXX
Xxxxxxx X. Xxxxx, President
PARTS, INC.
By: /s/ XXXXXXX X. XXXXX
Xxxxxxx X. Xxxxx, President
47
PRESATT, INC.
By: /s/ XXXXXXX X. XXXXX
Xxxxxxx X. Xxxxx, President
AUTO PARTS EXPRESS, LLC
By: /s/ XXXXXXX X. XXXXX
Name:
Title:
THE UNDERSIGNED ACKNOWLEDGE THEIR OBLIGATIONS
UNDER SECTIONS 4.4 AND 6.5 OF THIS AGREEMENT AND
AGREE TO BE BOUND BY THE TERMS THEREOF
/s/ XXXXXXX X. XXXXX
Xxxxxxx X. Xxxxx
/s/ XXXXX X. XXXXXX
Xxxxx X. Xxxxxx
/s/ XXXXX X. XXXXXXX
Xxxxx X. Xxxxxxx
/s/ XXXXXX X. XXXXXX
Xxxxxx X. Xxxxxx
/s/ XXXXXXX XXXXXXX
Xxxxxxx Xxxxxxx
48
