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EXHIBIT 10.6
PRODUCT PURCHASE AGREEMENT
This Agreement by and between A. P. S., Inc., a Delaware corporation
("Supplier") and AUTOMOTIVE ONEPARTS STORES, INC., a Florida corporation
("Purchaser") is hereby made this 25th day of October, 1995.
WHEREAS, Purchaser has from time to time requested credit from
Supplier for Purchaser's purchase of automotive parts, accessories and supplies
from Supplier and Supplier has advanced such credit and Supplier has arranged
for loans from a subsidiary of Supplier to Purchaser for the purpose of
Purchaser paying certain of Purchaser's existing obligations; and
WHEREAS, Purchaser has agreed to execute this Product Purchase
Agreement in exchange for such advances and loans.
NOW, THEREFORE, the parties hereto agree as follows:
1. Commencing the date hereof and continuing uninterrupted for
the longer of five (5) years from the date hereof or the date upon which all
sums due by Purchaser to Supplier or any subsidiary or affiliate of Supplier
are pain in full, with respect to the business location(s) described on Exhibit
"A" hereto and any other locations from time to time owned or operated by
Purchaser, Purchaser hereby agrees to purchase merchandise from Supplier over
any given four consecutive months billing period, net of all returns, an
average of not less than seventy-five percent (75%) of Purchaser's "cost of
goods" (the
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"Minimum Purchase Level") for automotive parts, accessories and supplies as set
forth in the financial books and records of Purchaser prepared in accordance
with generally accepted accounting principles ("GAAP") and in a format
reasonably acceptable to Supplier. T he term "cost of goods", as used herein,
shall include any and all rebates, discounts and other reductions that could,
by use of GAAP, be charged against Purchaser's cost of goods. Purchaser hereby
agrees to promptly provide Supplier with such financial information as Supplier
may deem necessary or convenient to establish Purchaser's compliance with the
terms of this Agreement.
2. Supplier agrees, during the term of this Agreement, to sell
Purchaser merchandise at the prices from time to time charged by Supplier in
accordance with the terms of Supplier's Net Pricing Program.
3. Supplier agrees, during the term of this Agreement, except as
described below, to provide Purchaser with merchandise at a fill rate of at
least ninety percent (90%) on merchandise historically sold by Purchaser,
calculated in the manner Supplier calculates its percentage of fill for the
Coal distribution center or such other distribution center or centers as may
hereinafter service Purchaser. Upon Purchaser's written request, Supplier
shall provide Purchaser with the percentage of fill results for the
distribution center serving Purchaser. Should
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Supplier fail to meet the service level described in this Xxxxxxxxx 0,
Xxxxxxxxx shall not for the period during which the fill rate falls below
ninety percent (90%) be required to maintain the Minimum Purchase Level. Should
Supplier fail to provide Purchaser with a fill level averaging at least eighty
percent (90%) during the first one hundred twenty (120) days of this Agreement
or a fill level averaging at least ninety percent (90%) for any continuous one
hundred twenty (120) day period after the initial one hundred twenty (120)
days, Purchaser shall, provided Purchaser has paid in full all moneys owed
Supplier or any subsidiary or affiliate thereof, including but not limited to
Autoparts Finance Company, Inc. or any lender to whom Supplier has made any
accommodation for the benefit of Purchaser in securing a loan or advance, and
provided Purchaser has notified Supplier in writing of Supplier's failure to
maintain the fill rate set forth herein not more than sixty (60) days after the
fill level returns to the level required herein, have the option of terminating
this Agreement upon providing supplier forty-five (45) days prior written
notice.
4. Purchaser hereby agrees to comply with the credit terms of
Supplier as from time to time and at any time published. Purchaser
acknowledges and agrees that Supplier shall have no obligation to sell
Purchaser merchandise on credit if Purchaser fails to conform to Supplier's
credit terms after notice of such
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failure and during which time Supplier shall sell Purchaser merchandise on a
COD basis, and Purchaser shall not, regardless of Purchaser's credit status, be
relieved of its obligation to buy merchandise from Supplier at or greater than
the Minimum Purchase Level.
5. Should Purchaser fail to buy merchandise from Supplier
according to the terms of Paragraph 1 hereof, Purchaser shall owe Supplier for
the account billing periods during which Purchaser was below the Minimum
Purchase Level, 10% of the difference between the amount of purchases which
would have been made by Purchaser if Purchaser had purchased at the Minimum
Purchase Level, and the amount actually purchased during the applicable period.
However, the percentage of Purchaser's purchases shall be averaged over a
period of one hundred twenty (120) days to ascertain compliance with the
Minimum Purchase Level requirements set forth herein and Purchaser shall only
be liable to make payment in the event that the average purchases for a twelve
(12) month period are less than the Minimum Purchase Level. In the event of
such an occurrence, Purchaser shall remit the monetary difference with its next
monthly payment. Provided, however, that Supplier hereby agrees to keep
Purchaser' acquisition price for all merchandise sold to Purchaser for resale
(taken in the aggregate) by Supplier, reasonably competitive in Purchaser's
marketplace with what Purchaser could pay for like merchandise
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from other automotive warehouse distributors. Should Purchaser believe that
Supplier has not kept Purchaser so reasonably competitive, Purchaser shall
provide Supplier with all evidence it may have to support that assertion and if
true, Supplier shall have ninety (90) days to remedy any failure by changing
its selling prices to Purchaser going forward, otherwise, Purchaser may
terminate this Agreement. Supplier and Purchaser each acknowledge and agree
that the charges described herein provide a good faith estimate of the actual
damages which may be reasonably anticipated from a breach of this Agreement,
which actual damages may be extremely difficult and impractical to ascertain.
6. Purchaser shall not, during the term of this Agreement, sell
the assets or properties (real or personal) of its business in bulk or any
substantial portion thereof, transfer any leasehold interest in and to the real
property(ies) from which Purchaser's business is conducted or change or permit
any change in any beneficial interest in the equity securities of Purchaser
(collectively "Sale of Business") without first giving Supplier forty-five (45)
days written notice of the specific details of the proposed
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transaction. Supplier shall have the right to purchase the assets proposed to
be sold or to assume any leasehold the assets proposed to be transferred or
acquire such interest in the equity securities of Purchaser according to the
same terms and conditions as set forth in the proposed transaction by sending a
written acceptance notification to Purchaser at the address set forth herein to
which notices are to be sent within thirty (30) days of Supplier's receipt of
the details of the transaction. Any purchase of Purchaser's business by
Supplier shall be consummated through the use of an Agreement of Sale with
customary terms, conditions, representations and warranties, including those
relating to non- competition by Purchaser and its principal stockholders.
Should Supplier not agree to the purchase on Purchaser's terms, Purchaser may
pursue the sale on substantially the terms offered to Supplier. Purchaser
shall in any event provide Supplier with a copy of the definitive Agreement of
Sale and exhibits promptly upon execution. Purchaser hereby acknowledges and
agrees that Supplier may file with such public records as Supplier deems
appropriate, a notice(s) identifying the rights granted Supplier in this
Paragraph 6 and Purchaser hereby names Supplier Purchaser's attorney-in- fact
solely for the purpose of recording such notice(s).
Nothing herein shall affect the rights of any shareholder of
Automotive One Parts Store, Inc. to transfer their stock to any of the other
shareholders, nor shall it affect any rights of transfer associated with death
or incapacity of a shareholder, or family members.
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7. In the event Supplier exercises any of the rights it has
herein for compensation or in respect of the transfer of the business assets,
leasehold interest(s) or equity interests of Purchaser, in addition to all
remedies at law and in equity which Supplier may have, Supplier shall have the
right to enforce the terms of this Agreement by specific performance in a court
of competent jurisdiction.
8. The parties hereto shall be excused for failure to perform any
part of this Agreement (but not for the payment of any sums of money due) to
the extent that performance by such party is prevented directly or indirectly
by an occurrence commonly known as force majeure, including, without
limitation, delays arising out of acts of God, acts or orders of a government,
agency or instrumentality thereof (whether of fact or law), acts of a public
enemy, riots, embargoes, strikes or other concerted acts of workmen (whether of
Supplier or other persons), casualties or accidents, deliveries or materials,
transportation or shortage of cars, trucks, fuel, power, labor or materials
delays beyond Supplier's control in receipt of materials from Supplier's
suppliers, or any other causes, circumstances or contingencies within or
without the United States of America, which are beyond such Party's control.
9. This Agreement constitutes the entire understanding between
the parties hereto with respect to the subject matter
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hereto but for any and all other documents that relate to loans, advances,
credit, security and other documents executed by Purchaser for the benefit of
Supplier and any alteration or modification hereto must be in writing executed
by the party to be bound.
10. This Agreement and the rights and duties created hereby, shall
be interpreted, construed and enforced, without regard to principles of
conflicts of laws, according to the laws of the State of Florida and venue
shall only be found in the state and Federal courts sitting within Orange
County, Florida. Concurrently with the execution, delivery and performance of
this Agreement by Purchaser does not violate any Federal, state or local law,
ordinance, rule or decision.
11. Any notice to be sent pursuant to the terms of this Agreement
or by applicable law shall be deemed fulfilled by written notice, demand or
request, mailed or personally served on the party entitled thereto or on its
successors or assigns. If
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mailed, such notice, demand or request shall be made by certified or registered
mail, return receipt requested, and deposited in any post office station or
letter-box, enclosed in a postage prepaid envelope addressed to such party at
its address set forth below, or to such other address as either party hereto
shall direct by like written notice and shall be deemed to have been made on
the day it is receipted for by the addressee. If personally served or
commercially sent, the party giving such notice shall be deemed to have given
such notice on the day that delivery by the courier to the party being noticed
occurs. If faxed the party giving the notice shall be deemed to have given
such notice when the transmission is verified. For the purposes herein,
notices shall be sent to Seller and Buyer, as follows:
If to Supplier, to: A. P. S., Inc.
00000 XXX Xxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attn: Vice President &
General Counsel
Fax No.: (000) 000-0000
If to Purchaser, to: Automotive One Parts Stores, Inc.
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxx X. Xxxxxx, III
Fax No.: (000) 000-0000
12. The invalidity of any provision of this Agreement shall not
impair the validity of any other provision. If any provision of this Agreement
is determined by a court of competent jurisdiction to be unenforceable, such
provision shall be deemed severable and the Agreement may be enforced with such
provisions severed or as modified by such court.
13. Until executed by all parties, this is a draft and is neither
an agreement between the parties nor an embodiment of any prior oral agreement.
When and if this document is fully executed, it shall become the Agreement of
the parties.
14. This Agreement may not be transferred or assigned by Purchaser
by operation of law or otherwise without having first
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received the prior written consent of Supplier. Supplier may assign this
Agreement by operation of law or otherwise to any parent, subsidiary or
affiliate of Supplier, provided that such assignee fully assumes and discharges
all obligations of Supplier hereunder.
IN WITNESS WHEREOF, this Agreement is executed as of the day and year
first above written.
PURCHASER:
ATTEST: AUTOMOTIVE ONE PARTS
STORES, INC.
/s/ By: /s/ Xxxxxx X. Xxxxxx III
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Name: Xxxxxx X. Xxxxxx III
As Its: President
SUPPLIER:
ATTEST: A. P. S., INC.
/s/ By: /s/
--------------------------------- -----------------------------------
Name:
----------------------------------
As Its:
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JOINDER
The undersigned, being the sole stockholders of Automotive One Parts
Stores, Inc. do, both jointly and severally, in their individual capacities,
hereby join in the above Agreement as parties thereto for the limited purpose
of agreeing to be bound by the Agreement's terms and conditions as set forth in
Section 6 or as otherwise relate to the stockholders or owners of any equity
securities of Automotive One Parts Stores, Inc., but not as guarantors of
Automotive One Parts Stores, Inc.'s otherwise performance of such Agreement.
WITNESS:
/s/ /s/ Xxxxxx X. Xxxxxx, III
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Xxxxxx X. Xxxxxx, III
In His Individual Capacity
WITNESS:
/s/ /s/ Xxxxxx Xxx Xxxxxx
------------------------------------ ----------------------------------
Xxxxxx Xxx Xxxxxx
In Her Individual Capacity
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