(99.2) Exhibit B to Schedule 13D
Dated November 9, 1995.
DRAFT OF NOVEMBER 7, 1995
STOCK PURCHASE AGREEMENT
______________, 1995
TABLE OF CONTENTS
1. PURCHASE AND SALE OF BALBOA SHARES. 2
1.1 Agreement to Purchase and Sell 2
1.2 Closing 2
1.3 Purchase Price 2
1.4 Reimbursement For Expenses 3
2. REPRESENTATIONS AND WARRANTIES OF SELLER 3
2.1 Organization/Good Standing 3
2.2 Authority 3
2.3 Binding Obligation of Seller 3
2.4 Title to the Balboa Shares 3
2.5 Expense Reimbursement Schedule 4
2.7 Compliance 4
2.8 Subsidiaries 4
2.9 Brokers and Finders 4
2.10 Proxy Statement/Schedule 13(D) 4
2.11 Permits 5
2.12 Litigation 5
2.13 Accuracy of Information 5
2.14 Investment Intent 5
2.15 Reliance Upon Seller's Representations6
2.16 Receipt of Information 6
2.17 Restricted Securities 6
2.18 Investment Experience 6
2.19 Accredited Investor 7
2.20 Legend on Note 8
3. REPRESENTATIONS AND WARRANTIES OF PURCHASER 8
3.1 Organization/Good Standing 8
3.2 Authority 8
3.3 Binding Obligation of Purchaser 8
3.4 Compliance 9
3.5 Subsidiaries 9
3.6 Brokers and Finders 9
3.7 Proxy Statement/Schedule 13(D) 9
3.8 Permits 10
3.9 Litigation 10
3.10 Accuracy of Information 10
4. COVENANTS OF SELLER 10
4.1 Negative Covenants 10
4.2 Compliance, Consents and Approvals 11
4.3 Negotiations 11
5. COVENANTS OF PURCHASER 11
5.1 Negative Covenants 11
5.2 Compliance, Consents and Approvals 11
6. CONFIDENTIALITY 12
7. CONDITIONS OF CLOSE WITH RESPECT TO SELLER 12
7.1 Representations, Warranties and
Covenants of Purchaser 12
7.2 Obligations and Conditions of
Purchaser 12
7.3 Consents and Approvals/Qualifications 12
7.4 No Violation of Orders, Etc. 12
7.5 Purchase Price 13
7.6 Certificate of Good Standing 13
8. CONDITIONS OF CLOSE WITH RESPECT TO
PURCHASER 13
8.1 Representations, Warranties and
Covenants of Seller 13
8.2 Obligations and Conditions of Seller 13
8.3 Consents and Approvals/Qualifications 13
8.4 Proceedings and Documents 13
8.5 No Violation of Orders, Etc. 13
8.6 Consummation of Plan of Merger 14
8.7 Elements of Financing 14
8.8 Dealer Participation 14
8.9 Approval of Big O ESOP 14
8.10 Certificate of Good Standing 14
8.11 Approval by Board of Directors
of Company 14
8.12 Shareholder Approval 15
9. INDEMNIFICATION 15
9.1 Indemnification By Seller 15
9.2 Indemnification By Purchaser 15
9.3 Notice of Asserted Liability 15
9.4 Survival 16
10. MISCELLANEOUS PROVISIONS 16
10.1 Survival of Representations,
Covenants and Warranties 16
10.2 Successors and Assigns 16
10.3 Governing Law 16
10.4 Counterparts 16
10.5 Expenses 16
10.6 Notices 16
10.7 Entire Agreement 17
10.8 Waivers, Amendments and Remedies 17
10.9 Severability 17
10.10 Headings/Recitals/Exhibits 17
10.11 Knowledge 17
10.12 Necessary Action 18
10.13 Time 18
10.14 Attorneys' Fees 18
10.15 California Corporate Securities Laws18
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT ("Agreement") is made as of
__________, 1995,
between BALBOA INVESTMENT GROUP, L.P., a California limited
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partnership
("Seller"), XXXXXXX X. XXXXX, XX., its general partner ("Balboa
General
Partner") and Big O Tire Dealers, L.P., a California limited
partnership to be
formed ("Purchaser").
RECITALS
X. Xxxxxx owns and holds three hundred nine
thousand five hundred
(309,500) shares of common stock (the "Balboa Shares") of the Big
O Tires, Inc.,
a Nevada corporation ("Company"), par value ten cents ($.10) per
share, which
Balboa Shares represent approximately nine and two tenths percent
(9.2%) of all
the issued and outstanding shares of common stock of Company.
X. Xxxxxxxxx has elected to participate in the possible
acquisition of
Company by and through an entity whose principals may (subject to
certain
conditions precedent, as shall hereinafter be set forth) be
comprised of certain
members of the Company's current senior management ("Big O
Management"), certain
participants in the Company's employee stock ownership plan ("Big
O ESOP"), and
Purchaser (collectively, the "Holding Company"). Purchaser is
required to make
an equity contribution to the Holding Company in exchange for the
issuance of
stock of the Holding Company. In order to make such equity
contribution
Purchaser is intending to borrow funds from various sources
("Equity
Financing"), including acquiring shares of Company Stock by way
of giving a
secured promissory note to certain existing shareholders of the
Company and
rolling over such shares into the Holding Company. In connection
with the
foregoing, Purchaser desires, upon the occurrence, fulfillment
and satisfaction
of certain conditions precedent as shall hereinafter be set
forth, to purchase
and acquire the Balboa Shares. The Holding Company has entered
into an
Agreement and Plan of Merger with the Company, a copy of which is
attached
hereto as EXHIBIT A (the "Merger Agreement").
C. Each limited partner of Purchaser that owns one or
more duly
franchised Big O Tire Retail Stores (individually, a "Dealer,"
collectively,
"Dealers") is required to execute a purchase commitment agreement
with Company
whereby each such Dealer agrees to purchase a minimum number of
tire units from
Company for a six and one quarter (6.25) year period commencing
as of the date
of the consummation of the Merger pursuant to the Merger
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Agreement (the
"Purchase Commitment"). In connection therewith, during the term
of the
Purchase Commitment, each such Dealer is required to make a
mandatory additional
capital contribution to purchase equal to One Dollar ($1.00) for
each tire unit
purchased from Company (the "Tire Contribution").
D. Subject to the terms an conditions as shall
hereinafter be set
forth, Seller is willing to transfer and convey the Balboa Shares
to Purchaser.
NOW, THEREFORE, the parties hereto hereby agree as follows:
AGREEMENT
1. PURCHASE AND SALE OF BALBOA SHARES.
1.1 Agreement to Purchase and Sell. On the "Closing
Date" (as defined
in SECTION 1.2 below), and upon the terms and subject to each and
every
condition precedent set forth in this Agreement, Seller shall
sell, assign,
transfer, convey and deliver the Balboa Shares to Purchaser or
its designee and
Purchaser shall purchase, acquire and accept the Balboa Shares
from Seller.
1.2 Closing. Seller and Purchaser intend that the
"Closing Date" of
the purchase and sale of the Balboa Shares shall take place at
the Offices of
Xxxxxx, Xxxx & Xxxxxxxx, 0000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000,
Xxxxxx, Xxxxxxxx,
00000, on the date upon which the plan of merger pursuant to the
terms of the
Merger Agreement shall have been fully and completely consummated
or at such
other time, place, and date as the parties hereto shall agree in
writing
("Closing Date"). Provided further, it is expressly understood
and agreed by
Seller and Purchaser that the Closing Date shall not occur unless
and until
(1) the plan of merger pursuant to the Merger Agreement is fully
and completely
consummated and (2) each and every condition precedent set forth
in SECTIONS 7
and 8 of this Agreement shall have been satisfied and fulfilled
or waived by the
party who holds such waiver right. On the Closing Date, Seller
shall transfer
and convey to the Purchaser the Balboa Shares.
In the event the Closing Date does not occur on or before
February 28,
1996, and the parties have not otherwise agreed in writing to
extend the Closing
Date, this Agreement shall be null and void and have no further
force and
effect, except that the provisions of SECTIONS 6, 9, and 10 shall
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survive such
termination. Provided that, to the extent any provision of this
Agreement is
required to survive for purposes of the indemnification
obligations of each
party to the other pursuant to the provisions of SECTION 9
hereof, such
provisions shall survive such termination. Provided further,
such termination
shall not relieve any party of its liability for any
misrepresentation, default
or breach of this Agreement.
1.3 Purchase Price. The Purchase Price for the Balboa
Shares
("Purchase Price") shall be the sum of
____________________________________________ Dollars ($_________)
(which
represents ________________________________________ (_______)
shares at _______
Dollars ($__) per share) which shall be paid by Purchaser to
Seller at the
Closing Date as follows:
1.3.1 Purchaser shall pay to Seller in cash or
equivalent,
the sum of _________________________________________________
Dollars
($_________) (the "Cash Portion") (which represents
________________________________________ (_______) shares times
___________
Dollars ($_____) per share) which Cash Portion shall, at the
election of
Purchaser be paid (1) as part of the "Merger Consideration" (as
such term is
defined in Section 1.5(a) of the Merger Agreement) or (2) by
Purchaser
simultaneously with the consummation of the plan of merger
pursuant to the
Merger Agreement (as specified in Section 1.3 of the Merger
Agreement).
1.3.2 The balance of the Purchase Price in the
sum of
__________________ _____________________ Dollars ($_______) along
with the
"Reimbursement" (as defined in SECTION 1.4 below) shall be paid
pursuant to the
terms of a secured promissory note in the form attached hereto as
EXHIBIT B (the
"Note"). The Note shall be fully amortized over a six (6)-year
period,
commencing immediately following the Closing Date. Interest on
the unpaid
principal shall bear interest at the rate of ______ percent (__%)
per annum, and
the Note shall be payable in seventy-two (72) equal monthly
installments over
the six (6)-year amortized term commencing on the first day of
the month
following the Closing Date and on the first day of each and every
month
thereafter during the amortized period. The Note shall be
secured by Purchaser
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granting Seller a security interest in that portion of
Purchaser's shareholding
in the Holding Company in the same ratio as the total sum of the
note bears to
the total of Purchaser's Equity Financing; and by Purchaser
assigning as
collateral that portion of the aggregate of the Dealers Purchase
Commitments in
the same ratio as the total sum of the note bears to the total of
Purchaser's
Equity Financing pursuant to the terms of the Security Pledge
Agreement in the
form attached hereto as EXHIBIT C. Purchaser will take all
necessary steps to
perfect the security interest as granted and assign as collateral
said portion
of the Purchasing Commitments.
1.4 Reimbursement For Expenses. As separate and
independent
consideration for expenses incurred by Seller in putting together
proposals for
certain shareholder actions and resolutions to the shareholders
of the Company
in 1993 and 1994 by way of proxy solicitations and related
actions, which
included proposals that the Company explore all alternatives to
enhance the
value of the Company, Purchaser hereby agrees to reimburse Seller
for such
expenses incurred by it in accordance with the schedule
("Reimbursement
Schedule") attached hereto as EXHIBIT D up to a maximum
reimbursement in the sum
of _____________________________ Dollars ($_______) (the
"Reimbursement");
provided that such obligation to reimburse Seller for such
expenses are subject
to and contingent upon and shall not be payable unless and until
the
consummation of the transaction contemplated by this Agreement
and the
consummation of the plan of merger contemplated by the Merger
Agreement. The
payment for such expenses shall be added to the Note and payable
in accordance
with the terms thereof.
2. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller hereby
represents and
warrants to Purchaser that each and every statement contained in
this SECTION 2
is correct an complete as of the date of this Agreement and will
be correct and
complete as of the Closing Date.
2.1 Organization/Good Standing. Seller is a
California limited
partnership, duly organized, validly existing and in good
standing under the
laws of the State of California, has all requisite partnership
power to own and
operate its properties and assets and to carry on its business as
it is now
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being conducted. Seller has the full right, power and authority
and all
partnership and related action has been taken as shall be
necessary and required
to consummate the transactions contemplated hereby.
2.2 Authority. Xxxxxxx Xxxxx, Xx., as the general
partner of
Seller, has the full power, authority and capacity to sign and
deliver this
Agreement and to take all necessary action on behalf of Seller as
shall be
necessary and required to consummate the transactions
contemplated hereby.
2.3 Binding Obligation of Seller. This Agreement
constitutes the
legally binding obligation of Seller in accordance with the terms
and provisions
hereof, subject as to its enforceability to limitations imposed
by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating
to or effecting
creditors' rights, generally and to the general principals of
equity.
2.4 Title to the Balboa Shares. Seller owns and holds
the Balboa
Shares beneficially and of record, free and clear of any liens,
claims,
encumbrances or restrictions of any kind or nature whatsoever
and, upon delivery
of and payment of the Purchase Price for the Balboa Shares as
herein provided,
Seller shall convey to Purchaser valid title thereto, free and
clear of any
liens, claims, security interests, encumbrances or restrictions
of any nature or
description.
2.5 Expense Reimbursement Schedule. The Expense
Reimbursement Schedule
accurately reflects the expenses described in Section 1.4 hereof
so incurred by
Seller.
2.6 No Preemptive or Other Rights. No person has any
right of first
refusal, any preemptive or other rights and there are no rights
or restrictions
under the terms and provision of Seller's partnership agreement
or otherwise
which would prohibit, preclude or otherwise affect the sale and
transfer of the
Balboa Shares to Purchase as contemplated by the terms and
provisions of this
Agreement.
2.7 COMPLIANCE. Neither the execution and delivery of
this Agreement
by Seller nor the consummation of the transactions contemplated
hereby, nor
compliance by Seller with respect to any of the provisions hereof
will:
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(1) violate, conflict with or result in the breach of any
provision of, or
constitute a default (or an event which with notice or lapse of
time are both
would constitute a default) under, or result in the termination
of, or
accelerate the performance by, or result in a right of
termination or
acceleration under, or result in a creation of any liens,
security interest,
charge or encumbrance upon any of the properties or assets of
Seller, under any
of the terms or provisions of (i) the partnership agreement of
Seller or
(ii) any material note, bond, mortgage, indenture, deed of trust,
license, lease
agreement, executory contract or arrangement or other instrument
or obligation
to which Seller is a party or to which it or any of its
properties or assets may
be otherwise subject or bound; or (2) subject to Seller's
obligations to take
all necessary steps to comply with the statutes or regulations
referred to in
the last sentence of this paragraph, violate any judgment,
ruling, writ,
injunction, decree, statute, rule or regulation applicable to
Seller, or any of
its respective properties or assets. Other than in connection
with Seller's
obligation to comply with the provisions of the Revised Uniform
Limited
Partnership Act of the State of California (the "RULPA"), the
Securities
Exchange Act of 1934, as amended, or any similar successor,
federal statute and
the rules and regulations thereunder, all as the same, shall be
in effect from
time-to-time ("Exchange Act"), the Securities Act of 1933, as
amended, or any
similar successor federal statute and the rules and regulations
thereunder, all
as the same shall be in effect from time-to-time ("Securities
Act"), the "take-over" or "blue sky" laws of the various states,
the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvement Acts of 1976 and the rules and regulations thereunder
("Xxxx-Xxxxx-Xxxxxx Act") and any required foreign regulatory
approvals, no notice to, filing
with, or authorization, consent or approval of any domestic or
foreign public
body or authority is necessary for the consummation by Seller of
the
transactions contemplated by this Agreement.
2.8 Subsidiaries. Seller does not own or control,
directly or
indirectly, any interest in any other corporation, association,
or other
business entity. Seller is not a participant in any joint
venture, partnership,
or similar arrangement.
2.9 Brokers and Finders. Seller has not engaged any
broker, finder or
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investment banker in connection with this Agreement or the
transactions
contemplated hereby.
2.10 Proxy Statement/Schedule 13(D). None of the
information supplied
or to be supplied by Seller or any of its agents, representatives
or affiliates
for inclusion, or included or incorporated by reference in (a)
any proxy
statements filed by Company with the Securities and Exchange
Commission (the
"Commission") or any amendment or supplement thereto, (b) any
Schedule 13(D) or
any amendment or supplement thereto filed by Seller, Purchaser,
the Holding
Company or Company, or any of its agents, representatives or
affiliates, or
(c) any other documents to be filed with the Commission, or any
other regulatory
agency in connection with the transactions contemplated hereby by
Seller,
Purchaser, the Holding Company or Company, or any of its agents,
representatives
or affiliates, will, insofar as such Schedule 13(D) and documents
relate to
Seller, its affiliates, agents and representatives, at the
respective time such
Schedule 13(D) and documents are filed, be false or misleading
with respect to
any material fact, or omit to state any material fact necessary
in order to make
the statements therein, at the time and in light of the
circumstances under
which they were made, not false or misleading. The Schedule
13(D) and any
related documents required in connection with the transactions
contemplated
hereunder, will comply as to form and all material respects with
the
requirements of law insofar as such Schedule 13(D) and documents
relate to
Seller, its affiliates, agents and representatives.
2.11 Permits. Seller has all franchises, permits,
licenses and any
similar authority necessary for the conduct of its business as
now being
conducted by it, the lack of which could materially and adversely
effect
Seller's ability to perform its obligations under this Agreement;
and believes
it can obtain, without undue burden or expense, any similar
authority. Seller
is not in default under in any material respect under any such
franchises,
permits, licenses or similar authority.
2.12 Litigation. There is no suit, action, proceeding
or investigation
pending or currently threatened against Seller or any of its
affiliates, agents
or representatives that questions the validity of this Agreement
or any
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documents, instruments or ancillary agreements in connection
therewith, or the
right of Seller to sell and convey the Balboa Shares and enter
into such
agreements or to consummate the transactions contemplated hereby
or thereby, or
that might result, either individually or in the aggregate in any
material
adverse change in the assets, business or property, prospects or
financial
condition of Seller, or in any material change in the current
equity ownership
of Seller. Seller is not a party, or to the best of its
knowledge, named in any
order, writ, injunction, judgment, or decree of any court,
government agency or
instrumentality. There is no action, suit or proceeding by
Seller currently
pending or that Seller currently intends to initiate.
2.13 Accuracy of Information. Except to the extent of
any subsequent
correction or supplement with respect thereto prior to the date
hereof, the
written statements, certificates, schedules, lists or any other
written
information furnished by or on behalf of Seller to Purchaser in
connection with
this Agreement, when considered as a whole, do not contain and
will not contain
any untrue statement of any material fact; and do not omit or
will not omit to
state a material fact necessary in order to make the statements
herein or
therein in light of the circumstances in which they were made,
not misleading.
Each document delivered by Seller to Purchaser is a true and
complete copy of
such document, unmodified except by another document delivered to
Purchaser.
Notwithstanding the foregoing, a mere inclusion on any particular
items of
information or statement of fact and any such written information
furnished by
or on behalf of Seller in connection with this Agreement, even if
coupled with a
representation or warranty to the effect that such written
information is
inclusive of all material information or statements of fact with
respect to the
subject matter thereof, shall not, without more, give rise to any
implication or
constitute any admission that such particular items or statements
are material.
Provided, however, Xxxxxx agrees to disclose to Purchaser any
such material
facts and information with respect to the foregoing within its
knowledge.
2.14 Investment Intent. With respect to the Note being
given by
Purchaser to Seller as partial consideration for the Purchase
Price, Seller
hereby acknowledges, confirms and represents that in accepting
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the Note as
partial consideration for payment of the Purchase Price and for
payment of the
Reimbursement, the Note is being acquired for investment for
Seller's own
account, not as a nominee or agent, and not with a view to the
resale or
distribution of any part thereof and that Seller has no present
intention of
selling, assigning, transferring, conveying or granting any
participation in or
otherwise distributing the Note. Seller further acknowledges and
confirms that
it does not have any contract, undertaking, agreement or other
arrangement with
any person to sell, transfer, assign or grant participation to
any such person
or to any third party with respect to the Note.
2.15 Reliance Upon Seller's Representations. Seller
acknowledges and
understands that the Note is not being registered under the
Securities Act on
the ground that the sale and transfer provided for in this
Agreement with
respect to the Note and the issuance of the Note hereunder is
exempt from
registration under the Securities Act pursuant to Section 4(2)
thereof and that
the Purchaser's reliance on such exemption is predicated on
Seller's
representations as set forth herein.
2.16 Receipt of Information. Seller believes that it
has received all
of the information it considers necessary or appropriate for
deciding whether to
accept the Note as partial consideration for the Purchase Price.
Seller further
represents that it has had an opportunity to ask questions,
receive answers and
information from the Purchaser regarding the business, assets and
properties,
prospects and financial condition of Purchaser and to obtain
additional
information (to the extent Purchaser possessed such information
or could acquire
it without unreasonable effort or expense) necessary to verify
the accuracy of
any information furnished to Seller or to which Seller had
access. The
foregoing, however, does not limit or modify the representations
and warranties
of Purchaser provided in SECTION 3 of this Agreement, nor the
right of Seller to
rely upon such representations and warranties.
2.17 Restricted Securities. Seller acknowledges and
understands that
in accepting the Note as partial consideration for the Purchase
Price, the Note
is characterized as "Restricted Securities" under applicable
Federal securities
laws, inasmuch as it is being acquired from Purchaser in a
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transaction not
involving a public offering and that under such laws and
applicable regulations,
such securities may be sold without registration under the
Securities Act, only
in limited circumstances. In this connection, Seller represents
that it is
familiar with Securities Exchange Commission Rule 144, as
promulgated by the
Commission under the Securities Act as such Rule 144 may be
amended from time to
time or any similar successor rule that may be promulgated by the
Commission,
and understands the resale limitations imposed thereby and by the
Securities
Act.
2.18 Investment Experience. Seller represents that it
is experienced
in evaluating and investing in securities of companies and
acknowledges that it
is able to fend for itself, can bear the economic risk of its
investment and has
such knowledge and experience in financial and business matters
that it is
capable of evaluating the merits and risks of the acceptance of
the Note as
partial consideration for the Purchase Price. Seller further
represents that it
has not been organized for the purpose of entering into this
transaction or
otherwise agreeing to the terms of the purchase and sale of the
Balboa Shares
pursuant to the terms, conditions and provisions of this
Agreement, without
limitation, accepting the Note as partial consideration for the
Purchase Price.
2.19 Accredited Investor.
2.19.1 The term "Accredited Investor" as defined in
Rule 501(a) of
Regulation D of the Securities Act means:
(a) a person or entity who is a general
partner, director or
executive officer and/or executive officer, director or general
partner of the
general partner of Purchaser;
(b) any bank as defined in Section 3(a)(2) of
the Securities
Act or any savings and loan association or other institution as
defined in
Section 3(a)(5)(A) of the Securities Act, whether acting in its
individual or
fiduciary capacity, any broker or dealer register pursuant to
Section 15 of the
Exchange Act; any insurance company as defined in Section 2(13)
of the
Securities Act; any investment company registered under the
Investment Company
Act of 1940 or a business development company as defined in
Section 2(a)(48) of
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that Act; any Small Business Investment Company licensed by the
U.S. Small
Business Administration under Section 301(c) or (d) of the Small
Business
Investment Act of 1958, any plan established and maintained by a
state, its
political subdivisions, or any agency or instrumentality of a
state or its
political subdivisions, for the benefit of its employees, if such
plan has total
assets in excess of Five Million Dollars ($5,000,000); any
employee benefit plan
within the meaning of Title I of the Employee Retirement Income
Security Act of
1974, if the investment decision is made by a plan fiduciary, as
defined in
Section 3(21) of such Act, which is either a bank, savings and
loan association,
insurance company or registered investment advisor, or if the
employee benefit
plan has total assets in excess of Five Million Dollars
($5,000,000), or if a
self-directed plan, with investment decisions made solely by
persons that are
Accredited Investors;
(c) any private business development company
as defined in
Section 202(a)(22) of the Investment Advisors Act of 1940;
(d) any organizations described in Section
501(c)(3) of the
Internal Revenue Code, corporation, Massachusetts or similar
business trust or
partnership not formed for the specific purposes of acquiring the
securities
offered, with total assets in excess of Five Million Dollars
($5,000,000);
(e) any natural person who individual net
worth, or joint net
worth with that persons spouse at the time of its purchase
exceeds One Million
Dollars ($1,000,000);
(f) any natural person who had an individual
income in excess
of Two Hundred Thousand Dollars ($200,000) in each of the two
most recent years
or joint income with that person's spouse in excess of Three
Hundred Thousand
Dollars ($300,000) in each of those years and has a reasonable
expectation of
reaching the same income level in the current year;
(g) any trust with total assets in excess of
Five Million
Dollars ($5,000,000), not formed for the specific purposes of
acquiring the
securities offered, whose purchase is directed by a person who
has such
knowledge and experience in such financial and business matters,
that he/she is
capable of evaluating the merits and risks of the prospective
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investment; or
(h) any entity in which all the equity owners
are Accredited
Investors.
As used in SECTION 2.18.1, the term "net worth" means
the excess of
total assets over total liabilities. For the purpose of
determining the
person's net worth, the principal residence owned by an
individual should be
valued at the fair market value, including the costs of
improvements, net of
current encumbrances. As used in this SECTION 2.18.1, "income"
means actual
economic income, which may differ from adjusted gross income for
income tax
purposes. Accordingly, Seller should consider whether it should
add any or all
of the following items to its adjusted gross income for income
tax purposes in
order to reflect more accurately its actual economic income: any
amounts
attributable to tax exempt income received, losses claimed as a
limited partner
in any limited partnership, deductions claimed for depletion,
contributions to
an IRA or Xxxxx Retirement Plan and alimony payments.
2.19.2 Seller further represents to Purchaser that
it is an
Accredited Investor.
2.20 Legend on Note. It is acknowledged, understood and
agreed that
the Note shall bear the following legends.
(a) "THESE SECURITIES HAVE NOT BEEN REGISTERED
UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD,
TRANSFERRED, ASSIGNED,
PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER SUCH
ACT, OR UNLESS
PURCHASER HAS RECEIVED AN OPINION OF COUNSEL OR OTHER EVIDENCE,
SATISFACTORY TO
PURCHASER AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT
REQUIRED, OR UNLESS
SOLD PURSUANT TO RULE 144 OF SUCH ACT"; and
(b) Any legend required by the laws of the
State of
California or any other applicable state laws.
3. REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser
hereby represents
and warrants to Seller that each and every statement contained in
this SECTION 3
is correct and complete as of the date of this Agreement and will
be correct and
complete as of the Closing Date.
3.1 Organization/Good Standing. Purchaser is a
California limited
- 14 -
partnership, duly organized, validly existing and in good
standing under the
laws of the State of California, has all requisite partnership
power to own and
operate its properties and assets and to carry on its business as
it is now
being conducted. Purchaser has the full power and authority and
all partnership
and related action has been taken as shall be necessary and
required to
consummate the transaction contemplated hereby.
3.2 Authority. Big O Tire Dealers of America, a
California
nonprofit mutual benefit corporation, as the general partner of
Purchaser, has
the full power, authority and capacity to sign and deliver this
Agreement and to
otherwise take all action on behalf of Purchaser as necessary and
required to
consummate the transactions contemplated hereby.
3.3 Binding Obligation of Purchaser. This Agreement
constitutes the
legally binding obligation of Purchaser in accordance with the
terms and
provisions hereof, subject as to its enforceability to
limitations imposed by
bankruptcy, insolvency, reorganization, moratorium or similar
laws relating to
or effecting creditors' rights, generally and to the general
principals of
equity.
3.4 Compliance. Neither the execution and delivery of
this Agreement
by Purchaser nor the consummation of the transactions
contemplated hereby, nor
compliance by Purchaser with respect to any of the provisions
hereof will:
(1) violate, conflict with or result in the breach of any
provision of, or
constitute a default (or an event which with notice or lapse of
time are both
would constitute a default) under, or result in the termination
of, or
accelerate the performance by, or result in a right of
termination or
acceleration under, or result in a creation of any liens,
security interest,
charge or encumbrance upon any of the properties or assets of
Purchaser, under
any of the terms or provisions of (i) the partnership agreement
of Purchaser or
(ii) any material note, bond, mortgage, indenture, deed of trust,
license, lease
agreement, executory contract or arrangement or other instrument
or obligation
to which Purchaser is a party or to which it or any of its
properties or assets
may be otherwise subject or bound; or (2) subject to Purchaser's
obligation to
take all necessary steps to comply with the statutes or
regulations referred to
- 15 -
in the last sentence of this paragraph, violate any judgment,
ruling, writ,
injunction, decree, statute, rule or regulation applicable to
Purchaser, or any
of its respective properties or assets. Other than in connection
with
Purchaser's obligation to comply with the provisions of the
RULPA, the Exchange
Act, the Securities Act, the "take-over" or "blue sky" laws of
the various
states, the Xxxx-Xxxxx-Xxxxxx Act and any required foreign
regulatory approvals,
no notice to, filing with, or authorization, consent or approval
of any domestic
or foreign public body or authority is necessary for the
consummation by
Purchaser of the transactions contemplated by this Agreement.
3.5 Subsidiaries. Purchaser does not own or control,
directly or
indirectly, any interest in any other corporation, association,
or other
business entity; except that some or all of the limited partners
of Purchaser
are members of the general partner of Purchaser which is a trade
organization
comprised of duly franchised retail Big O Tire Store Dealers and
formed for the
purpose of protecting and advancing their common business
interests on a united
basis. Purchaser is not a participant in any joint venture,
partnership, or
similar arrangement.
3.6 Brokers and Finders. Purchaser has not engaged any
broker, finder
or investment banker in connection with this Agreement or the
transactions
contemplated hereby, except for the engagement of KPMG Peat
Marwick LLP ("KPMG")
pursuant to those certain letter agreements dated October 18, and
19, 1994, and
May 11, 1995.
3.7 Proxy Statement/Schedule 13(D). None of the
information supplied
or to be supplied by Purchaser or any of its agents,
representatives or
affiliates for inclusion, or included or incorporated by
reference in (a) any
(if required) proxy statements filed by the Company with the
Commission or any
amendment or supplement thereto, (b) any Schedule 13(D) or any
amendment or
supplement thereto by Purchaser, Seller, the Holding Company or
the Company, or
any of its agents, representatives or affiliates, or (c) any
other documents to
be filed with the Commission, or any other regulatory agency in
connection with
the transactions contemplated hereby by Seller, Purchaser, the
Holding Company
or the Company, will, insofar as such Schedule 13(D) and
documents relate to
- 16 -
Purchaser, its affiliates agents and representatives, at the
respective time
such Schedule 13(D) and documents are filed, be false or
misleading with respect
to any material fact, or omit to state any material fact
necessary in order to
make the statements therein, at the time and in light of the
circumstances under
which they were made, not false or misleading. The Schedule
13(D) and any
related documents required in connection with the transactions
contemplated
hereunder, will comply as to form and all material respects with
the
requirements of law insofar as such Schedule 13(D) and documents
relate to
Purchaser, its affiliates, agents and representatives.
3.8 Permits. Purchaser has all franchises, permits,
licenses and any
similar authority necessary for the conduct of its business as
now being
conducted by it, lack of which could materially and adversely
effect Purchaser's
ability to perform its obligations under this Agreement and
believes it can, if
required in order to perform its obligations hereunder, obtain,
without undue
burden or expense, any similar authority. Purchaser is not in
default under in
any material respect under any such franchises, permits, licenses
or similar
authority.
3.9 Litigation. There is no suit, action, proceeding or
investigation
pending or currently threatened against Purchaser or any of its
affiliates,
agents or representatives that questions the validity of this
Agreement or any
documents, instruments or ancillary agreements in connection
therewith, or the
right of Purchaser to enter into such agreements or to consummate
the
transactions contemplated hereby or thereby, or that might
result, either
individually or in the aggregate in any material adverse change
in the assets,
business or properties, prospects or financial condition of
Purchaser, or in any
material change in the current equity ownership of Purchaser.
Purchaser is not
a party, or to the best of its knowledge, named in any order,
writ, injunction,
judgment, or decree of any court, government agency or
instrumentality. There
is no action, suit or proceeding by Purchaser currently pending
or that
Purchaser currently intends to initiate.
3.10 Accuracy of Information. Except to the extent of
any subsequent
correction or supplement with respect thereto prior to the date
hereof, the
- 17 -
written statements, certificates, schedules, lists or any other
written
information furnished by or on behalf of Purchaser to Seller in
connection with
this Agreement, when considered as a whole, do not contain and
will not contain
any untrue statement of any material fact; and do not omit or
will not omit to
state a material fact necessary in order to make the statements
herein or
therein in light of the circumstances in which they were made,
not misleading.
Each document delivered by Purchaser to Seller is a true and
complete copy of
such document, unmodified except by another document delivered to
Seller.
Notwithstanding the foregoing, a mere inclusion on any particular
items of
information or statement of fact and any such written information
furnished by
or on behalf of Purchaser in connection with this Agreement, even
if coupled
with a representation or warranty to the effect that such written
information is
inclusive of all material information or statements of fact with
respect to the
subject matter thereof, shall not, without more, give rise to any
implication or
constitute any admission that such particular items or statements
are material.
Provided, however, Xxxxxxxxx agrees to disclose to Seller any
such material
facts and information with respect to the foregoing within its
knowledge.
4. COVENANTS OF SELLER. Seller hereby covenants and agrees
as follows:
4.1 Negative Covenants. During the period commencing as
of the date of
this Agreement and ending on the Closing Date, except as
otherwise expressly
provided herein, Seller shall not (1) take any action to amend or
otherwise
modify its partnership agreement in a manner which would cause it
to be unable
to perform or otherwise carry out its obligations under this
Agreement; (2)
issue, grant, sell or enter into any options, warrants,
agreements, conversion
rights, rights of first refusal, preemptive rights, or other
rights to subscribe
for, purchase or otherwise acquire the Balboa Shares; (3) create
any material
lien, charge, security interest, claim or encumbrance upon any of
the Balboa
Shares; (4) deed, sell, transfer, assign, license or otherwise
dispose of any of
the Balboa Shares; or (5) otherwise take any action which would
materially
effect its ability to perform its obligations under this
Agreement.
4.2 Compliance, Consents and Approvals. Seller shall
- 18 -
(1) comply with
and obtain all necessary consents, waivers, authorizations and
approvals of all
governmental and regulatory authorities (including, without
limitation, such
compliances, consents, waivers, authorizations and approvals as
necessary or
required under the RULPA, the Exchange Act, the Securities Act,
the "take over"
or "blue sky" laws of the various states and the
Xxxx-Xxxxx-Xxxxxx Act) and of
all other persons, firms, partnerships, or corporations required
in connection
with the execution, delivery and performance by Seller of each
and every term,
condition and provision of this Agreement; and (2) diligently
assist and
cooperate with Purchaser in preparing and filing all documents
required to be
submitted by Purchaser to any governmental or regulatory
authority in connection
with such transactions (which assistance and cooperation shall
include, without
limitation, timely furnishing to Purchaser all information
concerning Seller
which, in the reasonable opinion of counsel to Purchaser, is
required to be
included into the documents) and in obtaining any governmental
and regulatory
authorities, consents, waivers, authorizations or approvals which
may be
required to be obtained by Purchaser in connection with the
transactions
contemplated by this Agreement.
4.3 Negotiations. Following the execution of this
Agreement by all
parties hereto, Seller nor any one acting on behalf of Seller,
shall, directly
or indirectly, encourage, solicit, engage in discussions or
negotiations with,
or provide any information to any person, firm, or other entity
or group (other
than Purchaser or its representatives) concerning any sale,
assignment or
transfer of the Balboa Shares or other similar transaction
involving the Balboa
Shares. Seller agrees to promptly communicate to Purchaser any
inquiries or
communications concerning any transactions which it may receive
or which it may
become aware of.
5. COVENANTS OF PURCHASER. Purchaser covenants and agrees as
follows:
5.1 Negative Covenants. During the period commencing as
of the date of
this Agreement and ending on the Closing Date, except as
otherwise expressly
provided herein, Purchaser shall (1) not take any action to cause
it to amend or
otherwise modify its partnership agreement in a manner which
would cause it to
- 19 -
be unable to perform or otherwise carry out its obligations under
this
Agreement; or (2) otherwise take any action which would
materially effect its
ability to perform its obligations under this Agreement.
5.2 Compliance, Consents and Approvals. Purchaser shall
(1) comply
with and obtain all necessary consents, waivers, authorizations
and approvals of
all governmental and regulatory authorities (including, without
limitation, such
compliances, consents, waivers, authorizations and approvals as
necessary or
required under the RULPA, the Exchange Act, the Securities Act,
the "take over"
or "blue sky" laws of the various states and the
Xxxx-Xxxxx-Xxxxxx Act) and of
all other persons, firms, partnerships or corporations required
in connection
with the execution, delivery and performance by Purchaser of each
and every
term, condition and provision of this Agreement; and (2)
diligently assist and
cooperate with Seller in preparing and filing all documents
required to be
submitted by Seller to any governmental or regulatory authority
in connection
with such transactions (which assistance and cooperation shall
include, without
limitation, timely furnishing to Seller all information
concerning Purchaser
which, in the reasonable opinion of counsel to Seller, is
required to be
included into the documents) and in obtaining any governmental
and regulatory
authorities, consents, waivers, authorizations or approvals which
may be
required to be obtained by Seller in connection with the
transactions
contemplated by this Agreement.
6. CONFIDENTIALITY. Seller and Purchaser acknowledge the
terms and
provisions of the confidentiality letter agreement attached
hereto as EXHIBIT F
(the "Confidentiality Letter Agreement") entered into by and
between the General
Partner of Seller and the general partner of Purchaser, reaffirm
same, and agree
to be fully bound thereby; and further agree that the terms and
provisions of
this Agreement shall be included within the meaning of
"Information" as defined
in the Confidentiality Letter Agreement. For purposes of this
Agreement, the
term "Party" under the Confidentiality Letter Agreement shall be
deemed to
include Seller and Purchaser. In connection with the foregoing,
Seller and
Purchaser covenant and agree to treat and hold all Information
contained in this
Agreement and in an exhibit, schedule, instrument, ancillary
agreement or other
- 20 -
document relating hereto, strictly confidential, except as
expressly provided
otherwise in the Confidentiality Letter Agreement; and further
covenant and
agree to consult and confer with each other and each of their
respective counsel
prior to issuing any public announcement or statement with
respect to this
Agreement and the Plan of Merger contemplated by the Merger
Agreement and any
other matter relating to this Agreement.
7. CONDITIONS OF CLOSE WITH RESPECT TO SELLER. All
obligations of Seller
under this Agreement are subject to fulfillment, at or prior to
the Closing Date
of the following conditions, part or all of which may be waived
by Seller only
by written notice to Purchaser on or before the Closing Date.
7.1 Representations, Warranties and Covenants of
Purchaser. All
representations, warranties and covenants made by Purchaser in
this Agreement
shall be true, correct and complete on and as of the Closing
Date, the same
effect as those such representations, warranties and covenants
had been made on
and as of the Closing Date.
7.2 Obligations and Conditions of Purchaser. Purchaser
shall have
performed and complied with all covenants and obligations
required by it under
this Agreement on or prior to the Closing Date.
7.3 Consents and Approvals/Qualifications. All
compliances, consents,
waivers, authorizations, permits, approvals or qualifications of
any
governmental authority or regulatory body of the United States or
of every state
(including, without limitation, such Purchaser compliances,
consents, waivers,
authorizations, approvals and qualifications with respect to the
RULPA, the
Exchange Act, the Securities Act, the "take-over" or "blue sky"
laws of the
various states and the Xxxx-Xxxxx-Xxxxxx Act as specified in
SECTION 5.3 hereof)
required in connection with the execution, delivery and
performance of this
Agreement, shall have been duly obtained and shall be in full
force and effect
on the Closing Date.
7.4 No Violation of Orders, Etc. There shall not be in
effect on the
Closing Date any statute, rule or regulation to create executive
order,
preliminary or permanent injunction or other order issued,
promulgated or
enacted by any federal, state or local government, or regulatory
authority or
- 21 -
court which declares this Agreement invalid in any respect or
prevents the
consummation of the transactions contemplated hereby; and no
action or
proceeding before any federal, state or local court, or
governmental or
regulatory authority shall be instituted or threatened by any
federal, state or
local government or governmental or regulatory authority or by
any other person,
entity or organization which seeks to prevent or delay the
consummation of the
transactions contemplated by this Agreement (including without
limitation, the
consummation of the proposed plan of merger pursuant to the terms
and provisions
of the Merger Agreement) or which challenges the validity or
enforceability of
this Agreement or any term or provision hereof.
7.5 Purchase Price. Purchaser shall have delivered to
Seller the
Purchase Price and the Reimbursement and all documents and
instruments in
connection therewith including, without limitation, the Note and
the Security
Agreement.
7.6 Certificate of Good Standing. Purchaser shall have
delivered to
Seller certificates of partnership and tax good standing and
legal existence of
Purchaser as of nor more than thirty (30) days prior to the
Closing Date from
the Secretary of State of California.
8. CONDITIONS OF CLOSE WITH RESPECT TO PURCHASER. All
obligations of
Purchaser under this Agreement are subject to fulfillment, at or
prior to the
Closing Date of the following conditions, part or all of which
may be waived by
Purchaser only by written notice to Seller on or before the
Closing Date.
8.1 Representations, Warranties and Covenants of Seller.
All
representations and warranties and covenants made by Seller in
this Agreement
shall be true, correct and complete on and as of the Closing
Date, the same
effect as those such representations, warranties and covenants
had been made on
and as of the Closing Date.
8.2 Obligations and Conditions of Seller. Seller shall
have performed
and complied with all covenants and obligations required by it
under this
Agreement on or prior to the Closing Date.
8.3 Consents and Approvals/Qualifications. All
compliances, consents,
waivers, authorizations, permits, approvals or qualifications of
- 22 -
any
governmental authority or regulatory body of the United States or
of every state
(including, without limitation, such Seller compliances,
consents, waivers,
authorizations, approvals and qualifications with respect to the
RULPA, the
Exchange Act, the Securities Act, the "take-over" or "blue sky"
laws of the
various states and the Xxxx-Xxxxx-Xxxxxx Act as specified in
SECTION 4.3 hereof)
required in connection with the execution, delivery and
performance of this
Agreement, shall have been duly obtained and shall be in full
force and effect
on the Closing Date.
8.4 Proceedings and Documents. All corporate,
partnership and other
proceedings in connection with the transactions contemplated at
the Closing
(including without limitation, consummation of the proposed plan
of merger
pursuant to the terms of the Merger Agreement) and all documents
incident
thereto, shall be reasonably satisfactory in form and substance
to Purchaser's
counsel, which counsel shall have received all such counterpart
original or
certified or other copies of such documents as he/she may
reasonably request or
require.
8.5 No Violation of Orders, Etc. There shall not be in
effect on the
Closing Date any statute, rule or regulation to create executive
order,
preliminary or permanent injunction or other order issued,
promulgated or
enacted by any federal, state or local government, or regulatory
authority or
court which declares this Agreement invalid in any respect or
prevents the
consummation of the transactions contemplated hereby; and no
action or
proceeding before any federal, state or local court, or
governmental or
regulatory authority shall be instituted or threatened by any
federal, state or
local government or governmental or regulatory authority or by
any other person,
entity or organization which seeks to prevent or delay the
consummation of the
transactions contemplated by this Agreement (including without
limitation, the
consummation of the proposed plan of merger pursuant to the terms
and provisions
of the Merger Agreement) or which challenges the validity or
enforceability of
this Agreement or any term or provision hereof.
8.6 Consummation of Plan of Merger. The consummation of
all
transactions necessary to consummate the plan of merger pursuant
- 23 -
to the terms
and provisions of the Merger Agreement, as amended, including,
without
limitation, the satisfaction of each and every condition
precedent set forth in
Article VI of the Merger Agreement.
8.7 Elements of Financing. The Holding Company having
obtained
commitments for the required elements of financing in connection
with the merger
transaction contemplated under the terms and provisions of the
Merger Agreement
on terms and conditions satisfactory to the Holding Company in
its sole
discretion, including by way of example the following: (i)
obtaining a
commitment from a lender for the senior facility in the
approximate sum of Forty
Million Dollars ($40,000,000); (ii) obtaining a commitment from a
lender for a
senior subdebt facility in the approximate sum of Ten Million
Dollars
($10,000,000); (iii) Purchaser obtaining financing in the sum of
Five Million
Dollars ($5,000,000) and having arranged to purchase and acquire
shares of
common stock of Company from other existing shareholders on
negotiated terms by
way of promissory notes substantially similar to the Note
contemplated herein
and cash and other property which promissory notes and cash and
other property
(including the Note herein) total in the aggregate the sum of
Five Million
Dollars ($5,000,000) for a total of Ten Million Dollars
($10,000,000); and
(iv) existing lenders, creditors and other obligees of the
Company having agreed
to the financial arrangements contemplated in connection with the
proposed plan
of merger pursuant to the terms and provisions of the Merger
Agreement.
8.8 Dealer Participation. At least eighty-five percent
(85%) of the
Dealers shall have elected to participate in the Merger
transaction contemplated
under the terms and provisions of the Merger Agreement.
8.9 Approval of Big O ESOP. The Big O ESOP shall have
provided its
approval as required by the terms of the governing documents of
the Big O ESOP
and applicable law of the proposed plan of merger contemplated
under the terms
and provisions of the Merger Agreement and the terms, provisions
and conditions
by which the Holding Company shall be formed, structured,
operated and governed,
including, without limitation, having obtained a fairness opinion
and
appropriate approval by the employees of the Company
participating in the Big O
- 24 -
ESOP; and that pursuant to the foregoing, holders of at least
eighty percent
(80%) of the shares of Common Stock of the Company owned and held
by the Big O
ESOP shall have elected to roll over their existing ESOP accounts
into
investments in securities of Holding Company pursuant to the
terms and
provisions of the plan of merger contemplated under the Merger
Agreement.
8.10 Certificate of Good Standing. Seller shall have
delivered to
Purchaser certificates of partnership and tax good standing and
legal existence
of Seller as of no more than thirty (30) days prior to the
Closing Date from the
Secretary of State of California.
8.11 Approval by Board of Directors of Company. The
Board of Directors
shall have approved the Holding Company's proposed plan of merger
on terms and
conditions satisfactory to the Holding Company, in its sole
discretion.
8.12 Shareholder Approval. The plan of merger pursuant
to the terms
and conditions of the Merger Agreement shall have been approved
and adopted by
the shareholders of the Company.
9. INDEMNIFICATION.
9.1 Indemnification By Seller. Seller agrees to and
shall indemnify,
protect, defend and hold harmless Purchaser from and against and
in respect of
any and all claims, losses, damages, costs, expenses,
obligations, charges,
recoveries, and deficiencies, including interest, penalties and
reasonable
attorneys' fees and other related expenses (collectively, the
"Seller Claims")
resulting from or arising out of or relating to any inaccuracy in
or breach of
any representation, warranty, covenant or agreement of Seller
contained in this
Agreement or in any schedule, certificate, exhibit, attachment or
other
instrument furnished or to be furnished by Seller pursuant to the
terms and
provisions of this Agreement.
9.2 Indemnification By Purchaser. Xxxxxxxxx agrees to
and shall
indemnify, protect, defend and hold harmless Seller from and
against and in
respect of any and all claims, losses, damages, costs, expenses,
obligations,
charges, recoveries, and deficiencies, including interest
penalties and
reasonable attorneys' fees and other related expenses
(collectively, the
- 25 -
"Purchaser Claims") resulting from or arising out of or relating
to any
inaccuracy in or breach of any representation, warranty, covenant
or agreement
of Purchaser contained in this Agreement or in any schedule,
certificate,
exhibit, attachment or other instrument furnished or to be
furnished by
Purchaser pursuant to the terms and provisions of this Agreement.
9.3 Notice of Asserted Liability. Promptly after
receipt by any party
hereto ("Indemnitee") of notice of any assertion of any claim
where the
commencement of any action against it in respect of which
Indemnitee or
reimbursement may be sought hereunder (an "Assertion"), such
Indemnitee shall
promptly give written notice (the "Claims Notice") to the other
party obligated
to provide indemnification pursuant to this SECTION 9 (the
"Indemnitor") of the
Assertion, but failure to so notify the Indemnitor shall not
relieve such
Indemnitor of its liability to the Indemnitee hereunder.
Indemnitor shall be
obligated to assume the defense of such Assertion at its own
expense with
counsel chosen by the Indemnitor in reasonably satisfactory to
the Indemnitee.
Notwithstanding that the Indemnitor shall be obligated to assume
the defense of
any Assertion, Indemnitee shall have the right to participate in
the
investigation and defense thereof, with separate counsel chosen
by such
Indemnitee but in such event the fees and expenses of such
counsel shall be paid
by such Indemnitee unless (i) Indemnitor shall agree to pay such
fees and
expenses, (ii) the Indemnitor shall have failed to assume the
defense of such
Assertion and to employ counsel satisfactory to such Indemnitee
or (iii) in the
reasonable judgment of the Indemnitee, based upon the advice of
its counsel, a
potential conflict of interest may exist between the Indemnitor
and the
Indemnitee with respect to such Assertion (in which case, such
Indemnitee
notifies the Indemnitor that such Indemnitee elects to employ
separate counsel
at the Indemnitor's expense, the Indemnitor shall not have the
right to assume
the defense of such Assertion on behalf of such Indemnitee.
Notwithstanding
anything to the contrary in this SECTION 9.3, the Indemnitor
shall not, without
the prior written consent of such Indemnitee, (a) settle or
compromise any
action or consent to the entering of any judgment which does not
include as an
unconditional term thereof the delivery by the claimant or
- 26 -
plaintiff to such
Indemnitee of a duly executed written release of such Indemnitee
from all
liability in respect of such Assertion, which release shall be
satisfactory in
form and substance to counsel to such Indemnitee, or (b) settle
or compromise
any action in a manner that, in the sole judgment of such
Indemnitee or its
counsel, may materially and adversely affect such Indemnitee
other than as a
result of money damages or other money judgments.
9.4 Survival. The indemnification, protection, defense
and hold
harmless obligations of the parties contained in this SECTION 9
shall survive
the closing or other termination of this Agreement.
10. MISCELLANEOUS PROVISIONS.
10.1 Survival of Representations, Covenants and
Warranties. The
respective representations, covenants and warranties of each of
the parties to
this Agreement shall survive the execution and delivery of this
Agreement, and
the closing or other termination of this Agreement.
10.2 Successors and Assigns. Except as otherwise
provided herein, the
terms and conditions of this Agreement shall inure to the benefit
of and be
binding upon the respective successors and assigns of the parties
hereto.
Provided, however, that nothing contained in this Agreement,
whether express or
implied, is intended to confer upon any party other than the
parties hereto or
their respective successors and assigns any rights, remedies,
obligations or
liabilities under or by reason of this Agreement, except as
expressly provided
in this Agreement.
10.3 Governing Law. This Agreement shall be governed by
and construed
under the laws of the State of California as applied.
10.4 Counterparts. This Agreement may be executed in
two or more
counterparts each of which shall be deemed an original, but all
of which
together shall constitute one instrument.
10.5 Expenses. Each party shall bear its respective
expenses incurred
in connection with the preparation, execution and performance of
this Agreement
and the transactions contemplated hereby, including, without
limitation, all
fees and expenses of agents, representatives, counsel,
accountants and other
professional advisors.
- 27 -
10.6 Notices. Unless otherwise provided, all notices
and
othercommunications required or permitted under this Agreement
shall be in
writing and shall be mailed by U.S. first-class mail, postage
prepaid, sent by
facsimile or delivered personally by hand or by a nationally
recognized courier
addressed to the party to be notified at the address or facsimile
number as
follows, or at such other address or facsimile number as such
party may
designate by ten (10) days advance notice to the other party:
If to Purchaser: Big O Tire Dealers, L.P.
c/o Xxxxxxx X. Xxxxxx, Esq.
Xxxxxx, Xxxxx, Xxxxx & Xxxx
P.O. Box 2047
Oakland, CA 94604-2047
With copy to: XXXXXX, XXXXX, XXXXX & XXXX
P.O. Box 2047
Oakland, CA 94604-2047
Attn: Xxxxxxx X. Xxxxxx, Esq.
If to Seller: Xxxxxxx X. Xxxxx, Xx.
General Partner
Balboa Investment, L.P.
0000 Xxxx Xxxxxx Xxxx.
Newport Beach, CA 92661-1313
With copy to: Xxxxxx & Xxxxxxx
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000-2562
Attn: Xxxxx X. Xxxxx, Esq.
All such notices and other written communication shall be
effective on the date
of mailing, facsimile transfer or delivery.
10.7 Entire Agreement. This Agreement together with all
schedules,
exhibits, attachments, instruments and documents referred to
herein constitute
the entire agreement among the parties and neither party shall be
liable or
bound to the other party in any manner by any warranties,
representations or
covenants except as specifically set forth herein or therein.
10.8 Waivers, Amendments and Remedies. This Agreement
may be amended
to, preceded, cancelled, renewed or extended, and the terms
hereof may be
waived, only by a written instrument signed by Xxxxxxxxx and
Seller or, in the
case of a waiver, by the party waiving compliance. No delay on
the part of any
party in exercise any right power or privilege hereunder shall
operate as a
waiver thereof; nor shall any waiver on the part of any party of
any such right,
power or privilege, or any single or partial exercise of any such
right, power
- 28 -
or privilege preclude any further exercise thereof or the
exercise of any other
such right, power or privilege. The rights and remedies herein
provided are
cumulative and are not exclusive in any rights or remedies that
any party may
otherwise have at law or in equity. The rights and remedies of
any party based
upon, arising out of or otherwise in respect of any inaccuracy in
or breach of
any representation, warranty, covenant or agreement contained in
this Agreement
shall in no way be limited by the fact the act, omission,
occurrence or other
state of facts upon which any claim of any such inaccuracy or
breach is based
may also be the subject matter of any other representation,
warranty, covenant
or agreement contained in this Agreement (or in any other
agreement among the
parties herein as to which there is no inaccuracy or breach).
10.9 Severability. If one or more provisions of this
Agreement are
held to be unenforceable under applicable law, such provisions
shall be excluded
from this Agreement and the balance of the Agreement shall be
interpreted as if
such provision were so excluded and shall be unenforceable in
accordance with
its terms.
10.10 Headings/Recitals/Exhibits. The section headings
in this
Agreement are solely for convenience of reference and do not
affect the meaning
or interpretation of this Agreement or any term or provision
hereof. The
recitals set forth in the introductory paragraphs hereof and each
exhibit,
schedule or other attachment referred to in this Agreement and
attached hereto
from an integral part of this Agreement are incorporated herein
by this
reference and made a part hereof.
10.11 Knowledge. Where any representation, warranty or
statement
contained in this Agreement or in any certificate or document
delivered in
connection with this Agreement is expressly qualified to the
knowledge of the
person making such representation, warranty or statement, it
shall mean the
knowledge of such person actually possesses by having made a
reasonable inquiry
as to the matters which are the subject thereof.
10.12 Necessary Action. Each of the parties will use
its reasonable
efforts to take all actions and to do all things as shall be
necessary, proper
or advisable to consummate and make effective the transactions
contemplated by
- 29 -
this Agreement.
10.13 Time. Time is of the essence of this Agreement.
10.14 Attorneys' Fees.
(a) If any action at law is necessary to enforce or
interpret the
terms of this Agreement and all exhibits, schedules, instruments
and documents
referred to herein, the prevailing party shall be entitled to
reasonable
attorneys' fees, costs and disbursements in addition to any other
relief to
which such party may be entitled.
(b) Attorneys' fees incurred by any party to this
Agreement in
enforcing any judgment, order or action brought to resolve any
controversy
arising under this Agreement shall be recoverable by the
prevailing party. Such
rights to recover postjudgment attorneys' fees shall be separate
and distinct
from the right to recover attorneys' fees pursuant to subsection
(a) above. The
provisions of this paragraph 10.14(b) shall be severable from all
provisions of
this Agreement and shall survive any judgment and shall not be
deemed merged
into any judgment.
10.15 California Corporate Securities Laws. SALE OF THE
SECURITIES
WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED
WITH THE
COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE
ISSUANCE OF SUCH
SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE
CONSIDERATION FOR SUCH
SECURITIES PRIOR TO SUCH QUALIFICATION IS UNLAWFUL. UNLESS THE
SALE OF
SECURITIES IS EXEMPT FROM QUALIFICATION BY SECTION 25100, 25102
OR 25105 OF THE
CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS
AGREEMENT ARE
EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED,
UNLESS THE SALE IS
SO EXEMPT.
IN WITNESS WHEREOF, Seller and Purchaser have caused this
Agreement to be
executed as of the date first above written.
"SELLER" "PURCHASER
BALBOA INVESTMENT GROUP, L.P. BIG O TIRE DEALERS, L.P.
By: BIG O TIRE DEALERS OF
AMERICA
Its: General Partner
By____________________________
Xxxxxxx X. Xxxxx, Xx.
General Partner By__________________________
Xxxxxx Xxxxxxxxxx
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Its: President
SECURITY AND PLEDGE AGREEMENT
THIS SECURITY AND PLEDGE AGREEMENT (the "Agreement") is made
as of this
____ day of ________________, 1995, is by and between BIG O
DEALERS, L.P., a
California limited partnership ("Pledgor"), BALBOA INVESTMENT
GROUP, L.P., a
_______________ limited partnership (the "Secured Party") and
_____________________________ (the "Escrow Holder").
RECITALS
X. Xxxxxxx is the maker under that certain promissory
note of even date
herewith in favor of Secured Party in the principal amount of
___________________________ Dollars ($_______) (the "Note").
B. The note provides that the obligations of Pledgor
under the Note are
to be secured by a security interest in, and a pledge of a
portion of Debtor's
interest in BOTI Holdings, Inc., a Nevada corporation ("Holding
Company")
NOW, THEREFORE, the parties hereto agree as follows:
AGREEMENT
In consideration of the foregoing recitals and agreements
and undertakings
set forth below, Secured Party and Pledgor agree as follows:
1. APPOINTMENT OF ESCROW HOLDER. Pledgor and Secured
Party hereby
appoint Escrow Holder for the purposes set forth in this
Agreement, and Xxxxxx
Holder accepts such appointment on the terms and conditions set
forth herein.
2. SECURITY INTEREST. To secure the performance of all
of the
obligations of Pledgor under the Note, Pledgor hereby grants a
security interest
in and hereby deposits with Escrow Holder a certificate or
certificates
evidencing ________________ (__) of Pledgor's shares of common
stock of Holding
Company owned and held by Pledgor (the "Pledged Shares") and a
reasonable number
of stock powers substantially in the form set forth in EXHIBIT A
attached
hereto, executed in blank with respect thereto, which shares and
stock powers
are to be held by the Escrow Holder for use in accordance with
the terms and
provisions of this Agreement. The Escrow Holder may, but need
not, have the
Pledged Stock registered in its name, as Escrow Holder, pursuant
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to this
Agreement.
3. OBLIGATIONS SECURED. Xxxxxxx agrees that the
security interest
created hereby secures performance of Xxxxxxx's obligations under
the Note and
all amendments, extensions, renewals and substitutions therefor
or thereto.
4. WARRANTIES AND OBLIGATIONS OF PLEDGOR. Pledgor
hereby affirms,
warrants, represents, covenants, and agrees as follows:
4.1 Pledgor has full power and authority to execute
and deliver
and to perform and observe the provisions of this Agreement, and
to carry out
the transactions contemplated hereby and thereby. The execution,
delivery and
performance by Pledgor of this Agreement have been duly
authorized by all
necessary corporate action required on its part. This Agreement
will constitute
a legal, valid and binding obligation of Pledgor, enforceable
against Pledgor in
accordance with its terms, subject to applicable bankruptcy and
other laws for
the relief of debtors.
4.2 The execution, delivery and performance of this
Agreement by
Pledgor will not result in a violation of its charter documents
or any mortgage,
deed of trust, indenture, material contract, instrument,
agreement, judgment,
decree, order, statute, law, rule or regulation to which Pledgor
is subject, or
be in conflict with, result in a breach of or constitute (with
due notice and/or
lapse of time or both) a default under any such mortgage, deed of
trust,
indenture, material contract, instrument or agreement, or result
in the creation
or imposition of any lien, charge or encumbrance of any nature
whatsoever upon
any of the respective properties or assets of Pledgor, except as
contemplated by
the provisions of this Agreement.
4.3 Any consent, approval or authorization of or
designation or
filing with any governmental authority on the part of Pledgor
which is required
in connection with the security interest granted under this
Agreement has been
obtained or effected.
4.4 Pledgor shall pay, perform or otherwise satisfy
the Note, when
the same shall become due, whether by acceleration or otherwise.
4.5 The Pledged Shares are owned by Xxxxxxx, free
and clear of all
- 32 -
liens, interests and encumbrances.
5. WARRANTIES AND REPRESENTATIONS TO REMAIN IN EFFECT.
Pledgor further
warrants to Secured Party, and covenants and agrees with Secured
Party, that all
of those warranties and representations and agreements set forth
in paragraph 4
hereof shall be in full force and effect until the Note has been
paid in full.
6. VOTING OF PLEDGED SHARES; DIVIDENDS. So long as no
event of default
exists hereunder Pledgor shall be entitled to vote the Pledged
Shares in respect
of any matters of business not constituting violations of this
Agreement. Upon
any default by Pledgor under the Note, Secured Party shall, in
addition to any
other remedies, be entitled at its option to vote all Pledged
Shares held by
Escrow Holder until such time as the default is cured by payment
of the amount
in default. In connection therewith, Pledgor grants the Secured
Party an
irrevocable proxy to vote the Pledged Shares. Such proxy is
coupled with an
interest and shall remain in full force and effect until such
time as the
obligation under the Note is paid in full. All dividends
declared and paid on
the Pledged Shares during the existence of this Agreement shall
be paid to the
Pledgor so long as Pledgor is not in default hereunder or under
the Note. Upon
any such default, Secured Party, in addition to any other
remedies available,
shall be entitled at its option to be paid and to retain all such
dividends pro
rata until such time as the default is cured.
7. TERMINATION UPON FULL PAYMENT. When all sums of
principal and
interest due under all of the notes in the Series have been paid,
all Pledged
Shares held by the Escrow Holder shall be delivered to Pledgor.
Provided that,
the Pledged Shares shall be released by the Escrow Holder only
after written
notice from the Secured Party or such other holder of the Note
(or upon adequate
proof submitted by the Pledgor) that payment of principal and
interest has been
made in full.
8. EVENTS OF DEFAULT. An event of default shall be
deemed to exist
hereunder at any time when:
(a) The Pledgor shall have failed to pay any
payment due under
the Note; or
(b) The Pledgor shall have (i) adopted a plan of
- 33 -
dissolution or
partial liquidation or taken any steps towards such end; or (ii)
been declared a
bankrupt or insolvent; or (iii) made a general assignment for the
benefit of
creditors, or entered into an arrangement with any creditor; or
(iv) suffered
the appointment of a receiver by a court of competent
jurisdiction; or (v)
suffered a material detrimental loss of business or the
occurrence of any event
which would reasonably be expected to cause a substantial
reduction in the value
of the Pledged Shares; or (vi) caused or permitted the occurrence
of any event
or transaction which could reasonably be expected to have a
substantial
detrimental effect upon the value of the Pledged Shares.
Upon the existence of an act of default Secured Party, at
its option, may
by written notice to Xxxxxxx declare the Note immediately due and
payable and
may proceed to enforce its rights under this Agreement, as well
as pursuing any
other remedies at law or in equity.
9. SALE OF PLEDGED STOCK ON DEFAULT/RETENTION. In the
event of default
by Pledgor of its obligations under the Note and without limiting
the remedy or
remedies therefor, Escrow Holder shall, subject to applicable
law, attempt to
sell, upon written instruction from Secured Party, after five (5)
days written
notice to Pledgor specifying the time and place of sale, so much
of the Pledged
Shares as may be necessary to produce the sum required in order
to pay the total
amount then due under the terms of the Note. Said sale may be
public or private
in the sole discretion of the Secured Party or the Secured Party
may elect,
pursuant to applicable law, to retain the Pledged Shares in
satisfaction of
Pledgor's obligations to Secured Party under the Notes.
10. SALE PROCEEDS. In case of said sale, Escrow Holder
shall deliver
the Pledged Shares to the purchasers thereof and shall apply any
and all monies
or credits, including the proceeds of any such sale or sales, to
the cost of
sale, including reasonable attorneys' fees of the Escrow Holder,
and the balance
after such sale shall be credited against the amount due and
owing under the
Note. Any sum remaining thereafter is to be delivered to Pledgor
or to
whomsoever may be lawfully entitled to receive such surplus. At
any such sale,
whether public or private, the holder of the Note or its/his/her
representative
shall have the right to purchase the property sold, or any part
- 34 -
thereof,
directly or in the name or names of either persons, and may bid
by allowing
credit in the bid amount against sums due and owing under the
Note or hereunder.
11. NOTICES. All notices or other communications
required or permitted
hereunder shall be in writing and shall be mailed by U.S.
first-class mail,
postage prepaid, sent by facsimile or delivered personally by
hand or by a
nationally recognized courier addressed tot he party to be
notified at the
address or facsimile number as follows, or at such other address
or facsimile
number as such party may designate upon not less than ten (10)
days' advance
written notice to the other party:
If to Pledgor: _____________________________
_____________________________
_____________________________
(_____)______________________
With a copy to: Xxxxxx, Xxxxx, Xxxxx & Xxxx
P.O. Box 2047
Oakland, CA 94604-2047
(000) 000-0000 (facsimile)
Attn: Xxxxxxx X. Xxxxxx
If to Secured Party: Balboa Investment Group, L.P.
0000 Xxxx Xxxxxx Xxxx.
Newport Beach, CA 92661-1313
(___)______________ (facsimile)
Attn: Xxxxxxx X. Xxxxx, Xx., General
Partner
With a copy to: Xxxxxx & Xxxxxxx
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000-0000
(415)______________ (facsimile)
Attn: Xxxxx X. Xxxxx
12. CALIFORNIA LAW. This Agreement shall be deemed to
be a contract
made and entered into under and pursuant to the law of the State
of California,
and shall be a California contract, and shall be construed and
enforced in
accordance with the laws of the State of California.
13. WAIVER OF LAW. Except as otherwise expressly
specified in this
Agreement, all of the provisions of law providing for the
retention of pledged
property and prescribing the conditions, demands, and notice of
mailing are to
the extent permissible hereby expressly waived by Xxxxxxx.
14. NONWAIVER. Should Escrow Holder postpone any action
to be taken
hereunder, or accept a payment on a date beyond the due date of
the Note, such
- 35 -
action shall not constitute a waiver of any of the rights of the
Secured Party
hereunder or under the Note.
15. BINDING EFFECT. This Agreement shall inure to the
benefit of and
shall be binding upon the parties hereto, and each of them, and
their respective
heirs, executors, administrators, personal representatives, legal
representatives, successors and assigns.
16. AMENDMENT. This Agreement shall not be amendable
except by a
written agreement of amendment executed by each of the parties
hereto.
17. ATTORNEYS' FEES. In the event that any action is
brought to
enforce any of the provisions of this Agreement, or to obtain
money damages for
the breach thereof, and such action results in the award of a
judgment for money
damages or in the granting of any injunction in favor of one of
the parties to
this Agreement, all expenses, including reasonable attorneys'
fees, shall be
paid by the nonprevailing party.
18. RELEASE OF ESCROW HOLDER. Pledgor and Secured Party
hereby release
Escrow Holder from any liability arising from Escrow Holder's
performance
hereunder, except liability for acts of gross negligence or
willful misconduct.
Specifically, Escrow Holder shall not be liable for failure of
any of the
conditions of the pledge or for failure to ascertain the terms or
conditions, or
comply with, any of the provisions of any agreement or other
document referred
to in this Agreement nor shall the Escrow Holder be liable for
the wrongful
assertion by either Pledgor or Secured Party of its rights and/or
remedies
hereunder. Escrow Holder shall not be liable for forgeries or
impersonations.
Should any controversy arise between the parties hereto, or with
any third
person, Escrow Holder shall not be required to determine the same
or take any
action, but may await the settlement of such controversy by
appropriate legal
proceedings. Pledgor and Secured Party and each of them, hereby
agree to and
shall indemnify, protect, defend and hold harmless the Escrow
Holder and its
partners, agents, employees, directors, officers, and principals
from all
liabilities, obligations, losses, damages, actions, suits, costs
and expenses
(including, without limitation, attorneys' fees) of whatever kind
or nature
imposed on, incurred by, or asserted against the Escrow Holder
which are in any
- 36 -
way related to or arise out of the execution and delivery of this
Agreement and
any action taken hereunder by Xxxxxx Xxxxxx.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the
day and year first above written.
"PLEDGOR" "SECURED PARTY"
BIG O DEALERS, L.P., a California limited BALBOA INVESTMENT
GROUP, L.P., a
partnership California limited
partnership
By: BIG O TIRE DEALERS OF
AMERICA, a Californa nonprofit By:
________________________
mutual benefit corporation, general Xxxxxxx X.
Xxxxx, Xx.
partner Its General Partner
By______________________________
Xxxxxx Xxxxxxxxxx
Its President
"ESCROW HOLDER"
______________________________________
By____________________________________
Name__________________________________
Its_____________________________________
EXHIBIT A
STOCK ASSIGNMENT SEPARATE FROM CERTIFICATES
FOR VALUE RECEIVED, the undersigned hereby sells, assigns,
and transfers
unto __________________________________________,
_______________________________________ shares of the common
stock of BOTI
Holdings, Inc., a Nevada corporation ("Holding Company"),
standing in the name
of Big O Dealers, L.P., a California limited partnership, on the
books of
Holding Company, represented by Certificate No. _________
herewith and
irrevocably constitutes and appoints
____________________________________
attorney to transfer the said stock of the books of Holding
Company with full
power of substitution.
Dated: ____________, 1995 BIG O DEALERS, L.P., a California
limited
- 37 -
partnership
By: BIG O TIRE DEALERS OF AMERICA,
a
California nonprofit mutual
benefit
corporation, general partner
By____________________________________
Xxxxxx Xxxxxxxxxx
Its President
THE SECURITY OFFERED HEREBY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF
1933, AS AMENDED, OR UNDER ANY STATE SECURITIES LAWS AND MAY NOT
BE SOLD,
TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION
STATEMENT UNDER THE APPLICABLE FEDERAL AND STATE SECURITIES LAWS
OR AN OPINION
OF COUNSEL ACCEPTABLE TO [1], A CALIFORNIA LIMITED PARTNERSHIP,
THAT SUCH
REGISTRATION IS NOT REQUIRED.
PROMISSORY NOTE
$_____________
____________, 1995
FOR VALUE RECEIVED, the undersigned, BIG O DEALERS, L.P., a
California
limited partnership (the "Maker"), hereby promises to pay to the
order of BALBOA
INVESTMENT GROUP, L.P., a California limited partnership
(together with any
successors or assigns, the "Payee"), at the time and in the
manner hereinafter
provided, the principal sum of
___________________________________ ($_______),
together with interest computed thereon at the rate hereinafter
provided. All
amounts due and payable hereunder shall be paid in immediately
available funds
of the United States.
The outstanding principal amount of this Note shall bear
interest from the
date hereof until the due date at the rate of ______ percent
(__%) per annum,
and shall be payable in seventy-two (72) equal monthly
installments of principal
and interest ___________________ ___________________ Dollars
($_________) on the
first day of each month commencing _____________, 199___, and
continuing through
______________, 20__. An amortization schedule is attached
hereto as SCHEDULE 1
and incorporated herein by this reference.
- 38 -
All payments shall be payable to Payee at 0000 Xxxx Xxxxxx
Xxxx., Xxxxxxx
Xxxxx, Xxxxxxxxxx 00000-0000, or at such other place as Payee may
designate from
time to time in writing to Maker. All payments shall be first
applied to the
payment of interest due, then to the payment of any other sums
payable hereunder
and finally to the principal amount then remaining unpaid. This
Note may be
prepaid in whole or in part from time to time, without premium or
penalty.
If any payment due hereunder is not received by Xxxxx on or
before the
tenth (10th) day after such payment is due, the late payment
shall be subject to
a six percent (6%) penalty. Maker shall be deemed in default
hereunder in the
event (i) any payment due hereunder is not received by Xxxxx on
or before the
fifteenth (15th) day after such payment is due, or (ii) Maker
shall fail to
perform any term, covenant or agreement Maker is obligated to
perform or observe
contained in this Note or the Security Agreement defined below.
If an event of
default is not cured within ten (10) days following written
notice from Payee,
then all sums (including, without limitation, principal, interest
and penalties)
then due and payable shall, at the option of Payee, become
immediately due and
payable.
Payment of the principal of and accrued interest on this
Note shall be
secured by a security interest in and pledge of _____ shares of
common stock of
BOTI Holdings, Inc., a Nevada corporation, pursuant to that
certain Security and
Pledge Agreement of even date herewith, by and between the Maker
and Payee (the
"Security Agreement").
In the event of default hereunder and placement of this Note
in the hands
of an attorney for collection (whether or not suit is filed), or
if this Note is
collected by suit or legal proceedings or through bankruptcy
proceedings, the
Maker agrees to pay in addition to all sums then due hereon,
including principal
and interest, all expenses of collection, including, without
limitation,
reasonable attorneys' fees.
The Maker and any and all sureties, guarantors and endorsers
of this Note
and all other parties now or hereafter liable hereon, severally
waive grace,
demand, presentment for payment, notice of dishonor, protest and
notice of
protest, notice of intention to accelerate, notice of
- 39 -
acceleration, any other
notice and diligence in collecting and bringing suit against any
party hereto
and agree (i) to all extensions and partial payments, with or
without notice,
before or after maturity, (ii) to any substitution, exchange or
release of any
security now or hereafter given for this Note, (iii) to the
release of any party
primarily or secondarily liable hereon, and (iv) that it will not
be necessary
for the holder hereof, in order to enforce payment of this Note,
to first
institute or exhaust such holder's remedies against the Maker or
any other party
liable therefor or against any security for this Note. No delay
on the part of
the Payee in exercising any power or right under this Note shall
operate as a
waiver of such power or right, nor shall any single or partial
exercise of any
power or right preclude further exercise of that power or right.
All agreements between the Maker and the holder hereof,
whether now
existing or hereafter arising and whether written or oral, are
hereby expressly
limited so that in no contingency or event whatsoever, whether by
reason of
acceleration of the maturity hereof or otherwise, shall the
amount paid, or
agreed to be paid, to the holder hereof for the use, forbearance
or detention of
the funds advanced pursuant to this Note, or otherwise, or for
the payment of
performance of any covenant or obligation contained herein or in
any other
document or instrument evidencing, securing or pertaining to this
Note exceed
the maximum amount permissible under applicable law. If from any
circumstances
whatsoever fulfillment of any provision hereof or any other
document or
instrument described by law, then ipso facto, the obligation to
be fulfilled
shall be reduced to the limit of such validity, and if from any
such
circumstances the holder hereof shall ever receive anything of
value deemed
interest by applicable law, which would exceed interest at the
highest lawful
rate, such amount which would be excessive interest shall be
applied to the
reduction of the unpaid principal balance of this Note or on
account of any
other principal indebtedness of the Maker to the holder hereof,
and not to the
payment of interest, or if such excessive interest exceeds the
unpaid principal
balance of this Note and such other indebtedness, such excess
shall be refunded
to the Maker. All sums paid, or agreed to be paid, by the Maker
for the use,
forbearance or detention of the indebtedness of the Maker to the
- 40 -
holder of this
Note shall, to the extent permitted by applicable law, be
amortized, prorated,
allocated and spread throughout the full term of such
indebtedness until payment
in full so that the actual rate of interest on account of such
indebtedness is
uniform throughout the term hereof. The terms and provisions of
this paragraph
shall control and supersede every other provision of all
agreements between the
Maker and the holder hereof.
This Note shall be governed by and construed in accordance
with the laws of
the State of California, and shall be deemed to have been
executed and delivered
in the State of California.
All references to the Maker herein shall, and shall be
deemed to, include
its successors and assigns, and all covenants, stipulations,
promises and
agreements contained herein by or on behalf of the Maker shall be
binding upon
its successors and assigns, whether so expressed or not.
IN WITNESS WHEREOF, this Note has been duly executed and
delivered by Maker
as of the date first above written.
"Maker"
BIG O TIRE DEALERS, L.P., a
California limited partnership
By: BIG O TIRE DEALERS OF
AMERICA, a California
nonprofit
mutual benefit corporation,
general
partner
By___________________________
Name_________________________
Its___________________________
- 41 -
