EXHIBIT 2.5
CONTRACT FOR SALE
AGREEMENT made this 9th day of June, 1997, between SEMINOLE FORD,
INC. ("Corporation"), XXXX X. XXXXXX AND XXXXXX XXXXXX ("Shareholders") and
XXXXXX HOLDINGS, INC., or its assigns ("Buyer").
The parties have reached an understanding with respect to the sale and
purchase of One Hundred Percent (100%) of the outstanding stock of Corporation
(the "Stock") and the obligations of Corporation, Shareholders and Buyer in
connection therewith.
IT IS THEREFORE AGREED:
1. PURCHASE PRICE. The Shareholders agree to sell and the Buyer agrees
to purchase, One Hundred Percent (100%) of the Stock and as consideration
therefor to pay Five Million Five Hundred Twenty Thousand Dollars
($5,520,000.00) plus 50% of any increase and less 50% of any decrease in the net
book value as reflected in the Closing Date Balance Sheet (as defined below), to
be paid as follows:
(a) Buyer shall receive that number of unregistered common shares
of First Team Automotive Corp., a Delaware corporation ("FTAC")
determined in accordance with the following:
$5,520,000 # of shares of FTAC
_________ = to Shareholders
("IPO Shares")
per share price
received by
FTAC in its
initial public
offering
(b) The balance of the purchase price shall be paid in cash upon
the closing by Buyer in the event of an upwards adjustment or by
the Shareholders in the event of a downward adjustment.
2. CONDITIONS. This purchase price for the Stock set forth in Section 1
above is based on the net worth of the Corporation, which Shareholders represent
to the Buyer will be ___________________________ Dollars ($__________). The
Buyer shall determine the net worth of the Corporation prior to Closing and
Buyer and Shareholders shall arrive at a balance sheet as of the date of Closing
(the "Closing Date Balance Sheet"). The purchase price shall be adjusted
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upwards by fifty percent (50%) of the amount by which the net worth of the
Corporation as determined in the Closing Date Balance Sheet is greater than
__________________________ Dollars ($___________) and adjusted downwards by
fifty percent (50%) of the amount by which the net worth of the Corporation as
determined in the Closing Date Balance Sheet is less than
___________________________ Dollars ($___________).
In determining the net worth of the Corporation, Generally Accepted
Accounting Principles, consistently applied shall be utilized by Buyer and
Corporation. In the event the Buyer and Corporation cannot agree on the Closing
Date Balance Sheet, they shall each choose a certified public accountant to whom
they shall submit the items in dispute for a determination by said accountant(s)
which shall be binding on Corporation and Buyer. For purposes of this Agreement
the assets of the limited partnership interest owned by the Corporation shall be
valued on a FIFO basis to determine the correctness of the Closing Date Balance
Sheet.
3. EXAMINATION OF RECORDS. After the execution of this Agreement,
Corporation will allow the Buyer, its counsel and other representatives full
access during normal business hours, or such other reasonable times, to all the
books, tax returns, both federal, state and local, records, files, documents,
assets, properties, contracts and agreements of Corporation and Corporation
shall furnish the Buyer, its officers and representatives with all information
concerning its affairs which may be reasonably requested. The Buyer agrees that
it will use its best efforts to prevent its review of the foregoing materials
from causing any disruption of the business of the Corporation. The Buyer shall
exercise its general rights under this provision to ascertain that the business
is generally as represented by the financial statement dated March 31, 1997. The
Buyer may, on or before thirty (30) days from the date of this Agreement, cancel
this Agreement if the results of the Buyer's investigation reveal material
discrepancies from that represented in the financial statements.
4. FAILURE TO CONSUMMATE SALE. In the event the Buyer fails to
consummate the purchase of the Stock from the Shareholders for any reason except
that described in Paragraph 3 or the failure of a condition precedent as set
forth in Paragraph 10, the xxxxxxx money paid this date shall be forfeited and
shall be retained by the Corporation as liquidated damages. In the event the
Shareholders fail to consummate the sale of the Stock for any reason except the
default of Buyer under this Agreement, the Buyer may require specific
performance of this Agreement by the Shareholders in any court of competent
jurisdiction, in addition to any other rights or remedies which Buyer may have
at law or in equity.
5. CLOSING. The closing of the sale shall take place at the offices of
Xxxxxx & Xxxxx, L.L.P., 00 Xxxxx Xxxxxx Xxx., Xxxxx 0000; Xxxxxxx, Xxxxxxx
00000, or such other place mutually agreed by the parties contemporaneously with
the initial public offering of FTAC, unless extended by the mutual agreement of
Buyer and Shareholders. At the Closing, Shareholders shall deliver to the Buyer,
free and clear of all liens, encumbrances and restrictions, an assignment of the
Stock, and such other documents as required by this Agreement. Upon such
delivery, the Buyer shall deliver to the Shareholders, a certified or cashier's
check payable to the Shareholders of the other for the cash portion of the
purchase price, subject to any adjustments as provided in Paragraph 2 and Buyer
shall also deliver the IPO shares.
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6. REPRESENTATIONS AND WARRANTIES. The Shareholders, jointly and
severally, represent and warrant as follows:
(a) ORGANIZATION AND STANDING OF CORPORATION. The Corporation is
duly organized, validly existing and in good standing under the laws of the
State of Florida. Copies of the Corporation's Articles of Incorporation and all
amendments thereof to date, certified by the Secretary of State of Florida, and
of the Corporation's Bylaws as amended to date, certified by the Corporation's
Secretary, shall be delivered to the Buyer, and are complete and correct as of
the date of this Agreement.
(b) OWNERSHIP. Shareholders are the owners, free and clear of any
liens, restrictions, encumbrances or rights of others, of all of the Stock.
Shareholders have full right and authority to transfer said Stock to the Buyer,
and there are no other shares of the Corporation owned or claimed by any other
person or entity. Shareholders own the Stock as follows:
# OF SHARES
Xxxx X. Xxxxxx _______
Xxxxxx Xxxxxx _______
(c) FINANCIAL STATEMENTS. Corporation has delivered to Buyer a copy
of the financial statements for the Corporation as of March 31, 1997, a copy of
which is attached as EXHIBIT "A" which present a true and complete statement of
the Corporation's condition as of that date and an accurate representation of
the results of the Corporation's operations for the period indicated and an
accurate and complete list of the Corporation's assets, fixed or otherwise. The
financial statements have been prepared in accordance with Generally Accepted
Accounting Principles consistently applied, and which are to be consistently
applied through and including the Closing. All other assets so listed are
correct and will remain so until Closing, except as might be affected by normal
business operations of the Corporation.
(d) ABSENCE OF UNDISCLOSED LIABILITIES. Except to the extent
reflected or reserved against in the March 31, 1997 financial statement, the
Corporation had no material liabilities of any nature, whether accrued,
absolute, contingent, or otherwise, including tax liabilities due or to become
due and arising out of transactions entered into or any state of facts existing
prior thereto. Corporation warrants that there are no material liabilities of
any nature or any material amount not fully reflected or reserved against in
said statement. Further, all liabilities of the Corporation shall be current as
of the date of Closing and reserved for in the Closing Date Balance Sheet. For
purposes of this Agreement, the term material shall refer to any individual
liability of $2,500.00 or more, or aggregate liabilities of the Corporation in
excess of $25,000.00 or more.
(e) ABSENCE OF CERTAIN CHANGES. Except as set forth in EXHIBIT "B",
from March 31, 1997 and continuing through the date of Closing, there has not
been (i) any material change in the Corporation's financial condition, assets,
liabilities or business, other than changes in the ordinary course of business,
none of which have been materially adverse; (ii) any material damage,
destruction
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or loss, whether or not covered by insurance, materially and adversely affecting
the Corporation's properties or business; (iii) any declaration, or setting
aside, or payment of any dividend or other distribution in respect to the
Corporation's shares, or any direct or indirect redemption, purchase or other
acquisition of any such shares; or (iv) any labor strike of the Corporation by
its employees, or any event or condition of any character, materially and
adversely affecting the Corporation's business or prospects.
(f) TITLE TO PROPERTIES. The Corporation has good and marketable
title to all of its properties and assets, real and personal, including those
reflected in the balance sheet of March 31, 1997 [except those sold or otherwise
disposed of in the ordinary course of business], subject to no security
interests, mortgage, pledge, lien, encumbrance or charge, except for liens shown
on the Balance Sheet as securing specified liabilities set forth therein (with
respect to which no default exists).
(g) Except as disclosed on EXHIBIT "C", the Corporation has not
received any request for information, notice of claim, demand or other
notification that it is or may be potentially responsible with respect to any
investigation or clean-up of hazardous, toxic or polluting substances; except in
accordance with applicable regulations, the Corporation has not treated, stored
for more than ninety (90) days, recycled or disposed of any hazardous, toxic or
polluting substances on any of its property, and to the best of Corporaton's
knowledge, no other person has treated or stored for more than ninety (90) days,
substances on any such property; no PCB's, asbestos or urea formaldehyde
insulation is present at any property owned or leased by and of the Corporation;
and there are no underground storage tanks, active or abandoned, on any of its
property.
To the best of its knowledge, the Corporation has complied with and
is not in violation of any federal, state or local law, regulation, permit,
provision or ordinance relating to the generation, storage, transportation,
treatment or disposal of hazardous, toxic or polluting substances; have obtained
and adhered to all necessary permits and other approvals necessary to store,
dispose, and otherwise handle hazardous, toxic and polluting substances; have
reported, to the extent required by federal, state and local law, all past and
present sites where hazardous, toxic or polluting substances, if any, from the
Corporation have been treated, stored or disposed. To the best of its knowledge,
the Corporation has not transported any hazardous, toxic or polluting substances
or arranged for the transportation of such substances to any location which is
listed or proposed for listing under the Comprehensive Environmental Response
Compensation and Liability Act of 1980, as amended ("CERCLA") the Resource
Conservation and Recovery Act, as amended, ("RCRA"), or the Clean Water Act, as
amended, ("CWA") or which is the subject of federal, state or local enforcement
actions or other investigations which may lead to claims against any of the
Seller for clean-up costs, remedial work, damages to natural resources or for
personal injury claims, including, but not limited to, claims under CERCLA, RCRA
or the CWA which could lead to a claim being made against Buyer or Corporation.
(h) CONTRACTS. The Corporation has no contract or commitment
extending beyond March 31, 1997, or involving payment by the Corporation of more
than $1,000.00 in the aggregate, except those listed on the attached EXHIBIT "D"
which is made a part hereof. True and complete copies of all listed contracts
have been delivered to the Buyer. The Corporation has complied with
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all the provisions of all such contracts and commitments to which it is a party,
and is not in default under any of them nor will the execution of this Agreement
result in a default under any of such contracts.
(i) TAX RETURNS. Both now and up to and including the Closing, the
Corporation has paid all due and payable income, social security, withholding,
sales, use, unemployment insurance and other taxes to all city, state and
federal governments, and have paid all due and payable premiums in satisfaction
of their statutory obligations for workers' compensation insurance coverage. The
Corporation has duly filed all federal, state and other tax returns required to
be filed. All taxes, assessments and other governmental charges at any time
known by the Corporation to be due from or upon the Corporation or any of its
income, property or assets have been duly paid, and no extensions for the time
of payment have been requested. The Corporation has paid, or set upon its books,
accruals or reserves adequate for the payment of all federal, state and other
income, franchise and other tax liabilities relating to any actions taken by
Corporation through the date of Closing. Shareholders hereby indemnify Buyer or
Corporation as to any future tax deficiencies, penalties and interest of
Corporation not otherwise reserved for, relating to any transaction or event
taking place prior to the Closing.
(j) DIRECTOR AND OFFICERS; COMPENSATION; BANKS. The Corporation
shall deliver to the Buyer within ten (10) days of the date of this Agreement a
true and complete list, as of the date of this Agreement, certified by the
Corporation's treasurer, showing: (i) the names of all the Corporation's
directors and officers; (ii) the names and title of all persons whose are
employed by the Corporation together with a statement of the full amount
presently paid or payable to each such person for services rendered; (iii) the
name of each bank in which the Corporation has an account or safe deposit box,
and the names of all persons authorized to draw thereon, or to have access
thereto; and (iv) the names of all persons holding powers of attorney from the
Corporation and a summary statement of the terms thereof.
(k) LITIGATION. Except as disclosed on EXHIBIT "E" for suits of a
character incident to the normal conduct of the Corporation's business and
involving not more than $1,000.00 in the aggregate, there is no litigation or
proceeding pending, or to the Corporation's knowledge threatened, against or
relating to the Corporation, its properties or business, nor does the
Corporation know or have reasonable grounds to know of any basis for any such
action, or of any governmental investigation relative to the Corporation, its
properties or business.
(l) LEASE, CONTRACTS AND LICENSES. Corporation represents and
warrants that the transfer of the Stock in accordance with the terms of this
Agreement will not constitute a prohibited assignment or transfer of any of the
licenses, leases or contracts of the Corporation, and that all of the foregoing
will remain in full force and effect without acceleration as a result of this
transaction.
(m) DISCLOSURE. No representation or warranty by the Corporation
and/or Shareholders in this Agreement, nor any statement or certificate
furnished or to be furnished to the Buyer pursuant hereto, or in connection with
the transactions contemplated hereby, contains or will contain any untrue
statement of a material fact, or omits or will omit to state a material fact
necessary to make the statements contained herein or therein not misleading.
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(n) PROFIT SHARING AND BENEFIT PLANS. Except as disclosed on
EXHIBIT "F", there are no employee benefit plans and agreements maintained by
Corporation for the benefit of its Shareholders, officers, directors or
employees. There are no contributions or payments due with respect to such plans
or agreements, nor will any such contributions or payments be due or required to
be paid on or prior to the Closing Date. Corporation is in compliance in all
respects with the presently applicable provisions of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"). No event which constitutes a
reportable event as defined in Section 4043 of ERISA has occurred and is
continuing with respect to any plan covered by ERISA. There would be no
liability of any of Corporation under Subtitle D of Title IV of ERISA if any
plan were terminated as of the Closing Date and Corporation has not incurred any
withdrawal liability to any multi-employer plan and does not have any contingent
withdrawal liability to any multi-employer plan under ERISA, as amended by the
Multi-employer Pension Plan Amendments Act of 1980.
(o) GUARANTEES. Corporation is not a guarantor, surety, endorser or
accommodation party for any third party, or otherwise obligated for the debt of
any person except as reflected in the March 31, 1997 Financial Statements.
7. CONDUCT OF BUSINESS PENDING CLOSING. The Shareholders and
Corporation covenant that, pending the closing:
(a) The Corporation's business will be conducted only in the
ordinary course and there shall be no acceleration of payment of any contract or
change in rate of compensation payable to any employee in the form of a bonus or
otherwise, other than commitments previously disclosed to Buyer in writing.
(b) No change will be made in the Corporation's Articles of
Incorporation or Bylaws, except as may be first approved in writing by the
Buyer.
(c) No change will be made in the Corporation's authorized or
issued corporate shares.
(d) No contract or commitment will be entered into by or on behalf
of the Corporation, except normal commitments in the ordinary course of
business, without the Buyer's written approval.
(e) No change will be made affecting the personnel, or banking or
safe deposit arrangements of the Corporation without the Buyer's written
approval.
(f) All debts will be paid as they become due.
(g) No contract right of the Corporation will be waived without
Buyer's written approval.
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(h) No obligations except current liabilities under contracts
entered into the ordinary course of business will be incurred without Buyer's
written approval.
8. CORPORATION PERSONNEL. The Buyer shall have no obligation to employ
Corporation's personnel, if any, after the Closing.
9. CONDITIONS PRECEDENT. All obligations of the Buyer and Shareholders
under this Agreement, are, at its option, subject to the fulfillment, prior to
or at the closing, of each of the following conditions:
(a) FORD MOTOR COMPANY APPROVAL. Approval of the transaction by
Ford Division of Ford Motor Company of the transfer of the Stock to Buyer.
(b) COMPLETION OF IPO. Completion of an initial public offering of
FTAC on or before November 15, 1997.
(c) XXXX-XXXXX-XXXXXX ANTITRUST ACT. All applicable waiting periods
related to the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 0000 (xxx "XXX"
Xxx") shall have expired.
(d) REPRESENTATIONS AND WARRANTIES TRUE AT CLOSING. The
Shareholders' representations and warranties contained in this Agreement shall
be true at the time of Closing.
(e) PERFORMANCE. The Shareholders shall have performed and complied
with all agreements and conditions required by this Agreement to be performed or
complied with by them prior to or at the Closing.
(f) OPINION OF SHAREHOLDERS' COUNSEL. The Corporation shall have
delivered to the Buyer an opinion of the Shareholders' counsel, Xxxxxx X.
Xxxxxxx, Esq., Trinkle, Redman, Xxxxxxx, Xxxx & Coton, P.A., 000 Xxxxx Xxxxxxx
Xx., Xxxxx Xxxx, Xxxxxxx 00000-0000, dated the closing date, that the
Corporation's corporate existence, good standing, and authorized and issued
stock are as stated in subparagraphs (a) and (b) of Paragraph 6; and that,
except as may be specified by such counsel, they do not know or have any
reasonable grounds to know of any litigation, proceeding, or governmental
investigation pending or threatened against, or relating to, the Corporation,
its properties, or business.
10. INDEMNIFICATION. The Shareholders shall, jointly and severally,
indemnify and hold harmless the Corporation and the Buyer, at all times after
the date of this Agreement, against and in respect of:
(a) UNDISCLOSED LIABILITIES. All material liabilities of the
Corporation of any nature, whether accrued, absolute, contingent, or otherwise,
existing at Closing or thereafter arising out of facts or transactions existing
or taking place prior to Closing, to the extent not reflected or reserved
against in full in the Corporation's Closing Date Balance Sheet, including,
without limitation, any tax liabilities to the extent not so reflected or
reserved against, accrued in respect of, or measured by the
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Corporation's income for any period prior to Closing, or arising out of
transactions entered into, or any state of facts existing, prior to such date;
(b) INTERIM LIABILITIES. All material liabilities of, or claims
against, the Corporation arising out of the conduct of the Corporation's
business between March 31, 1997 and the Closing otherwise than in ordinary
course, or arising out of any presently existing contract or commitment of the
character described in subparagraph (h) of paragraph 6 and not listed therein,
or arising out of any contract or commitment entered into or made by the
Corporation between the date hereof and the Closing except as permitted by the
provisions of subparagraph (d) of paragraph 6 and not reflected on the Closing
Date Balance Sheet;
(c) MISREPRESENTATION. Any damage or deficiency resulting from any
misrepresentation, breach of warranty, or nonfulfillment of any agreement on the
part of the Corporation and/or Shareholders under this Agreement, or from any
misrepresentation in or omission from any certificate or other instrument
furnished or to be furnished to the Buyer hereunder; and
(d) INCIDENTAL EXPENSES. All actions, suits, proceedings, demands,
assessments, judgment, costs, attorneys' fees (including appellate and
bankruptcy proceedings), and expenses incident to any of the foregoing.
The Shareholders shall reimburse the Corporation or the Buyer, on
demand for any payment made or required to be made by the Corporation or the
Buyer at any time after Closing, in respect of any liability or claim to which
the foregoing indemnity relates. The maximum amount of this indemnity shall not
exceed the total purchase price.
11. HSR ACT FILINGS. To the extent such filings have not been completed
prior to the execution of this Agreement, each party shall, in cooperation with
the other parties, file or cause to be filed any reports or notifications that
may be required to be filed by it under the HSR Act, with the Federal Trade
Commission and the Antitrust Division of the Department of Justice, and shall
furnish to the others all such information in its possession as may be necessary
for the completion of the reports or notifications to be filed by the other.
Prior to making any communication, written or oral, with the Federal Trade
Commission, the Antitrust Division of the Federal Department of Justice or any
other governmental agency or authority or members of their respective staffs
with respect to this Agreement or the transactions contemplated hereby, the
Shareholders shall consult with Buyer.
12. BROKERAGE. The Shareholders and Buyer each represent and warrant to
the other that all negotiations relative to this Agreement have been carried on
by them directly with each other, without the intervention of any person, and
each party shall indemnify the other and hold it harmless against and in respect
of any claim for brokerage or other commissions relative to this Agreement,or to
the transactions contemplated hereby, and also in respect of all expenses of any
character incurred by such party in connection with this Agreement or such
transactions.
13. NATURE AND SURVIVAL OF REPRESENTATIONS. All statements contained in
any certificate or other instrument delivered by or on behalf of the Corporation
and/or Shareholders pursuant hereto, or in connection with the transactions
contemplated hereby, shall be deemed representations and
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warranties by the Corporation and/or Shareholders hereunder. All
representations, warranties, and agreements made by the Corporation and
Shareholders in this Agreement, or pursuant hereto, shall be deemed joint and
several, except as otherwise expressly stated, and shall survive the Closing and
any investigation conducted in connection with this Agreement for a period of
three (3) years, except for liabilities associated with the operation of the
Seminole Ford Dealership which shall survive for a period of two (2) years.
14. CLAIMS. Following Closing, Shareholders shall have no claims
against or be due any sums from Corporation except as otherwise provided
pursuant to the terms of this Agreement and any related agreements.
15. BENEFIT. This Agreement shall be binding upon, and inure to the
benefit of, the respective legal representatives of the Shareholders, and the
successors and assigns of the Buyer. Without limiting the foregoing, the
Shareholders' rights hereunder may be enforced by it in its own name. In the
event that the Buyer causes the assets and business of the Corporation to be
transferred to some other corporation, the rights of the Buyer hereunder may be
enforced by such other corporation in its own name.
16. ENFORCEMENT. This Contract may be enforced by a specific
performance action by the Buyer if the Shareholders, without just cause, refuse
to complete this Agreement in addition to any other remedy Buyer may have at law
or in equity.
17. CONSTRUCTION. This Agreement shall be governed by the laws of
the State of Florida.
18. NOTICES. All notes, requests, demands, and other communications
hereunder shall be in writing, and shall be deemed to have been duly given if
delivered or mailed, first class postage prepaid, or delivered by overnight
courier, if to Corporation or Shareholders, at 000 X. Xxxxxxxx Xx., Xxxxx Xxxx,
Xxxxxxx 00000, with a copy to Xxxxxx X. Xxxxxxx, Esq., Trinkle, Redman, Xxxxxxx,
Xxxx & Coton, P.A., 000 Xxxxx Xxxxxxx Xx., Xxxxx Xxxx, Xxxxxxx 00000-0000, or at
such other address as either of them may have furnished to the Buyer in writing,
or, if to the Buyer, 000 X. Xxxx Xxxxxxx Xx., #000, Xxxxxxx, Xxxxxxx 00000, with
a copy to: J. Xxxxxxx Xxxxxxxxx, Esq., Xxxxxx & Xxxxx, L.L.P., 00 Xxxxx Xxxxxx
Xxx., Xxxxx 0000, Xxxxxxx, XX 00000-0000, or at such other addresses as Buyer
may have furnished to Corporation in writing.
19. EXPENSES. Each of the parties shall bear all expenses incurred
by it in connection with this Agreement and in the consummation of the
transactions contemplated hereby and in preparation thereof.
20. ATTORNEYS' FEES. In the event it becomes necessary for either
party to enforce the terms of this Agreement, the prevailing party shall be
entitled, in addition to such damages or other relief as may be granted, to
recover reasonable attorneys' fees and costs, such attorneys' fees to include
those incurred on any appeal.
21. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement among the parties hereto and supersedes and cancels any prior
agreements, representations, warranties, or
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communications, whether oral or written, among the parties hereto relating to
the transactions contemplated hereby or the subject matter herein. Neither this
Agreement nor any provision hereof may be changed, waived, discharged or
terminated orally, but only by an agreement in writing signed by the party
against whom or which the enforcement of such change, waiver, discharge or
termination is sought.
Executed the day and year first above written.
Signed in the presence of: CORPORATION:
SEMINOLE FORD, INC.
------------------------
Print Name:
-------------
By:
------------------------ ----------------------
Print Name: Name:
------------- --------------------
Title:
--------------------
SHAREHOLDERS:
------------------------
Print Name:
-------------
------------------------ -------------------------
Print Name: XXXX X. XXXXXX
--------------
------------------------
Print Name:
-------------
------------------------ -------------------------
Print Name: XXXXXX XXXXXX
-------------
BUYER:
XXXXXX HOLDINGS, INC.
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Print Name:
-------------
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By:
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Print Name: XXXXXX X. XXXXXX,
------------- President
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