1
EXHIBIT 10.(r)
ASSET PURCHASE AGREEMENT
BETWEEN
AUTOMOTIVE & INDUSTRIAL SUPPLY, INC.
AND
XXXXXX AUTOMOTIVE GROUP, INC.
Dated as of February 26, 1999
2
SCHEDULE
LETTER/NUMBER SCHEDULE NAME
SCHEDULE A FIXED ASSETS
SCHEDULE B-1 INVENTORY
SCHEDULE B-2 PURCHASED INVENTORY
SCHEDULE C OTHER CONTRACTS
SCHEDULE D NOT APPLICABLE
SCHEDULE E ACCOUNTS RECEIVABLE
2.2 ACCRUED EMPLOYEE BENEFITS
2.3 DEPOSITS
3.3 CONSENTS AND APPROVALS
3.4 VIOLATIONS AND DEFAULTS
3.5 PERMITS
3.7 ASSIGNED CONTRACTS
3.8 COLLECTIVE BARGAINING AGREEMENTS
3.9 LITIGATION
3.11 DISCLOSURES
3.12 CONDITION OF ASSETS
3.13 TAXES
3.14 RESTRICTIVE AGREEMENTS
4.4 FINANCING AGREEMENTS
5.6 PRE-CLOSING DEFAULTS
EXHIBIT EXHIBIT NAME
A ASSIGNMENT AND ASSUMPTION AGREEMENT
B XXXX OF SALE AND ASSUMPTION AGREEMENT
c COMMITMENT LETTER - DECEMBER 10, 1998
D ESCROW AGREEMENT
E EMPLOYMENT AGREEMENT
F INTELLECTUAL PROPERTY
Page ii of 27
3
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (THE "AGREEMENT") IS MADE AND ENTERED
INTO AS OF THE 26th DAY OF FEBRUARY, 1999, BETWEEN AUTOMOTIVE & INDUSTRIAL
SUPPLY, INC., TIN: 00-0000000. ("SELLER") A LOUISIANA CORPORATION, AND XXXXXX
AUTOMOTIVE GROUP, INC., A LOUISIANA CORPORATION C-PURCHASER").
RECITALS
WHEREAS, SELLER IS ENGAGED IN THE BUSINESS OF SELLING AND DISTRIBUTING
AUTOMOTIVE REPLACEMENT PARTS, ACCESSORIES AND SUPPLIES AND OPERATES
DISTRIBUTION AND SALES CENTERS LOCATED ON LEASED PREMISES IN THE STATE OF
LOUISIANA AND STATE OF TEXAS (THE "BUSINESS LOCATIONS");
WHEREAS, PURCHASER DESIRES TO PURCHASE FROM SELLER AND SELLER DESIRES
TO SELL TO PURCHASER, SUBSTANTIALLY ALL OF THE ASSETS ASSOCIATED WITH THE
SELLER'S OPERATIONS AT THE BUSINESS LOCATIONS, SUBJECT TO CERTAIN LIABILITIES,
ALL ON THE TERMS AND SUBJECT TO THE CONDITIONS SET FORTH HEREIN; AND
WHEREAS, IN CONNECTION WITH ITS CONTEMPLATED PURCHASE OF ASSETS,
PURCHASER DESIRES TO CONDUCT BUSINESS AT THE BUSINESS LOCATIONS AND TO HIRE
SUBSTANTIALLY ALL OF SELLER'S EMPLOYEES CURRENTLY EMPLOYED AT THE BUSINESS
LOCATIONS, ALL ON THE TERMS AND SUBJECT TO THE CONDITIONS SET FORTH HEREIN AND
IN THE ANCILLARY AGREEMENTS.
NOW, THEREFORE, IN CONSIDERATION OF THE PREMISES AND OF THE MUTUAL
AGREEMENTS HEREIN CONTAINED, AND OTHER GOOD AND VALUABLE CONSIDERATION, THE
RECEIPT AND SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED, THE PARTIES HERETO
AGREE AS FOLLOWS:
ARTICLE I
DEFINITIONS
(1.1) DEFINITIONS. UNLESS OTHERWISE DEFINED HEREIN, THE TERMS DEFINED
IN THE INTRODUCTORY PARAGRAPH AND THE RECITALS TO THIS AGREEMENT SHALL HAVE THE
RESPECTIVE MEANINGS SPECIFIED THEREIN, AND THE FOLLOWING TERMS SHALL HAVE THE
MEANINGS SPECIFIED BELOW:
"ACCOUNTS RECEIVABLE" MEANS ALL PERFORMING, COLLECTABLE ACCOUNTS
RECEIVABLE ALLOCABLE TO THE BUSINESS, AS WELL AS ALL RIGHTS TO XXXX
CUSTOMERS FOR PRODUCTS SHIPPED OR SERVICES RENDERED ON OR PRIOR TO THE
CLOSING DATE, SUBJECT TO 'TRUE UP' PURSUANT TO SECTION 5.7, AS
DESCRIBED IN SCHEDULE E ANNEXED HERETO.
"AFFILIATE" MEANS "AFFILIATE" AS DEFINED IN RULE 405 PROMULGATED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
"AGREEMENT" HAS THE MEANING SET FORTH IN THE PREAMBLE AND SHALL
INCLUDE ALL SCHEDULES AND EXHIBITS HERETO.
"ANCILLARY AGREEMENTS" MEANS, COLLECTIVELY, THE EMPLOYMENT
AGREEMENTS SUBSTANTIALLY IN THE FORM OF EXHIBIT E HERETO, THE
ASSIGNMENT AND ASSUMPTION AGREEMENTS, AND THE XXXX OF SALE AND
ASSUMPTION AGREEMENT.
Page 1 of 27
4
"APPORTIONMENT DATE" HAS THE MEANING SET FORTH IN SECTION 2.8.
"ASSIGNMENT AND ASSUMPTION AGREEMENT" MEANS THE FORM OF ASSIGNMENT
AND ASSUMPTION AGREEMENT TO BE EXECUTED AT CLOSING BY PURCHASER AND
SELLER FOR EACH OF THE ASSIGNED CONTRACTS, IN SUBSTANTIALLY THE FORM
ATTACHED HERETO As EXHIBIT A.
"ASSIGNED CONTRACTS" MEANS THE LEASES AND THE OTHER CONTRACTS TO BE
ASSIGNED BY SELLER TO PURCHASER AND SET FORTH ON SCHEDULE 3.7.
"ASSUMED LIABILITIES" HAS THE MEANING SET FORTH IN SECTION 2.2.
"AUDIT" HAS THE MEANING SET FORTH IN SECTION 5.7.
"XXXX OF SALE AND ASSUMPTION AGREEMENT" MEANS THE XXXX OF SALE AND
ASSUMPTION AGREEMENT TO BE EXECUTED AT CLOSING BY PURCHASER AND SELLER
IN SUBSTANTIALLY THE FORM ATTACHED HERETO AS EXHIBIT B.
"BUSINESS" MEANS SELLER'S BUSINESS OPERATIONS CONDUCTED AT THE
BUSINESS LOCATIONS.
"BUSINESS DAY" MEANS A DAY, OTHER THAN A SATURDAY OR A SUNDAY, ON
WHICH COMMERCIAL BANKS ARE NOT REQUIRED OR AUTHORIZED TO CLOSE IN THE
CITY OF NEW YORK.
"BUSINESS EMPLOYEES" MEANS EMPLOYEES OF THE SELLER WHOSE DUTIES
RELATE PRIMARILY TO THE BUSINESS.
"BUSINESS LOCATIONS" HAS THE MEANING SET FORTH IN THE RECITALS
HERETO.
"CLOSING" HAS THE MEANING SET FORTH IN SECTION 9.1 . "CLOSING DATE"
HAS THE MEANING SET FORTH IN SECTION 9.1.
"CODE" MEANS THE INTERNAL REVENUE CODE OF 1986, AS AMENDED.
"COMMITTED FINANCING" MEANS FUNDS AVAILABLE PURSUANT TO A WRITTEN
COMMITMENT LETTER ISSUED BY XXXXXX BUSINESS CREDIT, A DIVISION OF
XXXXXX FINANCIAL, INC. ('XXXXXX') DATED DECEMBER 10, 1998, A COPY OF
WHICH IS ATTACHED HERETO AS EXHIBIT C, OR OTHER SIMILAR DOCUMENTATION
FROM A COMMERCIAL BANK OR OTHER LENDING INSTITUTION, WHICH LENDER,
COMMITMENT LETTER AND OTHER DOCUMENTATION ARE ACCEPTABLE TO SELLER AND
PURCHASER.
"EXCLUDED ASSETS" MEANS:
(A) THAT CERTAIN SIXTY-ONE THOUSAND DOLLAR ($61,000.00)
CASH VALUE LIFE INSURANCE POLICY;
(B) MISCELLANEOUS CORPORATE CASH NOT TO EXCEED THIRTY-FOUR
THOUSAND DOLLARS ($34,000.00);
(C) EMPLOYEE ACCOUNTS RECEIVABLES OF NO MORE THAN TWO
THOUSAND DOLLARS ($2,000.00);
Page 2 of 27
5
(D) ACCOUNTS RECEIVABLE - OTHER - IN THE APPROXIMATE
AMOUNT OF FIFTY THOUSAND DOLLARS ($50,000.00), AS
REFLECTED ON SELLER'S BALANCE SHEET; AND
(E) STATE OF LOUISIANA FRANCHISE TAX RECEIVABLE.
"FIXED ASSETS" MEANS, TO THE EXTENT USED IN THE BUSINESS, (I) ALL
OF THE MACHINERY, EQUIPMENT, FURNITURE, FIXTURES, SIGNS, VEHICLES AND
LEASEHOLD IMPROVEMENTS WHICH ARE OWNED BY SELLER, A LIST OF WHICH IS
ATTACHED AS SCHEDULE A, WHICH LIST SHALL BE UPDATED ON THE CLOSING
DATE, AND (II) TO THE EXTENT ASSIGNABLE, ANY RIGHTS OF SELLER TO THE
WARRANTIES, LICENSES AND OTHER SIMILAR RIGHTS WITH RESPECT THERETO,
SUBJECT TO 'TRUE UP" PURSUANT TO SECTION 5.7.
"GAAP" MEANS UNITED STATES GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES, APPLIED ON A CONSISTENT BASIS AND CONSISTENT WITH SELLER'S
HISTORICAL PRACTICES, AS IN EFFECT FROM TIME TO TIME.
"GOVERNMENTAL AGENCY" MEANS (A) ANY INTERNATIONAL, FOREIGN,
FEDERAL, STATE, COUNTY, LOCAL OR MUNICIPAL GOVERNMENTAL OR
ADMINISTRATIVE AGENCY OR POLITICAL SUBDIVISION THEREOF, (B) ANY
GOVERNMENTAL AUTHORITY, BOARD, BUREAU, COMMISSION, DEPARTMENT OR
INSTRUMENTALITY, OR (C) ANY COURT OR ADMINISTRATIVE TRIBUNAL.
"INTELLECTUAL PROPERTY" MEANS TO THE EXTENT USED IN THE BUSINESS
THE INVENTIONS, COPYRIGHTS, TRADEMARKS, TRADE NAMES, AND APPLICATIONS,
ANY RELATED TRADEMARKS OR LOGOS AND APPLICATIONS, INCLUDING ANY RIGHTS
TO THE OWNERSHIP AND USE OF THE NAMES "AUTOMOTIVE & INDUSTRIAL SUPPLY,"
"A & I", "KEN'S AUTO PARTS" AND ANY OTHER TRADE NAME USED BY ANY
SUBSIDIARY OF SELLER, TRADE SECRETS, PROPRIETARY KNOW-HOW AND USE AND
APPLICATION KNOWHOW, PRODUCT FORMULAE, MANUFACTURING, ENGINEERING AND
OTHER DRAWINGS, TECHNOLOGY, TECHNICAL INFORMATION, ENGINEERING DATA,
DESIGN AND ENGINEERING SPECIFICATIONS, PRODUCTION STANDARDS AND
PRACTICES AND PROMOTIONAL LITERATURE, GOODWILL AND OTHER INTELLECTUAL
PROPERTY AND RIGHTS, IN EACH CASE USED BY THE SELLER IN CONNECTION
WITH THE BUSINESS, INCLUDING WITHOUT LIMITATION, SUCH INTELLECTUAL
PROPERTY AS IS LISTED ON EXHIBIT F.
"INVENTORY" MEANS ALL ITEMS OF CLEAN, CURRENT AND SALABLE PRODUCTS
AS LISTED IN THE MANUFACTURER'S PRICE SHEET RELATING TO SAME. SCHEDULE
B-1, WHICH SHALL BE PREPARED IN ACCORDANCE WITH SECTION 2.4 HEREOF AND
ANNEXED TO THIS AGREEMENT ON THE CLOSING DATE, SHALL SET FORTH A
DESCRIPTION OF THE INVENTORY.
"INVENTORY VALUE" MEANS THE RAW ACQUISITION COST TO SELLER PER ITEM
OF INVENTORY.
"IRS" MEANS THE INTERNAL REVENUE SERVICE OF THE UNITED STATES
DEPARTMENT OF THE TREASURY.
"KNOWLEDGE" AS APPLIED TO SELLER MEANS THE ACTUAL KNOWLEDGE OF THE
PRESIDENT, CHIEF EXECUTIVE OFFICER OR THE CHIEF FINANCIAL OFFICER OF
SELLER AND AS APPLIED TO PURCHASER MEANS THE ACTUAL KNOWLEDGE OF THE
PRESIDENT,
Page 3 of 27
6
THE CHIEF EXECUTIVE OFFICER, THE CHAIRMAN OF THE BOARD OR THE CHIEF
FINANCIAL OFFICER.
"LEASED PROPERTY" MEANS THE PREMISES SUBJECT TO THE LEASES.
"LEASES" MEANS THE REAL ESTATE LEASES AS SHOWN ON SCHEDULE 3.7.
"LIEN" MEANS ANY MORTGAGE, PLEDGE, SECURITY INTEREST, CHARGE OR
OTHER ENCUMBRANCE.
"OTHER CONTRACTS" MEANS THE CONTRACTS WHICH ARE LISTED ON THE OTHER
CONTRACTS SCHEDULE ATTACHED HERETO AS SCHEDULE C.
"PERMIT" MEANS ANY PERMIT, APPROVAL, AUTHORIZATION, LICENSE,
VARIANCE OR PERMISSION REQUIRED BY A GOVERNMENTAL AGENCY UNDER ANY
APPLICABLE LAW.
"PERSON" MEANS ANY INDIVIDUAL, PARTNERSHIP, CORPORATION, TRUST,
ASSOCIATION, LIMITED LIABILITY COMPANY, GOVERNMENTAL AGENCY OR OTHER
ENTITY.
"PHYSICAL INVENTORY DATE" MEANS THE LAST DAY OF THE PHYSICAL
INVENTORY PERIOD.
"PHYSICAL INVENTORY PERIOD" HAS THE MEANING SET FORTH IN SECTION
2.4(A).
"PURCHASE PRICE" HAS THE MEANING SET FORTH IN SECTION 2.3.
"PURCHASED ASSETS" MEANS ALL OF THE SELLER'S RIGHT, TITLE AND
INTEREST IN AND TO THE FOLLOWING:
(A) THE PURCHASED INVENTORY;
(B) THE FIXED ASSETS;
(C) THE ASSIGNED CONTRACTS;
(D) RECORDS RELATING PRIMARILY TO THE PURCHASED ASSETS,
AND COPIES OF PERSONNEL FILES FOR BUSINESS EMPLOYEES;
(E) TO THE EXTENT LEGALLY ASSIGNABLE, ALL PERMITS REQUIRED
TO CONDUCT BUSINESS AT THE BUSINESS LOCATIONS;
(F) CUSTOMER LISTS AND OTHER INFORMATION AND DATA RELATING
TO THE INDEPENDENT CUSTOMERS OF THE BUSINESS AT THE
BUSINESS LOCATIONS;
(G) ALL DEPOSITS (INCLUDING SECURITY DEPOSITS) AND
PREPAYMENTS MADE BY SELLER UNDER ANY OF THE ASSIGNED
CONTRACTS;
(H) ALL OF THE ACCOUNTS RECEIVABLE;
(I) ALL REBATES RECEIVABLE;
(J) ALL GOODWILL INHERENT IN THE BUSINESS;
Page 4 of 27
7
(K) INTELLECTUAL PROPERTY;
PROVIDED, HOWEVER, THAT NOTWITHSTANDING ANY OF THE FOREGOING
PROVISIONS OF THIS DEFINITION, THE PURCHASED ASSETS SHALL NOT INCLUDE
ANY EXCLUDED ASSETS.
"PURCHASED INVENTORY" HAS THE MEANING SET FORTH IN SECTION 2.4(B),
A COMPLETE LIST OF WHICH PURCHASED INVENTORY SHALL BE ANNEXED TO THIS
AGREEMENT AS SCHEDULE B-2 ON THE CLOSING DATE, SAID LIST BASED ON THE
ACTUAL PHYSICAL INVENTORY TO BE CONDUCTED. SAID LIST AND THE PRICES TO
BE PAID THEREFOR SHALL BE SUBJECT TO "TRUE UP" PURSUANT TO SECTION
5.7.
"SCHEDULES" MEANS THE VARIOUS SCHEDULES REFERRED TO IN THIS
AGREEMENT DELIVERED SEPARATELY TO PURCHASER ON OR BEFORE THE DATE OF
THIS AGREEMENT, EXCEPT AS OTHERWISE SPECIFIED IN THIS AGREEMENT.
"TAX RETURN" MEANS ANY REPORT, RETURN, INFORMATION RETURN, FILING,
CLAIM FOR REFUND OR OTHER INFORMATION, INCLUDING ANY SCHEDULES OR
ATTACHMENTS THERETO, AND ANY AMENDMENTS TO ANY OF THE FOREGOING
REQUIRED TO BE SUPPLIED TO A TAXING AUTHORITY IN CONNECTION WITH
TAXES.
"TAXES" MEANS ALL FEDERAL, STATE, LOCAL AND FOREIGN TAXES,
INCLUDING INCOME, GROSS RECEIPTS, EXCISE, EMPLOYMENT, SALES, USE,
TRANSFER, LICENSE, PAYROLL, FRANCHISE, SEVERANCE, STAMP, WITHHOLDING,
SOCIAL SECURITY, UNEMPLOYMENT, DISABILITY, REAL PROPERTY, PERSONAL
PROPERTY, REGISTRATION, ALTERNATIVE OR ADD-ON MINIMUM, ESTIMATED OR
OTHER TAX, INCLUDING ANY INTEREST, PENALTIES OR ADDITIONS THERETO,
WHETHER DISPUTED OR NOT.
"TRANSACTION TAXES" HAS THE MEANING SET FORTH IN SECTION 10.1.
"TRUE UP" SHALL MEAN A RECONCILIATION OF ALL AMOUNTS TO BE PAID FOR
PURCHASED ASSETS AND ASSUMED LIABILITIES FROM THE AUDITED FINANCIAL
STATEMENTS FOR THE YEAR ENDING DECEMBER 31,1998, THROUGH THE DATE OF
CLOSING.
ARTICLE II
SALE AND PURCHASE OF
PURCHASED ASSETS AND
ASSUMPTION OF ASSUMED LIABILITIES
SECTION 2.1 PURCHASE AND SALE OF PURCHASED ASSETS. ON THE TERMS AND
SUBJECT TO THE CONDITIONS SET FORTH IN THIS AGREEMENT, AT THE CLOSING,
PURCHASER SHALL PURCHASE FROM SELLER AND SELLER SHALL SELL, TRANSFER, ASSIGN,
CONVEY AND DELIVER TO PURCHASER AT THE BUSINESS LOCATIONS, ALL OF SELLER'S
RIGHT, TITLE AND INTEREST IN AND TO THE PURCHASED ASSETS PROVIDED, HOWEVER,
THAT SELLER SHALL BE ENTITLED TO RETAIN COPIES OF ALL BOOKS AND RECORDS, IN
WHATEVER FORM, INCLUDED IN THE PURCHASED ASSETS.
SECTION 2.2 ASSUMPTION OF OBLIGATIONS AND LIABILITIES. ON THE TERMS
AND SUBJECT TO THE CONDITIONS SET FORTH IN THIS AGREEMENT, FROM AND AFTER THE
CLOSING,
Page 5 of 27
8
PURCHASER WILL ASSUME AND PAY, PERFORM, DISCHARGE AND BE RESPONSIBLE
FOR ALL OF THE FOLLOWING LIABILITIES OF SELLER (COLLECTIVELY, THE "ASSUMED
LIABILITIES"):
(A) ALL OBLIGATIONS AND LIABILITIES OF SELLER UNDER THE
ASSIGNED CONTRACTS WHICH ACCRUE ON AND AFTER THE
CLOSING DATE; AND
(B) ALL OBLIGATIONS AND LIABILITIES OF SELLER RELATING TO
THE LEASED PROPERTY WHICH ACCRUE ON AND AFTER THE
CLOSING DATE; AND
(C) ASSUMPTION OF ACCOUNTS PAYABLE, SALARIES PAYABLE, TAX
ACCRUALS (OTHER THAN INCOME TAX ACCRUALS), AMOUNTS
RELATED TO EMPLOYEE 401 K PAYABLE AS SHOWN ON CLOSING
BALANCE SHEET, INSURANCE PAYABLE AND OTHER ACCRUALS AS
REFLECTED BY THE AUDITED FINANCIAL STATEMENTS FOR THE
YEAR ENDING DECEMBER 31,1998, SUBJECT TO "TRUE-UP"
PURSUANT TO SECTIONS.7;
(D) ALL OBLIGATIONS AND LIABILITIES SET FORTH IN ARTICLE
XI.
PURCHASER SHALL NOT ASSUME OR PAY, PERFORM, DISCHARGE OR BE RESPONSIBLE FOR ANY
OF THE OBLIGATIONS OR LIABILITIES OF SELLER OTHER THAN THE ASSUMED LIABILITIES.
WITHOUT LIMITING ANY OF PURCHASER'S OBLIGATIONS UNDER ARTICLE XI HEREOF WITH
RESPECT TO THE BUSINESS EMPLOYEES, PURCHASER EXPRESSLY DOES NOT ASSUME ANY
OBLIGATIONS OR LIABILITIES OF SELLER THAT ARISE PRIOR TO THE CLOSING DATE WITH
RESPECT TO THE BUSINESS EMPLOYEES, SAVE AND EXCEPT THOSE DESCRIBED IN SECTION
2.2(C) ABOVE. SELLER SHALL NOT ASSUME OR BE RESPONSIBLE FOR ANY OBLIGATIONS OR
LIABILITIES OF PURCHASER THAT ARISE FROM AND AFTER THE CLOSING DATE WITH
RESPECT TO THE BUSINESS EMPLOYEES. NOTWITHSTANDING THE FOREGOING, AT CLOSING,
SELLER WILL SUPPLY PURCHASER WITH A LISTING OF ALL OBLIGATIONS AND LIABILITIES
WITH RESPECT To BUSINESS EMPLOYEES' ACCRUED VACATION LEAVE/PAY, SICK LEAVE PAY
AND OTHER COMPENSABLE BENEFITS DUE EMPLOYEES OF THE BUSINESS, SAID LISTING TO
BE MADE ON SCHEDULE 2.2(c). PURCHASER SHALL HAVE NO LIABILITY WHATSOEVER FOR
ANY LIABILITIES OF SELLER, INCLUDING, WITHOUT LIMITATION, (1) ANY CLAIM,
REGARDLESS OF WHEN MADE OR ASSERTED, WHICH ARISES OUT OF OR IS BASED UPON ANY
EXPRESS OR IMPLIED REPRESENTATION, WARRANTY, AGREEMENT OR GUARANTEE MADE BY THE
SELLER, OR ALLEGED TO HAVE BEEN MADE BY THE SELLER, OR WHICH IS IMPOSED OR
ASSERTED TO BE IMPOSED BY OPERATION OF LAW, IN CONNECTION WITH ANY PRODUCT
MANUFACTURED, SHIPPED OR INSTALLED BY OR ON BEHALF OF THE SELLER OR FOR ANY
SERVICE PERFORMED BY OR ON BEHALF OF THE SELLER, INCLUDING, WITHOUT LIMITATION,
ANY CLAIM RELATING TO THE REPAIR OR REPLACEMENT OF ANY SUCH PRODUCT AND ANY
CLAIM SEEKING RECOVERY FOR PROPERTY DAMAGE, CONSEQUENTIAL DAMAGES, LOSS, LOST
REVENUE OR INCOME OR PERSONAL INJURY OR (11) LIABILITY OR OBLIGATION IN RESPECT
OF ANY FEDERAL, STATE OR LOCAL INCOME OR OTHER TAX PAYABLE WITH RESPECT TO THE
BUSINESS OR THE PURCHASED ASSETS FOR ANY PERIOD PRIOR TO THE CLOSING DATE.
NOTWITHSTANDING THE ABOVE, THIS PROVISION DOES NOT CONSTITUTE A GUARANTEE BY
SELLER OF THE ACCOUNTS RECEIVABLES RELATED TO ANY SUCH PRODUCT OR SERVICE.
SECTION 2.3 PURCHASE PRICE.
(A) ON THE TERMS AND SUBJECT TO THE CONDITIONS SET FORTH
IN THIS AGREEMENT, THE PURCHASE PRICE PAYABLE BY
PURCHASER TO SELLER FOR THE PURCHASED ASSETS SHALL BE
AN AGGREGATE AMOUNT EQUAL TO THE SUM OF THE FOLLOWING,
PAYABLE ON VARIOUS DATES AS DESCRIBED IN THIS SECTION
2.3:
Page 6 of 27
9
(I) EIGHT HUNDRED, SIXTY THOUSAND DOLLARS
($860,000.00) REPRESENTING GOODWILL; PLUS
100% OF THE BOOK VALUE OF THE GOODWILL
INHERENT IN THE BUSINESS; PLUS 100% OF THE
BOOK VALUE OF REBATES RECEIVABLE; PLUS 100%
OF BOOK VALUE OF FIXED ASSETS AS SHOWN ON
SELLER'S BALANCE SHEET AS OF CLOSING; PLUS
100% OF PURCHASED INVENTORY AT INVENTORY
VALUE, PLUS 100% OF ALL DEPOSITS AND
PREPAYMENTS MADE BY SELLER; PLUS PAYMENT OF
100% OF THE ACCOUNTS RECEIVABLES; LESS THE
AMOUNTS REPRESENTED BY THE OBLIGATIONS AND
LIABILITIES ASSUMED;
(II) LESS THE FOLLOWING:
THE SUM OF ($20,000.00) AS AN ADJUSTMENT
RESERVE FOR BAD DEBT ON ACCOUNTS
RECEIVABLES, SUBJECT TO "TRUE UP" PROVIDED
FOR IN SECTION 5.7, AND THE ENTIRETY LESS
AN ESCROW FOR THE ANTICIPATED "TRUE UP"
PROVIDED FOR IN SECTION 5.7 IN THE AMOUNT
OF ONE HUNDRED THOUSAND DOLLARS
($100,000.00), TO BE DISTRIBUTED AS
DESCRIBED IN AND CONTEMPLATED BY THE ESCROW
AGREEMENT ATTACHED HERETO AS EXHIBIT D;
(III) PROVIDED HOWEVER, THAT $200,000.00 OF THE
TOTAL PURCHASE PRICE REFERRED TO IN
2.3(A)(i) SHALL BE REPRESENTED BY
$200,000.00 WORTH OF XXXXXX COMMON STOCK
VALUED AT THE PRICE PER SHARE OF XXXXXX
COMMON STOCK AT THE CLOSE OF BUSINESS ON
THE DATE OF THE SIGNING OF THIS AGREEMENT.
(B) ON THE CLOSING DATE, PURCHASER SHALL PAY TO SELLER AN
AMOUNT EQUAL TO THE PURCHASE PRICE IN CASH, BY WIRE
TRANSFER OF IMMEDIATELY AVAILABLE FUNDS (PURSUANT TO
WRITTEN INSTRUCTIONS TO BE PROVIDED BY SELLER TO
PURCHASER), EQUAL TO THE SUM OF THOSE PORTIONS OF THE
PURCHASE PRICE PROVIDED FOR IN SECTIONS 2.3(A)(1)
HEREOF (SUCH AMOUNT, THE "CLOSING DATE PAYMENT"), LESS
THE ESCROW AMOUNT OF ONE HUNDRED THOUSAND DOLLARS
($100,000.00), WHICH SHALL BE DISTRIBUTED IN ACCORD
WITH THE ESCROW AGREEMENT ATTACHED HERETO AS EXHIBIT D,
AND FURTHER, PURCHASER WILL EFFECT A TRANSFER OF STOCK
AS PROVIDED FOR IN SECTION 2.3(A)(11), AND FURTHER
DELIVER THE ANCILLARY AGREEMENTS.
THE CLOSING DATE PAYMENT SHALL BE ADJUSTED, AND THE
REMAINDER OF THE PURCHASE PRICE SHALL BE PAID BY THE
PURCHASER, PURSUANT TO SECTIONS 2.4, AND 2.5 HEREOF.
SECTION 2.4 PHYSICAL INVENTORY; DETERMINATION OF PURCHASED INVENTORY.
(A) COMMENCING ON OR ABOUT 5:00 P.M. ON THE DAY OF
, 1999, CONTINUING OVER THE NEXT TWO DAYS
(THE "PHYSICAL INVENTORY PERIOD"), EMPLOYEES OR
REPRESENTATIVES OF SELLER AND PURCHASER WILL JOINTLY
CONDUCT A PHYSICAL INVENTORY COUNT OF THE CLEAN,
CURRENT AND SALABLE INVENTORY AND THE FIXED ASSETS
AT THE BUSINESS LOCATIONS. A WRITTEN, ITEMIZED LIST
SETTING FORTH SPECIFICALLY ALL SUCH ITEMS OF INVENTORY
PHYSICALLY ACCOUNTED FOR WHICH ARE CLEAN, CURRENT AND
SALABLE SHALL BE PREPARED BY SELLER WITH THE ASSISTANCE
OF PURCHASER, AND SHALL, ON THE
Page 7 of 27
10
CLOSING DATE, BE ATTACHED HERETO AS SCHEDULE B-1, WITH
SUCH REVISIONS MADE BY SELLER WITH THE ASSISTANCE OF
PURCHASER AS ARE NECESSARY TO REFLECT ANY CHANGES IN
THE INVENTORY THAT OCCUR DURING THE PERIOD COMMENCING
IMMEDIATELY AFTER THE PHYSICAL INVENTORY DATE AND
ENDING ON THE CLOSING DATE. SELLER AND PURCHASER SHALL
EACH BEAR THEIR OWN COSTS ASSOCIATED WITH CONDUCTING
THE PHYSICAL INVENTORY. ONLY INVENTORY IN A CURRENT
PRICE SHEET OR STILL READILY AVAILABLE FROM THE
MANUFACTURER WILL BE PURCHASED BY PURCHASER. PURCHASER
WILL REIMBURSE SELLER FOR ITS LABOR COSTS ASSOCIATED
WITH THE TAKING OF THIS INVENTORY; HOWEVER, IT BEING
UNDERSTOOD AND AGREED THAT SAID REIMBURSEMENT IS NOT TO
INCLUDE COSTS ASSOCIATED WITH SALARIED OR MANAGEMENT
PERSONNEL.
(B) AT THE COMPLETION OF THE PHYSICAL INVENTORY CONDUCTED
PURSUANT TO SECTION 2.4(A), PURCHASER SHALL PREPARE A
LIST OF INVENTORY AND THE INVENTORY VALUE TO BE
PURCHASED IN ACCORDANCE WITH THE PROVISIONS OF THIS
AGREEMENT, (SUCH ITEMS OF INVENTORY, COLLECTIVELY, THE
"PURCHASED INVENTORY"), WHICH LIST SHALL BE: (1)
ADJUSTED AS OF THE CLOSING DATE BY SELLER WITH THE
ASSISTANCE OF PURCHASER TO REFLECT CHANGES IN THE
PURCHASED INVENTORY THAT OCCUR DURING THE PERIOD
COMMENCING IMMEDIATELY AFTER THE PHYSICAL INVENTORY
DATE AND ENDING ON THE CLOSING DATE; AND (11) ATTACHED
TO THIS AGREEMENT ON THE CLOSING DATE AS SCHEDULE B-2,
SAID INVENTORY AND INVENTORY VALUE SUBJECT TO THE
"TRUE UP" PROVIDED BY SECTION 5.7.
SECTION 2.5 ALLOCATION OF PURCHASE PRICE. TO THE EXTENT REQUIRED BY
LAW AFTER THE CLOSING DATE, PURCHASER AND SELLER SHALL PREPARE AND FILE THOSE
STATEMENTS OR FORMS (INCLUDING FORM 8594) REQUIRED BY SECTION 1060 OF THE CODE
AND THE TREASURY REGULATIONS THEREUNDER AND SHALL FILE SUCH STATEMENTS OR FORMS
WITH THEIR RESPECTIVE FEDERAL INCOME TAX RETURNS. THE PARTIES SHALL PREPARE
SUCH STATEMENTS OR FORMS CONSISTENTLY WITH ANY AGREED ALLOCATION OF ALL OR A
PORTION OF THE PURCHASE PRICE TO THE PURCHASED ASSETS. EACH PARTY SHALL PROVIDE
THE OTHER PARTY WITH A COPY OF SUCH STATEMENTS OR FORMS AS FILED.
SECTION 2.6 SALE AT CLOSING DATE. THE SALE, TRANSFER, ASSIGNMENT AND
DELIVERY BY SELLER OF THE PURCHASED ASSETS TO PURCHASER, AND THE ASSUMPTION BY
PURCHASER OF THE ASSUMED LIABILITIES, AS HEREIN PROVIDED SHALL BE EFFECTED ON
THE CLOSING DATE BY (A) THE EXECUTION AND DELIVERY BY SELLER AND PURCHASER OF
AN ASSIGNMENT AND ASSUMPTION AGREEMENT FOR THE LEASE AND EACH OF THE OTHER
CONTRACTS SUBSTANTIALLY IN THE FORM OF EXHIBIT A, PURSUANT TO WHICH ASSIGNMENT
AND ASSUMPTION AGREEMENTS PURCHASER SHALL BE SUBJECT TO ALL LIABILITIES AND
OBLIGATIONS UNDER THE ASSIGNED CONTRACTS WHICH ACCRUE AFTER THE CLOSING DATE,
AND (B) WITH RESPECT TO THE OTHER PURCHASED ASSETS AND ASSUMED LIABILITIES, BY
THE EXECUTION AND DELIVERY BY THE SELLER AND PURCHASER OF THE XXXX OF SALE AND
ASSUMPTION AGREEMENT SUBSTANTIALLY IN THE FORM OF EXHIBIT B.
SECTION 2.7 APPORTIONMENTS. THE FOLLOWING AMOUNTS ARE TO BE
APPORTIONED AS OF 12:00 MIDNIGHT ON THE DAY PRECEDING THE CLOSING DATE (THE
"APPORTIONMENT DATE") (I) WATER, SEWER AND UTILITY CHARGES ; AND (II) SUCH
OTHER APPORTIONMENTS AND ADJUSTMENTS AS ARE CUSTOMARILY APPORTIONED IN
TRANSACTIONS OF THIS NATURE. EXCEPT AS OTHERWISE PROVIDED HEREIN, ALL
PRORATIONS SHALL BE MADE ON THE BASIS OF ACTUAL BILLS, TO THE EXTENT AVAILABLE,
OR, IN THE ABSENCE OF SUCH ACTUAL BILLS, ON GOOD FAITH ESTIMATES OF SELLER
BASED ON THE MOST RECENT XXXX RECEIVED BY SELLER.
Page 8 of 27
11
ALL PRORATIONS SHALL BE ADJUSTED WITHIN TEN (10) BUSINESS DAYS OF SELLER'S
RECEIPT OF THE FINAL BILLS.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
SUBJECT TO SECTION 3.12, THE SELLER REPRESENTS AND WARRANTS TO
PURCHASER AS FOLLOWS:
SECTION 3.1 AUTHORITY OF SELLER. SELLER IS A CORPORATION VALIDLY
EXISTING AND IN GOOD STANDING UNDER THE LAWS OF THE STATE OF LOUISIANA SELLER
HAS FULL CORPORATE POWER AND AUTHORITY TO EXECUTE AND DELIVER THIS AGREEMENT
AND EACH OF THE ANCILLARY AGREEMENTS, AND THE EXECUTION AND DELIVERY BY EACH
SELLER OF THIS AGREEMENT AND THE ANCILLARY AGREEMENTS AND THE CONSUMMATION OF
THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY HAVE BEEN DULY AND VALIDLY
AUTHORIZED BY ALL NECESSARY CORPORATE ACTION ON THE PART OF SELLER, AND THIS
AGREEMENT CONSTITUTES, AND EACH OF THE ANCILLARY AGREEMENTS UPON ITS EXECUTION
WILL CONSTITUTE, THE LEGAL, VALID AND BINDING OBLIGATION OF SELLER ENFORCEABLE
IN ACCORDANCE WITH ITS TERMS, SUBJECT TO RECEIPT OF THE CONSENTS, WAIVERS AND
APPROVALS SPECIFIED ON SCHEDULE 3.3, AND EXCEPT AS SUCH ENFORCEMENT MAY BE
LIMITED BY APPLICABLE BANKRUPTCY, INSOLVENCY, MORATORIUM, OR SIMILAR LAWS FROM
TIME TO TIME IN EFFECT WHICH AFFECT CREDITORS' RIGHTS GENERALLY, AND BY LEGAL
AND EQUITABLE LIMITATIONS ON THE ENFORCEABILITY OF SPECIFIC REMEDIES.
SECTION 3.2 NO CONFLICT OR VIOLATION. THE EXECUTION, DELIVERY AND
PERFORMANCE BY SELLER OF THIS AGREEMENT AND THE ANCILLARY AGREEMENTS DO NOT AND
WILL NOT VIOLATE OR CONFLICT WITH ANY PROVISION OF THE CERTIFICATE OF
INCORPORATION OR BY-LAWS OF SELLER AND, ASSUMING THAT THE CONSENTS, WAIVERS,
AUTHORIZATIONS, APPROVALS, DECLARATIONS, FILINGS AND REGISTRATIONS REFERRED TO
IN SECTION 3.3 ARE OBTAINED OR MADE, DO NOT AND WILL NOT VIOLATE OR RESULT IN A
MATERIAL BREACH OF OR CONSTITUTE (WITH DUE NOTICE OR LAPSE OF TIME OR BOTH) A
MATERIAL DEFAULT UNDER ANY ASSIGNED CONTRACT.
SECTION 3.3 CONSENTS AND APPROVALS. SCHEDULE 3.3 SETS FORTH A TRUE AND
COMPLETE LIST OF EACH MATERIAL CONSENT, WAIVER, AUTHORIZATION OR APPROVAL OF
ANY PERSON IN CONNECTION WITH ANY ASSIGNED CONTRACT THAT IS REQUIRED FOR THE
EXECUTION AND DELIVERY OF THIS AGREEMENT BY SELLER OR THE PERFORMANCE BY SELLER
OF ITS OBLIGATIONS HEREUNDER.
SECTION 3.4 COMPLIANCE WITH LAW. EXCEPT AS SET FORTH ON SCHEDULE 3.4,
TO SELLER'S KNOWLEDGE SELLER HAS NOT RECEIVED WRITTEN NOTICE OF ANY VIOLATION
OF ANY LAW, REGULATION, ORDER OR OTHER LEGAL REQUIREMENT, AND IS NOT IN DEFAULT
IN ANY MATERIAL RESPECT UNDER ANY ORDER, WRIT, JUDGMENT, AWARD, INJUNCTION OR
DECREE OF ANY GOVERNMENTAL AGENCY, APPLICABLE TO THE PURCHASED ASSETS.
SECTION 3.5 PERMITS, NOTICES. ATTACHED HERETO AS SCHEDULE 3.5 IS A
COMPLETE LIST OF ALL GOVERNMENTAL PERMITS, LICENSES AND AUTHORIZATIONS
(COLLECTIVELY, THE 'PERMITS') WHICH SELLER HAS OBTAINED TO OPERATE THE
BUSINESS. TO SELLER'S KNOWLEDGE, NO OTHER GOVERNMENTAL PERMITS, LICENSES OR
AUTHORIZATIONS WERE NECESSARY TO OPERATE AND CONTINUE THE FACILITY AND THE
BUSINESS. To SELLER'S KNOWLEDGE, SELLER WAS NOT IN BREACH OF THE TERMS OF ANY
OF THE PERMITS AND HAD PAID ALL NECESSARY FEES ASSOCIATED THEREWITH AND THERE
WERE NO OTHER PERMITS
Page 9 of 27
12
NECESSARY FOR THE OPERATION OF THE BUSINESS. EXCEPT AS DISCLOSED ON SCHEDULE
3.5, SELLER HAD NOT RECEIVED AND TO SELLER'S KNOWLEDGE, THERE DID NOT EXIST,
ANY NOTICE, NOTIFICATION OR INQUIRY FROM ANY GOVERNMENTAL OR QUASI-GOVERNMENTAL
AGENCY TO THE EFFECT THAT THE BUSINESS OR ANY OF THE ASSETS WAS IN VIOLATION OF
ANY LAW, ORDINANCE, RULE, REGULATION, LICENSE, PERMIT OR AUTHORIZATION AS OF
THE DATE OF EXECUTION OF THIS AGREEMENT.
SECTION 3.6 OWNERSHIP OF PURCHASED ASSETS AND PAYMENT OF OUTSTANDING
LOANS. OTHER THAN THE REAL PROPERTY SUBJECT TO THE LEASES AND ANY ITEMS OF
PROPERTY SUBJECT TO THE OTHER CONTRACTS, SELLER IS THE OWNER OF THE PURCHASED
ASSETS. AT THE CLOSING BUYER WILL RECEIVE, GOOD TITLE TO ALL SUCH PURCHASED
ASSETS, FREE AND CLEAR OF ANY LIENS, IT SPECIFICALLY BEING AGREED HEREIN THAT
SELLER WILL PAY, RETIRE AND SATISFY ALL OF THE SHAREHOLDER NOTES AND LOANS
RELATED TO CAPITAL LEASES, OUTSTANDING NOTES, LINES OF CREDIT AND TERM LOANS
ASSOCIATED WITH THE BUSINESS, SAID LOANS IN THE AMOUNT REPRESENTED ON THE
AUDITED FINANCIAL STATEMENTS OF THE YEAR ENDING DECEMBER 31, 1998, THROUGH THE
DATE OF CLOSING. SUBJECT TO THE ABOVE, SELLER MAKES NO REPRESENTATION OR
WARRANTY AS TO THE EXISTENCE OR ABSENCE OF ANY LIEN: (I) ON THE REAL PROPERTY
SUBJECT TO THE LEASES; (II) ON ANY ITEMS OF PROPERTY SUBJECT TO THE OTHER
CONTRACTS. SELLER HAS GOOD, VALID AND MARKETABLE TITLE TO ALL OF THE ASSETS,
REAL, PERSONAL AND MIXED, INCLUDING ALL OF THE PROPERTIES AND ASSETS USED BY
THE BUSINESS (EXCEPT IN EACH CASE FOR ASSETS SOLD OR OTHERWISE DISPOSED OF IN
THE ORDINARY COURSE OF BUSINESS CONSISTENT WITH PAST PRACTICE), FREE AND CLEAR
OF ALL MORTGAGES, LIENS, PLEDGES, SECURITY INTERESTS, CHARGES, CLAIMS,
RESTRICTIONS AND OTHER ENCUMBRANCES AND DEFECTS OF TITLE OF ANY NATURE
WHATSOEVER, EXCEPT LIENS FOR CURRENT TAXES NOT YET DUE AND PAYABLE. TO SELLER'S
KNOWLEDGE, ALL LEASES, LICENSES, PERMITS AND AUTHORIZATIONS IN ANY MANNER
RELATED TO THE PURCHASED ASSETS OR THE BUSINESS AND ALL OTHER INSTRUMENTS,
DOCUMENTS AND AGREEMENTS PURSUANT TO WHICH SELLER HAS OBTAINED THE RIGHT TO USE
ANY REAL OR PERSONAL PROPERTY IN CONNECTION WITH THE BUSINESS ARE IN GOOD
STANDING, VALID AND EFFECTIVE IN ACCORDANCE WITH THEIR RESPECTIVE TERMS, AND
THERE IS NOT UNDER ANY OF SUCH INSTRUMENTS, DOCUMENTS OR AGREEMENTS ANY
EXISTING DEFAULT OR EVENT WHICH WITH NOTICE OR LAPSE OF TIME, OR BOTH, WOULD
CONSTITUTE A DEFAULT AND IN RESPECT OF WHICH SELLER HAS NOT TAKEN ADEQUATE
STEPS TO PREVENT A DEFAULT FROM OCCURRING.
SECTION 3.7 ASSIGNED CONTRACTS. TRUE AND COMPLETE COPIES OF THE
ASSIGNED CONTRACTS LISTED ON SCHEDULE 3.7 HAVE BEEN PROVIDED OR MADE AVAILABLE
BY SELLER TO PURCHASER. NEITHER SELLER NOR, TO SELLER's KNOWLEDGE, ANY OTHER
PARTY UNDER ANY OF THE ASSIGNED CONTRACTS, HAS COMMENCED ANY ACTION AGAINST THE
OTHER OR GIVEN OR RECEIVED ANY WRITTEN NOTICE OF ANY MATERIAL DEFAULT OR
VIOLATION UNDER ANY ASSIGNED CONTRACT WHICH WAS NOT WITHDRAWN OR DISMISSED. THE
LEASE AND EACH OF THE OTHER ASSIGNED CONTRACTS LISTED ON SCHEDULE 3.7 IS OR
WILL BE AT THE CLOSING VALID, BINDING AND IN FULL FORCE AND EFFECT AS AGAINST
SELLER, EXCEPT AS OTHERWISE SET FORTH ON SCHEDULE 3.7 OR SCHEDULE C.
SECTION 3.8 LABOR RELATIONS. EXCEPT AS SET FORTH ON SCHEDULE 3.8,
SELLER IS NOT PARTY TO ANY COLLECTIVE BARGAINING AGREEMENT COVERING BUSINESS
EMPLOYEES. TO SELLER'S KNOWLEDGE, NO ORGANIZATIONAL EFFORT IS PRESENTLY BEING
MADE OR THREATENED IN WRITING BY OR ON BEHALF OF ANY LABOR UNION WITH RESPECT
TO BUSINESS EMPLOYEES.
SECTION 3.9 LITIGATION. EXCEPT AS SET FORTH ON SCHEDULE 3.9, THERE ARE
NO ACTIONS, CAUSES OF ACTION, CLAIMS, SUITS OR PROCEEDINGS PENDING OR, TO
SELLER's
Page 10 of 27
13
KNOWLEDGE, THREATENED AGAINST SELLER WHICH SEEK TO RESTRAIN OR ENJOIN THE
CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 3.10 BROKERS. ALL NEGOTIATIONS RELATIVE TO THIS AGREEMENT AND
THE TRANSACTIONS CONTEMPLATED HEREBY HAVE BEEN CARRIED ON BY SELLER WITHOUT THE
INTERVENTION OF ANY OTHER PERSON ACTING ON SELLER'S BEHALF IN SUCH MANNER AS TO
GIVE RISE TO ANY VALID CLAIM BY ANY SUCH PERSON AGAINST PURCHASER FOR A
FINDER'S FEE, BROKERAGE COMMISSION OR OTHER SIMILAR PAYMENT BASED ON AN
ARRANGEMENT WITH SELLER.
SECTION 3.11 EXISTING CONDITION. TO SELLER'S KNOWLEDGE, EXCEPT AS
DISCLOSED ON SCHEDULE 3.11 HERETO, SELLER, IN RELATION TO THE BUSINESS, HAS
NOT:
(A) SOLD, ASSIGNED OR TRANSFERRED ANY OF THE ASSETS OR
OTHER INTERESTS IN THE BUSINESS EXCEPT IN THE ORDINARY
COURSE OF BUSINESS CONSISTENT WITH PAST PRACTICE;
(B) MORTGAGED, PLEDGED OR SUBJECTED TO ANY LIEN, PLEDGE,
MORTGAGE, SECURITY INTEREST, CONDITIONAL SALES
CONTRACT OR OTHER ENCUMBRANCE OF ANY NATURE WHATSOEVER
OF ANY PURCHASED ASSETS, OTHER THAN THE LIENS, IF ANY,
OF CURRENT TAXES NOT YET DUE AND PAYABLE OR LIENS
WHICH WILL BE DISCHARGED OR SATISFIED BY THE CLOSING
DATE;
(C) SUFFERED ANY DAMAGE, DESTRUCTION OR LOSS, WHETHER OR
NOT COVERED BY INSURANCE, MATERIALLY AND ADVERSELY
AFFECTING THE ASSETS;
(D) SUFFERED ANY MATERIAL ADVERSE CHANGE TO THE CONDITION
OF THE PURCHASED ASSETS.
SECTION 3.12 CONDITION OF TANGIBLE ASSETS. TO SELLER'S KNOWLEDGE,
EXCEPT AS DISCLOSED ON SCHEDULE 3.12 HERETO, ALL PURCHASED ASSETS ARE IN GOOD
OPERATING CONDITION AND REPAIR, SUBJECT TO NORMAL WEAR AND MAINTENANCE, ARE
USABLE IN THE REGULAR AND ORDINARY COURSE OF THE BUSINESS AND CONFORM TO ALL
APPLICABLE LAWS, ORDINANCES, CODES, RULES AND REGULATIONS RELATING TO THEIR
CONSTRUCTION, USE AND OPERATION. TO SELLER'S KNOWLEDGE, NO PERSON OTHER THAN
SELLER OWNS ANY VEHICLES, EQUIPMENT OR OTHER TANGIBLE ASSETS OR PROPERTIES
SITUATED ON PROPERTY SUBJECT TO THE LEASES OR NECESSARY TO THE OPERATION OF THE
BUSINESS, EXCEPT FOR LEASED ITEMS DISCLOSED ON OTHER SCHEDULES HERETO AND FOR
ITEMS OF IMMATERIAL VALUE.
SECTION 3.13 TAX AND OTHER RETURNS AND REPORTS. TO SELLER'S KNOWLEDGE,
EXCEPT AS DISCLOSED ON SCHEDULE 3.13 HERETO, (A) ALL FEDERAL, STATE AND LOCAL
TAX RETURNS, REPORTS AND STATEMENTS (INCLUDING ALL INCOME TAX, UNEMPLOYMENT
COMPENSATION, SOCIAL SECURITY, PAYROLL, SALES AND USE, EXCISE, PRIVILEGE,
PROPERTY, AD VALOREM, FRANCHISE, LICENSE, SCHOOL AND ANY OTHER TAX UNDER LAWS
OF THE UNITED STATES OR ANY STATE OR MUNICIPAL OR POLITICAL SUBDIVISION
THEREOF) REQUIRED TO BE FILED BY SELLER IN CONNECTION WITH THE BUSINESS (THE
'TAX RETURNS') HAVE BEEN FILED WITH THE APPROPRIATE GOVERNMENTAL AGENCIES IN
ALL JURISDICTIONS IN WHICH SUCH RETURNS, REPORTS AND STATEMENTS ARE REQUIRED TO
BE FILED, AND ALL SUCH RETURNS, REPORTS AND STATEMENTS PROPERLY REFLECT THE TAX
LIABILITIES OF SELLER IN RELATION TO THE BUSINESS FOR THE PERIODS, PROPERTIES
OR EVENTS COVERED THEREBY; (B) ALL FEDERAL, STATE AND LOCAL TAXES, ASSESSMENTS,
INTEREST, PENALTIES, DEFICIENCIES, FEES AND OTHER GOVERNMENTAL CHARGES OR
IMPOSITIONS, INCLUDING THOSE ENUMERATED
Page 11 of 27
14
ABOVE IN RESPECT OF THE TAX RETURNS, WHICH ARE CALLED FOR BY THE TAX RETURNS,
OR CLAIMED TO BE DUE BY ANY TAXING AUTHORITY FROM SELLER, OR UPON OR MEASURED
BY SELLER'S PROPERTIES, ASSETS OR INCOME (THE "TAXES"), HAVE BEEN PROPERLY
ACCRUED OR PAID; (C) SELLER HAS NOT RECEIVED ANY NOTICE OF ASSESSMENT OR
PROPOSED ASSESSMENT BY THE INTERNAL REVENUE SERVICE OR ANY OTHER TAXING
AUTHORITY IN CONNECTION WITH ANY TAX RETURNS AND THERE ARE NO PENDING TAX
EXAMINATIONS OF OR TAX CLAIMS ASSERTED AGAINST SELLER OR ANY OF ITS ASSETS OR
PROPERTIES; (D) THERE ARE NO TAX LIENS (OTHER THAN ANY LIEN FOR CURRENT TAXES
NOT YET DUE AND PAYABLE) ON ANY OF THE ASSETS; (F) SELLER HAS NO KNOWLEDGE OF
ANY BASIS FOR ANY ADDITIONAL ASSESSMENT OF ANY TAXES IN RELATION TO THE
BUSINESS; AND (E) SELLER HAS MADE ALL DEPOSITS REQUIRED BY LAW TO BE MADE WITH
RESPECT TO EMPLOYEES' WITHHOLDING TAXES.
SECTION 3.14 CONTRACTS AND COMMITMENTS. TO SELLER'S KNOWLEDGE, EXCEPT
AS LISTED AND DESCRIBED ON SCHEDULE 3.14 SELLER, IN RELATION TO THE BUSINESS,
IS NOT A PARTY TO ANY WRITTEN OR ORAL:
(A) AGREEMENT, CONTRACT OR COMMITMENT WITH ANY PRESENT OR
FORMER SHAREHOLDER, DIRECTOR, OFFICER, EMPLOYEE OR
CONSULTANT OR FOR THE EMPLOYMENT OF ANY PERSON,
INCLUDING ANY CONSULTANT;
(B) AGREEMENT, CONTRACT, COMMITMENT OR ARRANGEMENT WITH
ANY LABOR UNION OR OTHER REPRESENTATIVE OF EMPLOYEES
OTHER THAN: NONE;
(C) AGREEMENTS, CONTRACTS OR COMMITMENTS FOR THE FUTURE
PURCHASE OF, OR PAYMENT FOR, SUPPLIES OR PRODUCTS, OR
FOR THE PERFORMANCE OF SERVICES BY A THIRD PARTY,
INVOLVING THE EXPENDITURES OF $5.,000.00, OR MORE;
(D) AGREEMENTS, CONTRACTS OR COMMITMENTS TO SELL OR SUPPLY
PRODUCTS OR TO PERFORM SERVICES, INVOLVING $5,,000.00
IN VALUE;
(E) AGREEMENTS, CONTRACTS OR COMMITMENTS NOT OTHERWISE
LISTED ON SCHEDULE 3.14 HERETO AND CONTINUING OVER A
PERIOD OF MORE THAN SIX MONTHS FROM THE DATE HEREOF OR
EXCEEDING $5,000.00 IN VALUE;
(F) REPRESENTATIVE OR SALES AGENCY AGREEMENT, CONTRACT OR
COMMITMENT;
(G) LEASE UNDER WHICH SELLER IS EITHER THE LESSOR OR
LESSEE, EXCEPT AS LISTED ON SCHEDULE 3.14;
(H) AGREEMENT, CONTRACT OR COMMITMENT FOR ANY CHARITABLE
OR POLITICAL CONTRIBUTION;
(I) AGREEMENTS, CONTRACTS OR COMMITMENTS FOR ANY CAPITAL
EXPENDITURE IN EXCESS OF $5,000.00.
(J) AGREEMENT, CONTRACTOR COMMITMENT LIMITING OR
RESTRAINING IT FROM ENGAGING OR COMPETING IN ANY LINES
OF BUSINESS WITH ANY PERSON NOR IS ANY OFFICER OR
EMPLOYEE OF THE BUSINESS SUBJECT TO ANY SUCH
AGREEMENT, CONTRACT OR COMMITMENT;
Page 12 of 27
15
(K) LICENSE, FRANCHISE, DISTRIBUTORSHIP OR OTHER
AGREEMENT, INCLUDING THOSE WHICH RELATE IN WHOLE OR IN
PART TO ANY PATENT, TRADEMARK, OR COPYRIGHT OR TO ANY
IDEAS, TECHNICAL ASSISTANCE OR OTHER KNOW-HOW OF OR
USED BY THE BUSINESS; OR
(L) MATERIAL AGREEMENT OR CONTRACT NOT MADE IN THE
ORDINARY COURSE OF BUSINESS.
T0 SELLER'S KNOWLEDGE, EXCEPT AS MAY BE DISCLOSED ON SCHEDULE 3.14, EACH OF THE
AGREEMENTS, CONTRACTS, COMMITMENTS, LEASES AND OTHER INSTRUMENTS, DOCUMENTS AND
UNDERTAKINGS LISTED ON SCHEDULE 3.14 IS VALID AND ENFORCEABLE IN ACCORDANCE
WITH ITS TERMS, THE PARTIES THERETO ARE IN COMPLIANCE WITH THE PROVISIONS
THEREOF, NO PARTY IS IN DEFAULT IN THE PERFORMANCE, OBSERVANCE OR FULFILLMENT
OF ANY MATERIAL OBLIGATION, COVENANT OR CONDITION CONTAINED THEREIN AND NO
EVENT HAS OCCURRED WHICH WITH OR WITHOUT THE GIVING OF NOTICE OR LAPSE OF TIME,
OR BOTH, WOULD CONSTITUTE A DEFAULT THEREUNDER, FURTHERMORE, EXCEPT AS MAY BE
DISCLOSED ON SCHEDULE 3.14, NO SUCH AGREEMENT, CONTRACT, COMMITMENT, LEASE OR
OTHER INSTRUMENT, DOCUMENT OR UNDERTAKING, IN THE REASONABLE OPINION OF THE
SELLER, CONTAINS ANY CONTRACTUAL REQUIREMENT WITH WHICH THERE IS A REASONABLE
LIKELIHOOD SELLER OR ANY OTHER THERETO WILL BE UNABLE TO COMPLY.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
PURCHASER REPRESENTS AND WARRANTS TO SELLER AS FOLLOWS:
SECTION 4.1 AUTHORITY OF PURCHASER. PURCHASER IS A CORPORATION,
VALIDLY EXISTING, AND IN GOOD STANDING UNDER THE LAWS OF THE STATE OF
LOUISIANA. PURCHASER HAS FULL CORPORATE POWER AND AUTHORITY TO EXECUTE AND
DELIVER THIS AGREEMENT AND EACH OF THE ANCILLARY AGREEMENTS, AND THE EXECUTION
AND DELIVERY BY PURCHASER OF THIS AGREEMENT AND THE ANCILLARY AGREEMENTS AND
THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY HAVE BEEN DULY AND
VALIDLY AUTHORIZED BY ALL NECESSARY CORPORATE ACTION ON THE PART OF PURCHASER,
AND THIS AGREEMENT CONSTITUTES, AND EACH OF THE ANCILLARY AGREEMENTS UPON ITS
EXECUTION WILL CONSTITUTE, THE LEGAL, VALID AND BINDING OBLIGATION OF PURCHASER
ENFORCEABLE IN ACCORDANCE WITH THEIR TERMS, EXCEPT AS SUCH ENFORCEMENT MAY BE
LIMITED BY APPLICABLE BANKRUPTCY, INSOLVENCY, MORATORIUM, OR SIMILAR LAWS FROM
TIME TO TIME IN EFFECT WHICH AFFECT CREDITORS' RIGHTS GENERALLY, AND BY LEGAL
AND EQUITABLE LIMITATIONS ON THE ENFORCEABILITY OF SPECIFIC REMEDIES. PURCHASER
HAS FULL CORPORATE POWER AND AUTHORITY TO OWN ITS PROPERTIES AND TO CARRY ON
THE BUSINESS PRESENTLY BEING CONDUCTED BY IT.
SECTION 4.2 NO CONFLICT OR VIOLATION. THE EXECUTION, DELIVERY AND
PERFORMANCE BY PURCHASER OF THIS AGREEMENT AND THE ANCILLARY AGREEMENTS DO NOT
AND WILL NOT VIOLATE OR CONFLICT WITH ANY PROVISION OF THE CERTIFICATE OF
INCORPORATION OR BY-LAWS OF PURCHASER AND DO NOT AND WILL NOT VIOLATE ANY
PROVISION OF LAW, OR ANY ORDER, JUDGMENT OR DECREE OF ANY COURT OR OTHER
GOVERNMENTAL AGENCY APPLICABLE TO PURCHASER, OR VIOLATE OR RESULT IN A MATERIAL
BREACH OF OR CONSTITUTE (WITH DUE NOTICE OR LAPSE OF TIME OR BOTH) A DEFAULT
UNDER ANY LOAN AGREEMENT, MORTGAGE, SECURITY AGREEMENT, INDENTURE OR OTHER
INSTRUMENT TO WHICH PURCHASER IS A PARTY OR BY WHICH IT IS BOUND.
Page 13 of 27
16
SECTION 4.3 CONSENTS AND APPROVALS. THE EXECUTION, DELIVERY AND
PERFORMANCE BY PURCHASER OF THIS AGREEMENT DO NOT REQUIRE THE CONSENT OR
APPROVAL OF, OR FILING WITH, ANY GOVERNMENTAL AGENCY OR OTHER ENTITY OR PERSON
EXCEPT: (I) AS MAY BE REQUIRED TO EFFECT THE TRANSFER OF ANY PERMITS; OR (II)
SUCH CONSENTS, APPROVALS AND FILINGS, THE FAILURE TO OBTAIN OR MAKE WHICH WOULD
NOT, INDIVIDUALLY OR IN THE AGGREGATE, HAVE A MATERIAL ADVERSE EFFECT ON ITS
ABILITY TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 4.4 AVAILABILITY OF FUNDS. PURCHASER HAS OBTAINED COMMITTED
FINANCING AS DESCRIBED ON SCHEDULE 4.4 HERETO, SUFFICIENT TO ALLOW IT TO PAY
THE PURCHASE PRICE AT THE TIMES AND IN THE MANNER SET FORTH IN THIS AGREEMENT
AND TO SATISFY ALL ITS OTHER OBLIGATIONS UNDER THIS AGREEMENT, AND ON THE DATE
OF THIS AGREEMENT PURCHASER HAS PROVIDED SELLER WITH ALL DOCUMENTATION RELATING
TO SUCH COMMITTED FINANCING.
SECTION 4.5 LITIGATION. THERE ARE NO ACTIONS, CAUSES OF ACTION,
CLAIMS, SUITS, PROCEEDINGS, ORDERS, WRITS, INJUNCTIONS, OR DECREES PENDING OR,
TO THE KNOWLEDGE OF PURCHASER, THREATENED AGAINST PURCHASER AT LAW OR IN EQUITY
OR BEFORE OR BY ANY GOVERNMENTAL AGENCY, WHICH SEEK TO RESTRAIN OR ENJOIN THE
CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THAT COULD OTHERWISE
ADVERSELY AFFECT THE ABILITY OF PURCHASER TO PERFORM ITS OBLIGATIONS HEREUNDER.
SECTION 4.6 BROKERS. ALL NEGOTIATIONS RELATIVE TO THIS AGREEMENT AND
THE TRANSACTIONS CONTEMPLATED HEREBY HAVE BEEN CARRIED ON BY PURCHASER WITHOUT
THE INTERVENTION OF ANY OTHER PERSON ACTING ON ITS BEHALF IN SUCH MANNER AS TO
GIVE RISE TO ANY VALID CLAIM BY ANY SUCH PERSON AGAINST THE SELLER OR THEIR
AFFILIATES FOR A FINDER'S FEE, BROKERAGE COMMISSION OR OTHER SIMILAR PAYMENT
BASED ON AN ARRANGEMENT WITH PURCHASER.
ARTICLE V
CERTAIN COVENANTS OF SELLER
SELLER COVENANTS WITH PURCHASER THAT FROM AND AFTER THE DATE HEREOF
THROUGH THE CLOSING DATE:
SECTION 5.1 CONDUCT OF BUSINESS BEFORE THE CLOSING DATE. SELLER SHALL
NOT, EXCEPT AS REQUIRED OR EXPRESSLY PERMITTED PURSUANT TO THE TERMS HEREOF,
MAKE ANY MATERIAL CHANGE IN THE BUSINESS, FIXED ASSETS, CAPITAL STRUCTURE, OR
CONTRACTUAL OR EMPLOYMENT RELATIONSHIPS, OR ENTER INTO ANY TRANSACTION
RESPECTING THE PURCHASED ASSETS, OTHER THAN (A) SALES OF INVENTORY IN THE
ORDINARY COURSE OF THE BUSINESS, OR (B) OTHER TRANSACTIONS IN THE ORDINARY
COURSE OF THE BUSINESS, IN EITHER CASE SUBSTANTIALLY CONSISTENT WITH SELLER'S
PAST PRACTICES OR AS OTHERWISE CONTEMPLATED BY THIS AGREEMENT. FURTHER, THERE
SHALL BE NO MATERIAL ADVERSE CHANGE AS OF THE SIGNING OF THE DEFINITIVE
AGREEMENT IN THE BUSINESS MIX, OPERATIONS, RESULTS OF OPERATIONS OR FINANCIAL
CONDITION OF SELLER AS REFLECTED IN THE AUDITED FINANCIAL STATEMENTS BY PEAT
MARWICK OF SELLER FOR THE FISCAL YEAR ENDED AS OF THE SAME DATE (DECEMBER 31,
1998). THERE SHALL HAVE BEEN AND SHALL BE NO SIGNIFICANT CHANGE IN THE
MANAGEMENT OF SELLER FROM OCTOBER 7,1998 UNTIL THE CLOSING WITHOUT THE EXPRESS
CONSENT OF PURCHASER.
Page 14 of 27
17
SECTION 5.2 IN GENERAL. EXCEPT TO THE EXTENT EXPRESSLY PROVIDED
OTHERWISE IN THIS AGREEMENT, SELLER SHALL BE RESPONSIBLE FOR ANY AND ALL WAGES,
VACATIONS, HOLIDAYS, UNION CHECKOFF DUES, BEREAVEMENT PAY, JURY DUTY PAY,
DISABILITY INCOME, SUPPLEMENTAL UNEMPLOYMENT BENEFITS, PERSONAL OR SICK LEAVE
PAY, PAYROLL EXPENSES AND, OTHER BENEFITS UNDER ANY OF THE SELLER'S EMPLOYEE
BENEFIT PLANS, ARISING OUT OF THE EMPLOYMENT OF EMPLOYEES ("EMPLOYEES") BY
SELLER WHICH ARE EARNED PRIOR TO THE CLOSING DATE (REGARDLESS OF WHEN SUCH
AMOUNTS ARE PAYABLE) AND PURCHASER SHALL BE RESPONSIBLE FOR AND ASSUME ALL
LIABILITY FOR ACCRUED VACATION BENEFITS AS REFLECTED ON THE AUGUST 31,1998,
BALANCE SHEET, SUBJECT TO "TRUE UP" PURSUANT TO SECTION 5.7, AND ANY AND ALL
SUCH AMOUNTS (OR ANY COMPARABLE AMOUNTS UNDER PURCHASER'S PLANS) TO EMPLOYEES
THAT ARE EARNED ON OR AFTER THE CLOSING DATE.
SECTION 5.3 INFORMATION AND ACCESS. SELLER WILL PERMIT REPRESENTATIVES
OF PURCHASER TO HAVE REASONABLE ACCESS DURING NORMAL BUSINESS HOURS AFTER
REASONABLE NOTICE FROM PURCHASER TO SELLER, AND IN A MANNER SO AS NOT TO
INTERFERE WITH THE NORMAL OPERATIONS, TO ALL PREMISES, PROPERTIES, PERSONNEL,
ACCOUNTANTS, BOOKS, RECORDS, CONTRACTS AND DOCUMENTS OF OR PERTAINING TO THE
PURCHASED ASSETS. PURCHASER AND EACH OF ITS REPRESENTATIVES WILL TREAT AND HOLD
SUCH INFORMATION AS CONFIDENTIAL. PURCHASER SHALL INDEMNIFY, DEFEND AND HOLD
HARMLESS SELLER, THE LESSOR UNDER THE LEASE AND THEIR RESPECTIVE AFFILIATES
FROM AND AGAINST ANY AND ALL CLAIMS, DEMANDS, CAUSES OF ACTION, LOSSES,
DAMAGES, LIABILITIES, COST AND EXPENSES (INCLUDING, WITHOUT LIMITATION,
ATTORNEYS' FEES AND DISBURSEMENTS), SUFFERED OR INCURRED BY SUCH PERSONS IN
CONNECTION WITH (I) PURCHASER'S AND/OR PURCHASER'S REPRESENTATIVES' ENTRY UPON
THE LEASED PROPERTY, OR (II) ANY AND ALL OTHER ACTIVITIES UNDERTAKEN BY
PURCHASER OR PURCHASER'S REPRESENTATIVES PURSUANT TO THIS SECTION 5.3.
SECTION 5.4 FURTHER ASSURANCES. UPON THE REQUEST OF PURCHASER AT ANY
TIME AFTER THE CLOSING DATE, TO THE EXTENT THAT SELLER IS ABLE TO COMPLY WITH
THE REQUIREMENTS OF THIS SECTION, SELLER SHALL FORTHWITH EXECUTE AND DELIVER
SUCH DOCUMENTS AS PURCHASER OR ITS COUNSEL MAY REASONABLY REQUEST TO EFFECTUATE
THE PURPOSES OF THIS AGREEMENT.
SECTION 5.5 REASONABLE EFFORTS. UPON THE TERMS AND SUBJECT TO THE
CONDITIONS OF THIS AGREEMENT, SELLER WILL USE COMMERCIALLY REASONABLE EFFORTS
TO TAKE, OR CAUSE TO BE TAKEN, ALL ACTIONS, AND TO DO, OR CAUSE TO BE DONE, ALL
THINGS NECESSARY OR PROPER CONSISTENT WITH APPLICABLE LAW TO CONSUMMATE AND
MAKE EFFECTIVE IN THE MOST EXPEDITIOUS MANNER PRACTICABLE THE TRANSACTIONS
CONTEMPLATED HEREBY.
SECTION 5.6 CURE OF DEFAULTS. SELLER SHALL (I) CURE ANY DEFAULT IN
BASE RENTAL PAYMENTS ARISING UNDER THE LEASE AND OUTSTANDING AS OF THE CLOSING
DATE; AND (II) USE COMMERCIALLY REASONABLE EFFORTS TO CURE ANY AND ALL OTHER
DEFAULTS WITH RESPECT TO THE ASSIGNED CONTRACTS. SHOULD SELLER FOR SOME REASON
BE UNABLE TO CURE SUCH DEFAULT, SELLER WILL PROVIDE A SCHEDULE TO BE DESIGNATED
SCHEDULE 5.6, AND SELLER WILL PROVIDE INDEMNITY AGREEMENTS FOR ANY SUCH
DEFAULTS, AGREEING TO FULLY INDEMNIFY PURCHASER FOR ANY LOSS OR DAMAGES
SUSTAINED AS A RESULT OF SAID DEFAULT, PURCHASER MAINTAINING, IN ITS SOLE
DISCRETION, THE RIGHT TO WAIVE ANY OR ALL SUCH DEFAULTS.
SECTION 5.7 AUDIT OF OPERATIONS AT BUSINESS LOCATIONS. PRIOR TO
CLOSING, SELLER SHALL PROVIDE PURCHASER WITH INTERIM, UNAUDITED FINANCIAL
STATEMENTS FOR SELLER FOR THE TWELVE (12) MONTHS ENDED DECEMBER, 1998 AND
MONTHLY FINANCIAL STATEMENTS OF SELLER FOR EACH MONTH AFTER DECEMBER, 1998
UNTIL THE CLOSING, AND SUCH FINANCIAL STATEMENTS SHALL BE TRUE, COMPLETE AND
CORRECT IN ALL MATERIAL RESPECTS AND THE INVENTORY AND RECEIVABLES THEREIN
FAIRLY STATED. THE AFOREMENTIONED INTERIM UNAUDITED FINANCIAL STATEMENTS DO NOT
REFLECT ANY MATERIAL ADVERSE CHANGE IN SELLER'S RESULTS OF OPERATIONS AND
FINANCIAL CONDITION AS COMPARED TO SELLER'S RESULTS AND OPERATIONS AND
FINANCIAL CONDITION AS REFLECTED IN THE REVIEWED FINANCIAL STATEMENTS OF SELLER
PREVIOUSLY PROVIDED TO PURCHASER. PURCHASER SHALL PAY SELLER $20,000.00 FOR THE
COST OF THE DECEMBER 31, 1998 AUDIT OF SELLER. WITHIN SIXTY (60) DAYS AFTER THE
CLOSING, A "TRUE UP" AND AUDIT WILL OCCUR TO DETERMINE THE APPROPRIATE AMOUNT
OF THE PURCHASE PRICE TO BE PAID FROM ESCROW BASED ON A FINAL DETERMINATION OF
THE PURCHASED ASSETS, THE COSTS OF SUCH TRUE UP AND AUDIT TO BE PAID BY
PURCHASER.
SECTION 5.8 SEVERANCE; VACATION AND SICK LEAVE. SELLER SHALL OTHERWISE
INDEMNIFY AND HOLD PURCHASER HARMLESS, TO THE EXTENT PURCHASER IS NOT OTHERWISE
LIABLE, ON ACCOUNT OF ANY CLAIM BY ANY BUSINESS EMPLOYEES WITH RESPECT TO ANY
AMOUNTS OWED TO SUCH BUSINESS EMPLOYEES FOR SEVERANCE OR UNUSED VACATION AND
SICK LEAVE EARNED AS OF THE CLOSING DATE.
Page 15 of 27
18
SECTION 5.9 WORKER'S COMPENSATION/OSHA.
(A) SELLER SHALL RETAIN RESPONSIBILITY FOR ALL WORKERS'
COMPENSATION CLAIMS FILED BY EMPLOYEES EITHER PRIOR TO
OR SUBSEQUENT TO THE CLOSING DATE FOR INJURIES
SUSTAINED PRIOR TO THE CLOSING DATE. PURCHASER SHALL
BE RESPONSIBLE FOR ALL WORKERS' COMPENSATION CLAIMS
RELATED TO THE BUSINESS WHICH ARE NOT THE
RESPONSIBILITY OF SELLER UNDER THE PRECEDING SENTENCE.
(B) SELLER SHALL RETAIN RESPONSIBILITY FOR ANY MONETARY
FINES OR PENALTIES ASSESSED UNDER THE OCCUPATIONAL
SAFETY AND HEALTH ACT ('OSHA') AND SIMILAR STATE AND
LOCAL STATUTES AND ORDINANCES AND THAT ARE ASSESSED
WITH RESPECT TO CITATIONS OUTSTANDING AT THE CLOSING
DATE ('OUTSTANDING CITATIONS') WHICH CITATIONS RELATE
TO THE BUSINESS OR TO THE EMPLOYEES. PURCHASER SHALL
PROMPTLY TAKE, AND SHALL ASSUME RESPONSIBILITY FOR,
ALL REMEDIAL AND NON-MONETARY ACTION REQUIRED AS A
RESULT OF ANY OUTSTANDING CITATIONS BUT SELLER SHALL
INDEMNIFY AND HOLD HARMLESS PURCHASE FROM ALL COSTS
INCURRED AS A RESULT OF SUCH ACTIONS. PURCHASER SHALL
BE RESPONSIBLE FOR ALL CITATIONS RELATING TO THE
BUSINESS OR TO THE EMPLOYEES MADE AFTER THE CLOSING
DATE.
SECTION 5.10 GRIEVANCES. SELLER SHALL BE RESPONSIBLE FOR (I) THE
RESOLUTION OF ALL FILED GRIEVANCES ATTRIBUTABLE TO EVENTS OCCURRING PRIOR TO
THE CLOSING DATE AND (II) THE PAYMENT OF ANY AMOUNTS IN THE NATURE OF BACK PAY
OR EMPLOYEE COMPENSATION IN RESPECT OF SUCH GRIEVANCES FOR PERIODS BEFORE OR
AFTER THE CLOSING DATE AND ALL OTHER EXPENSES INCIDENT THERETO.
SECTION 5.11 SELLER CERTIFICATION. SECTION 1445 OF THE INTERNAL
REVENUE CODE PROVIDES THAT A PURCHASER OF A U.S. REAL PROPERTY INTEREST MUST
WITHHOLD TAX IF THE SELLER IS A FOREIGN PERSON. IN CONNECTION THEREWITH, SELLER
WARRANTS THAT WITHHOLDING OF TAX IS NOT REQUIRED UPON DISPOSITION OF THE U.S.
REAL PROPERTY INTEREST BEING SOLD PURSUANT TO THIS AGREEMENT, AGREES TO HOLD
PURCHASER HARMLESS FROM ANY LIABILITY UNDER SECTION 1445 OR ANY INTEREST OR
PENALTIES IMPOSED IN CONNECTION THEREWITH, AND REPRESENTS THE FOLLOWING:
(A) SELLER IS NOT A FOREIGN CORPORATION, FOREIGN
PARTNERSHIP, FOREIGN TRUST, OR FOREIGN ESTATE (AS
THESE TERMS ARE DEFINED IN INTERNAL REVENUE CODE AND
INCOME TAX REGULATIONS);
(B) SELLER'S U.S. EMPLOYER IDENTIFICATION NO. IS
00-0000000;
(C) SELLER'S OFFICE ADDRESS is 725 XXXX XXXXX INDUSTRIAL
LOOP, XXXXXXXXXX, XXXXXXXXX 00000; AND
(D) SELLER SHALL PROVIDE ON OR BEFORE THE CLOSING DATE A
CERTIFICATION OF NONFOREIGN STATUS AS PROVIDED IN
TREAS. REG. SECTION 1.4445-T(B))2)(iii)(B).
SELLER CONSENTS THAT THE INFORMATION CONTAINED IN THIS SECTION 5.11 MAY BE
DISCLOSED TO THE INTERNAL REVENUE SERVICE BY THE PURCHASER.
Page 16 of 27
19
SECTION 5.12 SELLER INDEMNITY. TO THE EXTENT NOT OTHERWISE PROVIDED
HEREIN, EXCEPT FOR ASSUMED LIABILITIES, SELLER AGREES TO DEFEND, INDEMNIFY AND
HOLD HARMLESS PURCHASER FROM AND AGAINST:
(A) ALL DEBTS, LIABILITIES AND OBLIGATIONS ARISING OUT OF
OR IN ANYWAY RELATING TO THE OPERATION OF THE BUSINESS
ACCRUING PRIOR TO THE CLOSING DATE OR FROM EVENTS
OCCURRING PRIOR TO THE CLOSING WITH RESPECT TO THE
OWNERSHIP, MANAGEMENT, OPERATION AND MAINTENANCE OF
THE BUSINESS;
(B) ANY ACTUAL LOSS, LIABILITY OR DAMAGE SUFFERED OR
INCURRED BY PURCHASER BECAUSE ANY REPRESENTATION OR
WARRANTY CONTAINED IN THIS AGREEMENT, OR IN ANY
DOCUMENT FURNISHED TO PURCHASER BY SELLER IN
CONNECTION WITH THE CLOSING HEREUNDER, SHALL BE FALSE
OR MISLEADING IN ANY MATERIAL RESPECT; AND
(C) ALL REASONABLE COSTS AND EXPENSES (INCLUDING
REASONABLE ATTORNEYS' FEES) INCURRED BY PURCHASER IN
CONNECTION WITH ANY ACTION, SUIT, PROCEEDING, DEMAND,
ASSESSMENT OR JUDGMENT INCIDENT TO ANY OF THE MATTERS
INDEMNIFIED AGAINST IN THIS PROVISION.
ARTICLE VI
CERTAIN COVENANTS OF PURCHASER
SECTION 6.1 REASONABLE EFFORTS AND FURTHER ASSURANCES. UPON THE TERMS
AND SUBJECT TO THE CONDITIONS OF THIS AGREEMENT, PURCHASER WILL USE
COMMERCIALLY REASONABLE EFFORTS TO TAKE, OR CAUSE TO BE TAKEN, ALL ACTION, AND
TO DO, OR CAUSE TO BE DONE, ALL THINGS NECESSARY OR PROPER CONSISTENT WITH
APPLICABLE LAW TO CONSUMMATE AND MAKE EFFECTIVE IN THE MOST EXPEDITIOUS MANNER
PRACTICABLE THE TRANSACTIONS CONTEMPLATED HEREBY. UPON THE REQUEST OF PURCHASER
AT ANY TIME AFTER THE CLOSING DATE, TO THE EXTENT THAT SELLER IS ABLE TO COMPLY
WITH THE REQUIREMENTS OF THIS SECTION, SELLER SHALL FORTHWITH EXECUTE AND
DELIVER SUCH DOCUMENTS AS PURCHASER OR ITS COUNSEL MAY REASONABLY REQUEST TO
EFFECTUATE THE PURPOSES OF THIS AGREEMENT.
SECTION 6.2 PERFORMANCE UNDER ASSIGNED CONTRACTS. PURCHASER AGREES
THAT FROM AND AFTER THE CLOSING DATE IT SHALL (I) ASSUME ALL OBLIGATIONS AND
LIABILITIES UNDER THE ASSIGNED CONTRACTS WHICH ACCRUE AFTER THE CLOSING DATE,
(II) TAKE ALL ACTIONS NECESSARY TO SATISFY ITS OBLIGATIONS UNDER THE TERMS AND
CONDITIONS OF EACH OF THE ASSIGNED CONTRACTS AND (III) INDEMNIFY AND HOLD
HARMLESS SELLER FOR ANY LOSS OR DAMAGES ARISING OUT OF A BREACH OF THIS
COVENANT.
SECTION 6.3 PURCHASER FINANCING. PURCHASER SHALL, FROM THE DATE OF
THIS AGREEMENT UNTIL AND INCLUDING THE CLOSING DATE, MAINTAIN THE AVAILABILITY
OF FUNDS PURSUANT TO THE COMMITTED FINANCING SET FORTH ON SCHEDULE 4.4, AND, IN
THE EVENT THAT SUCH FINANCING BECOMES UNAVAILABLE, SHALL (I) USE COMMERCIALLY
REASONABLE EFFORTS TO OBTAIN ALTERNATIVE COMMITTED FINANCING AND (II) IN THE
EVENT THAT PURCHASER IS UNABLE TO OBTAIN SUCH ALTERNATIVE COMMITTED FINANCING,
ACCEPT SUCH ALTERNATIVE FINANCING AS MAY BE ARRANGED BY SELLER, PROVIDED THAT
SUCH SELLER ARRANGED FINANCING IS ON TERMS NO LESS FAVORABLE TO PURCHASER THAN
THE
Page 17 of 27
20
COMMITTED FINANCING SET FORTH ON SCHEDULE 4.4 (IT BEING UNDERSTOOD THAT SELLER
SHALL BE UNDER NO OBLIGATION TO OBTAIN ALTERNATIVE FINANCING FOR PURCHASER).
SELLER ACKNOWLEDGES AND CONSENTS TO AND AGREES TO EXECUTE A CONSENT TO
COLLATERAL ASSIGNMENT OF ASSET PURCHASE AGREEMENT BY XXXXXX AUTOMOTIVE GROUP,
INC. TO XXXXXX FINANCIAL, INC.
SECTION 6.4 PURCHASER INDEMNITY. TO THE EXTENT NOT OTHERWISE PROVIDED
HEREIN OR NOT INCONSISTENT WITH ANY OTHER PROVISION HEREOF, PURCHASER AGREES TO
DEFEND, INDEMNIFY AND HOLD SELLER HARMLESS FROM AND AGAINST:
(A) ALL DEBTS, LIABILITIES AND OBLIGATIONS ARISING OUT OF
OR IN ANYWAY RELATING TO THE OPERATION OF THE BUSINESS
ACCRUING SUBSEQUENT TO THE CLOSING OR FROM EVENTS
OCCURRING SUBSEQUENT TO THE CLOSING WITH RESPECT TO
THE OWNERSHIP, MANAGEMENT, OPERATION, MAINTENANCE AND
REPAIR OF THE BUSINESS;
(B) ANY ACTUAL LOSS, LIABILITY, OR DAMAGE SUFFERED OR
INCURRED BY SELLER BECAUSE OF ANY REPRESENTATION OR
WARRANTY CONTAINED IN THIS AGREEMENT, OR IN ANY
DOCUMENT FURNISHED TO SELLER BY PURCHASER IN
CONNECTION WITH THE CLOSING HEREUNDER, SHALL BE FALSE
OR MISLEADING IN ANY MATERIAL RESPECT; AND
(C) ALL REASONABLE COSTS AND EXPENSES (INCLUDING
REASONABLE ATTORNEYS' FEES) INCURRED BY SELLER IN
CONNECTION WITH ANY SUIT, PROCEEDING, DEMAND,
ASSESSMENT OR JUDGMENT INCIDENT TO ANY OF THE MATTERS
INDEMNIFIED AGAINST IN THIS PROVISION.
ARTICLE VII
CONDITIONS TO SELLER'S OBLIGATIONS
THE OBLIGATIONS OF SELLER TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED
BY THIS AGREEMENT ARE SUBJECT TO THE SATISFACTION OF EACH OF THE FOLLOWING
CONDITIONS ON OR PRIOR TO THE CLOSING DATE:
SECTION 7.1 REPRESENTATIONS AND WARRANTIES. THE REPRESENTATIONS AND
WARRANTIES OF PURCHASER CONTAINED IN THIS AGREEMENT SHALL BE TRUE ON AND AS OF
THE CLOSING DATE IN ALL MATERIAL RESPECTS AS THOUGH SUCH REPRESENTATIONS AND
WARRANTIES WERE MADE ON AND AS OF THE CLOSING DATE.
SECTION 7.2 COMPLIANCE WITH AGREEMENT. PURCHASER SHALL HAVE PERFORMED
AND COMPLIED IN ALL MATERIAL RESPECTS (AND IN ALL RESPECTS IN THE CASE OF
ARTICLE 11 HEREOF) WITH ALL COVENANTS AND CONDITIONS TO BE PERFORMED OR
COMPLIED WITH BY IT ON OR PRIOR TO THE CLOSING DATE.
SECTION 7.3 CONSENTS. ANY CONSENT REQUIRED IN CONNECTION WITH THE
ASSIGNMENT TO PURCHASER OF THE LEASE, AND ANY CONSENTS REQUIRED IN CONNECTION
WITH THE ASSIGNMENT OF THOSE OTHER ASSIGNED CONTRACTS LISTED IN SCHEDULE 3.7
HERETO SHALL HAVE BEEN DULY OBTAINED AND SHALL BE IN FULL FORCE AND EFFECT ON
THE CLOSING DATE.
Page 18 of 27
21
SECTION 7.4 PURCHASER'S CLOSING DELIVERIES AND OBLIGATIONS. PURCHASER
SHALL HAVE DELIVERED ALL ITEMS AND SATISFIED ALL OBLIGATIONS PURSUANT TO
SECTION 9.1 (C).
SECTION 7.5 AVAILABILITY OF PURCHASER FINANCING. THE COMMITTED
FINANCING SET FORTH ON SCHEDULE 4.4 SHALL BE AVAILABLE TO PURCHASER ON THE
CLOSING DATE, OR ALTERNATE FINANCING IS AVAILABLE TO PURCHASER TO THE
SATISFACTION OF SELLER.
SECTION 7.6 NO ADVERSE PROCEEDING. AS OF THE CLOSING DATE, THERE SHALL
NOT HAVE BEEN INSTITUTED OR BE PENDING OR THREATENED ANY SUIT, ACTION OR OTHER
PROCEEDING BY ANY GOVERNMENTAL AGENCY OR ANY OTHER PERSON IN WHICH IT IS SOUGHT
TO RESTRAIN OR PROHIBIT THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.
ARTICLE VIII
CONDITIONS TO PURCHASER'S OBLIGATIONS
THE OBLIGATION OF PURCHASER TO CONSUMMATE THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT IS SUBJECT TO THE SATISFACTION (UNLESS WAIVED IN
WRITING BY PURCHASER) OF EACH OF THE FOLLOWING CONDITIONS ON OR PRIOR TO THE
CLOSING DATE:
SECTION 8.1 REPRESENTATIONS AND WARRANTIES. THE REPRESENTATIONS AND
WARRANTIES OF SELLER CONTAINED IN THIS AGREEMENT SHALL BE TRUE ON AND AS OF THE
CLOSING DATE IN ALL MATERIAL RESPECTS.
SECTION 8.2 COMPLIANCE WITH AGREEMENT. SELLER SHALL HAVE PERFORMED AND
COMPLIED IN ALL MATERIAL RESPECTS WITH ALL COVENANTS AND CONDITIONS TO BE
PERFORMED OR COMPLIED WITH BY IT ON OR PRIOR TO THE CLOSING DATE.
SECTION 8.3 NO ADVERSE PROCEEDING. AS OF THE CLOSING DATE, THERE SHALL
NOT HAVE BEEN INSTITUTED OR BE PENDING OR THREATENED ANY SUIT, ACTION OR OTHER
PROCEEDING BY ANY GOVERNMENTAL AGENCY OR ANY OTHER PERSON IN WHICH IT IS SOUGHT
TO RESTRAIN OR PROHIBIT THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.
SECTION 8.4 CONSENTS. THE FOLLOWING CONSENTS SHALL HAVE BEEN DULY
OBTAINED AND SHALL BE IN FULL FORCE AND EFFECT ON THE CLOSING DATE: (I) THE
CONSENT, IF ANY, REQUIRED IN CONNECTION WITH THE ASSIGNMENT TO PURCHASER OF THE
LEASES; AND (II) THE CONSENTS, IF ANY, REQUIRED IN CONNECTION WITH THE
ASSIGNMENT OF THOSE OTHER ASSIGNED CONTRACTS LISTED IN SCHEDULE 3.7 HERETO.
SECTION 8.5 SELLER'S CLOSING DELIVERIES AND OBLIGATIONS. SELLER SHALL
HAVE DELIVERED ALL ITEMS AND SATISFIED ALL OBLIGATIONS PURSUANT TO SECTION 9.1
(B).
ARTICLE IX
THE CLOSING AND TERMINATION
SECTION 9.1 THE CLOSING. THE CLOSING SHALL BE HELD ON THE ___ DAY OF
___________________________, 1999 (THE "CLOSING DATE") THE CLOSING SHALL BE
HELD AT THE __________ AT THE CLOSING, ALL OF THE TRANSACTIONS PROVIDED FOR IN
ARTICLE II HEREOF SHALL BE CONSUMMATED ON A SUBSTANTIALLY CONCURRENT BASIS.
Page 19 of 27
22
(A) SELLER's DELIVERIES AND OBLIGATIONS AT CLOSING. AT THE
CLOSING, SELLER SHALL DELIVER (OR CAUSE TO BE
DELIVERED) TO PURCHASER THE FOLLOWING (IN FORM AND
SUBSTANCE REASONABLY SATISFACTORY TO COUNSEL FOR
PURCHASER):
(I) A DULY EXECUTED ASSIGNMENT AND ASSUMPTION
AGREEMENT ASSIGNING TO PURCHASER THE RIGHTS,
TITLE, INTEREST, AND OBLIGATIONS IN, UNDER, AND
TO EACH OF THE OTHER CONTRACTS BEING ASSIGNED TO
PURCHASER, SUBSTANTIALLY IN THE FORM ATTACHED
HERETO As EXHIBIT A;
(II) A DULY EXECUTED XXXX OF SALE AND ASSUMPTION
AGREEMENT AND SUCH OTHER DOCUMENTS OR INSTRUMENTS
OF TRANSFER NECESSARY TO VEST IN PURCHASER FULL
AND COMPLETE TITLE TO THE PURCHASED INVENTORY AND
FIXED ASSETS, FREE AND CLEAR OF ALL LIENS,
PLEDGES, SECURITY INTERESTS, AND ENCUMBRANCES, ON
THE CLOSING DATE, SUBSTANTIALLY IN THE FORM
ATTACHED HERETO As EXHIBIT B; A DULY EXECUTED
ASSIGNMENT AND ASSUMPTION OF LEASE ASSIGNING THE
RIGHTS, TITLE, INTEREST, AND OBLIGATIONS IN,
UNDER, AND TO THE LEASES TO PURCHASER,
SUBSTANTIALLY IN THE FORM ATTACHED HERETO As
EXHIBIT A;
(III)CERTIFIED RESOLUTIONS OF THE DIRECTORS OF SELLER
APPROVING AND AUTHORIZING THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT;
(IV) A CERTIFICATE, EXECUTED BY A DULY AUTHORIZED
OFFICER OF SELLER, TO THE EFFECT THAT ALL
CONDITIONS TO CLOSING SET FORTH IN SECTION 8.1
AND SECTION 8.2 HAVE BEEN SATISFIED; AND
(V) SUCH OTHER INSTRUMENTS, DOCUMENTS, AND
CONSIDERATIONS WHICH MAY BE REASONABLY REQUIRED
BY PURCHASER OR PURCHASER's COUNSEL TO EFFECTUATE
THE TRANSACTION CONTEMPLATED BY THIS AGREEMENT.
(B) PURCHASER'S DELIVERIES AND OBLIGATIONS AT CLOSING. AT
THE CLOSING, PURCHASER SHALL DELIVER (OR CAUSE TO BE
DELIVERED) TO SELLER THE FOLLOWING (IN FORM AND
SUBSTANCE REASONABLY SATISFACTORY TO COUNSEL FOR
SELLER):
(I) PAYMENT OF THE PURCHASE PRICE AND OTHER AMOUNTS
IN ACCORDANCE WITH THE TERMS AND CONDITIONS SET
FORTH IN SECTION 2.3 AND OTHER APPLICABLE
PROVISIONS OF THIS AGREEMENT;
(II) A DULY EXECUTED ASSIGNMENT AND ASSUMPTION
AGREEMENT ACCEPTING THE ASSIGNMENT OF THE RIGHTS,
TITLE, INTEREST, AND OBLIGATIONS IN, UNDER, AND
TO EACH OF THE OTHER CONTRACTS BEING ASSIGNED TO
PURCHASER, SUBSTANTIALLY IN THE FORM ATTACHED
HERETO AS EXHIBIT A;
Page 20 of 27
23
(III)A DULY EXECUTED ASSIGNMENT AND ASSUMPTION OF
LEASES ACCEPTING THE ASSIGNMENT OF THE RIGHTS,
TITLE, INTEREST, AND OBLIGATIONS IN, UNDER, AND
TO THE LEASES, SUBSTANTIALLY IN THE FORM ATTACHED
HERETO AS EXHIBIT A;
(IV) CERTIFIED RESOLUTIONS OF THE DIRECTORS OF
PURCHASER APPROVING AND AUTHORIZING THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT;
(V) A CERTIFICATE, EXECUTED BY A DULY AUTHORIZED
OFFICER OF PURCHASER, TO THE EFFECT THAT ALL THE
CONDITIONS TO CLOSING SET FORTH IN SECTION 7.1
AND SECTION 7.2 HAVE BEEN SATISFIED;
(VI) SUCH OTHER INSTRUMENTS, DOCUMENTS, AND
CONSIDERATIONS WHICH MAY BE REASONABLY REQUIRED
BY PURCHASER OR PURCHASER'S COUNSEL TO EFFECTUATE
THE TRANSACTION CONTEMPLATED BY THIS AGREEMENT.
SECTION 9.2 TERMINATION. ANYTHING IN THIS AGREEMENT TO THE CONTRARY
NOTWITHSTANDING, THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY MAY BE
TERMINATED IN ANY OF THE FOLLOWING WAYS AT ANY TIME BEFORE THE CLOSING AND IN
NO OTHER MANNER:
(A) BY MUTUAL WRITTEN CONSENT OF PURCHASER AND SELLER; OR
(B) BY SELLER, IF PURCHASER IS IN BREACH IN ANY MATERIAL
RESPECT OF ANY OF ITS REPRESENTATIONS MADE IN THIS
AGREEMENT, OR IS IN VIOLATION OR DEFAULT OF ANY OF ITS
COVENANTS OR AGREEMENTS IN THIS AGREEMENT IF THE
BREACH OR DEFAULT IS NOT CURED WITHIN TEN (I 0)
BUSINESS DAYS AFTER WRITTEN NOTICE BY SELLER;
(C) BY PURCHASER, IF SELLER IS IN BREACH IN ANY MATERIAL
RESPECT OF ANY OF ITS REPRESENTATIONS MADE IN THIS
AGREEMENT OR IS IN VIOLATION OR DEFAULT OF ANY OF ITS
COVENANTS OR AGREEMENTS IN THIS AGREEMENT WHICH BREACH
OR DEFAULT IS NOT CURED WITHIN TEN (10) BUSINESS DAYS
AFTER WRITTEN NOTICE BY PURCHASER.
(D) BY PURCHASER, IF AT ANY POINT UP UNTIL AND INCLUDING
THE CLOSING DATE, PURCHASER DOES NOT HAVE AVAILABLE
COMMITTED FINANCING.
SECTION 9.3 EFFECTS OF TERMINATION.
(A) IN THE EVENT THIS AGREEMENT IS TERMINATED PURSUANT TO
SECTION 9.2, EXCEPT AS PROVIDED IN THIS SECTION 9.3,
ALL FURTHER OBLIGATIONS OF THE PARTIES HEREUNDER SHALL
TERMINATE. IF THIS AGREEMENT IS TERMINATED AS
PERMITTED BY SECTION 9.2(B), PURCHASER SHALL BE LIABLE
FOR ANY AND ALL LOSSES, DAMAGES AND EXPENSES INCURRED
OR SUFFERED BY SELLER AS A RESULT OF SUCH FAILURE TO
PERFORM. IF THIS AGREEMENTS IS TERMINATED AS PERMITTED
BY SECTION 9.2(C), SELLER SHALL BE LIABLE FOR ANY AND
ALL LOSSES, DAMAGES, AND EXPENSES INCURRED OR SUFFERED
BY PURCHASER AS A RESULT OF SUCH FAILURE TO PERFORM.
IF THIS AGREEMENT IS TERMINATED BY SELLER PURSUANT TO
SECTION 9.2(D), PURCHASER SHALL BE LIABLE FOR
LIQUIDATED DAMAGES IN THE AMOUNT OF TWENTY-FIVE
THOUSAND DOLLARS ($25,000.00). THE PROVISIONS OF THIS
SECTION 9.3 SHALL SURVIVE ANY TERMINATION HEREOF
PURSUANT TO SECTION 9.2.
(B) THE FOREGOING PROVISIONS OF THIS SECTION 9.3 SHALL NOT
LIMIT THE RIGHTS OF THE PARTIES HERETO TO SEEK SPECIFIC
PERFORMANCE OF ANY OBLIGATION HEREUNDER OF ANY OTHER
PARTY.
Page 21 of 27
24
ARTICLE X
TAXES
THE PARTIES HERETO HEREBY COVENANT AND AGREE AS FOLLOWS:
SECTION 10.1 TAXES RELATED TO PURCHASE OF ASSETS. THE PARTIES
RECOGNIZE AND ACKNOWLEDGE THAT, BECAUSE THE SALE, TRANSFER, ASSIGNMENT AND
DELIVERY OF THE PURCHASED ASSETS MAY BE SUBJECT STATE AND LOCAL TRANSFER,
RECORDING, STAMP OR OTHER SIMILAR TRANSFER TAXES (COLLECTIVELY, "TRANSACTION
TAXES") WHICH MAY BE IMPOSED BY REASON OF THE SALE, TRANSFER, ASSIGNMENT AND
DELIVERY OF THE PURCHASED ASSETS; PROVIDED, HOWEVER, THAT IF TRANSACTION TAXES
ARE ASSESSED FOR ANY REASON, THEN PURCHASER SHALL PAY SUCH TRANSACTION TAXES
ALONG WITH ANY RECORDING AND FILING FEES. PURCHASER AND SELLER AGREE TO
COOPERATE TO DETERMINE THE AMOUNT OF TRANSACTION TAXES PAYABLE IN CONNECTION
WITH THE TRANSACTIONS CONTEMPLATED UNDER THIS AGREEMENT. TRANSACTION TAXES
SHALL NOT INCLUDE ANY TAXES FOR WHICH SELLER IS RESPONSIBLE UNDER SECTION 10.2.
AT THE CLOSING, PURCHASER SHALL REMIT TO THE SELLER SUCH PROPERLY COMPLETED
RESALE EXEMPTION CERTIFICATES AND OTHER SIMILAR CERTIFICATES OR INSTRUMENTS AS
ARE APPLICABLE TO CLAIM AVAILABLE EXEMPTIONS FROM THE PAYMENT OF SALES,
TRANSFER, USE OR OTHER SIMILAR TAXES UNDER APPLICABLE LAW. PURCHASER AND SELLER
SHALL COOPERATE IN PREPARING SUCH FORMS AND WILL EXECUTE AND DELIVER SUCH
AFFIDAVITS AND FORMS AS ARE REASONABLY REQUESTED BY THE OTHER PARTY.
SECTION 10.2 COOPERATION ON TAX MATTERS. PURCHASER AND SELLER AGREE TO
FURNISH OR CAUSE TO BE FURNISHED TO EACH OTHER, AS PROMPTLY AS PRACTICABLE,
SUCH INFORMATION AND ASSISTANCE RELATING TO THE PURCHASED ASSETS AS IS
REASONABLY NECESSARY FOR THE PREPARATION AND FILING OF ANY RETURN, CLAIM FOR
REFUND OR OTHER REQUIRED OR OPTIONAL FILINGS RELATING TO TAX MATTERS, FOR THE
PREPARATION FOR AND PROOF OF FACTS DURING ANY TAX AUDIT, FOR THE PREPARATION
FOR ANY TAX PROTEST, FOR THE PROSECUTION OR DEFENSE OF ANY SUIT OR OTHER
PROCEEDING RELATING TO TAX MATTERS AND FOR THE ANSWER OF ANY GOVERNMENTAL OR
REGULATORY INQUIRY RELATING TO TAX MATTERS.
PURCHASER AGREES TO RETAIN POSSESSION OF ALL FILES AND RECORDS
DELIVERED TO PURCHASER BY SELLER FOR A PERIOD OF AT LEAST SIX YEARS FROM THE
CLOSING DATE. IN ADDITION, FROM AND AFTER THE CLOSING DATE, PURCHASER AGREES
THAT IT WILL PROVIDE ACCESS TO SELLER AND ITS ATTORNEYS, ACCOUNTANTS AND OTHER
REPRESENTATIVES (AFTER REASONABLE NOTICE AND DURING NORMAL BUSINESS HOURS AND
WITHOUT CHARGE) TO SUCH FILES AND RECORDS AS SELLER MAY REASONABLY DEEM
NECESSARY TO PROPERLY PREPARE FOR, FILE, PROVE, ANSWER, PROSECUTE AND/OR DEFEND
ANY SUCH RETURN, FILING, AUDIT, PROTEST, CLAIM, SUIT, INQUIRY OR OTHER
PROCEEDING.
ARTICLE XI
EMPLOYEES AND EMPLOYEE BENEFIT PLANS
SECTION 11.1 CURRENT INTENT REGARDING BUSINESS EMPLOYEES; WARN.
WITHOUT MAKING ANY OTHER COMMITMENT REGARDING THE BUSINESS EMPLOYEES,
PURCHASER COMMITS TO HIRE, AS OF THE CLOSING DATE, SUBSTANTIALLY ALL OF THE
CURRENT BUSINESS EMPLOYEES. PURCHASER ALSO STATES THAT ITS CURRENT INTENT IS TO
Page 22 of 27
25
HIRE MOST OR ALL OF THE CURRENT BUSINESS EMPLOYEES ON OR FOLLOWING THE CLOSING
DATE. PURCHASER ASSUMES NO OBLIGATION, LIABILITY, OR RESPONSIBILITY OF SELLER
WITH RESPECT TO THE BUSINESS EMPLOYEES. PURCHASER'S OBLIGATION WITH RESPECT TO
THE BUSINESS EMPLOYEES WHO ACCEPT EMPLOYMENT WITH PURCHASER SHALL COMMENCE AS
OF THE CLOSING DATE. PURCHASER SHALL BE RESPONSIBLE FOR ANY OBLIGATIONS OR
LIABILITIES TO THE BUSINESS EMPLOYEES UNDER THE WORKER ADJUSTMENT AND
RETRAINING NOTIFICATION ACT AND ANY SIMILAR STATE OR LOCAL "PLANT CLOSING" LAW
("WARN") TO THE EXTENT WARN THRESHOLDS ARE EXCEEDED AS A RESULT OF ACTIONS
TAKEN BY THE PURCHASER ON OR AFTER THE CLOSING DATE WITH RESPECT TO THE
BUSINESS EMPLOYEES. SELLER SHALL BE RESPONSIBLE FOR ANY OBLIGATIONS OR
LIABILITIES TO THE BUSINESS EMPLOYEES UNDER WARN AS A RESULT OF ACTIONS TAKEN
BY SELLER PRIOR TO THE CLOSING DATE.
ARTICLE XII
MISCELLANEOUS PROVISIONS
SECTION 12.1 REPRESENTATIONS AND WARRANTIES. THE REPRESENTATIONS AND
WARRANTIES OF THE PARTIES TO THIS AGREEMENT MADE IN THIS AGREEMENT, SUBJECT TO
THE EXCEPTIONS THERETO, WILL NOT BE AFFECTED BY ANY INFORMATION FURNISHED TO,
OR ANY INVESTIGATION CONDUCTED BY, ANY OF THEM OR THEIR REPRESENTATIVES IN
CONNECTION WITH THE SUBJECT MATTER OF THIS AGREEMENT. NONE OF THE
REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS AGREEMENT SHALL SURVIVE THE
CLOSING.
SECTION 12.2 NOTICES. ALL NOTICES, DEMANDS OR OTHER COMMUNICATIONS TO
BE GIVEN OR DELIVERED UNDER OR BY REASON OF THE PROVISIONS OF THIS AGREEMENT
SHALL BE IN WRITING AND SHALL BE DEEMED TO HAVE BEEN GIVEN (A) WHEN DELIVERED
PERSONALLY TO THE RECIPIENT, (B) WHEN SENT TO THE RECIPIENT BY TELECOPY
(RECEIPT ELECTRONICALLY CONFIRMED BY SENDER'S TELECOPY MACHINE) IF DURING
NORMAL BUSINESS HOURS OF THE RECIPIENT, OTHERWISE ON THE NEXT BUSINESS DAY, (C)
ONE (1) BUSINESS DAY AFTER THE DATE WHEN SENT TO THE RECIPIENT BY REPUTABLE
EXPRESS COURIER SERVICE (CHARGES PREPAID) OR (D) SEVEN (7) BUSINESS DAYS AFTER
THE DATE WHEN MAILED TO THE RECIPIENT BY CERTIFIED OR REGISTERED MAIL, RETURN
RECEIPT REQUESTED AND POSTAGE PREPAID. SUCH NOTICES, DEMANDS AND OTHER
COMMUNICATIONS WILL BE SENT TO THE SELLER AND TO PURCHASER AT THE ADDRESSES
INDICATED BELOW:
IF TO PURCHASER: XXXXXX AUTOMOTIVE GROUP, INC.
0000 X. XXXXXXXXX XXXXX
XXXXXXXXXX, XX 00000
ATTENTION: XXXXXXX X. XXXXXX
FACSIMILE No. 000-000-0000
WITH A COPY XXXXX X. XXXXXX
(WHICH SHALL NOT XXXXXXX & XXXXXX, L.L.C.
CONSTITUTE NOTICE) TO: 0000 XXXXXXX XXXXXX, XXXXX X 00
XXXXXXXXXX, XX 00000
FACSIMILE No. 000-000-0000
WITH A COPY XXXXXXX XXXXX, Esq.
(WHICH SHALL NOT 0000 XXXXX XXXXXX
CONSTITUTE NOTICE) TO: XXXXXXXXXX, XXXXXXXXX 00000
FACSIMILE No. 000-000-0000
Page 23 of 27
26
IF TO SELLER: AUTOMOTIVE & INDUSTRIAL SUPPLY, INC.
X/X XX XXXXXX
000 XXXX XXXXX
XXXXXXXXXX, XX 00000
FACSIMILE No. 000-000-0000
WITH A COPY XXXXX X. XXXXXXX, ESQ.
(WHICH SHALL NOT COOK, YANCEY, KING & XXXXXXXX
CONSTITUTE NOTICE) TO: 000 XXXXX XXXXXX, XXXXX 0000
XXXXXXXXXX, XX 00000
FACSIMILE No. 318-227-7850
OR TO SUCH OTHER ADDRESS AS ANY PARTY HERETO MAY, FROM TIME TO TIME, DESIGNATE
IN WRITING DELIVERED PURSUANT TO THE TERMS OF THIS SECTION.
SECTION 12.3 NOTICE REGARDING INDEMNITIES, LIMITATION OF INDEMNITY,
ETC. EXCEPT TO THE EXTENT EXPRESSLY PROVIDED ELSEWHERE IN THIS AGREEMENT, THE
FOLLOWING PROCEDURES SHALL BE FOLLOWED WITH RESPECT TO ALL CLAIMS FOR
INDEMNIFICATION UNDER THIS AGREEMENT AND ALL OBLIGATIONS OF INDEMNIFICATION
HEREUNDER SHALL BE SUBJECT TO COMPLIANCE BY THE PARTY TO BE INDEMNIFIED WITH
SUCH PROCEDURES:
(A) THE IDEMNITEE SHALL GIVE PROMPT WRITTEN NOTICE TO THE
INDEMNITOR OF ANY CLAIM THAT MIGHT GIVE RISE TO A
CLAIM BY THE INDEMNITEE AGAINST THE INDEMNITOR
PURSUANT TO THIS AGREEMENT, STATING THE NATURE AND
BASIS OF SUCH CLAIMS AND THE ESTIMATED AMOUNTS
THEREOF.
(B) IF ANY ACTION, SUIT OR PROCEEDING IS BROUGHT AGAINST
AN INDEMNITEE WITH RESPECT TO WHICH AN INDEMNITOR MAY
HAVE A LIABILITY PURSUANT TO THIS AGREEMENT, THE
ACTION, SUIT OR PROCEEDING SHALL, UPON
(I) THE WRITTEN ACKNOWLEDGMENT BY THE INDEMNITOR THAT
IT HAS THE OBLIGATION TO INDEMNIFY THE INDEMNITEE
UNDER THE INDEMNITY AGREEMENTS CONTAINED HEREIN;
AND
(II) THE MAKING OF REASONABLY ADEQUATE PROVISIONS BY
THE INDEMNITOR TO ENSURE THE INDEMNITEE OF THE
ABILITY OF THE INDEMNITOR TO SATISFY ITS
OBLIGATION HEREUNDER BE DEFENDED (INCLUDING ALL
PROCEEDINGS ON APPEAL OR FOR REVIEW THAT COUNSEL
FOR THE INDEMNITOR SHALL DEEM APPROPRIATE) BY,
AND MAY BE SETTLED OR COMPROMISED BY, THE
INDEMNITOR. PRIOR TO RECEIPT BY THE INDEMNITEE OF
THE INDEMNITOR'S WRITTEN ACKNOWLEDGMENT, THE
INDEMNITEE SHALL HAVE THE RIGHT TO CONTEST OR
DEFEND (AND, IF THE INDEMNITEE HAS NOT RECEIVED
SUCH WRITTEN ACKNOWLEDGMENT AND PROVISION WITHIN
30 BUSINESS DAYS AFTER THE INDEMNITEE HAS
PROVIDED WRITTEN NOTICE AS REQUIRED BY SECTION
12.2 ABOVE, TO SETTLE OR COMPROMISE) SUCH ACTION,
SUIT OR PROCEEDING AT THE EXPENSE OF THE
Page 24 of 27
27
INDEMNITOR. IN ADDITION TO THE FOREGOING, THE
INDEMNITEE MAY BY WRITTEN NOTICE TO THE
INDEMNITOR REQUIRE THE INDEMNITOR TO ASSUME THE
DEFENSE OF ANY ACTION, SUIT OR PROCEEDING WITH
RESPECT TO WHICH THE INDEMNITOR MAY HAVE
LIABILITY PURSUANT TO THIS AGREEMENT. THE
INDEMNITEE SHALL HAVE THE RIGHT TO EMPLOY ITS OWN
COUNSEL IN CONNECTION WITH ANY ACTION, SUIT OR
PROCEEDING BEING DEFENDED BY THE INDEMNITOR
PURSUANT HERETO, BUT THE FEES AND EXPENSES OF
SUCH COUNSEL SHALL BE AT THE INDEMNITEE'S OWN
EXPENSE UNLESS (I) THE EMPLOYMENT OF SUCH COUNSEL
AND THE PAYMENT OF SUCH FEES AND EXPENSES SHALL
HAVE BEEN SPECIFICALLY AUTHORIZED BY THE
INDEMNITOR IN CONNECTION WITH THE DEFENSE OF SUCH
ACTION, SUIT OR PROCEEDING OR (II) THE INDEMNITEE
SHALL HAVE REASONABLY CONCLUDED AND NOTIFIED THE
INDEMNITOR THAT THERE MAY BE SPECIFIC DEFENSES
AVAILABLE TO IT THAT ARE DIFFERENT FROM OR IN
ADDITION TO THOSE AVAILABLE TO THE INDEMNITOR OR
THAT SUCH ACTION, SUIT OR PROCEEDING INVOLVES OR
COULD HAVE AN EFFECT UPON MATTERS BEYOND THE
SCOPE OF THE INDEMNITY AGREEMENTS CONTAINED
HEREIN. IN EITHER OF WHICH EVENTS (A) THE
INDEMNITOR, TO THE EXTENT MADE NECESSARY BY SUCH
DEFENSES, SHALL NOT HAVE THE RIGHT TO DIRECT THE
DEFENSE OF SUCH ACTION, SUIT OR PROCEEDING ON
BEHALF OF THE INDEMNITEE AND (B) ONLY THAT
PORTION OF SUCH FEES AND EXPENSES REASONABLY
RELATED TO MATTERS COVERED BY THE INDEMNITY
AGREEMENTS CONTAINED HEREIN SHALL BE BORNE BY THE
INDEMNITOR. THE INDEMNITOR SHALL KEEP THE
INDEMNITEE FULLY INFORMED OF SUCH ACTION, SUITE
OR PROCEEDING AT ALL STAGES THERE OF WHETHER OR
NOT THE INDEMNITEE IS SO REPRESENTED. THE
INDEMNITOR SHALL MAKE AVAILABLE TO THE INDEMNITEE
AND ITS ATTORNEYS AND ACCOUNTANTS ALL BOOKS AND
RECORDS OF THE INDEMNITOR RELATING TO SUCH
PROCEEDINGS OR LITIGATIONS, AND THE PARTIES
HERETO AGREE TO RENDER TO EACH OTHER SUCH
ASSISTANCE AS THEY MAY REASONABLE REQUIRE TO
ENSURE THE PROPER AND ADEQUATE INVESTIGATION, AND
THE DEFENSE OR SETTLEMENT, OF ANY SUCH ACTION,
SUIT OR PROCEEDING.
(III)THE INDEMNITEE SHALL BE ENTITLED TO COMPROMISE
AND SETTLE ALL ACTIONS, SUITS OR PROCEEDINGS AS
TO WHICH THE INDEMNITOR DOES NOT HAVE OR DOES NOT
EXERCISE THE RIGHT TO ASSUME THE DEFENSE, WITHOUT
CONSENT OF THE INDEMNITOR, PROVIDED, THAT IT ACTS
REASONABLY AND IN GOOD FAITH IN DOING SO. THE
INDEMNITEE SHALL KEEP THE INDEMNITOR FULLY
INFORMED OF SUCH ACTION, SUIT OR PROCEEDING AT
ALL STATES THEREOF.
(IV) NO CLAIM FOR INDEMNIFICATION SHALL BE MADE
PURSUANT TO SECTION 5.13 OR SECTION 6.4 UNLESS
THE AMOUNT OF SUCH CLAIM EXCEEDS $5,000.00, BUT
EACH CLAIM PAID PURSUANT TO SUCH PROVISIONS SHALL
BE THE FULL AMOUNT OF SUCH CLAIM.
Page 25 of 27
28
SECTION 12.4 AMENDMENTS. THE TERMS, PROVISIONS AND CONDITIONS OF THIS
AGREEMENT MAY NOT BE CHANGED, MODIFIED OR AMENDED IN ANY MANNER EXCEPT BY AN
INSTRUMENT IN WRITING DULY EXECUTED BY EACH OF THE PARTIES HERETO.
SECTION 12.5 ASSIGNMENT. THIS AGREEMENT IS BINDING UPON AND INURES TO
THE BENEFIT OF THE SUCCESSORS AND ASSIGNS OF EACH PARTY TO THIS AGREEMENT
EXCEPT AS PROVIDED PURSUANT TO SECTION 6.3. BUT NO RIGHTS, OBLIGATIONS OR
LIABILITIES UNDER THIS AGREEMENT MAY BE ASSIGNED BY ANY PARTY WITHOUT THE PRIOR
WRITTEN CONSENT OF THE OTHER PARTIES HERETO.
SECTION 12.6 ANNOUNCEMENTS. THE TIMING OF ALL PRESS RELEASES, NOTICES
TO CUSTOMERS AND SUPPLIERS AND OTHER ANNOUNCEMENTS PRIOR TO THE CLOSING DATE
WITH RESPECT TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT SHALL BE APPROVED BY BOTH PURCHASER AND SELLER PRIOR TO THE ISSUANCE
THEREOF; PROVIDED THAT ANY PARTY MAY MAKE ANY PUBLIC DISCLOSURE IT BELIEVES IN
GOOD FAITH IS REQUIRED BY LAW OR REGULATION (IN WHICH CASE THE DISCLOSING PARTY
SHALL ADVISE THE OTHER PARTY (WHICH SHALL BE SELLER IN THE CASE OF DISCLOSURE
PROPOSED TO BE MADE BY PURCHASER AND PURCHASER IN THE CASE OF DISCLOSURE
PROPOSED TO BE MADE BY SELLER) PRIOR TO MAKING SUCH DISCLOSURE AND PROVIDE SUCH
OTHER PARTY AN OPPORTUNITY TO REVIEW THE PROPOSED DISCLOSURE).
SECTION 12.7 EXPENSES. EXCEPT AS OTHERWISE SET FORTH IN THIS
AGREEMENT, EACH PARTY TO THIS AGREEMENT SHALL BEAR ALL OF ITS LEGAL,
ACCOUNTING, INVESTMENT BANKING AND OTHER EXPENSES INCURRED BY IT OR ON ITS
BEHALF IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT,
WHETHER OR NOT SUCH TRANSACTIONS ARE CONSUMMATED.
SECTION 12.8 ENTIRE AGREEMENT. OTHER THAN THE OBLIGATIONS SET FORTH IN
THE CONFIDENTIALITY AGREEMENTS ENTERED IN CONTEMPLATION OF THIS AGREEMENT, THIS
AGREEMENT AND THE ANCILLARY AGREEMENTS CONSTITUTE THE ENTIRE AGREEMENT BETWEEN
THE PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDE AND
ARE IN FULL SUBSTITUTION FOR ANY AND ALL PRIOR AGREEMENTS AND UNDERSTANDINGS
BETWEEN THEM RELATING TO SUCH SUBJECT MATTER. THE EXHIBITS AND SCHEDULES TO
THIS AGREEMENT ARE HEREBY INCORPORATED AND MADE A PART HEREOF AND ARE AN
INTEGRAL PART OF THIS AGREEMENT.
SECTION 12.9 DESCRIPTIVE HEADINGS. THE DESCRIPTIVE HEADINGS OF THE
SEVERAL SECTIONS OF THIS AGREEMENT ARE INSERTED FOR CONVENIENCE ONLY AND SHALL
NOT CONTROL OR AFFECT THE MEANING OR CONSTRUCTION OF ANY OF THE PROVISIONS
HEREOF.
SECTION 12.10 COUNTERPARTS. FOR THE CONVENIENCE OF THE PARTIES, ANY
NUMBER OF COUNTERPARTS OF THIS AGREEMENT MAY BE EXECUTED BY ANY ONE OR MORE
PARTIES HERETO, AND EACH SUCH EXECUTED COUNTERPART SHALL BE, AND SHALL BE
DEEMED TO BE, AN ORIGINAL, BUT ALL OF WHICH SHALL CONSTITUTE, AND SHALL BE
DEEMED TO CONSTITUTE, IN THE AGGREGATE BUT ONE AND THE SAME INSTRUMENT.
SECTION 12.11 GOVERNING LAW; JURISDICTION. THIS AGREEMENT SHALL BE
CONSTRUED, PERFORMED AND ENFORCED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS
OF THE STATE OF LOUISIANA.
SECTION 12.12 CONSTRUCTION. THE LANGUAGE USED IN THIS AGREEMENT WILL
BE DEEMED TO BE THE LANGUAGE CHOSEN BY THE PARTIES TO EXPRESS THEIR MUTUAL
INTENT, AND NO RULE OF STRICT CONSTRUCTION WILL BE APPLIED AGAINST ANY PARTY.
ANY
Page 26 of 27
29
REFERENCES TO ANY FEDERAL, STATE, LOCAL OR FOREIGN STATUTE OR LAW WILL ALSO
REFER TO ALL RULES AND REGULATIONS PROMULGATED THEREUNDER, UNLESS THE CONTEXT
REQUIRES OTHERWISE. UNLESS THE CONTEXT OTHERWISE REQUIRES: (A) A TERM HAS THE
MEANING ASSIGNED TO IT BY THIS AGREEMENT; (B) AN ACCOUNTING TERM NOT OTHERWISE
DEFINED HAS THE MEANING ASSIGNED TO BY GAAP; (C) THE WORD 'OR' IS NOT
EXCLUSIVE; (D) THE WORDS "INCLUDE", 'INCLUDES" AND 'INCLUDING" SHALL BE DEEMED
TO BE FOLLOWED BY THE WORDS "WITHOUT LIMITATION"; (E) WORDS IN THE SINGULAR
INCLUDE THE PLURAL AND IN THE PLURAL INCLUDE THE SINGULAR; (F) PROVISIONS APPLY
TO SUCCESSIVE EVENTS AND TRANSACTIONS; AND (G) "$" MEANS THE CURRENCY OF THE
UNITED STATES OF AMERICA.
SECTION 12.13 SEVERABILITY. IN THE EVENT THAT ANY ONE OR MORE OF THE
PROVISIONS CONTAINED IN THIS AGREEMENT OR IN ANY OTHER INSTRUMENT REFERRED TO
HEREIN SHALL, FOR ANY REASON, BE HELD TO BE INVALID, ILLEGAL OR UNENFORCEABLE
IN ANY RESPECT, THEN TO THE MAXIMUM EXTENT PERMITTED BY LAW, SUCH INVALIDITY,
ILLEGALITY OR UNENFORCEABILITY SHALL NOT AFFECT ANY OTHER PROVISION OF THIS
AGREEMENT OR ANY OTHER SUCH INSTRUMENT. FURTHERMORE, IN LIEU OF ANY SUCH
INVALID OR UNENFORCEABLE TERM OR PROVISION, THE PARTIES HERETO INTEND THAT
THERE SHALL BE ADDED AS A PART OF THIS AGREEMENT A PROVISION AS SIMILAR IN
TERMS TO SUCH INVALID OR UNENFORCEABLE PROVISION AS MAY BE POSSIBLE AND BE
VALID AND ENFORCEABLE.
SECTION 12.14 CONFIDENTIALITY. SELLER AND PURCHASER AGREE TO KEEP, AND
TO CAUSE EACH OF THEIR AFFILIATES, DIRECTORS, OFFICERS, AND EMPLOYEES TO KEEP,
CONFIDENTIAL ANY AND ALL CONFIDENTIAL INFORMATION OF THE OTHER PARTY THAT
EITHER RECEIVES IN THE COURSE OF PERFORMING ITS OBLIGATIONS HEREUNDER (EXCEPT
THAT SUCH INFORMATION MAY BE SHARED, ON A CONFIDENTIAL BASIS, WITH THE PARTY'S
ATTORNEYS AND AUDITORS) AND WILL NOT, WITHOUT THE OTHER PARTY'S WRITTEN
CONSENT, USE ANY OF SUCH CONFIDENTIAL INFORMATION EXCEPT AS REASONABLY
NECESSARY TO PERFORM ITS DUTIES UNDER THIS OR ANOTHER OF ITS AGREEMENTS WITH
THE OTHER PARTY. UPON TERMINATION OF THIS AGREEMENT, EACH PARTY WILL RETURN,
AND WILL CAUSE ITS AFFILIATES TO RETURN, TO THE OTHER PARTY, ALL ORIGINAL
DOCUMENTS AND COPIES OF THE CONFIDENTIAL INFORMATION WHICH ARE IN ITS
POSSESSION. THE OBLIGATIONS OF CONFIDENTIALITY ASSUMED BY THE PARTIES HEREIN
SHALL SURVIVE THIS AGREEMENT IN PERPETUITY.
SECTION 12.15 SCHEDULES. EACH OF PURCHASER AND SELLER SHALL USE ITS
REASONABLE AND BEST EFFORTS TO COMPLETE AND DELIVER TO THE OTHER, AS SOON AS
REASONABLY PRACTICAL, THE EXHIBITS AND SCHEDULES TO THIS AGREEMENT THAT ARE TO
BE PREPARED BY SUCH PARTY. UPON AGREEMENT BY PURCHASER AND SELLER TO THE FORM
AND CONTENT OF SUCH EXHIBITS AND SCHEDULES, THEY SHALL BE ATTACHED HERETO AND
BECOME A PART HEREOF. THE EXHIBITS AND SCHEDULES ATTACHED TO THE AGREEMENT AT
THE TIME THE AGREEMENT IS SIGNED REPRESENT THE PARTIES GENERAL INTENTIONS AND
ARE SUBJECT TO CHANGE.
IN WITNESS WHEREOF, SELLER AND PURCHASER HAVE EXECUTED AND DELIVERED
THIS AGREEMENT AS OF THE DAY AND YEAR FIRST WRITTEN ABOVE.
SELLER:
AUTOMOTIVE & INDUSTRIAL SUPPLY, INC.
BY:
-----------------------------------------
NAME: XXXX X. XXXXXX, XX.
TITLE: VICE-PRESIDENT
PURCHASER:
XXXXXX AUTOMOTIVE GROUP, INC.
BY:
-----------------------------------------
NAME: XXXXXXX X. XXXXXX
TITLE: PRESIDENT
Page 27 of 27
