1
Exhibit 10.1
ASSET PURCHASE AGREEMENT
BETWEEN
A.P.S., INC.
AND
THE PARTS SOURCE, INC.
DATED AS OF AUGUST 21, 1998
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TABLE OF CONTENTS
Page No.
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ARTICLE I. DEFINITIONS...........................................................................................8
Section 1.1. Definitions....................................................................................8
ARTICLE II. SALE AND PURCHASE OF PURCHASED ASSETS AND ASSUMPTION OF
ASSUMED LIABILITIES..............................................................................................14
Section 2.1. Purchase and Sale of Purchased Assets.........................................................14
Section 2.2. Assumption of Obligations and Liabilities.....................................................14
Section 2.3. Inventory Levels and Purchase Price...........................................................14
Section 2.4. Physical Inventory; Determination of Purchased Inventory......................................15
Section 2.5. Condition of Purchased Assets; Return of Inventory; Inventory in Transit......................15
Section 2.6. Allocation of Purchase Price..................................................................16
Section 2.7. Sale at Closing Date..........................................................................16
Section 2.8. Apportionments................................................................................16
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF SELLER...........................................................17
Section 3.1. Authority of Seller...........................................................................17
Section 3.2. No Conflict or Violation......................................................................17
Section 3.3. Consents and Approvals........................................................................17
Section 3.4. Compliance with Law...........................................................................17
Section 3.5. Permits.......................................................................................17
Section 3.6. Ownership of Purchased Assets.................................................................17
Section 3.7. Assigned Contracts............................................................................17
Section 3.8. Labor Relations...............................................................................18
Section 3.9. Litigation....................................................................................18
Section 3.10. Brokers......................................................................................18
Section 3.11. Disclaimer of Additional Representations and Warranties; Schedules...........................18
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF PURCHASER.........................................................19
Section 4.1. Authority of Purchaser........................................................................19
Section 4.2. No Conflict or Violation......................................................................19
Section 4.3. Consents and Approvals........................................................................19
Section 4.4. Availability of Funds.........................................................................19
Section 4.5. Litigation....................................................................................19
Section 4.6. Brokers.......................................................................................19
Section 4.7. Adequate Assurances Regarding Executory Contracts.............................................20
ARTICLE V. CERTAIN COVENANTS OF SELLER..........................................................................20
Section 5.1. Conduct of Business Before the Closing Date...................................................20
Section 5.2. Consents and Approvals........................................................................20
Section 5.3. Information and Access........................................................................20
Section 5.4. Further Assurances............................................................................20
Section 5.5. Reasonable Efforts............................................................................20
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Section 5.6. Assignment of Contracts.......................................................................21
Section 5.7. Services to be Provided by Seller.............................................................21
Section 5.8. Cure of Defaults..............................................................................21
Section 5.9. Bankruptcy Actions............................................................................21
Section 5.10. Audit of Operations at Business Location.....................................................21
Section 5.11. Restrictions as to Employees.................................................................21
ARTICLE VI. CERTAIN COVENANTS OF PURCHASER......................................................................21
Section 6.1. Reasonable Efforts............................................................................21
Section 6.2. Consents and Approvals........................................................................22
Section 6.3. Adequate Assurances Regarding Executory Contracts.............................................22
Section 6.4. Performance Under Assigned Contracts..........................................................22
Section 6.5. Further Assurances............................................................................22
Section 6.7. Payment of Outstanding Accounts Receivable....................................................22
ARTICLE VII. CONDITIONS TO SELLER'S OBLIGATIONS.................................................................23
Section 7.1. Representations and Warranties................................................................23
Section 7.2. Compliance with Agreement.....................................................................23
Section 7.3. Consents......................................................................................23
Section 7.4. Purchaser's Closing Deliveries and Obligations................................................23
Section 7.5. Availability of Purchaser Financing...........................................................23
Section 7.6. Entry of the Preliminary Order and the Sale and Assignment Order..............................23
Section 7.7. Assignment of Contracts.......................................................................23
ARTICLE VIII. CONDITIONS TO PURCHASER'S OBLIGATIONS.............................................................24
Section 8.1. Representations and Warranties................................................................24
Section 8.2. Compliance with Agreement.....................................................................24
Section 8.3. No Adverse Proceeding.........................................................................24
Section 8.4. Consents......................................................................................24
Section 8.5. Seller's Closing Deliveries and Obligations...................................................24
Section 8.6. Entry of the Preliminary Order and the Sale and Assignment Order..............................24
Section 8.7. Assignment of Contracts.......................................................................24
ARTICLE IX. THE CLOSING; BREAK-UP FEE; TERMINATION..............................................................25
Section 9.1. The Closing...................................................................................25
Section 9.2. Break-up Fee..................................................................................26
Section 9.3. Termination...................................................................................26
Section 9.4. Effects of Termination........................................................................27
ARTICLE X. TAXES.................................................................................................28
Section 10.1. Taxes Related to Purchase of Assets..........................................................28
Section 10.2. Proration of Real and Personal Property Taxes................................................29
Section 10.3. Cooperation on Tax Matters...................................................................29
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ARTICLE XI. EMPLOYEES AND EMPLOYEE BENEFIT PLANS................................................................29
Section 11.1. Current Intent Regarding Business Employees..................................................29
ARTICLE XII. MISCELLANEOUS PROVISIONS...........................................................................29
Section 12.1. Representations and Warranties...............................................................29
Section 12.2. Notices......................................................................................29
Section 12.3. Amendments...................................................................................30
Section 12.4. Assignment...................................................................................30
Section 12.5. Announcements................................................................................30
Section 12.6. Expenses.....................................................................................31
Section 12.7. Entire Agreement.............................................................................31
Section 12.8. Descriptive Headings.........................................................................31
Section 12.9. Counterparts.................................................................................31
Section 12.10. Governing Law; Jurisdiction.................................................................31
Section 12.11. Construction................................................................................31
Section 12.12. Severability................................................................................31
Section 12.13. Confidentiality.............................................................................32
SCHEDULE
LETTER/NUMBER SCHEDULE NAME
Schedule A Fixed Assets
Schedule B-1 Inventory
Schedule B-2 Purchased Inventory
Schedule B-3 In-transit Inventory Purchase Orders
Schedule C Merchandise Repurchase Agreements
Schedule D Other Contracts
Schedule E Auto Parts Finance Company Notes
Schedule F Warehouse Notes
3.3 Consents and Approvals
3.4 Defaults and Violations of Law
3.5 Permits
3.7 Assigned Contracts
3.8 Collective Bargaining Agreements
3.9 Litigation
4.4 Financing Agreements
EXHIBIT EXHIBIT NAME
A Assignment and Assumption Agreement
B ▇▇▇▇ of Sale and Assumption Agreement
C Services Agreement
D-1 Preliminary Order
D-2 Sale and Assignment Order
E Put and Call Agreement
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "AGREEMENT") is made and entered
into as of August 21, 1998 between A.P.S., INC., a Delaware corporation
("SELLER") and a debtor and debtor-in-possession in a case pending under
chapter 11 of the Bankruptcy Code, and THE PARTS SOURCE, INC., a Florida
corporation ("PURCHASER").
RECITALS
WHEREAS, Seller is engaged in the business of selling and distributing
automotive replacement parts, accessories and supplies and operates a
distribution center located in leased premises in Ocala, Florida (the "BUSINESS
LOCATION");
WHEREAS, on February 2, 1998, Seller filed a voluntary petition with
the Bankruptcy Court initiating a case under chapter 11 of the Bankruptcy Code
and has continued in the possession of its assets and in the management of its
business pursuant to sections 1107 and 1008 of the Bankruptcy Code;
WHEREAS, Purchaser desires to purchase from Seller, and Seller desires
to sell to Purchaser, certain of the assets associated with the Seller's
operations at the Business Location, 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 Location and, for a
limited time after the Closing Date, to: (i) obtain access to Seller's Parts
Information Management System; and (ii) obtain certain related services from
Seller, 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
SECTION 1.1. DEFINITIONS. Unless otherwise defined herein, the terms
defined in the introductory paragraph and the Recitals to this Agreement shall
have the respective meanings specified therein, and the following terms shall
have the meanings specified below:
"AFCO" means the Auto Parts Finance Company, Inc., a
wholly-owned subsidiary of Seller.
"AFFILIATE" means "affiliate" as defined in Rule 405 promulgated
under the Securities Act of 1933, as amended.
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"AGREEMENT" has the meaning set forth in the preamble and shall
include all Schedules and Exhibits hereto.
"ALTERNATIVE TRANSACTION" has the meaning set forth in SECTION
9.2.
"ALTERNATIVE BUYER" means a purchaser of substantially all of
the Purchased Assets pursuant to an Alternative Transaction.
"ALTERNATIVE BUYER SUPPLY COMMITMENT" has the meaning set forth
in SECTION 9.4(c).
"ANCILLARY AGREEMENTS" means, collectively, the Assignment and
Assumption Agreement, the ▇▇▇▇ of Sale and Assumption Agreement, the
Put and Call Agreement and the Services Agreement.
"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 Lease, the Other Contracts and
all MRAs 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.
"AUTO PARTS FINANCE COMPANY NOTES" means those notes listed on
SCHEDULE E annexed to this Agreement.
"BANKRUPTCY CODE" means The Bankruptcy Reform Act of 1978, as
heretofore and hereafter amended, and codified as 11 U.S.C. Section
101, et seq.
"BANKRUPTCY COURT" means the United States Bankruptcy Court for
the District of Delaware, or any other court, having jurisdiction
over the Cases from time to time.
"▇▇▇▇ OF SALE AND ASSUMPTION AGREEMENT" means the ▇▇▇▇ of Sale
and Assumption Agreement to be executed at Closing by Purchaser and
Seller in substantially the form attached hereto as EXHIBIT B.
"BREAK-UP FEE" has the meaning set forth in SECTION 9.2.
"BREAK-UP FEE HEARING DATE" has the meaning set forth in SECTION
2.3(d).
"BUSINESS" means Seller's business operations conducted at the
Business Location.
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"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 LOCATION" has the meaning set forth in the Recitals
hereto.
"CASES" means the Chapter 11 cases of Seller pending in the
Bankruptcy Court and being jointly administered for procedural
purposes as In re APS Holding Corporation, et. al., Case No. 98-197
(PJW).
"CLOSING" has the meaning set forth in SECTION 9.1.
"CLOSING DATE" has the meaning set forth in SECTION 9.1.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMMITTED FINANCING" means funds available pursuant to a
written commitment letter or other similar documentation from a
commercial bank or other lending institution, which lender,
commitment letter and other documentation are acceptable to Seller.
"DAMAGES" means losses, amounts paid in settlement, Taxes,
claims, damages, liabilities, obligations, judgments and reasonable
out-of-pocket costs (including costs of investigation or enforcement)
and reasonable expenses and attorneys' fees; provided, however, that
Damages shall not include (i) any incidental or consequential damages
or (ii) any special or punitive damages.
"DESIGNATED FINANCIALLY RESPONSIBLE PARTY" has the meaning set
forth in SECTION 2.3(d).
"DIP LENDERS" means The Chase Manhattan Bank, as agent and the
other financial institutions from time to time party to the Revolving
Credit, Term Loan and Guaranty Agreement.
"DIRTY CORE AND WARRANTY INVENTORY" means any and all used cores
and warranty inventory present at the Business Location as of the
Closing Date.
"EXCESS INVENTORY" means any Dirty Core and Warranty Inventory
in excess of $500,000 and New Inventory in excess of $6,300,000 based
on PIMS Inventory Value on hand at the Business Location as of the
Physical Inventory Date, as described in SECTION 2.3.
"EXCLUDED ASSETS" means all of Seller's assets other than those
specifically defined as Purchased Assets.
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"EXECUTORY CONTRACTS" means all Assigned Contracts entered into
by or assigned to Seller before February 2, 1998 and which are
executory or unexpired as of the Closing Date.
"FINANCIALLY RESPONSIBLE PARTY" means a corporation,
partnership, unincorporated association or individual that: (i) in
Seller's good faith determination, is creditworthy and has the
financial ability to consummate the Put and Call Agreement and fully
perform all of the obligations thereunder and the transactions
contemplated therein; and (ii) has provided Seller with evidence
showing that it has obtained a Committed Financing under which
sufficient amounts will be available for a sufficient period of time
so as to enable the Financially Responsible Party to purchase all of
the Notes and the Sun Coast Assets in the manner contemplated by the
Put and Call Agreement.
"FIXED ASSETS" means, to the extent used in the Business, (i)
all of the machinery, equipment, furniture, fixtures, signs and
leasehold improvements located at the Business Location on the
Closing Date and 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.
"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.
"HIGHER OR BETTER OFFER" has the meaning set forth in SECTION
9.2.
"INVENTORY" means all items of New Inventory and Dirty Core and
Warranty Inventory. SCHEDULE B-1, which shall be annexed to this
Agreement on the Closing Date, shall set forth a list of all items of
on-hand Inventory located at the Business Location and physically
counted during the Physical Inventory Period in accordance with
SECTION 2.4 hereof.
"IN-TRANSIT INVENTORY" means all automotive inventory subject to
open purchase orders (including back orders) of Seller as of the
Physical Inventory Date.
"IN-TRANSIT INVENTORY PURCHASE ORDERS" means: (a) the open
purchase orders annexed to this Agreement as SCHEDULE B-3 on the
Closing Date and relating to In-transit Inventory; and (b) all back
orders of In-transit Inventory received after the Closing Date.
"IRS" means the Internal Revenue Service of the United States
Department of the Treasury.
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"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, Chief Executive Officer or Chief Financial Officer.
"LEASED PROPERTY" means the premises subject to the Lease.
"LEASE" means the warehouse lease for premises located at ▇▇▇
▇.▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇, dated August 21, 1995 between
Seller, as tenant, and First Florida Echo Inc., as landlord.
"LIEN" means any mortgage, pledge, security interest, charge or
other encumbrance.
"MRA" means a merchandise repurchase agreement among Seller,
independent jobbers and a lender, pursuant to which MRA the
independent jobber may return items of Inventory to Seller, typically
at a discount to purchase price. A list of MRAs relating to the
Business customers shall be annexed to this Agreement on the Closing
Date as SCHEDULE C.
"NEW INVENTORY" means all items of new automotive inventory
including core charges associated with such inventory, if applicable,
owned by Seller and on hand at the Business Location as of the
Physical Inventory Date.
"NOTES" means the Auto Parts Finance Company Notes and Warehouse
Notes, provided however, that any such Auto Parts Finance Company
Notes and Warehouse Notes payable by Sun Coast Express, Inc., Sun
Coast Auto Parts, Inc., Sun Coast Undercar Warehouse, Inc. and
Automotive One Parts Stores, Inc. shall not be Notes.
"OTHER CONTRACTS" means the equipment leases and other
agreements which are listed on SCHEDULE D attached hereto, as such
schedule may be updated on the Closing Date.
"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).
"PIMS" means the Parts Information Management System, the
information management system used in operating the Business, access
to which is to be granted to Purchaser pursuant to the Services
Agreement.
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"PIMS INVENTORY VALUE" means the invoice cost to Seller per item
of Inventory (excluding any early payment, cash discount, or vendor
rebate) as shown on PIMS on the Physical Inventory Date.
"POST-CLOSING RECEIVABLES" has the meaning set forth in SECTION
6.7(a).
"PRELIMINARY ORDER" means an order of the Bankruptcy Court, in
substantially the form attached hereto as EXHIBIT D-2, which order
shall not have been stayed, vacated or otherwise rendered
ineffective, authorizing, among other things, the Break-up Fee and
notice and bidding procedures with respect to the Purchased Assets.
"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
hired by Purchaser;
(e) to the extent legally assignable, all Permits
required to conduct business at the Business
Location; and
(f) independent customer lists and other information and
data relating to the independent customers of the
Business at the Business Location;
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.
"PUT AND CALL AGREEMENT" has the meaning set forth in SECTION
2.3(d).
"REJECTED INVENTORY" means up to $500,000 (in PIMS Inventory
Value) in New Inventory that Purchaser rejects, elects not to
purchase and returns to Seller.
"REVOLVING CREDIT, TERM LOAN AND GUARANTY AGREEMENT" means the
Revolving Credit, Term Loan and Guaranty Agreement, dated as of
February 2, 1998, as the same has been and may be amended, among APS
Holding Corporation, Seller, Seller's subsidiaries and The Chase
Manhattan Bank, as agent for the other financial institutions named
therein.
"SALE AND ASSIGNMENT HEARING DATE" has the meaning set forth in
SECTION 2.4(a).
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"SALE AND ASSIGNMENT ORDER" means an order of the Bankruptcy
Court, in substantially the form attached hereto as EXHIBIT D-1,
which order shall not have been stayed, vacated or otherwise rendered
ineffective, authorizing, among other things, the sale of the
Purchased Assets to Purchaser, the assumption and assignment of the
Assigned Contracts to Purchaser, the transactions contemplated by the
Services Agreement, and all other transactions and agreements
contemplated hereby.
"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.
"SERVICES AGREEMENT" means the Services Agreement to be entered
into by Purchaser and Seller at Closing, pursuant to which Services
Agreement Seller shall render certain services to Purchaser relating
to PIMS for a limited time following the Closing Date, as
contemplated by SECTION 5.7 and substantially in the form attached
hereto as EXHIBIT C.
"SUN COAST ASSETS" means the accounts receivable owed by Sun
Coast Express, Inc., Sun Coast Undercar Warehouse, Inc. or Sun Coast
Auto Parts, Inc. to Seller and any Auto Parts Finance Company Notes
and Warehouse Notes payable by Sun Coast Express, Inc. and Sun Coast
Auto Parts, Inc.
"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.
"WAREHOUSE NOTES" means those notes listed on SCHEDULE F annexed
to this Agreement.
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 Location, 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.
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SECTION 2.2. ASSUMPTION OF OBLIGATIONS AND LIABILITIES. On the terms
and subject to the conditions set forth in this Agreement, from and after the
Closing, Purchaser will assume and pay, perform, discharge and be responsible
for all of the following liabilities of Seller (the "ASSUMED LIABILITIES"):
(a) all obligations and liabilities of Seller under the Assigned
Contracts which accrue after the Closing Date; and
(b) all obligations and liabilities of Seller relating to the
Leased Property which accrue after the Closing Date.
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,
and Purchaser expressly does not assume any obligations or liabilities of
Seller relating to the Business Employees, although Purchaser acknowledges
certain commitments set forth in SECTION 11.1 hereof, which relate to Business
Employees. Seller shall not assume or be responsible for any obligations or
liabilities of Purchaser relating to the Business Employees. In addition,
Purchaser does not assume and Seller remains responsible for all obligations
and liabilities related to all rebate and incentive programs established by or
for national accounts, manufacturers, or customers and relating to sales by
Seller prior to the Closing Date.
SECTION 2.3. INVENTORY LEVELS AND PURCHASE PRICE.
(a) Subject to the terms of SECTION 2.3(b), Purchaser agrees to pay to
Seller an aggregate amount equal to (i) one hundred percent (100%) of the PIMS
Inventory Value for the Dirty Core and Warranty Inventory, plus (ii) eighty
percent (80%) of the PIMS Inventory Value for the New Inventory, plus (iii)
fifty percent (50%) of the depreciated book value, up to a maximum of $437,500,
for the Fixed Assets (items (i)-(iii), collectively, the "PURCHASE PRICE").
Additionally, Purchaser shall be obligated to pay an amount for In-transit
Inventory, in accordance with SECTION 2.5.
(b) All Inventory values described in this section are calculated
based on the PIMS Inventory Value. Purchaser shall purchase all of the Dirty
Core and Warranty Inventory, up to a maximum required amount of $500,000, at a
purchase price equal to one hundred percent (100%) of the PIMS Inventory Value.
With respect to the New Inventory, Purchaser may reject up to $500,000 of the
New Inventory (the "REJECTED INVENTORY"), and Purchaser shall purchase all of
the New Inventory less the Rejected Inventory, up to a maximum required amount
of $5,800,000, at a purchase price equal to eighty percent (80%) of PIMS
Inventory Value. At its sole discretion, Purchaser may purchase any or all of
the Excess Inventory. However, notwithstanding any other provision in this
Agreement, Purchaser (i) may reject up to $500,000 of the New Inventory no
matter what level of New Inventory exists at the Business Location as of the
Closing Date, (ii) shall have no obligation to purchase more than $5,800,000 of
New Inventory and (iii) shall have no obligation to purchase more than $500,000
of the Dirty Core and Warranty Inventory. Thus, if the inventory levels are
maintained as expected, the portion of the Purchase Price attributable to
Purchased Inventory will equal $5,140,000 calculated as follows:
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(c) The Purchase Price shall be payable on the Closing Date by wire
transfer of immediately available funds, pursuant to written instructions to be
provided by Seller to Purchaser.
(d) Notwithstanding the foregoing provisions, no later than the date
on which the Bankruptcy Court is scheduled to hold a hearing to approve the
Break-up Fee (the "BREAK-UP FEE HEARING DATE"), Purchaser shall cause a
Financially Responsible Party (the "DESIGNATED FINANCIALLY RESPONSIBLE PARTY")
and Seller shall cause AFCO to enter into a put and call and note purchase
agreement among the Designated Financially Responsible Party, AFCO and the
Seller, in the form attached as EXHIBIT E hereto (the "PUT AND CALL AGREEMENT")
with respect to the Notes and the Sun Coast Assets.
SECTION 2.4. PHYSICAL INVENTORY; DETERMINATION OF PURCHASED INVENTORY.
(a) Commencing on or about 5:00 p.m. on the Friday immediately
preceding the date on which the Bankruptcy Court is scheduled to hold a hearing
on the motion seeking entry of the Sale and Assignment Order (the "SALE AND
ASSIGNMENT HEARING DATE") and 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 Inventory and the Fixed
Assets at the Business Location. A written, itemized list setting forth
specifically all such items of Inventory physically accounted for shall be
prepared by Seller with the assistance of Purchaser, and shall, on the Closing
Date, be attached hereto as SCHEDULE B-1. Seller and Purchaser shall each bear
their own costs associated with conducting the Physical Inventory, provided,
however, that if the Sale and Assignment Order is not approved, Seller shall
bear all costs associated with the physical inventory.
(b) At the completion of the physical inventory conducted pursuant to
SECTION 2.4(a), Purchaser shall prepare a list of Inventory to be purchased in
accordance with the provisions of this Agreement, including any Excess
Inventory that it intends to purchase in accordance with the provisions of this
Agreement (the "PURCHASED INVENTORY"), which list shall be: (i) adjusted as of
the Closing Date to reflect changes in the Inventory that occur during the
period commencing immediately following the Physical Inventory Date and ending
on the Closing Date; and (ii) attached to this Agreement on the Closing Date as
SCHEDULE B-2.
SECTION 2.5. CONDITION OF PURCHASED ASSETS; RETURN OF INVENTORY;
INVENTORY IN TRANSIT.
(a) Except for the warranty of title set forth in SECTION 3.6, the
Purchased Assets are being sold "AS IS," "WHERE IS" and "WITH ALL FAULTS" and
Seller hereby expressly disclaims any and all other warranties both express and
implied.
(b) The Rejected Inventory and Excess Inventory not purchased by
Purchaser shall be returned by Purchaser to Seller's distribution center
located at Atlanta, Georgia or Charlotte, North Carolina, at the sole expense
of Purchaser, with shipment of such returned Inventory to Seller to take place
within five (5) Business Days after the Closing Date, and Purchaser shall be
liable for any loss
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of or damage to returned Inventory prior to its delivery to Seller at Atlanta,
Georgia or Charlotte, North Carolina.
(c) Purchaser shall allow employees or representatives designated by
Seller to be present at the Business Location during normal business hours for
a period of twenty (20) Business Days following the Closing Date for the
purpose of determining items of In-transit Inventory which arrive at the
Business Location during that period. At least five (5) Business Days prior to
the Closing Date, with an update provided on the Closing Date, Seller shall
present Purchaser with an itemized list of all In-transit Inventory, and
Purchaser shall pay Seller, by wire transfer and within three (3) Business Days
after receipt of any In-transit Inventory, one hundred percent (100%) of
Seller's PIMS Inventory Value for each item of In-transit Inventory, as
indicated on the In-transit Inventory Purchase Orders, or pursuant to other
purchase orders for In-transit Inventory which may be provided by Seller to
Purchaser.
SECTION 2.6. 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. Such
allocation of the Purchase Price will not be binding in the Cases upon the
Seller's creditors or other parties in interest and will not have precedential
value with respect to any allocations of value contained in a plan or plans
under chapter 11 of the Bankruptcy Code involving Seller.
SECTION 2.7. 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 Sellers and Purchaser of the ▇▇▇▇ of Sale and
Assumption Agreement substantially in the form of EXHIBIT B.
SECTION 2.8. APPORTIONMENTS. The following amounts are to be
apportioned as of 12:00 midnight on the day preceding the Closing Date (the
"APPORTIONMENT DATE") to the extent such are valid post-petition claims or are
subject to non-avoidable liens: (i) water, sewer and utility charges and real
estate taxes, to the extent all or any are payable under the Lease; 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 ▇▇▇▇ received by Seller. All prorations shall be
adjusted within ten (10) Business Days of Seller's receipt of the final bills.
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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 Delaware. 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 Preliminary Order and
the Sale and Assignment Order, the receipt of the consents, waivers and
approvals specified on SCHEDULE 3.3. Subject to any necessary authorization
from the Bankruptcy Court, Seller has full corporate power and authority to own
its properties and to carry on the Business at the Business Location presently
being conducted by it.
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, to the extent the
requirements of Section 365 of the Bankruptcy Code are not met in connection
with the assignment of any Assigned Contract, 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. The material Permits necessary for the conduct
of the Business as it is currently being conducted at the Business Location are
set forth on SCHEDULE 3.5, and, to the best of Seller's Knowledge, Seller has
and maintains in full force and effect all such material Permits.
SECTION 3.6. OWNERSHIP OF PURCHASED ASSETS. Other than the real
property subject to the Lease and any items of property subject to the Other
Contracts, Seller is the owner of the Purchased Assets. Subject to the issuance
of the Sale and Assignment Order, Seller has, and at the Closing Buyer will
receive, good title to all such Purchased Assets, free and clear of any Liens,
provided however, that Seller makes no representation or warranty as to the
existence or absence of any Lien:
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(i) on the real property subject to the Lease; or (ii) on any items of property
subject to the Other Contracts.
SECTION 3.7. ASSIGNED CONTRACTS. True and complete copies (including
all modifications and amendments) of the Assigned Contracts listed on SCHEDULE
3.7 have been provided by Seller to Purchaser. Other than as set forth on
SCHEDULE 3.7, neither Seller nor, to the best of 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 default or violation under any
Assigned Contract which was not withdrawn or dismissed, except only for those
defaults which will be cured prior to the Closing in accordance with the Sale
and Assignment Order (or which need not be cured under the Bankruptcy Code to
permit the assumption and assignment of Executory Contracts). 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.
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. Other than in connection with the Cases and
except as set forth on SCHEDULE 3.9, there are no actions, causes of action,
claims, suits or proceedings pending or, to Seller's Knowledge, threatened
against Seller which: (i) seek to restrain or enjoin the consummation of the
transactions contemplated hereby; or (ii) could reasonably be expected to have
a material adverse effect with respect to the Purchased Assets.
SECTION 3.10. 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. DISCLAIMER OF ADDITIONAL REPRESENTATIONS AND
WARRANTIES; SCHEDULES.
(a) Except as expressly set forth in this Agreement, the Schedules and
Exhibits hereto, the Ancillary Agreements, and any certificate or instrument
delivered pursuant to the terms hereof or thereof, Seller makes no
representations or warranties with respect to the Business, or its operations,
assets (including, without limitation, the Purchased Assets), liabilities
(including, without limitation, the Assumed Liabilities) or conditions,
including, with respect to the Purchased Assets, any representation or warranty
of merchantability, suitability or fitness for a particular purpose, or quality
as to the Purchased Assets, or any part thereof, or as to the condition or
workmanship thereof, or the absence of any defects therein, whether latent or
patent. Except as provided in this Agreement, the Schedules and Exhibits
hereto, the Ancillary Agreements, and any other certificate or instrument
delivered pursuant to the terms hereof or thereof, the Purchased Assets are to
be conveyed hereunder "AS IS," "WHERE IS" and "WITH ALL FAULTS" on the date
hereof and in their present condition,
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subject to reasonable use, wear and tear between the date hereof and the
Closing Date, and Purchaser shall rely upon its own examination thereof.
(b) Any item disclosed on any one Schedule shall be deemed to be
disclosed on each Schedule, where relevant. Disclosure of an item in any
Schedule shall not be deemed to be an admission that such item is material.
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 Florida.
Purchaser has full corporate power and authority to execute and deliver this
Agreement, and the execution and delivery by Purchaser of this Agreement and
the consummation of the transactions contemplated hereby have been duly and
validly authorized by all necessary corporate action on the part of Purchaser,
and this Agreement constitutes the legal, valid and binding obligation of
Purchaser enforceable in accordance with its 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.
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.
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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 Sellers or their
Affiliates for a finder's fee, brokerage commission or other similar payment
based on an arrangement with Purchaser.
SECTION 4.7. ADEQUATE ASSURANCES REGARDING EXECUTORY CONTRACTS.
Purchaser is and will be capable of satisfying the conditions contained in
sections 365(b)(1)(c) and (f) of the Bankruptcy Code with respect to the
Executory Contracts.
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. Unless
otherwise ordered by the Bankruptcy Court sua sponte or on motion by a third
party, Seller shall not, except as required or expressly permitted pursuant to
the terms hereof, make any material change in the Fixed Assets or enter into
any transaction respecting the Purchased Assets, other than (a) sales of
Inventory in the ordinary course of the Business in the Cases or (b) other
transactions in the ordinary course of the Business in the Cases, in either
case consistent with Seller's past practices or as otherwise contemplated by
this Agreement.
SECTION 5.2. CONSENTS AND APPROVALS. Subject to Section 9.2 and
Seller's right to accept a higher or otherwise better offer, Seller shall use
commercially reasonable efforts to obtain (i) entry of the Preliminary Order
and the Sale and Assignment Order by the Bankruptcy Court and (ii) the
requisite consent or consents of the DIP Lenders to this Agreement and the
transactions contemplated hereby.
SECTION 5.3. 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
19
representatives' entry upon the Leased Property, or (ii) any and all other
activities undertaken by Purchaser or Purchaser's representatives with respect
to the Leased Property pursuant to this SECTION 5.3. The parties hereto agree
and acknowledge that the Purchaser's obligations hereunder shall not be subject
to any "due diligence" condition.
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. ASSIGNMENT OF CONTRACTS. Seller shall use
commercially reasonable efforts to obtain from the Bankruptcy Court an order
authorizing Seller, effective on the Closing Date, to assume, cure all
defaults, and assign the Assigned Contracts to Purchaser.
SECTION 5.7. SERVICES TO BE PROVIDED BY SELLER. On the
Closing Date, Seller shall enter into the Services Agreement with Purchaser,
pursuant to which Services Agreement, among other things, Purchaser shall be
licensed, for a limited time, to use the PIMS and a certain trademark or
trademarks owned by Seller.
SECTION 5.8. CURE OF DEFAULTS. Seller shall, on or prior to
the Closing Date: (i) cure any default in base rental payments arising under
the Lease and outstanding as of the Closing Date; and (ii) use commercially
reasonable efforts to cure any and all other defaults with respect to the
Assigned Contracts as provided in Section 365 of the Bankruptcy Code, so that
such Assigned Contracts may be assigned to Purchaser in accordance with the
provisions of section 365 of the Bankruptcy Code.
SECTION 5.9. BANKRUPTCY ACTIONS. No later than two (2) Business Days
after the date hereof, Seller will file a motion with an attached proposed
order, reasonably acceptable to Seller and Purchaser seeking approval of the
terms of this Agreement.
SECTION 5.10. AUDIT OF OPERATIONS AT BUSINESS LOCATION. No later than
forty-five (45) days following the Closing Date, Seller shall obtain from its
accounting firm an audit of the business operations relating exclusively to the
Business Location (separate from Seller's other business operations), and
including profit and loss statements and balance sheets and such other
documentation and financial information regarding Seller's operations related
to the Business Location so as to allow Purchaser to include in its Form 8K,
Form 8K-A and any registration statement filed by the Purchaser pursuant to the
Securities Act of 1933, the financial statements of the Business to the extent
required by the federal securities laws (the "Audit"). The cost of the audit
shall be borne equally by Seller and Purchaser. Within ten (10) days of
Purchaser's receipt of the auditors written report and opinion
20
regarding the completion of the Audit, Purchaser shall pay Seller in full any
and all costs payable by Purchaser arising in connection with the Audit.
SECTION 5.11. RESTRICTIONS AS TO EMPLOYEES. Seller acknowledges that
Purchaser assumes no responsibilities of Seller as to the Business Employees.
Seller represents and warrants to Purchaser that Seller will no longer have any
need for the Business Employees. With respect to each Business Employee for
which Purchaser makes an offer of employment, Seller covenants and agrees that
it shall not directly or indirectly attempt to entice or induce any such
Business Employee to either not accept the employment offer from Purchaser or
to leave such employment with Purchaser for a six-month period after the
Closing Date.
ARTICLE VI.
CERTAIN COVENANTS OF PURCHASER
SECTION 6.1. REASONABLE EFFORTS. 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.
SECTION 6.2. CONSENTS AND APPROVALS. Purchaser shall use commercially
reasonable efforts to (i) provide, at Seller's request, assistance in obtaining
the Preliminary Order and the Sale and Assignment Order, and (ii) assist Seller
in obtaining Bankruptcy Court approval for assignment of the Assigned
Contracts.
SECTION 6.3. ADEQUATE ASSURANCES REGARDING EXECUTORY CONTRACTS. With
respect to each Executory Contract, Purchaser shall make commercially
reasonable efforts to provide adequate assurance as required under the
Bankruptcy Code of the future performance of such Executory Contract by
Purchaser. Purchaser agrees that it will promptly take all actions as are
reasonably required by Seller to assist in obtaining the Bankruptcy Court's
entry of the Preliminary Order and the Sale and Assignment Order, such as
furnishing affidavits, non-confidential financial information or other
documents or information for filing with the Bankruptcy Court and making
Purchaser's employees and representatives available to testify before the
Bankruptcy Court, with respect to demonstrating adequate assurance of future
performance by Purchaser under the Executory Contracts.
SECTION 6.4. 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 damages arising out of a breach of this covenant.
SECTION 6.5. FURTHER ASSURANCES. Upon the request of Seller at any
time after the Closing Date, Purchaser shall forthwith execute and deliver such
documents as Seller or its counsel may reasonably request to effectuate the
purposes of this Agreement.
21
SECTION 6.6. 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) 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 Committed Financing set forth on
SCHEDULE 4.4 (it being understood that Seller shall be under no obligation to
obtain alternative financing for Purchaser). Additionally, Purchaser shall, no
later than the Break-up Fee Hearing Date, cause a Financially Responsible Party
acceptable to Seller to execute the Put and Call Agreement as contemplated by
SECTION 2.3(d) hereof.
SECTION 6.7. PAYMENT OF OUTSTANDING ACCOUNTS RECEIVABLE. (a) Purchaser
shall remit to Seller all amounts received by it after the Closing Date which
relate to accounts receivable for Inventory shipped from the Business Location
to any customer (other than Purchaser) prior to the Closing Date (the
"POST-CLOSING RECEIVABLES"), and Seller shall continue to collect all accounts
receivable sent to Seller's lock-box. In connection with Purchaser's obligation
to remit the PostClosing Receivables, for a period of one (1) year following
the Closing Date, Purchaser shall permit representatives of Seller to have
reasonable access during normal business hours to Purchaser's books, records,
or documents of or pertaining to Purchaser's receipt of the Post-Closing
Receivables.
(b) On or before the Closing Date, Purchaser shall be current on its
obligations to Seller under its existing terms with Seller. Thereafter, within
thirty (30) days after the Closing Date, Purchaser shall pay all amounts due
under its account with Seller, and Seller agrees, immediately upon receipt of
payment of the full amount due Seller hereunder and pursuant to all other
obligations (including all amounts owed to APS for In-transit Inventory), to
cancel the guaranties of Messrs. ▇▇▇▇▇▇ ▇. ▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇, ▇▇., and to
terminate all UCC filings of Seller with respect to Purchaser.
ARTICLE VII.
CONDITIONS TO SELLER'S OBLIGATIONS
The obligations of Seller to consummate the transactions contemplated
by this Agreement are subject to the satisfaction (unless waived in writing by
Seller upon consultation with, and with the consent of, the DIP Lenders) of
each of the following conditions on or prior to the Closing Date:
SECTION 7.1. REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Purchaser contained in this Agreement shall be true 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. Other than those obligations
of Purchaser that arise with respect to the Put and Call Agreement under
SECTION 2.3(d) hereof, Purchaser shall have performed and complied in all
material respects (and in all respects in the case of Article II hereof) with
all covenants and conditions to be performed or complied with by it on or prior
to the Closing Date. In the case of those obligations of Purchaser that arise
with respect to the Put and Call
22
Agreement under SECTION 2.3(d) hereof, Purchaser shall have caused a
Financially Responsible Party to enter into the Put and Call Agreement no later
than the Break-up Fee Hearing Date.
SECTION 7.3. CONSENTS. Other than the Bankruptcy Court's entry of the
Preliminary Order and the Sale and Assignment Order (which is addressed in
SECTION 7.6), (i) the consent of the lenders under the Revolving Credit, Term
Loan and Guaranty Agreement as required by the terms thereof, (ii) any consent
required in connection with the assignment to Purchaser of the Lease, and (iii)
any consents required in connection with the assignment of those other Assigned
Contracts listed in SCHEDULE 8.4 hereto shall have been duly obtained and shall
be in full force and effect on the Closing Date.
SECTION 7.4. PURCHASER'S CLOSING DELIVERIES AND OBLIGATIONS.
Purchaser shall have delivered all items and satisfied all obligations pursuant
to SECTION 9.1(c).
SECTION 7.5. 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
reasonable satisfaction of Seller.
SECTION 7.6. ENTRY OF THE PRELIMINARY ORDER AND THE SALE AND
ASSIGNMENT ORDER. (i) The Bankruptcy Court shall have entered the Preliminary
Order and the Sale and Assignment Order and (ii) the Preliminary Order and the
Sale and Assignment Order, as entered by the Bankruptcy Court, shall not be
stayed or modify the terms and conditions of this Agreement or the transactions
contemplated hereby in any way that adversely affects Seller.
SECTION 7.7. ASSIGNMENT OF CONTRACTS. The Bankruptcy Court shall have
entered the Sale and Assignment Order, or some additional order that expressly
authorizes the assumption and assignment of the Assigned Contracts, effective
on the Closing Date.
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
23
Agency or any other Person in which it is sought to restrain or prohibit the
transactions contemplated by this Agreement.
SECTION 8.4. CONSENTS. Other than obtaining the Preliminary Order and
the Sale and Assignment Order (which is addressed in SECTION 8.6), the
following consents shall have been duly obtained and shall be in full force and
effect on the Closing Date: (i) the consent of the lenders under the Revolving
Credit, Term Loan and Guaranty Agreement as required by the terms thereof; and,
as to clauses (x) and (y) below, to the extent required under Section 365 of
the Bankruptcy Code, (x) the consent, if any, required in connection with the
assignment to Purchaser of the Lease; and (y) the consents, if any, required in
connection with the assignment of those other Assigned Contracts listed in
SCHEDULE 8.4 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).
SECTION 8.6. ENTRY OF THE PRELIMINARY ORDER AND THE SALE AND
ASSIGNMENT ORDER. (i) The Bankruptcy Court shall have entered the Preliminary
Order and the Sale and Assignment Order and (ii) the Preliminary Order and the
Sale and Assignment Order, as entered by the Bankruptcy Court, shall not be
stayed or modify the terms and conditions of this Agreement or the transactions
contemplated hereby in any way that adversely affects Purchaser.
SECTION 8.7. ASSIGNMENT OF CONTRACTS. The Bankruptcy Court shall have
entered the Sale and Assignment Order, or some additional order that expressly
authorizes the assumption and assignment of the Assigned Contracts, effective
on the Closing Date. In addition, Seller shall cure all defaults under the
Assigned Contracts and pay all liabilities and obligations accrued prior to the
Closing Date.
ARTICLE IX.
THE CLOSING; BREAK-UP FEE; TERMINATION
SECTION 9.1. THE CLOSING.
(a) The Closing of the purchase and sale of the Purchased Assets (the
"CLOSING") shall be held on the first Business Day following the signing of the
Sale and Assignment Order (the "CLOSING DATE"). The Closing shall be held at
the New York offices of ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇. At the Closing, all of the
transactions provided for in ARTICLE II hereof shall be consummated on a
substantially concurrent basis.
(b) 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
24
Contracts being assigned to Purchaser, substantially in the form
attached hereto as EXHIBIT A;
(ii) a duly executed ▇▇▇▇ 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;
(iii) a duly executed Services Agreement, substantially in the
form attached hereto as EXHIBIT D;
(iv) A duly executed Assignment and Assumption of Lease
assigning the rights, title, interest, and obligations in, under, and
to the Lease to Purchaser, substantially in the form attached hereto
as EXHIBIT A;
(v) certified resolutions of the directors of Seller approving
and authorizing the transactions contemplated by this Agreement;
(vi) a certificate, executed by a duly authorized officer of
Seller, to the effect that all conditions to closing set forth in
SECTION 8.1 and SECTION 8.2 have been satisfied; and
(vii) 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,
including any assignment document required pursuant to SECTION
2.3(d).
(c) 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):
(viii) payment of the Purchase Price and other amounts in
accordance with the terms and conditions set forth in SECTION 2.3;
(ix) 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;
(x) a duly executed Assignment and Assumption of Lease accepting
the assignment of the rights, title, interest, and obligations in,
under, and to the Lease, substantially in the form attached hereto as
EXHIBIT A;
(xi) a duly executed Services Agreement, substantially in the
form attached hereto as EXHIBIT D;
25
(xii) certified resolutions of the directors of Purchaser
approving and authorizing the transactions contemplated by this
Agreement;
(xiii) 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; and
(xiv) such other instruments, documents, and considerations
which may be reasonably required by Buyer or Buyer's counsel to
effectuate the transaction contemplated by this Agreement.
SECTION 9.2. BREAK-UP FEE.
In the event that, prior to entry of the Sale and Assignment Order,
Seller shall: (a) accept an offer embodying a "HIGHER OR BETTER OFFER" (as
defined below) (the "ALTERNATIVE TRANSACTION") and terminate this Agreement
pursuant to SECTION 9.3(b); or (b) willfully fail to perform a covenant of this
Agreement or willfully breach the representations set forth in Article III
hereof and Purchaser terminates this Agreement pursuant to Section 9.3(h), then
Purchaser shall, without further court order, be entitled to receive, as
liquidated damages and not as a penalty, a break-up fee equal to $150,000 (the
"BREAK-UP FEE") in lieu of any and all damages Purchaser may suffer as a
result. Purchaser shall not be entitled to receive the Break-up Fee if: (i) the
Agreement is terminated pursuant to SECTION 9.3(a), 9.3(c), 9.3(d), 9.3(e)
9.3(f) OR 9.3(g) hereof; or (ii) the Bankruptcy Court has not approved the
terms and conditions of the provisions set forth in this SECTION 9.2. "HIGHER
OR BETTER OFFER" shall mean an offer to purchase substantially all of the
Purchased Assets for an amount greater than an amount equal to (i) the Purchase
Price plus (ii) $300,000, or an offer that is otherwise on terms and conditions
more favorable to Seller.
SECTION 9.3. TERMINATION. Anything in this Agreement to the contrary
notwithstanding, this Agreement and the transactions contemplated hereby may be
terminated in any of the following ways at any time before the Closing and in
no other manner:
(a) by mutual written consent of Purchaser and Seller (in the case of
Seller, upon consultation with, and with the consent of, the DIP Lenders); or
(b) by Seller, if Seller receives and accepts a Higher and Better
Offer; or
(c) 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 (10) Business Days after written notice by Seller;
(d) 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 five (5) Business Days after written notice by Purchaser.
26
(e) by Seller, if at any point up until and including the Closing
Date, Purchaser does not have available Committed Financing.
(f) in the event that Seller uses commercially reasonable efforts to
obtain the Preliminary Order and the Bankruptcy Court has not entered the
Preliminary Order by September 7, 1998, then, except as otherwise provided in
SECTION 9.4 hereof, Purchaser may terminate this Agreement without any
liability or obligation to Seller.
(g) in the event that Seller uses commercially reasonable efforts to
obtain the Sale and Assignment Order and the Bankruptcy Court has not entered
the Sale and Assignment Order by September 25, 1998, then, except as otherwise
provided in SECTION 9.4 hereof, this Agreement shall terminate without further
liability or obligation of either party.
(h) by Purchaser, if Seller has willfully breached in any material
respect any of its representations made in this Agreement or has willfully
violated or defaulted on any of its covenants or agreements in this Agreement,
which willful breach or default is not cured within five (5) Business Days
after written notice by Purchaser.
SECTION 9.4. EFFECTS OF TERMINATION.
(a) In the event this Agreement is terminated pursuant to SECTION 9.3,
except as provided in SECTION 9.2 or in this SECTION 9.4, all further
obligations of the parties hereunder shall terminate. If this Agreement is
terminated as permitted by SECTION 9.3, termination shall be without liability
of any party (or any stockholder, director, officer, employee, agent,
consultant or representative of such party) to any other party to this
Agreement; provided, however, that (i) if such termination shall result from
the willful failure of Purchaser to perform a covenant of this Agreement or
from a breach of its representations in SECTION 4.4, Purchaser shall be liable
for any and all Damages incurred or suffered by Seller as a result of such
failure to perform, (ii) if this Agreement is terminated by Seller pursuant to
SECTION 9.3(b), Seller shall pay to Purchaser, as its sole and exclusive
remedy, the Breakup Fee pursuant to the provisions of SECTION 9.2, (iii) if
such termination shall result from the willful failure of Seller to perform a
covenant of this Agreement or from a willful breach of its representations in
ARTICLE III hereof, Seller shall pay to Purchaser, as its sole and exclusive
remedy, the Break-up Fee pursuant to the provisions of SECTION 9.2 and (iv) if
this Agreement is terminated by Seller pursuant to SECTION 9.3(e), Purchaser
shall be liable for any and all Damages incurred or suffered by Seller as a
result of such failure to perform. The provisions of this SECTION 9.4 shall
survive any termination hereof pursuant to SECTION 9.3.
(b) The foregoing provisions of this SECTION 9.4 shall not limit the
rights of the parties hereto to seek specific performance of any obligation
hereunder of any other party.
(c) In the event that Seller terminates this Agreement pursuant to
SECTION 9.3(b), Seller shall use commercially reasonable efforts to cause the
Alternative Buyer to enter a commitment with Purchaser (the "ALTERNATIVE BUYER
SUPPLY COMMITMENT"), under which the Alternative Buyer shall sell to Purchaser
items of new automotive inventory from the Business Location in amounts
sufficient to meet the reasonable business needs of Purchaser, provided that
such reasonable business needs are
27
consistent with Purchaser's historical business needs, for a period of sixty
(60) days from the date of such termination. In the event that Purchaser and the
Alternative Buyer enter an Alternative Buyer Supply Commitment pursuant to this
SECTION 9.4(c); (i) Seller shall use commercially reasonable efforts to sell to
Purchaser items of new automotive inventory from one or more of Seller's
automotive parts distribution centers in amounts sufficient to meet the
reasonable business needs of Purchaser, provided that such reasonable business
needs are consistent with Purchaser's historical business needs, for a period
commencing on the date on which Seller terminates this Agreement pursuant to
SECTION 9.3(b) and terminating on the date on which Purchaser and the
Alternative Buyer enter into the Alternative Buyer Supply Commitment; and (ii)
following the date on which Purchaser and the Alternative Buyer enter into the
Alternative Buyer Supply Commitment, Seller shall have no liability to Purchaser
for any damages resulting from the failure of the Alternative Buyer to perform
under the Alternative Buyer Supply Commitment.
(d) In the event that Seller terminates this Agreement pursuant to
SECTION 9.3(b) and, despite commercially reasonable efforts, Seller is unable
to secure an Alternative Buyer Supply Commitment within three (3) Business Days
of the date of such termination, Seller hereby agrees to use commercially
reasonable efforts to sell to Purchaser items of new automotive inventory from
one or more of Seller's automotive parts distribution centers in amounts
sufficient to meet the reasonable business needs of Purchaser, provided that
such reasonable business needs are consistent with Purchaser's historical
business needs, for a period of sixty (60) days from the date of such
termination.
ARTICLE X.
TAXES
The parties hereto hereby covenant and agree as follows:
SECTION 10.1. TAXES RELATED TO PURCHASE OF ASSETS. The parties
recognize and acknowledge that, because the sale, transfer, assignment and
delivery of the Purchased Assets is being made in contemplation of Seller's
plan of reorganization, they may be exempt under section 1146(c) of the
Bankruptcy Code and the Sale and Assignment Order from all state and local
transfer, recording, stamp or other similar transfer taxes (collectively,
"TRANSACTION TAXES") that may be imposed by reason of the sale, transfer,
assignment and delivery of the Purchased Assets; provided, however, that if
Transaction Taxes are assessed for any reason, 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. PRORATION OF REAL AND PERSONAL PROPERTY TAXES. Personal
and real property taxes and assessments on the Purchased Assets shall be
prorated between Purchaser and Seller as of the Apportionment Date, provided,
however, that Seller shall not be responsible for any increased
28
assessments on real and personal property resulting from the transactions
contemplated hereby. All such prorations shall be allocated so that items
relating to time periods ending prior to the Closing Date shall be allocated to
Seller and items related to time periods beginning on or after the Closing Date
shall be allocated to Purchaser The amount of all such prorations shall be
settled and paid on the Closing Date unless, with respect to Seller's
obligations hereunder, otherwise ordered by the Bankruptcy Court or as
otherwise required by applicable Bankruptcy Law.
SECTION 10.3. COOPERATION 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. Without
making any other commitment regarding the Business Employees, Purchaser commits
to hire, as of the Closing Date, no fewer than twenty-five (25) of the current
Business Employees. Purchaser also states that its current intent is to 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.
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
29
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 Sellers and to Purchaser at the addresses
indicated below:
If to Purchaser: The Parts Source, Inc.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇
Facsimile No. ▇▇▇-▇▇▇-▇▇▇▇
With a copy (which shall not Holland & Knight
constitute notice) to: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
If to Seller: APS Holding Corporation
▇▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No. ▇▇▇-▇▇▇-▇▇▇▇
With a copy (which shall not ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
constitute notice) to: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇ III, Esq.
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
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. AMENDMENTS. The terms, provisions and conditions of
this Agreement may not be changed, modified or amended in any manner except by
an instrument in writing duly executed by each of the parties hereto.
SECTION 12.4. ASSIGNMENT. This Agreement is binding upon and inures to
the benefit of the successors and assigns of each party to this Agreement
(including any trustee appointed in respect of Seller under the Bankruptcy
Code), but no rights, obligations or liabilities under this Agreement may be
assigned by any party without the prior written consent of the other parties
hereto.
SECTION 12.5. ANNOUNCEMENTS. All press releases, notices to customers
and suppliers and other announcements prior to the Closing Date with respect to
this Agreement and the transactions
30
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 12.6. 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 12.7. ENTIRE AGREEMENT. This Agreement and the Ancillary
Agreements constitute the entire agreement between the parties hereto with
respect to the subject matter hereof and supersede and are in full substitution
for any and all prior 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 12.8. DESCRIPTIVE HEADINGS. The descriptive headings of the
several sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
SECTION 12.9. COUNTERPARTS. For the convenience of the parties, any
number of counterparts of this Agreement may be executed by any one or more
parties hereto, and each such executed counterpart shall be, and shall be
deemed to be, an original, but all of which shall constitute, and shall be
deemed to constitute, in the aggregate but one and the same instrument.
SECTION 12.10. GOVERNING LAW; JURISDICTION. This Agreement shall be
construed, performed and enforced in accordance with, and governed by, the laws
of the State of Delaware, without giving effect to conflict of laws principles
thereof. For so long as Seller is subject to the jurisdiction of the Bankruptcy
Court, the parties hereto irrevocably elect as the sole judicial forum for the
adjudication of any matters arising under or in connection with this Agreement,
and consent to the jurisdiction of, the Bankruptcy Court. After Seller is no
longer subject to the jurisdiction of the Bankruptcy Court, the parties hereto
irrevocably elect as the sole judicial forum for the adjudication of any
matters arising under or in connection with this Agreement, and consent to the
jurisdiction of, the courts of the County of Newcastle, State of Delaware or of
the United States of America for the District of Delaware.
SECTION 12.11. CONSTRUCTION. The language used in this Agreement will
be deemed to be the language chosen by the parties to express their mutual
intent, and no rule of strict construction will be applied against any party.
Any references to any federal, state, local or foreign statute or law will also
refer to all rules and regulations promulgated thereunder, unless the context
requires otherwise. Unless the context otherwise requires: (a) a term has the
meaning assigned to it by this Agreement; (b) an accounting term not otherwise
defined has the meaning assigned to by GAAP; (c) the word "or" is not
exclusive; (d) the words "include", "includes" and "including" shall be deemed
31
to be followed by the words "without limitation"; (e) words in the singular
include the plural and in the plural include the singular; (f) provisions apply
to successive events and transactions; and (g) "$" means the currency of the
United States of America.
SECTION 12.12. SEVERABILITY. In the event that any one or more of the
provisions contained in this Agreement or in any other instrument referred to
herein shall, for any reason, be held to be invalid, illegal or unenforceable
in any respect, then to the maximum extent permitted by law, such invalidity,
illegality or unenforceability shall not affect any other 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 12.13. CONFIDENTIALITY. Seller and Purchaser agree to keep, and
to cause each of their affiliates, directors, officers, and employees to keep,
confidential any and all confidential information of the other party that either
receives in 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.
IN WITNESS WHEREOF, Seller and Purchaser have executed and delivered
this Agreement as of the day and year first written above.
A.P.S., INC.
BY: ___________________________
Name: ___________________________
Title: ___________________________
THE PARTS SOURCE, INC.
BY: ___________________________
Name: ___________________________
Title: ___________________________
