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EXHIBIT 10.4
ASSET PURCHASE AGREEMENT
THIS AGREEMENT is entered into this 25th day of January, 1999, by and
between Xxxx Xxxxxx Ford, Inc., a Texas corporation ("Seller"), and Delaware
Acquisitions - F, L.L.C., a Delaware limited liability company ("Purchaser").
EXPLANATORY STATEMENT
WHEREAS, Seller is presently a party to a Sales and Service Agreement
with Ford Motor Company ("Ford") ("Manufacturer"); which provide for the sale
and service of Ford vehicles ("Dealership") at 0000 X. 00xx Xxxxxx, Xxxxxxx,
Xxxxx (the "Dealership Location"); and
WHEREAS, Purchaser wishes to acquire substantially all of the assets of
Seller for the purpose of succeeding Seller as the authorized Ford dealer at the
Dealership Location.
WHEREAS, the Seller is one of six (6) affiliated companies (the
"Companies") that own dealerships that sell new vehicles manufactured by various
manufacturers;
WHEREAS, the Purchaser and affiliates has made an offer to buy
substantially all of the assets of the Companies under the terms and conditions
set forth herein;
WHEREAS, the Companies are dependent on each other for management
skills, training, "best practices," and economies of scale, and the Seller could
not operate its business effectively without the benefits it receives from the
other Companies;
WHEREAS, while the parties have allocated the value of the goodwill
among the Companies based upon an objective formula, the effect of each Company
on the combined goodwill of all of the Companies as a group is significantly
greater than the goodwill allocated to each Company separately;
WHEREAS, the Seller would not sell the Assets to Purchaser unless
Purchaser continues the existing relationships among the Companies and Purchaser
and affiliates buy substantially all of the assets of the Companies;
WHEREAS, the Purchaser's agreement to purchase the assets of Seller is
contingent upon Purchaser's and affiliates ability to acquire substantially all
of the assets of the Companies;
WHEREAS, it is the expectation of both Seller and Purchaser and a
material term of this Agreement that substantially all of the assets of all of
the Companies will be controlled by one entity and their names, local
management, employees and goodwill be preserved;
WHEREAS, Seller is presently a party to a franchise agreement with NAPA
which provides for the sale of NAPA parts, accessories, paint and automotive
products in Lubbock, Texas;
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NOW, THEREFORE, in consideration of the above premises and the mutual
promises set forth in this Agreement, the receipt and sufficiency of which are
hereby acknowledged, the Seller and Purchaser hereby agree as follows and each
of the Companies agrees as set forth in separate agreements (the "Related
Agreements") of even date herewith, with each purchaser under each Related
Agreement, all of which are conditioned on the purchase by Purchaser or
affiliates of substantially all of the assets of the Companies, and other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereby agree as follows:
1. Xxxxxxx Money. Purchaser has delivered to Seller the Xxxxxxx Money
deposit of Fifty Thousand and No/100 Dollars ($50,000.00). If the transactions
contemplated by this Agreement are consummated, the Xxxxxxx Money shall be
delivered to Seller at Closing (as hereinafter defined) and applied against the
Purchase Price. If sale fails to close for any reason other than Purchaser's
default, the Xxxxxxx Money shall be refunded to Purchaser. If Purchaser elects
not to close for any reason other than: (i) Seller's default; or (ii) failure to
satisfy the approvals required in Section 4.1, below; the Xxxxxxx Money shall be
paid to Seller as full and complete liquidated damages in full relief and
discharge of any and all obligations of Purchaser hereunder. Upon execution of
this Agreement, Purchaser has delivered to Seller, and Seller acknowledges
receipt of, One Hundred and no/100 Dollars ($100.00) (the "Independent
Consideration"), as consideration for Purchaser's right to purchase the Assets
and for Seller's execution, delivery and performance of this Agreement. The
Independent Consideration is in addition to and independent of any other
consideration or payment provided for in this Agreement, is non-refundable and
shall be retained by Seller notwithstanding any other provision of this
Agreement.
2. Purchase and Sale. Subject to the terms and conditions of this
Agreement, Seller agrees to sell and deliver to Purchaser, and Purchaser agrees
to purchase and take from Seller certain assets, property rights, tangible and
intangible, of the Dealership more specifically described below ("Assets"), all
of which are presently being used in the operation of the Dealership, for the
purpose of succeeding the Seller as the authorized Ford dealer at the Dealership
Location.
2.1.Purchase Price. The purchase price for the Assets to be sold and
transferred by Seller to Purchaser shall be the total of the items listed in
Sections 2.1.1. through 2.1.11. (collectively, the "Purchase Price"):
2.1.1. Purchaser agrees to purchase all new, unused and undamaged
current model year motor vehicles with less than Six Thousand
(6,000) miles in Seller's inventory at the Closing Date (as
hereinafter defined). Vehicles with more than Six Thousand
(6,000) miles shall be considered used and sold pursuant to
the terms of Section 2.1.2, below. Purchaser shall pay factory
invoice, less: holdback, floor plan assistance or interest
credits, model year change-over allowances, full fuel tank
reimbursement, or other manufacturer allowances or incentives
paid or payable to Seller. Vehicles in inventory which
previously have been delivered to a customer together with the
Manufacturer's Certificate of Origin ("MCO") (e.g. "unwinds"
or "back-outs") shall be considered used cars and sold
pursuant to the terms of section 2.1.2, below. Seller will
furnish proper documentation (including an "R.D.R. card",
"sale card," or comparable documentation) to Purchaser so that
Purchaser
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may subsequently sell, transfer and register such vehicles as
new vehicles. Seller shall disclose all damage as well as any
repairs made to any vehicle. Any vehicle previously damaged,
even if repaired, if the cost of repairing such damage exceeds
or has exceeded Five Hundred Dollars ($500), shall be
considered used cars and sold pursuant to the terms of section
2.1.2, below. Installed accessories shall be purchased at
actual dealer cost, except Purchaser shall not pay for
rust-proofing, undercoating, scotch-guarding, non-Manufacturer
alarm systems, interrupt systems, theft prevention devices and
similar dealer additions. A list of new vehicles together with
the information to calculate the Purchase Price, will be
provided to Purchaser at least Five (5) days prior to the
Closing Date.
2.1.2. Purchaser will purchase all of the used vehicle inventory of
Seller, which are less than Seventy Five (75) days old, at the
book value of the vehicles, as reflected on Seller's books,
less the "Pack" added to the book value of the vehicles by
Seller. Purchaser will purchase all of the used vehicle
inventory of Seller, which is more than Seventy Five (75) days
old, at the current wholesale market value of the vehicles as
determined by the Purchaser, provided that Seller may retain
any of said used vehicles if Seller is not satisfied with the
valuation established. Seller shall deliver titles to all used
vehicles within One Hundred Twenty (120) days after the
Closing Date. Seller guarantees the delivery of the used car
titles to Purchaser. If Seller is unable to deliver the title
to a vehicle within One Hundred Twenty (120) days after the
Closing Date, Seller will repurchase the vehicle.
2.1.3. Purchaser agrees to purchase Seller's actual verifiable
inventory of new, unused, undamaged and non-obsolete
Manufacturer's parts and accessories. Purchase Price will be
those dealer prices in accordance with the Manufacturer's
Price Schedules in effect on the Closing Date. Seller shall
assign to Purchaser the termination rights provided by each
Manufacturer's Sales and Service Agreement, to the extent same
exist or are assignable. In the alternative, Seller agrees to
allow Purchaser to exercise any and all Seller's termination
rights in Seller's name.
2.1.4. Purchaser agrees to purchase Seller's actual verifiable
inventory of after-market parts and accessories. The Purchase
Price will be the dealer's actual cost.
2.1.5. Purchaser agrees to purchase Seller's work in process for an
amount equal to Seller's actual cost for sublet repairs and
Seller's internal rate for labor and parts, as reflected on
outstanding repair orders as of the Closing Date.
2.1.6. Purchaser shall purchase all oil and grease in Seller's
possession at Seller's cost.
2.1.7. Purchaser shall purchase from Seller all of the fixed assets
including all machinery and shop equipment, special tools,
parts and accessories equipment, furniture and fixtures, and
company vehicles. Purchaser shall purchase the fixed assets of
Seller listed in SCHEDULE 2.1 ("Fixed Asset List") attached
hereto, for Two Hundred Ninety Nine Thousand Four Hundred
Thirty Two and no/100 Dollars ($299,432.00). The Fixed Asset
List shall be deemed to include all fixed assets
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located at the Dealership Location, even if omitted from
SCHEDULE 2.1, unless said asset is specifically listed on
SCHEDULE 2.2 ("Retained Assets") attached hereto, in which
case the asset shall be retained by Seller. Seller agrees to
provide Purchaser with SCHEDULES 2.1 and SCHEDULE 2.2 for
attachment hereto, on or before March 15, 1999.
2.1.8. Seller will transfer to Purchaser all parts catalogues,
service manuals, films, videos, instructional materials,
vehicle literature, supplies and other assets used in the
sales or service of Ford vehicles and used vehicles, and
Hillcrest Country Club stock ("Other Assets") (specifically
excluding Retained Assets") whether or not such assets are
considered fixed assets or are reported as such on Seller's
books and records or listed on the attached SCHEDULE 2.1.
Purchaser shall purchase the Other Assets of Seller for Five
Thousand and no/100 Dollars ($5,000.00).
2.1.9. Purchaser will assume Seller's obligations under the lease
agreements and contracts listed on the attached SCHEDULE 2.4
("Leased Assets"). Purchaser will also assume the obligations
for the computer, telephone, copier, and manufacturer required
leased equipment. In addition Purchaser will assume other
leases not otherwise described above with a total monthly
obligation not to exceed One Thousand and no/100 Dollars
($1,000.00) per month, in the aggregate. A copy of the lease
agreements and contract listed on SCHEDULE 2.4, together with
any amendments thereto, shall be delivered to Purchaser as
soon as practical after execution of this Agreement. Seller
agrees to provide Purchaser with SCHEDULE 2.4 for attachment
hereto, on or before March 15, 1999.
2.1.10. Purchaser shall receive all contract rights, warranties, and
intangible assets, including the right to use Seller's
telephone numbers. Purchaser shall receive all sales and
service files and parts records, customer lists, computer
files containing sales and service files, parts records and
customer lists and all other information and documents which
are necessary and/or which might be useful in the furtherance
of the dealership business (Seller shall retain its employee
personnel files, general ledgers, sub-ledgers, canceled
checks, journals, vouchers, tax returns and other accounting
ledgers.). Purchaser agrees to pay Seller for the goodwill,
the sum of Sixteen Million Six Hundred Eighty Thousand Five
Hundred Six and No/100 Dollars ($16,680,506.00).
2.1.11. Purchaser agrees to purchase Seller's actual verifiable
inventory of NAPA parts, accessories, paint and automotive
products. The Purchase Price will be the Seller's actual cost.
2.2. Liens and Encumbrances. All Assets will be transferred free of any
liens or encumbrances, except for the obligations which Purchaser agrees to
assume, as listed on the attached Schedule 2.3 ("Assumed Liabilities").
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3. Supplemental Agreements.
3.1. Maintenance of Business Prior to Closing. Seller agrees that prior
to Closing it shall operate its business in a manner consistent with prior
business practice. In connection therewith, the parties agree that Seller may
dealer trade vehicles for similar models, but Seller shall not liquidate or
otherwise dispose of any of its new vehicles other than in the ordinary course
of business to retail buyers. Seller agrees to maintain its advertising
expenditures and activities commensurate with prior business practices. Seller
shall not advertise a "Going Out of Business" sale. Seller agrees to pay (or
contest, if disputed) Seller's trade payables, including Seller's telephone and
yellow pages bills, through the Closing Date. All revenue and expenses prior to
Closing shall be the benefit and burden of Seller.
3.2. Seller's Name. Seller shall assign all rights to the name "Xxxx
Xxxxxx Ford" to Purchaser. Purchaser may not assign this Agreement or any right
hereunder to any unrelated third party. Seller values its name and reputation in
the community, has investigated Group 1 and its management and believes that
Group 1 and Purchaser will preserve and carry forward the name and reputation
that Seller, and its primary owner, Xxxx Xxxxxx, whose name is used in the
business, has established in its community for many years. Purchaser and Group 1
agree that it will not assign this Agreement or any rights hereunder to any
unrelated third party, and in the event that substantially all of the assets of
the Dealership or the equity ownership of the Dealership are acquired by any
party other than Group 1 or an entity controlled by Group 1, the name "Xxxxxx"
shall immediately cease to be used in the promotion and name of the dealership
so acquired by the third party. In the event there is an adverse change in the
operations to the extent that the integrity of the name Xxxx Xxxxxx is impacted,
Seller shall have the opportunity to request the Board of Directors of Group 1
("Board"), that the name "Xxxxxx" be removed from the dealership within a
reasonable period of time. After due consideration of the facts and
circumstances of this request, the decision of the Board will be final.
3.3. Prepaids. Seller shall retain all prepaid accounts, provided
however, that Seller and Purchaser may review the prepaid accounts and transfer
any such prepaid accounts as they determine mutually beneficial, at the amount
agreed to by them.
3.4. Liabilities. Purchaser is not assuming the floor plan liabilities
of Seller. As of the Closing Date, Seller and Purchaser shall obtain the
complete release and discharge of the floor plan liability secured by liens on
vehicles or other assets conveyed under this Agreement. Purchaser is not
assuming any other liabilities of Seller, except as otherwise provided herein.
3.5. Retail Orders. On the Closing Date, Seller shall turn over or
assign by proper and appropriate instruments to Purchaser all unfulfilled retail
orders and customer deposits attributable thereto, held by Seller as of the
Closing Date. Purchaser shall assume such retail orders and responsibility to
the customer for making future delivery of any vehicle covered by the orders.
3.6. Allocation of Purchase Price. Purchaser and Seller agree that the
purchase price is allocated for the purposes of Section 1060 of the Internal
Revenue Code 1986, as amended, in accordance with the value set forth for each
class of asset and for each corporation, as listed on
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the attached EXHIBIT "A" ("Allocation of Purchase Price"). The parties hereto
agree that each of them will timely file with the Internal Revenue Service Form
8594 and that all tax returns or other tax information any party hereto files or
cause to be filed with any governmental agency including the Internal Revenue
Service, will be prepared in a manner that is consistent with this section.
3.7. Property Taxes. All real and personal property taxes on property
owned or leased by Seller, which are not covered by the VIT (as hereinafter
defined), for the current year shall be prorated to the Closing Date. If the
amount of property taxes for the current tax year has not been fixed by the
Closing Date, the proration of such taxes shall be based upon the preceding tax
year's assessment. Purchaser shall receive the prorated taxes and shall pay the
full tax amount when due. Purchaser shall collect and remit the "vehicle
inventory tax" under Section 23.122 of the Texas Property Tax Code ("VIT") on
each vehicle sold by Purchaser after the Closing Date through December 31, 1999.
All such remittances shall be applied to the 1999 VIT liability of the
Dealership. If the aggregate of all remittances is not sufficient to fully
discharge Dealership's liability, Seller shall be liable for the balance of tax
owing.
3.8. Information Releases. Purchaser and the Seller will jointly
prepare and issue all releases of information relating to the sale. Subject to
the prior sentence, if inquiries are made by any person with respect to any
transaction contemplated by this Agreement, Seller and Purchaser will consult
each other prior to responding to such inquiries.
3.9. Business Records. Seller shall not copy or remove any of the
records described in Section 2.10 from the dealership premises prior to the
Closing Date and shall return any of such records previously removed. Seller
agrees that such information is extremely important to Purchaser and promises to
retain such information in strict confidence and will not disclose any such
information to Purchaser's competitors or other parties. Purchaser agrees that
Purchaser will retain such information for a period not less than seven (7)
years after the Closing Date and that Seller and Seller's representatives may
have access to review and copy such information during Purchaser's regular
business hours if such information is necessary for Seller's business purposes.
Purchaser and its representatives may have access to review and copy any records
retained by Seller during Seller's regular business hours if such information is
necessary in Purchaser's operation of the dealership business after Closing.
Seller agrees to remove all retained records from the Dealership Location with
thirty (30) days after the Closing Date. If Purchaser wishes to destroy any of
the business records transferred by Seller, within Seven (7) years of the
Closing Date, Purchaser shall notify Seller prior to such destruction, in order
that Seller may retain such records.
3.10. Access of Purchaser. During the period from the date of this
Agreement to the Closing Date, Purchaser shall have full and free access to the
offices, property, records, files, books of account and tax returns of Seller
insofar as they relate to the Dealership business (save and except employee
files), through Seller's employees, independent public accountants and outside
consultants; provided however, that such access shall be conducted at a mutually
convenient time to be determined by Purchaser and Seller, during normal business
hours and in a manner that does not unreasonably interfere with Seller's normal
operations and employee relations.
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3.11. Confidentiality. Group 1, Purchaser, Seller and Stockholders
agree, and they agree to cause their officers, directors, employees,
representatives and consultants, to hold in confidence and not to disclose to
others for any reason whatsoever, any and all non-public information received by
it or its representatives in connection with this transaction, including but not
limited to all terms, conditions and agreements related to this transaction,
except (i) as required by law; and (ii) for disclosure to officers, directors,
employees, attorneys, accountants and other representatives of Seller as
necessary in connection with the transactions contemplated hereby or as
necessary to the operation of Seller's business. In the event the transactions
contemplated by this Agreement are not consummated, Seller will return all
non-public documents and other material obtained from Purchaser or its
representatives in connection with the transactions contemplated hereby or
certify to Purchaser that all such information has been destroyed. Neither party
will make a public statement without the other parties consent.
3.12. Post Closing Accounting. Purchaser and Seller agree that if
subsequent to Closing either party receives any funds (including credits on
accounts) to which the other party is entitled, such party will immediately pay
such amounts to the other party. Purchaser will assist Seller with the
collection of Seller's receivables. Purchaser and Seller will cooperate to
pro-rate all xxxxxxxx received by either party, which include charges applicable
to both Purchaser and Seller. Purchaser further agrees: (i) that if subsequent
to Closing Purchaser receives any amounts of money to which any Seller is
entitled, such as, but not limited to, manufacturer payments relative to
warranty work or holdback, Purchaser will immediately make payment to such
Seller of any such amount; and (ii) to assist each Seller in collecting any
amounts due and owing to such Seller from the applicable manufacturer, such as
for warranty work or holdbacks.
3.13. Termination. Seller, at no further cost or expense, may terminate
this Agreement if at any time after the date first written above and prior to
the Closing Date, the closing price of the Group 1 Automotive, Inc. ("Group 1")
Common Stock on the New York Stock Exchange is less than Five and no/100 Dollars
($5.00) per share (as adjusted for splits).
3.14. Finance Reserves. Purchaser shall receive all finance reserves,
if any, and shall assume responsibility for all chargebacks of unearned finance
income, vehicle service contracts and credit life insurance, other than
chargebacks from default or early payoff prior to the customer making three (3)
regular installment payments under the agreement.
3.15. Stock Options. An integral consideration for this Agreement and
the Related Agreements is the post-closing acceptance of non-dealer ownership of
the employer by select employees of Seller. To aid in this employee acceptance
of the change in ownership of employer, Group 1 agrees to make available to
selected employees options to acquire Group 1 common stock on the same basis as
employees of its other dealerships. The numbers of such options will be
consistent with the numbers of options awarded to other similarly sized Group 1
owned dealerships. Nothing herein shall be construed to mean that any employee
is entitled to, or will receive, any stock options.
3.16. Expenses. Regardless of whether the transaction contemplated
herein is consummated, all costs and expenses in connection with this Agreement
and the transactions
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contemplated hereby incurred by Purchaser shall be paid by Purchaser and all
such costs and expenses incurred by Sellers and Stockholders shall be paid by
the Sellers; provided, however, that Group 1 shall pay for all costs associated
with (i) preparation of the HSR Act filing and the HSR filing fees; and (ii)
application and approval process with the Manufacturer.
3.17. Right of First Refusal. If within Ten (10) years of the Closing
Date, Purchaser agrees to transfer the Sales and Service Agreement for Ford
("Franchise") to an independent third party (an entity not owned or controlled
by Group 1), in a transaction that is not part of the Manufacturer's channelling
or alignment programs (e.g. "Project 2000"), any such agreement shall be subject
to the terms and provisions of this Section 3.17 and Seller shall have the right
of first refusal upon such assets transferred. If Purchaser enters into an
agreement to transfer the Franchise ("Transfer Agreement") in a transaction
which is subject to this right of first refusal, then Purchaser shall deliver a
copy of the Transfer Agreement together with the financial and operating
information provided to the prospective transferee, to Seller ("Notice"). Seller
will have thirty (30) days from the Notice date to exercise Seller's right to
assume the prospective transferee's position under the Transfer Agreement. If
Seller exercises the right of first refusal, Seller must comply with all terms,
conditions and covenants of the Transfer Agreement. If Seller does not respond
to the Notice within thirty (30) days it will be deemed refused by Seller. If
Seller does not exercise the right of first refusal, then Purchaser may complete
the transaction contemplated in the Transfer Agreement, upon the terms and
conditions contained therein. If Purchaser does not close the transaction
contemplated in the Transfer Agreement within One Hundred Eighty (180) days,
then Seller's right of first refusal on such assets shall be reinstated.
3.18. Benefit Plans. Group 1 shall cause the employee benefit plans and
programs maintained after the Closing Date by Group 1 and Purchaser to recognize
each current employee's years of service and level of seniority prior to the
Closing Date with Seller and their affiliates for purposes of terms of
employment and eligibility, vesting, and benefit determination under such plans
and programs (other than benefit accruals under any defined benefit pension
plan).
4. Conditions to Sale.
4.1. Conditions Precedent to Obligations of Purchaser. The obligation
of Purchaser with respect to actions to be taken by Purchaser at or before the
Closing are subject to the satisfaction, or the written waiver by the Purchaser
of each of the following conditions:
4.1.1. Approval of Purchaser, at Purchaser's sole cost and expense,
for a new Sales and Service Agreement for Ford.
4.1.2. Approval for and receipt by Purchaser of all appropriate
licenses and permits for operation of the Dealership at the
Dealership Location, including but not limited to approval by
the Motor Vehicle Division of the Texas Department of
Transportation as the franchise dealer for Ford at the
Dealership Location.
4.1.3. All representations and warranties of Seller as set forth
herein are true and accurate as of the Closing Date and Seller
has performed or is prepared to perform at
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Closing, all of its obligations, covenants and agreements
hereunder to be performed prior to or at Closing.
4.1.4. Delivery of the documents, certificates and resolutions
described in Section 5.2, in form and substance reasonably
satisfactory to Purchaser.
4.1.5. Receipt of a Phase I environmental survey, and any Phase II
procedures recommended by the survey firm, at Seller's
expense, prepared by a firm approved in writing by Purchaser,
showing no environmental problems or recommended actions, (as
determined by Purchaser in its discretion).
4.1.6. Execution and delivery of a lease agreement in the form
attached hereto as Exhibit "B" for the Dealership Location
("Lease Agreement").
4.1.7. Execution and delivery of an employment agreement by and
between Group 1 and Xxxxxxx X. Xxxxxxx, and Group 1 and Xxxx
Xxxxxx in the form attached hereto as Exhibit "C1" and Exhibit
"C2" (respectively "Employment Agreements").
4.1.8. Closing of the transactions contemplated in the Related
Agreements pursuant to the terms of the Related Agreements.
4.1.9. Receipt by Purchaser, at Seller's expense, of a Lessee's Title
Insurance Commitment, issued by the Title Company, approved by
Purchaser, subject only to the Permitted Exceptions, as
described on SCHEDULE 4.1 ("Permitted Title Exceptions").
4.1.10. Receipt by Purchaser, at Seller's expense, of a current ALTA
survey to ACSM urban class standards, of the Property showing
the location of all of the Improvements, prepared by a
licensed surveyor, approved by Purchaser.
4.1.11. The applicable waiting period under the HSR Act with respect
to the transactions contemplated by this Agreement shall have
expired or been terminated.
4.1.12. Purchaser shall have received the opinion of Seller's legal
counsel, dated the Closing Date and satisfactory in form and
substance to Purchaser and its counsel, as to the following
items, with customary qualifications and in reliance upon
documents customarily relied upon in giving such opinions.
Such opinion may be limited to matters governed by the federal
laws of the United States and the laws of the state of Texas.
(a) Due incorporation and existence of Seller and the
corporate power of Seller to execute, deliver and
perform the Asset Purchase Agreement.
(b) Due authorization, execution and delivery of the
Asset Purchase Agreement, Xxxx of Sale and Lease (as
to the Stockholders of Seller and entities controlled
by them which are party to the Lease).
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(c) Binding effect of the Asset Purchase Agreement and
Bills of Sale.
(d) Absence of any violation of the charter or by-laws of
Seller by reason of the execution, delivery or
performance of Asset Purchase Agreement.
4.1.13. Closing of the transactions contemplated in the Related
Agreements.
4.1.14. Approval of Purchaser, for a new NAPA franchise.
4.2. Conditions Precedent to Obligations of Seller. The obligation of
Seller with respect to actions to be taken by Seller at or before the Closing
are subject to the satisfaction, or the written waiver by the Seller of each of
the following conditions:
4.2.1. All representations and warranties of Purchaser as set forth
herein are true and accurate as of the Closing Date and
Purchaser has performed all of its obligations, covenants and
agreements hereunder to be performed prior to or at Closing.
4.2.2. Execution and delivery of the Lease Agreement and related
lease guaranty in the form attached hereto as Exhibit "D"
("Lease Guaranty").
4.2.3. Execution and delivery of the Employment Agreements.
4.2.4. Closing of the transactions contemplated in the Related
Agreements pursuant to the terms of the Related Agreements.
4.2.5. Seller shall have received the opinion of Purchaser's legal
counsel, as of the Closing Date and satisfactory in form and
substance to Sellers, Stockholders and their counsel, as to
the following items, with customary qualifications and in
reliance upon documents customarily relied upon in giving such
opinions. Such opinion may be limited to matters governed by
the federal laws of the United States and the laws of the
states of Delaware and Texas.
(a) Due incorporation and existence of Purchaser and the
power of to execute, deliver and perform the Asset
Purchase Agreement.
(b) Due authorization, execution and delivery of the
Asset Purchase Agreement, Lease, and related Lease
Guaranty agreement.
(c) Binding effect of the Asset Purchase Agreement,
Lease, and Lease Guarantee agreements, with certain
qualifications.
(d) Absence of any violation of the articles of
organization, operating agreement of Purchaser, or
the charter or by-laws of Purchaser by reason of the
execution, delivery or performance of Asset Purchase
Agreement.
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(e) Due incorporation and existence of Group 1, and the
shares of Group 1 Common Stock have been duly
authorized, and when issued in accordance with the
terms of the Asset Purchase Agreement, will be fully
paid and non-assessable.
4.2.6. Closing of the transactions contemplated in the Related
Agreements.
5. Closing.
5.1. Time of Closing. Unless otherwise agreed to in writing by the
parties, Closing shall take place in Lubbock, Texas, on the first Monday
following the receipt of the approvals required in Section 4.1.1, 4.1.2, and
4.1.11., above, and receipt of the approvals required in Section 4.1.1, 4.1.2
and 4.1.11 of each of the Related Agreements ("Closing Date"). Provided however,
that if the Closing has not taken place by September 30, 1999, then Seller or
Purchaser at no further cost or expense as a result of the act of terminating,
may terminate this Agreement at any time by written notice to the other party.
5.2. Seller's Actions at Closing. At Closing, Seller shall deliver to
Purchaser at Seller's sole cost and expense, such bills of sales, endorsements,
assignments, and other good and sufficient instruments of conveyance and
transfer as provided for herein, and any other instruments in form and substance
acceptable to Purchaser as shall be necessary to vest effective in Purchaser all
right, title, and interest in and to the Assets, free and clear of all liens,
charges, encumbrances, pledges or claims of any nature (except as provided
herein), including without limitation, the following:
5.2.1. General bills of sale fully and properly executed by Seller
vesting in Purchaser good and marketable title to the Assets,
in the form attached hereto as Exhibit "E" ("Xxxx of Sale").
5.2.2. Fully and properly executed transfers of MCOs for all vehicles
transferred to Purchaser.
5.2.3. Fully and properly executed transfers of title for all company
vehicles and used vehicles, subject to the provisions of
Section 2.1.2.
5.2.4. A certificate executed by Seller's president in his corporate
and not in his individual capacity, certifying that, as of the
Closing Date, all of the representations and warranties of
Seller are true and correct in all respects and that each and
every covenant and agreement to be performed by Seller prior
to or as of the Closing Date pursuant to this agreement has
been performed in all respects.
5.2.5. A certificate of corporate existence in good standing for
Seller from the State of Texas dated within thirty (30) days
of the Closing Date.
5.2.6. A copy of resolutions duly adopted by Seller authorizing and
approving Seller's performance of the transaction contemplated
herein and the execution and delivery
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of all documents in connection with such transactions,
certified by the secretary of Seller, as true in full force as
of the Closing Date.
5.2.7. Possession of the Assets.
5.2.8. Such other instruments and documents as Purchaser may
reasonably consider necessary to effect the transactions
contemplated herein.
5.2.9. Executed Lease Agreement.
5.2.10. Executed Employment Agreements.
5.2.11. Opinion of Seller's counsel referred to in Section 4.1.13.
5.2.12. Such other instruments and documents as Purchaser may
reasonably consider necessary to effect the transactions
contemplated herein.
5.3. Actions of Purchaser at Closing. At the Closing, Purchaser shall
deliver the following:
5.3.1. Payment for the Purchase Price of the Assets less the Xxxxxxx
Money, and release any claim to the Xxxxxxx Money ("Closing
Payment"), as follows:
(a) The number of shares of Group 1 Common Stock equal to
(x) Five Million and no/100 Dollars ($5,000,000.00),
divided by (y) the average closing price of the Group
1 Common Stock on the New York Stock Exchange for the
Five (5) consecutive trading days ended on the third
trading day prior to the Closing Date. The stock
certificates representing the Group 1 Common Stock
shall be delivered to the Stockholders within Five
(5) business days after the Closing Date. No
fractional shares of Group 1 Common Stock will be
issued, but in lieu thereof, Seller shall receive
cash for any fractional shares.
(b) Immediately available funds to Seller in the amount
of Purchase Price less: (i) the Xxxxxxx Money, and
(ii) Five Million and no/100 Dollars ($5,000,000.00),
shall be delivered (or wired) to Seller on the
Closing Date.
5.3.2. A copy of resolutions duly adopted by Purchaser authorizing
and approving Purchaser's performance of the transactions
contemplated herein and the execution and delivery of all
documents in connection with such transactions, certified by
the secretary of Purchaser, as true in full force as of the
Closing Date.
5.3.3. A certificate executed by Purchaser's Manager certifying that,
as of the Closing Date, all of the representations and
warranties of Purchaser are true and correct in all respects
and that each and every covenant and agreement to be performed
by Purchaser prior to or as of the Closing Date pursuant to
this Agreement has been performed in all respects.
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5.3.4. A certificate of existence for Purchaser from the State of
Delaware.
5.3.5. Executed Lease Agreement and Lease Guaranty.
5.3.6. Executed Employment Agreements.
5.3.7. Opinion of Purchaser's counsel referred to in Section 4.2.5.
5.3.8. Such other instruments and documents as Purchaser may
reasonably consider necessary to effect the transactions
contemplated herein.
6. Representations and Warranties. All representations and warranties
made herein by Purchaser and Seller shall be continuing and shall be true and
correct on and as of the Closing Date with the same force and effect as if made
at that time, and shall not be affected by any investigation, verification, or
approval by any party hereto or by anyone acting on behalf of any such party.
6.1. Purchaser. Purchaser represents and warrants to Seller as follows:
6.1.1. Purchaser is a Delaware limited liability company duly
organized, validly existing and in good standing under the
laws of the State of Delaware. Purchaser has all requisite
authority and power to enter into this Agreement and performs
its obligations herein. The execution and delivery of this
Agreement and the consummation by Purchaser of the
transactions contemplated herein have been authorized by all
requisite company actions on the part of Purchaser.
6.1.2. This Agreement constitutes the valid and binding obligations
of Purchaser enforceable in accordance with its terms. All
documents or agreements being executed and delivered at
closing by Purchasers will constitute valid and binding
obligations of Purchaser enforceable in accordance with its
terms.
6.1.3. Neither the execution or delivery of this Agreement by
Purchaser nor the consummation by Purchaser of the
transactions contemplated herein will (i) conflict with or
result in a breach of, the terms, conditions or provisions of,
or constitute a default under the Articles of Organization,
Operating Agreement, resolutions or consents of Purchaser, or
any indenture, mortgage, lease, agreement or other instrument
to which Purchaser is a party; or (ii) violate any law or
regulation to which Purchaser is or will be subject.
6.1.4. Purchaser is not aware of any facts or matters of which Seller
is not aware which would materially and adversely affect
Purchaser's future business operations or the current or
future value of Purchaser's stock or securities.
6.1.5. Purchaser, to the best of Purchaser's knowledge, warrants that
there are no actions, suits, claims, investigations or other
proceedings pending and there is no action,
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suit, claim, investigation, proceeding, grievance, or
controversy threatened against the Purchaser that could affect
the ability to consummate the transaction contemplated in this
Agreement. Furthermore, no governmental agency has at any time
challenged or questioned, or commenced or given notice of
intention to commence any investigation relating to the
transactions which are the subject of this Agreement.
6.1.6. Purchaser will use is best efforts to obtain the approvals
described in Section 4.1.1, 4.1.2 and 4.1.11.
6.1.7. Purchaser acknowledges and represents and warrants to Seller,
that Purchaser, either directly or through affiliates, has
purchased automobile dealerships, and continues to own and
operate automobile dealerships. As a result, Purchaser is
knowledgeable and familiar with all aspects of purchasing,
owning and operating automobile dealership, and the potential
economic consequences (favorable and unfavorable) that can
occur in the purchase and operation of an automobile
dealership. Purchaser shall conduct its own due diligence and
shall rely solely on its own inspection, examination and
investigation in making the decision to purchase the Assets
and enter in the transaction described in or contemplated ;by
this Agreement, and Purchaser acknowledges that no independent
investigation or verification has been or will be make by any
of the Seller with respect to the accuracy or completeness of
the information supplied by any Seller concerning any of the
Assets and of Seller's business. Except for the warranty of
title contained in the xxxx of Sale and the representations
and warranties contained in Section 6.2, Seller expressly
disclaims any and all representations, warranties, or
guarantees, of any kind, oral or written, express or implied,
including, without limitation the value, condition,
merchantability, marketability, suitability or fitness for a
particular use or purpose of any of the Assets. Seller is not,
and will not make any representation or warranty express or
implied, as to future profitability of the Dealership or
whether Purchaser will be able to retain any or all of those
franchises if they are so transferred to Purchaser.
6.2. Seller's. Seller represents and warrants to Purchaser as follows:
6.2.1. Seller is a corporation duly organized, validly existing and
in good standing under the laws of the State of Texas. Seller
is qualified to do business in Texas, and Seller has all
requisite authority and power to enter into this Agreement.
Furthermore, Seller is duly authorized to own, lease or
otherwise hold the Assets conveyed under this Agreement. The
execution, delivery and performance of this Agreement by
Seller and the consummation by Seller of the transactions
contemplated herein have been authorized by all requisite
corporate actions on the part of the Seller. This Agreement
constitutes the valid and binding obligation of Seller,
enforceable in accordance with its terms.
6.2.2. Neither the execution or delivery of this Agreement by Seller
nor the consummation by Seller of the transactions
contemplated herein will (i) conflict
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with or result in a breach of, the terms, conditions or
provisions of, or constitute a default under, or result in the
creation of a lien or encumbrance on any of the property
conveyed pursuant to this Agreement, pursuant to the Articles
of Incorporation or Bylaws of Seller, or any indenture,
mortgage, lease, agreement or other instrument to which Seller
is a party or by which any of the Assets conveyed pursuant to
this Agreement may be bound or affected; or (ii) violate any
law or regulation to which Seller is or will be subject to
whereby either them or any of the Assets conveyed pursuant to
this Agreement is bound.
6.2.3. Except for the leased property, Seller has good and marketable
title to all the property conveyed pursuant to this Agreement,
free and clear of all agreements, obligations, liabilities,
security interests, pledges, restrictions, mortgages, liens,
claims or encumbrances of any kind or any conditional sale
agreement or other title retention agreement, except as
specifically set forth on SCHEDULE 6.1.
6.2.4. Seller, to the best of Seller's knowledge, warrants that there
are no actions, suits, claims, investigations or other
proceedings pending and there is no action, suit, claim,
investigation, proceeding, grievance, or controversy
threatened against the Seller that could affect the ability to
convey the Assets conveyed pursuant to this Agreement.
Furthermore, no governmental agency has at any time challenged
or questioned, or commenced or given notice of intention to
commence any investigation relating to the Seller's ownership
of the Assets conveyed pursuant to this Agreement.
6.2.5. To the best of Seller's knowledge, the Seller is in compliance
in all material respects with all laws, rules, regulations,
and other legal requirements relating to the prevention of
pollution and the protection of the environment (collectively,
"Environmental Laws"). To the best of Seller's knowledge,
including all items included in the Phase I Survey, there is
no other physical condition existing on any property ever
owned or operated by the Company nor are there any physical
conditions existing on any other property that may have been
affected by the Company's operations which could give rise to
any material remedial obligation under any Environmental Laws
or which could result in any material liability to any third
party pursuant to any Environmental Laws.
6.2.6. Seller is not aware of any facts or matters of which Purchaser
is not aware which would materially and adversely affect
Seller's future business operations or the assets acquired
hereunder.
6.2.7. To the best of Seller's knowledge, all historical operating
information provided to Purchaser is materially accurate.
7. Additional Representations and Warranties of Seller and the
Stockholders. Prior to Closing, Seller will cause each Stockholder to execute an
agreement in which each Stockholder, severally and not jointly, represents and
warrants to Purchaser and Group 1 that:
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7.1. Investment Intent. The Seller intends to distribute some or
all of the Closing Payment to its stockholders on or shortly after the Closing
Date. The Seller and each Stockholder makes the following representations
relating to his, her or its acquisition of shares of Group 1 Common Stock: (i)
such Stockholder will be acquiring the shares of Group 1 Common Stock to be
issued pursuant to the Acquisition to such Stockholder solely for such
Stockholder's account, for investment purposes only and with no current
intention or plan to distribute, sell or otherwise dispose of any of those
shares in connection with any distribution (except by way of gift to a
charitable foundation, provided that such foundation executes a customary
investor representation letter with respect to exemptions from the Securities
Act of 1933 ("Securities Act") and any applicable state blue sky laws); (ii)
such Stockholder is not a party to any agreement or other arrangement for the
disposition of any shares of Group 1 Common Stock; (iii) such Stockholder is an
"accredited investor" as defined in Securities Act Rule 501(a); (iv) such
Stockholder (A) is able to bear the economic risk of an investment in the Group
1 Common Stock acquired pursuant to this Agreement, (B) can afford to sustain a
total loss of that investment, (C) has such acknowledge and experience in
financial and business matters, and such past participation in investment that
he or she is capable of evaluating the merits and risks of the proposed
investment in the Group 1 Common Stock, (D) has received and reviewed the SEC
Documents, (E) has had an adequate opportunity to ask questions and receive
answers from the officers of Group 1 concerning any and all matters relating to
the transactions contemplated hereby, including the background and experience of
the current officers and directors of Group 1, the plans for operations of the
business of Group 1, the business, operations and financial condition of Group 1
and any plans of Group 1 for additional acquisitions, and (F) has asked all
questions of the nature described in the preceding clause (E), and all those
questions have been answered to his or her satisfaction; (v) such Stockholder
acknowledges that the shares of Group 1 Common Stock to be delivered to such
Stockholder pursuant to the Acquisition have not been and will not be registered
under the Securities Act or qualified under applicable blue sky laws and
therefore may not be resold by such Stockholder without compliance with Rule 144
of the Securities Act; (vi) such Stockholder, if a corporation, partnership,
trust or other entity, acknowledges that it was not formed for the specific
purpose of acquiring the Group 1 Common Stock; and (viii) without limiting all
of the foregoing, such Stockholder agrees not to dispose of any portion of Group
1 Common Stock unless (1) a registration statement under the Securities Act is
in effect as to the applicable shares and the disposition is made in accordance
with that registration statement, or (2) the Stockholder has notified Group 1 of
the proposed disposition, disposition is made though Merrill, Lynch, Xxxxxx,
Xxxxxx & Xxxxx Incorporated or Xxxxxxx, Sachs & Co., Inc., or any of their
successors or affiliates, subject to SEC Rule 144 and such disposition is made
in compliance with any other requirements of the Securities Act. SEC Documents
means, Group 1's most recent annual report, definitive proxy statement filed
with the annual report and Form 10-K.
7.2. Restrictions on Transfer of Group 1 Common Stock.
7.2.1. During the one-year period ending on the anniversary of the
Closing Date (the "Restricted Period"), Xxxxxxx X. Xxxxxxx
("Xxxxxxx") will not voluntarily: (i) sell, assign, exchange,
transfer, encumber, pledge, distribute, appoint or otherwise
dispose of (A) any shares of Group 1 Common Stock received by
Xxxxxxx in the Acquisition or (B) any interest in (including
any option to buy or sell) any of those
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shares of Group 1 Common Stock, in whole or in part, and Group
1 will have no obligation to, and shall not, treat any such
attempted transfer as effective for any purpose or (ii) engage
in any transaction, whether or not with respect to any shares
of Group 1 Common Stock or any interest therein, the intent or
effect of which is to reduce the risk of owning the shares of
Group 1 Common Stock acquired pursuant to this Agreement
(including, for example, engaging in put, call, short sale,
straddle or similar market transactions). Notwithstanding the
foregoing, Xxxxxxx may: (i) pledge shares of Group 1 Common
Stock, provided that the pledgee of such shares shall agree
not to sell or otherwise dispose of any such shares for the
Restricted Period; (ii) transfer shares to immediate family
members or the estate of any such individual (including
without limitation, any transfer by Xxxxxxx to or among any
trust, custodial or other similar accounts or funds that are
for the benefit of his or her immediate family members),
provided that such person or entity shall agree not to sell or
otherwise dispose of any such shares for the Restricted
Period; and (iii) transfer shares by will or laws of descent
and distribution or otherwise by reason of such Xxxxxxx death.
The certificates evidencing the Group 1 Common Stock delivered
to Xxxxxxx pursuant to this Agreement will bear a legend
substantially in the form set forth below and containing such
other information as Group 1 may deem necessary or
appropriate:
EXCEPT PURSUANT TO THE TERMS OF THE ASSET PURCHASE AGREEMENT
AMONG THE ISSUER, THE HOLDER OF THIS CERTIFICATE AND THE OTHER
PARTIES THERETO, THE SHARES REPRESENTED BY THIS CERTIFICATE MAY
NOT BE VOLUNTARILY SOLD, ASSIGNED, EXCHANGED, TRANSFERRED,
ENCUMBERED, PLEDGED, DISTRIBUTED, APPOINTED OR OTHERWISE DISPOSED
OF, AND THE ISSUER SHALL NOT BE REQUIRED TO GIVE EFFECT TO ANY
ATTEMPTED VOLUNTARY SALE, ASSIGNMENT, EXCHANGE, TRANSFER,
ENCUMBRANCE, PLEDGE, DISTRIBUTION, APPOINTMENT, OR OTHER
DISPOSITION OF ANY OF THOSE SHARES, DURING THE ONE-YEAR PERIOD
ENDING ON ________________[DATE THAT IS THE ANNIVERSARY OF THE
CLOSING DATE] (THE "RESTRICTED PERIOD"). ON THE WRITTEN REQUEST
OF THE HOLDER OF THIS CERTIFICATE, THE ISSUER AGREES TO REMOVE
THIS RESTRICTIVE LEGEND (AND ANY STOP ORDER PLACED WITH THE
TRANSFER AGENT) AFTER THE DATE SPECIFIED ABOVE.
7.2.2. Seller and each Stockholder, severally and not jointly with
any other person, (i) acknowledges that the shares of Group 1
Common Stock to be delivered to Seller and that Stockholder
pursuant to this Agreement have not been and, if applicable,
will not be registered under the Securities Act and therefore
may not be resold by Seller or that Stockholder without
compliance with the Securities Act and (ii) covenants that
none of the shares of Group 1 Common Stock issued to Seller or
that Stockholder pursuant to this Agreement will be offered,
sold, assigned, pledged, hypothecated, transferred or
otherwise disposed of except after full compliance with all
the applicable provisions of the Securities Act and the rules
and regulations of the Commission and applicable state
securities laws and regulations. All certificates evidencing
shares of Group 1 Common Stock issued pursuant to this
Agreement will bear the following legend in addition to the
legend prescribed by Section 7.2.1:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
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INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS, AND
MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR
HYPOTHECATED UNLESS AND UNTIL SUCH SHARES ARE REGISTERED UNDER
SUCH ACT, OR SUCH STATE LAWS, OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY IS OBTAINED TO THE EFFECT THAT SUCH
REGISTRATION IS NOT REQUIRED."
In addition, certificates evidencing shares of Group 1 Common
Stock issued pursuant to the Acquisition to Seller and each
Stockholder will bear any legend required by the securities or blue
sky laws of the state in which Seller or that Stockholder resides.
8. Indemnification.
8.1. Purchaser's Obligation to Indemnify. Purchaser shall indemnify and
hold Seller harmless from and against any and all liability, loss, damage, or
deficiency resulting from: (i) any misrepresentation, breach of warranty, or
nonfulfillment of any agreement on the part of Purchaser under this Agreement;
(ii) any misrepresentations in or occasioned by any certificate, document, or
other instrument furnished or to be furnished by Purchaser herein; (iii)
Purchaser's ownership, management and conduct of the Assets subsequent to
Closing; (iv) any misrepresentation, inaccuracy, or failure of any
representation or warranty of Purchaser; and (v) any and all actions, suits,
proceedings, claims, demands, assessments, judgments, costs, and expenses,
including without limitation, legal fees and expenses incident to any of the
foregoing or incurred in investigating or attempting to void the same or to
oppose the imposition thereof or in enforcing this indemnity.
8.2. Seller's Obligation to Indemnify. Seller agrees to indemnify,
defend and hold Group 1 and Purchaser harmless (subject to the limitations and
conditions set forth in Sections 8.3 and 8.4) from all Indemnifiable Damages (as
defined below) resulting from: (i) any misrepresentation, breach of warranty or
nonfulfillment of any agreement on the part of Seller under this Agreement; (ii)
any misrepresentation in or occasioned by any certificate, document, or other
instrument or to be furnished by Seller herein; (iii) except for liabilities
otherwise assumed, the ownership, management, and operations of, and interests
in or to the Assets prior to the Closing of this Agreement; (iv) any
misrepresentation, inaccuracy, or failure of any representation or warranty of
Seller; and (v) any and all actions, suits, proceedings, claims, demands,
assessments, judgments, costs, and expenses, including without limitation, legal
fees and expenses incident to any of the foregoing or incurred in investigating
or attempting to void the same or to oppose the imposition thereof or in
enforcing this indemnity. Each Stockholder will agree to indemnify, defend an
hold Group 1 harmless (subject to the limitations in Section 8.3 and 8.4) from
all Indemnifiable Damages resulting from such Stockholder's breach of Section 7.
8.3. Notice to Indemnifying Party. To be entitled to such
indemnification, the party claiming indemnification ("Indemnified Party") shall
give the other party ("Indemnifying Party") prompt written notice of the
assertion by a third party of any claim with respect to which the Indemnified
Party might bring a claim for indemnification herein, and in all events must
have supplied such notice to the Indemnifying Party within the applicable period
for defense of such claim. This indemnification shall survive the consummation
of the transactions contemplated
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herein and shall remain in effect for a period of four (4) years after the
Closing Date. The remedies provided under this section shall be cumulative and
shall not preclude any party from asserting any other rights or seeking any
other remedies against any other party hereto. At the option of the Indemnifying
Party, sums due under this section may be offset against any sums which may be
due the Indemnified Party under Any Other Agreement between them.
8.4. Limitation of Indemnity. Notwithstanding anything to the contrary
contained in this Article 8, the Indemnified Party shall have no claim for
Indemnifiable Damages unless and until all Indemnifiable Damages incurred under
this Section 8.4 of each Related Agreement with each Other Company exceeds Two
Hundred Fifty Thousand and no/100 ($250,000.00) ("Basket Amount"), in which
event the Indemnifying Party shall be liable for only such Indemnifiable Damages
in excess of the Basket Amount; provided, however, that the limitations of (i)
this Section 8.4 shall not apply to (i) any fraud or intentional
misrepresentation, (ii) any intentional breach under this Agreement, (iii) any
misrepresentation or breach under Sections 6.2.1, 6.2.2, 6.2.3 or 3.16 and (iv)
any liabilities of Stockholders or Seller other than Assumed Liabilities.
Additionally, Seller shall not be liable for Indemnifiable Damages in excess of
the Purchase Price, nor shall a Stockholder be liable in excess of the value of
the Group 1 stock received by such Stockholder.
9. Provisions Respecting Employees.
9.1. Dealership Employees. Seller will notify all of its employees who
are engaged at or in connection with the operations of the Dealership (the
"Employees") that the Assets are being sold to Purchaser. Seller shall terminate
all employees effective on the Closing Date and except as otherwise provided in
Section 9.2, Seller assumes the responsibility and obligation for discharging
any and all benefits owed to such terminated employees. Purchaser will receive
applications for employment from such employees and will decide in its sole and
absolute discretion which persons to hire, if any.
9.2. Indemnification for Wages, Severance and Other Obligations. Seller
shall be liable to the Employees for all wages, severance benefits, and other
obligations of any kind whatsoever, including, without limitation, obligations
and liabilities under Seller's Plans (as hereinafter defined), which accrued
through the day before the Closing and shall hold Purchaser harmless from and
indemnify Purchaser against, any and all such liabilities to Employees.
Purchaser agrees to carryover the employees "seniority status" with regard to
vacation days and other compensated leave. Purchaser shall assume the Seller's
obligations for accrued and unused vacation and sick leave on the Closing Date.
9.3. COBRA Indemnification and Information. Seller shall pay and be
liable to Purchaser and shall assume, indemnify, defend and hold harmless
Purchaser from and against and in respect of any and all losses, damages,
liabilities, taxes, and sanctions that arise under the Consolidated Omnibus
Budget Reconciliation Act of 1984 ("COBRA") and the Code, interest and
penalties, costs, and expenses (including without limitation disbursements and
reasonable legal fees incurred in connection therewith, and in seeking
indemnification therefor, and any amounts or expenses required to be paid or
incurred in connection with any action, suit, proceeding, claim, appeal, demand,
assessment, or judgment) imposed upon, incurred by, or assessed
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against, Purchaser and any of its employees arising by reason of or relating to
any failure to comply with the continuation of health care coverage of COBRA and
Sections 601 through 608 of ERISA which failure occurred with respect to any
current or prior employee of Seller or any qualified beneficiary of such
employee (as defined in COBRA) on or prior to the date of Closing or as
otherwise required as a result of any transactions or matters contemplated by
this agreement.
10. General Provisions.
10.1. Notices. Any notice, demand, or communication required,
permitted, or desired to be given hereunder shall be in writing and shall be
deemed effectively given when personally delivered or mailed by prepaid,
certified mail, return receipt requested, addressed as follows:
If to Seller: Xxxx Xxxxxx Ford, Inc.
c/o Xxxx Xxxxxx Ford, Inc.
000 X. 00xx Xxxxxx
Xxxxxxx, Xxxxx 00000
Attn: Xxxx Xxxxxxx
with a copy to: Xxxxxxx X. Xxxxx, Esq.
2112 Indiana
Xxxxxxx, Xxxxx 00000-0000
If to Purchaser: Delaware Acquisitions - F, L.L.C.
c/o Xxxxxx X. Xxxxxx XX
X.X. Xxx 00000
Xxxxxxxx Xxxx, Xxxxxxxx, 00000-0000
with a copy to: Xxxxxxx X. Xxxxxxx, Esq.
0000 X. Xxxxxxx, Xxxxx 000
Xxxxxxxx Xxxx, Xxxxxxxx 00000
or to such other address, and to the attention of such other person or officer,
as either party may designate, at the addresses that the party may designate by
like written notice.
10.2. Exhibits. The exhibits attached hereto or included herein are
made a part hereof for all purposes. As used herein, the expression "this
Agreement" means the body of this Agreement and such Exhibits; and the
expressions "herein", "hereof", and "hereunder" and other words of similar
import refer to this Agreement and such Exhibits as a whole and not to any
particular part or subdivision thereof.
10.3. Survival of Obligations. The respective representations,
warranties, covenants, and agreements of the parties to this Agreement shall
survive consummation of the transactions contemplated herein and shall continue
in full force and effect after the Closing without expiration.
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10.4. Broker's Fees. Purchaser covenants that it has neither incurred
any obligations for commissions, brokers fees or other related matters. Seller
covenants that it has not incurred any obligations for commissions, brokers fees
or other related matters. It is further agreed that in the event any claims are
made for commissions, brokers fees or other related items, the party incurring
such obligation shall hold the other harmless therefrom.
10.5. Governing Law. This Agreement will be governed by, construed and
enforced in accordance with the laws of the state of Texas.
10.6. Attorney's Fees. If this Agreement or any term or provision
hereof becomes the subject of litigation, the prevailing party in such
litigation will be entitled to recover from the non-prevailing party court costs
and reasonable attorney's fees.
10.7. Entire Agreement. This Agreement and the other agreements of even
date herewith (herein "Any Other Agreement") and the agreements attached as
exhibits hereto, contains the entire understanding of the parties with respect
to the sale of the assets of Seller to Purchaser and supersedes all prior
agreements, arrangements and understandings, whether written or oral, relating
to the subject matter hereof and all of them are merged into this Agreement.
10.8. Severability. Any provision of this agreement which is prohibited
or unenforceable, in whole or in part, in any jurisdiction shall be ineffective
only to the extent of such prohibition or unenforceability without invalidating
the remaining provisions hereof.
10.9. Amendment. This Agreement may not be amended by any oral
agreement or understanding but only by an amendment in writing executed by the
parties hereto.
10.10. Binding Effect. The terms, conditions and covenants of this
Agreement shall apply to, inure to the benefit of and be binding upon each of
the parties hereto and their respective successors and permitted assigns. This
Agreement or a portion thereof may be assigned by either party upon receipt of
the written consent of the non-assigning party.
10.11. Further Instruments. Seller shall make, execute and deliver in
due form, such other and further instruments as Purchaser may deem necessary to
carry out and further the purposes of this Agreement.
10.12. Specific Performance. The parties hereto recognize that the
Purchaser's remedies at law for damages in the event of breach of this Agreement
are inadequate and accordingly, it is the intention of the parties that the
obligations and duties of the parties hereunder shall be enforceable in equity
by specific performance, and further the Purchaser's remedy is specifically
limited to specific performance.
10.13. Headings. The section headings contained in this Agreement are
for convenience only and shall not affect in any way the meaning or
interpretation of the Agreement.
10.14. Multiple Counterparts. This Agreement may be executed in a
number of identical counterparts which, taken together, shall constitute
collectively one (1) agreement; but in making
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22
proof of this Agreement, it shall not be necessary to produce or account for
more than one such counterpart.
[The remainder of this page is intentionally blank.]
23
IN WITNESS WHEREOF, the parties have executed this Agreement in multiple
original on the date first written above.
"PURCHASER"
Delaware Acquisitions - F, L.L.C.,
a Delaware limited liability company
By: /s/ XXXXXX X. XXXXXX XX
----------------------------------------
Xxxxxx X. Xxxxxx XX, Manager
"SELLER"
Xxxx Xxxxxx Ford, Inc., a Texas corporation
By: /s/ XXXX XXXXXX
----------------------------------------
Xxxx Xxxxxx, President
24
ASSET PURCHASE AGREEMENT
EXHIBIT "A"
ALLOCATION OF PURCHASE PRICE
AMONG CONVEYED ASSETS UNDER
SECTION 1060 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED
Class I Cash and Cash Equivalents $
Class II Certificates of Deposit, U.S. Government
Securities, Marketable Stocks or Securities $
Class III All other tangible and intangible assets,
whether or not depreciable or amortizable,
except goodwill (see attached Allocated Exhibit) $
Class IV All Section 197 intangibles, except those in the
nature of goodwill $
Class V Goodwill $
Total of Classes, I, II, III, IV, and V $
--------------------------------------------------------------------------------
1. Date of Sale: __________, 1999.
2. Are the aggregate fair market values listed for each of asset Classes
I, II and III the amounts agree upon in the sales contract or in a
separate written document:
[ ] Yes [ ] No
3. Were any of the following purchased or entered into:
License or covenant not to compete, lease agreement, employment contract,
management contract, or similar arrangement with Seller (or managers,
directors, owners or employees of Seller)?
[ ] Yes [ ] No
If "yes," specify (a) type of agreement and (b) maximum amount of
consideration (not including interest) paid or to be paid under agreement.
Attach separate sheet detailing the above.
Under the penalties of perjury, the undersigned parties to this Agreement
certify that the information provided on this form, to the best of our knowledge
and belief, is true, correct and complete.
PURCHASER: SELLER:
Delaware Acquisitions-F, L.L.C. Xxxx Xxxxxx Ford, Inc.
Taxpayer ID No. ____________________ Taxpayer ID No. 00-0000000
BY: ________________________________ BY: ______________________________
25
ASSET PURCHASE AGREEMENT
EXHIBIT "B"
LEASE AGREEMENT
26
ASSET PURCHASE AGREEMENT
EXHIBIT "C1"
EMPLOYMENT AGREEMENT - XXXXXXX
27
ASSET PURCHASE AGREEMENT
EXHIBIT "C2"
EMPLOYMENT AGREEMENT - XXXXXX
28
ASSET PURCHASE AGREEMENT
EXHIBIT "D"
LEASE GUARANTY
29
ASSET PURCHASE AGREEMENT
EXHIBIT "E"
XXXX OF SALE
30
ASSET PURCHASE AGREEMENT
SCHEDULE 2.1
FIXED ASSET LIST
31
ASSET PURCHASE AGREEMENT
SCHEDULE 2.2
RETAINED ASSET LIST
32
ASSET PURCHASE AGREEMENT
SCHEDULE 2.3
ASSUMED LIABILITIES
33
ASSET PURCHASE AGREEMENT
SCHEDULE 2.4
LEASED ASSETS
34
ASSET PURCHASE AGREEMENT
SCHEDULE 6.1
LIENS AND ENCUMBRANCES
35
ASSET PURCHASE AGREEMENT
SCHEDULE 6.2
SELLER'S PLANS
