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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C.
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (EVENT): November 27, 1996
THE PARTS SOURCE, INC.
(exact name of Registrant as specified in charter)
Florida 0- 27864 59-3149403
- ------------------------ -------------------- ------------------
(State of Incorporation) (Commission File No.) (IRS Employer
Identification No.)
1751 South Missouri Avenue
Clearwater, Florida 34616
-------------------------
(address of principal executive offices)
(813) 588-0377
--------------
(Registrant's telephone number, including area code)
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Item 2. Acquisition of Assets
On November 27, 1996 The Parts Source, Inc., d/b/a/ Ace Auto Parts
(the "Company"), acquired from Central Motor Supply, Inc., Central
Motor Supply of Alachua, Inc., Central Motor Supply of Williston,
Inc. Central Motor Supply of Hawthorne, Inc. and Central Motor
Supply of East Gainesville, Inc. ("Sellers") and Mr. William
Stanley ("Stockholder"), certain net assets, principally inventory
and fixed assets of five auto parts stores located in and around
the Gainesville, Florida area. As a result of this acquisition,
the Company now operates 38 auto parts stores, all located in the
state of Florida.
The consideration paid for the stores was approximately $890,000.
The purchase price is being funded from the Company's line of
credit with the Barnett Bank N. A.
The Company also entered into a five-year employment contract with
the principal Stockholder of the Sellers and granted to such
person a five-year option to purchase 30,000 shares of Common
Stock of the Company. The option is exercisable at $12.00 per
share, the fair market value of the Common Stock on the date of
Closing.
The Company intends to continue the operations of each of the
acquired stores as auto parts stores.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
a. Financial Statements of Businesses Acquired.
It is impracticable at this time to provide the required financial
statements for the businesses acquired in the acquisition
described in Item 2 above. The Company is in the process of
preparing the appropriate financial statements. It is anticipated
that such financial statements will be available within 60 days
from the date of this report, and will be filed as an amendment to
this report as soon as practicable, but no later than 60 days
after this report has been filed.
b. Pro Forma Financial Information
No pro forma financial information with respect to the acquisition
described in Item 2 above is available at this time. It is
anticipated that the required pro forma financial information will
be available within 60 days from the date of this report, and will
be filed as an amendment to this report as soon as practicable,
but no later than 60 days after this report has been filed.
-2-
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c. Exhibits.
10.1 Agreement of Sale by and Between The
Parts Source, Inc.(the "Purchaser")
and Central Motor Supply, Inc.,
Central Motor Supply of Alachua,
Inc., Central Motor Supply of
Williston, Central Motor Supply of
Hawthorne, Inc. and Central Motor
Supply of East Gainesville,
Inc.,("Sellers") and Mr. William
Stanley. ("Stockholder")
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereto duly authorized.
THE PARTS SOURCE, INC.
---------------------------------
(Registrant)
Dated: December 11, 1996 /s/ Thomas D. Cox
---------------------------------
Thomas D. Cox, President and
Chief Executive Officer
<PAGE> 1
Exhibit 10.1
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT is made and entered into as of the 25th
day of November 1996, by and among THE PARTS SOURCE INC., D/B/A ACE AUTO PARTS,
a Florida corporation (the "Purchaser"), CENTRAL MOTOR SUPPLY, INC., CENTRAL
MOTOR SUPPLY OF ALACHUA, INC., CENTRAL MOTOR SUPPLY OF WILLISTON, INC., CENTRAL
MOTOR SUPPLY OF HAWTHORNE, INC. and CENTRAL MOTOR SUPPLY OF EAST GAINESVILLE,
INC. ,all Florida corporations (collectively, the "Sellers") and MR. WILLIAM
STANLEY (the "Stockholder").
W I T N E S S E T H:
WHEREAS, the Sellers are the owners of certain assets used in the
operation of the businesses of the Sellers located in Gainesville, Alachua,
Williston, Hawthorne and East Gainesville, Florida; and
WHEREAS, the Purchaser desires to purchase certain assets used in the
operation of the businesses of the Sellers, and the Sellers and the Stockholder
desire to sell such assets, all upon the terms and subject to the conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained in this Agreement, and in order to
consummate the purchase and sale of the property aforementioned, it is hereby
agreed as follows:
1. PURCHASE AND SALE OF ASSETS; CLOSING.
(a) Purchase and Sale of Assets. Upon the terms and subject to the
conditions hereinafter set forth, at the closing of the transactions
contemplated hereby (as defined in Section 1(b) below, the "Closing"), the
Sellers will sell, assign, transfer, convey and deliver to the Purchaser free
and clear of all liabilities whatsoever (whether absolute or contingent), all
mortgages, liens, encumbrances, equities, claims and charges or interests of
third persons, except as specifically noted in this Agreement and the exhibits
hereto, and the Purchaser shall purchase from the Sellers, certain of the
assets used in connection with the operation of the businesses of the Sellers
as listed on Exhibit A to this Agreement (as so conveyed, collectively referred
to in this Agreement as the "Assets"). In consideration of the sale,
conveyance, transfer and delivery of the Assets, and upon and subject to the
conditions of this Agreement, the Purchaser will deliver to the Sellers
consideration as provided in Section 2 of this Agreement.
(b) Procedure for Closing. Subject to the satisfaction or
appropriate waiver of all conditions precedent thereto, the Closing shall be
held at the offices of Schifino & Fleischer, P.A. at 4:00 p.m. on November
27,1996, or at such other place, date and time as the parties to this Agreement
may otherwise agree (such date to be referred to in this Agreement as the
"Closing Date"). At the Closing, the Sellers will deliver to the Purchaser a
bill or bills of sale and all other instruments necessary or appropriate in the
opinion of counsel to the Purchaser to convey title to the Assets to the
Purchaser, and the Purchaser shall deliver to the Sellers such consideration
for the purchase of the Assets as provided in Section 2 of this Agreement.
(c) Access and Information. Between the date hereof and the
Closing Date, Sellers shall give Purchaser and its employees, auditors, legal
counsel and other authorized representatives all reasonable opportunity and
access, during normal business hours, to inspect the Sellers' books, records
and businesses. Sellers shall also furnish Purchaser during such period with
all information concerning Sellers' affairs that
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Purchaser reasonably requests. Purchaser and its agents shall keep such
information confidential until the transactions contemplated hereby are
consummated.
2. CALCULATION AND PAYMENT OF PURCHASE PRICE.
(a) Consideration. As total consideration for the purchase and the
sale of the Assets, the Purchaser shall pay to the Sellers and the Sellers
agree to accept a check payable to the order of the Sellers on the Closing Date
in an amount equal to the Purchase Price (as defined below) less any applicable
adjustments to the Purchase Price as provided for in Section 2(d) below, and
Purchaser shall grant to the Stockholder as part of an employment contract an
option to purchase 30,000 shares of Common Stock of the Purchaser in accordance
with the terms and conditions of an option agreement, a copy of which is
attached hereto as Exhibit B.
(b) Inventory. Sellers and Purchaser shall take a physical
inventory of the stock-in-trade and merchandise at the close of business on
November 22, 1996. Such inventory shall set forth all items of stock-in-trade
and merchandise in detail, and Sellers' cost of each item as invoiced to
Sellers, adjusted for any discounts. The acquisition price of such
stock-in-trade and merchandise shall be $688,000.
(c) Fixed Assets. Purchaser shall acquire those fixed assets of
Sellers identified on Exhibit A at a price of $150,000. The acquisition price
of the inventory and fixed assets shall be referred to herein as the "Purchase
Price."
(d) Allocations. The parties to this Agreement represent, warrant
and covenant the Purchase Price shall be allocated as noted on Exhibit C to
this Agreement.
3. REPRESENTATIONS AND WARRANTIES OF THE SELLERS AND THE STOCKHOLDERS.
Except as disclosed in this Agreement, the Sellers and each of the
Stockholders hereby jointly and severally represent and warrant to the
Purchaser the following:
(a) Organization and Standing. The Sellers are corporations duly
organized, validly existing and in good standing under the laws of the State of
Florida and have the corporate power and authority to carry on its business as
is now being conducted. The Sellers' corporate records will be made available
to the Purchaser and its representatives at any reasonable time or times prior
to the Closing for inspection and will be complete and correct as of the date
of any such inspection.
(b) Capitalization. (i) The authorized capital stock of the
Sellers is as follows:
<TABLE>
<CAPTION>
AUTHORIZED PAR SHARES
NAME SHARES VALUE OUTSTANDING
- --------- ------ ----- -----------
<S> <C> <C> <C>
Central Motor Supply, Inc. 1,000 $50.00 482
Central Motor Supply of Alachua, Inc. 100 $5.00 53.5
Center Motor Supply of Williston, Inc. 100 $5.00 49
Central Motor Supply of Hawthorne, Inc. 100 $100.00 36.75
Central Motor Supply of East Gainesville, Inc. 600 $50.00 37.87
</TABLE>
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All of the above outstanding shares of capital stock have been validly
issued and are fully paid and are nonassessable, and, all of such
outstanding shares of capital stock of the Sellers (the "Stock") are
owned by the Stockholder and Ms. Bonnie Sue Stanley and Ms. Lisa S.
Merrow.
(ii) The Sellers nor the Stockholder and Ms. Bonnie Sue
Stanley and Ms. Lisa S. Merrow are a party to any agreement, written
or oral, creating rights in respect to the capital stock of the
Sellers in any third person or relating to the voting of such capital
stock.
(iii) The Stockholder and Ms. Bonnie Sue Stanley and Ms.
Lisa S. Merrow are the lawful owners of all of the capital stock of
the Sellers, free and clear of all security interests, claims, liens,
encumbrances, equities and other charges.
(iv) There are no existing warrants, options, stock
purchase agreements, redemption agreements, restrictions of any
nature, calls or rights to subscribe of any character relating to the
capital stock of the Sellers, nor are there any securities convertible
into the capital stock of the Sellers.
(c) Qualification To Do Business. By reason of the nature of
the business conducted by it, its ownership of property or otherwise, the
Sellers are not required to be qualified to do business as a foreign
corporation in any other state.
(d) Authority Relative to this Agreement. The execution of this
Agreement by the Sellers and the delivery of this Agreement to the Purchaser
have been duly authorized by the Board of Directors of the Sellers and by the
Stockholder and Ms. Bonnie Sue Stanley and Ms. Lisa S. Merrow, and no further
corporate or other action is necessary on their part to make this Agreement
valid and binding upon each of them and enforceable against each of them in
accordance with the terms hereof or to carry out the transactions contemplated
hereby.
(e) No Violations. The execution, delivery and performance of
this Agreement by the Sellers will not (i) constitute a breach or a violation
of such corporation's Articles of Incorporation, its by-laws or any law, rule
or regulation, agreement, indenture, deed of trust, mortgage loan agreement or
other instrument to which the Sellers or any Stockholder is a party or by which
any of such parties is bound; (ii) constitute a violation of any order,
judgment or decree to which the Sellers or any Stockholder is a party or by
which any of the Sellers' assets or properties are bound or affected; or (iii)
result in the creation of any lien, charge or encumbrance upon the Assets.
(f) Financial Statements. Attached hereto as Exhibit D are the
gross sales for the Sellers on a consolidated basis for the twelve month period
ended August 31, 1996, which gross sales (i) are in accordance with Sellers
books and records; and (ii) are true and accurate for the periods covered
thereby.
(g) Absence of Undisclosed Liabilities. Except as disclosed on
Exhibit E to this Agreement, the Sellers are not obligated for nor are any of
the Assets subject to any liabilities of any kind (whether accrued, absolute,
contingent or otherwise), regardless of whether such liabilities are
customarily reflected in a corporate balance sheet prepared in accordance with
generally accepted accounting principles. There are no facts in existence on
the date hereof known to the Sellers or any Stockholder that might reasonably
serve as the basis now or in the future for any liabilities or obligations not
disclosed in this Agreement or the exhibits thereto.
(h) Absence of Certain Changes or Events. Other than as disclosed
in exhibits to this Agreement and in the ordinary course of its business or in
connection with effecting the transactions contemplated by this
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Agreement, since the date of each of the financial statements provided pursuant
to Section 3(f) above, the Sellers have not:
(i) experienced any change in its financial
condition, assets, liabilities, results of operations or business, any
of which has been materially adverse;
(ii) suffered any damage, destruction or loss,
whether or not covered by insurance, materially and adversely
affecting its properties or business;
(iii) discharged or satisfied any lien or
encumbrance or paid any obligation or liability (fixed or contingent),
except current liabilities in the ordinary course of business;
(iv) mortgaged, pledged or subjected to lien,
charge, security interest or any other encumbrance (other than the
lien of taxes and liens of mechanics and material/men not yet due and
payable) any of its assets or properties;
(v) transferred or leased any of its assets or
properties;
(vi) canceled or compromised any debt or claim
(except for adjustments made with respect to contracts for the
purchase of supplies or for the sale of products which in the
aggregate are not material);
(vii) suffered any operating loss or material other
loss;
(viii) made any amendment to or terminated any
material contract, license or other agreement to which it is a party;
(ix) made any payment or transfer in violation of
Section 547 or Section 548 of the Federal Bankruptcy Code or in
violation of other similar state law;
(x) failed to make payment of any of its debts or
other obligations as they have become due and payable in the ordinary
course of business; or
(xi) experienced any other event or condition of
any character which has materially and adversely affected its
business.
(i) Tax Matters. The Sellers have prepared and filed in a timely
manner all federal, state and local tax returns and reports as are and have
been required to be filed, which returns were prepared on a basis consistent
with the financial statements of such corporation, and all taxes shown thereon
to be due have been paid in full. The Sellers have not executed or filed with
the Internal Revenue Service or any other taxing authority any agreement
extending the period for assessment or collection of any income or other taxes;
and, as of the date hereof, the Sellers are not a party to any pending action
or proceeding by any governmental authority for assessment or collection of
taxes, and no claim for assessment or collection of taxes has been asserted
against such corporation. No accrued and unpaid taxes of any type exist, and
no formal claims have been made or asserted by the United States Government or
by any state or foreign country or local government for income or any other
taxes, except such as have been paid or (whether or not disputed) are disclosed
pursuant to Section 3(g) hereof.
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(j) Litigation. Except as disclosed in Exhibit F to this
Agreement, each of the Sellers: (i) is not a party to any litigation,
proceeding or administrative investigation and none is pending or threatened
against such corporation, its properties, any property used in its business or
the transactions contemplated by this Agreement; (ii) knows of no outstanding
order, writ, injunction or decree of any court, government, governmental
authority or arbitration against or affecting it, its properties or business;
(iii) knows of no basis for any such litigation, proceeding or investigation
which might have a material adverse affect, financial or otherwise, on its
business, property, operations or prospects; (iv) has not experienced any labor
trouble, dispute, grievance, controversy or strike nor is there any pending or
threatened against such corporation; and (v) knows of no basis for any such
labor trouble, dispute, grievance, controversy or strike which might have a
material adverse effect on the business, properties, assets, operations or
prospects or on the condition, financial or otherwise, of the Sellers.
(k) Title to and Condition of the Assets. Except as disclosed in
Exhibit G to this Agreement, the Sellers have good and marketable title to all
of the Assets, and the Assets are subject to no mortgage, guaranty, judgment,
execution, pledge, lien, conditional sales agreement, security agreement,
encumbrance or charge, except as disclosed pursuant to this Agreement (with
respect to which no default exists). The Assets, are in good condition and
repair, reasonable wear and tear excepted, and the stock-in-trade and
merchandise consists of current, readily saleable goods and merchandise which
are listed on the manufacturer's current price sheet.
(l) Leases, Contracts and Commitments. Except as listed on
Exhibit H to this Agreement, the Sellers are not a party to any equipment
leases, contracts, agreements or commitments, written or oral, of any nature
(including mortgages, loans, deeds of trust, indentures and credit agreements)
which relate to the Assets. Exhibit H lists each such lease, contract,
agreement or commitment, indicating the parties thereto and briefly summarizing
the terms of each such agreement. Copies of each such lease, agreement,
contract or commitment have been delivered to the Purchaser.
(m) Customers. There has been no termination, cancellation,
limitation, modification or change since the date of each of the financial
statements, provided pursuant to Section 3(f) above, in the business
relationship of the Sellers with any customer or group of customers whose
purchases individually or in the aggregate provided more than five percent of
aggregate gross revenues for the previous fiscal year of such corporation.
(n) No Interest in Properties, Competitors, Etc. No director,
officer or stockholder of any of the Sellers owns, directly or indirectly, any
interest in (except for the ownership of marketable securities of publicly
owned corporations, representing in no case more than three percent of the
outstanding shares of such class of securities) or controls or is an employee,
officer, director or partner of, participant in or consultant to any
corporation, association, partnership, limited partnership, joint venture or
other business organization which is a competitor, supplier or customer of the
Sellers or the Purchaser.
(o) Compliance With Applicable Laws. The conduct of its business
by the Sellers does not violate or infringe any federal, state, local or
foreign law, statute, ordinance, license or regulation presently in effect, or
that to the knowledge of the Sellers or any Stockholder is proposed to be
adopted, or any right of others, the enforcement of which would materially
adversely affect the Sellers's business or the value of the Assets being
conveyed hereunder. The Sellers have and have maintained all licenses and
permits required by all local, state and federal authorities and regulating
bodies.
(p) Approvals and Consents. No consent, approval or authorization
is required in connection with the execution or delivery of this Agreement by
the Sellers and the Stockholders or the consummation by each of them of the
transactions contemplated hereby.
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(q) Disclosure. No representation or warranty made by the Sellers
or any Stockholder in this Agreement, the exhibits hereto or any of the
documents and papers required to be delivered pursuant to this Agreement or in
connection with the consummation of the transactions contemplated hereby
contains or will contain any untrue statement of a material fact or omits or
will omit to state a material fact necessary to make the statements contained
herein or therein not misleading.
4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.
The Purchaser hereby represents and warrants the following:
(a) Organization and Standing. The Purchaser is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Florida and has the corporate power and authority to carry on its
business as it is now being conducted.
(b) Authority Relative to This Agreement. The execution and
delivery of this Agreement by the Purchaser has been duly authorized by the
Board of Directors of the Purchaser and no further corporate action will be
necessary on its part to make this Agreement valid and binding upon it and
enforceable against it in accordance with the terms hereof or to carry out the
actions contemplated hereby.
(c) Approvals and Consents. No additional consent, approval or
authorization is required in connection with the execution or delivery of this
Agreement by the Purchaser or the consummation by the Purchaser of the
transactions contemplated hereby.
5. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE PURCHASER.
The obligations of the Purchaser under this Agreement are subject to
the satisfaction, at or prior to the Closing Date of each of the following
conditions (the fulfillment of any of which may be waived in writing by the
Purchaser):
(a) Accuracy of Representations and Warranties. The
representations and warranties and statements of the Sellers and each of the
Stockholders contained in this Agreement, all exhibits hereto and any documents
delivered in connection herewith shall be true and complete.
(b) Compliance. The Sellers and each of the Stockholders shall
each have performed and complied with all agreements, covenants and conditions
required by this Agreement and all exhibits hereto to be performed and complied
with by each of them.
(c) Good Standing Certificates. The Purchaser shall have received
a certificate executed by the Secretary of State of the State of Florida dated
within 10 days prior to the Closing Date certifying that each of the Sellers is
a corporation in good standing under the laws of the State of Florida.
(d) Certificate. The Purchaser shall have received a certificate
executed by the President of each of the Sellers, attested to by the Secretary
of such corporations under their corporate seal, and a certificate executed by
the Stockholder, dated the Closing Date, satisfactory in form and substance to
the Purchaser and its counsel, certifying as to (i) the fulfillment of matters
set forth in Sections 5(a) through 5(c) of this Agreement, (ii) the resolutions
adopted by the Board of Directors of the Sellers and the stockholders approving
the execution of this Agreement and the consummation of the transactions
contemplated hereby, and (iii) the incumbent officers of the Sellers and the
authenticity of the signatures of each.
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(e) Opinion of Counsel. The Purchaser shall have received an
opinion of Henry Barber, Esquire, as counsel to the Sellers and the
Stockholders, dated the Closing Date, satisfactory in form and substance to the
Purchaser and its counsel, to the effect that:
(i) the Sellers are corporations duly organized,
validly existing and in good standing under the laws of the State of
Florida with full corporate power and authority to carry on its
business as it is presently conducted and to own the Assets;
(ii) the capitalization of the Sellers is as set
forth in Section 3(b) of this Agreement, all of the outstanding
capital stock of such corporation is validly issued, fully paid and
nonassessable and all of such stock is owned by the Stockholders free
and clear of all liens, encumbrances or interests of third persons;
(iii) to the best of his knowledge, the Sellers
have good and marketable title to the Assets being conveyed to the
Purchaser pursuant to this Agreement and title to the Assets as
conveyed to the Purchaser hereunder is free and clear of all liens,
encumbrances, equities and interests of third persons except as
specifically noted in this Agreement and the exhibits hereto;
(iv) this Agreement has been duly authorized,
executed and delivered by each of the Sellers and the Stockholder and
constitutes a legal, valid and binding obligation of each of them
enforceable against each of them in accordance with its terms;
(v) the execution and delivery of this Agreement
and performance of the transactions contemplated hereby will not
violate any provision of state law applicable to the Sellers or the
Stockholder; will not conflict with, result in the breach of any
provision of or the termination of or constitute a default under any
corporate charter, by-laws, indenture, mortgage, deed of trust,
partnership agreement, joint venture agreement or other instrument or
agreement to which any of them is a party or by which any of the
Assets are abound; will not constitute a violation of any order,
judgment or decree to which any of them is a party or by which any of
the Assets are bound; and will not result in the creation of any lien,
charge or encumbrance upon any of the Assets;
(f) Litigation. There shall not be any litigation or proceeding
to restrain or invalidate the consummation of the transactions contemplated
hereby the defense of which, in the sole discretion of the Purchaser, would
involve expense to the Purchaser or lapse of time that would be materially
adverse to the interests of the Purchaser.
(g) Termination of Financing Statements. Except as disclosed on
Exhibit I, at or prior to the Closing Date, no financing statements shall be of
record with the Secretary of State of the State of Florida, or in the public
records of any county thereof, with respect to any of the Assets, and the
Sellers shall have furnished evidence satisfactory to counsel to the Purchaser
of the termination of all such filings previously on record with respect to any
of the Assets.
(h) Noncompetition Agreement. Stockholder shall enter into a
Confidentiality, Noncompetition and Nonsolicitation Agreement (a
"Noncompetition Agreement") with Purchaser, in substantially the form attached
hereto as Exhibit J.
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(i) Actions, Proceedings, Etc. All actions, proceedings,
instruments, agreements and documents required to carry out the transactions
contemplated by this Agreement or incidental thereto and all other related legal
matters shall have been reasonably satisfactory to and approved by Schifino &
Fleischer, P.A., counsel to the Purchaser; and, such counsel shall have been
furnished with such copies (certified if requested) all of such actions,
proceedings, instruments, agreements and documents as they shall have reasonably
requested.
6. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE SELLERS AND THE
STOCKHOLDERS.
The obligations of the Sellers and each of the Stockholders under this
Agreement are subject to the satisfaction, at or prior to the Closing Date, of
each of the following conditions (the fulfillment of any one of which may be
waived in writing by such parties):
(a) Accuracy of Representations and Warranties. The
representations and warranties and statements of the Purchaser contained in
this Agreement shall be true and complete.
(b) Compliance. The Purchaser shall have performed and complied
with all agreements, covenants and conditions required by this Agreement and
all exhibits hereto to be performed and complied with by it.
(c) Certificate. The Sellers shall have received a certificate
executed by the President of the Purchaser and attested to by its Secretary
under its corporate seal, dated the Closing Date, certifying as to (i) the
fulfillment of the matters mentioned in Sections 6(a) and (b) of this
Agreement, and (ii) the resolutions adopted by the Board of Directors of the
Purchaser approving the execution of this Agreement and the consummation of the
transactions contemplated hereby, and (iii) the incumbent officers of the
Purchaser and the authenticity of the signatures of each.
(d) Employment Agreement. Purchaser shall enter into a five year
employment agreement with William Stanley, in substantially the form attached
hereto as Exhibit K.
(e) Lease Agreements. Purchaser shall enter into lease
agreements, in substantially in the form attached hereto as Exhibit L, at
Closing with Stockholder, as lessor, for the following locations:
<TABLE>
<CAPTION>
Annual
Site Sq. Ft. Rental$ /ft. Rental
---- -------- ----------- ---------------
<S> <C> <C> <C>
Main Location (Gainesville) 12,940 $5.00 $64,700
Alachua* 4,050 $4.50 $18,225
Hawthorne* 2,250 $4.10 $9,225
(Option for additional 2,000 - 3,000 sq. ft. at $4.10 per sq. ft.)
East Gainesville* 5,600 $4.50 $ 25,200
----------------
</TABLE>
* Lease may be canceled after one year at the option of the Purchaser.
7. OTHER COVENANTS.
(a) Covenant of Sellers and Stockholder. The Purchase Price shall
be applied first to the discharge of any unpaid debts and liabilities of the
Sellers pertaining to the Assets. Sellers shall pay all of its unpaid debts
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and liabilities. Sellers and Stockholder shall indemnify and hold purchaser
harmless of and from all liabilities of Sellers resulting from Sellers's failure
to pay its creditors.
(b) Audited Financial Statements. The Sellers shall furnish to
the Purchaser, at the Purchaser's expense (not to exceed $50,000), within
forty-five (45) days following the Closing Date, financial statements for the
Sellers certified by Graham & Cotrill independent public accountants, including
a balance sheet, statement of operations, statement of stockholders' equity and
statement of cash flows (with supporting schedules), prepared in accordance
with generally accepted accounting principles for such periods as may be
specified by the Purchaser, accompanied by a copy of the report thereon of such
independent certified public accountants.
8. INDEMNIFICATION.
(a) General. The Sellers and Stockholder jointly and severally
agree to indemnify the Purchaser in respect of any and all claims, losses and
expenses which may be incurred by the Purchaser (the "Indemnified Party")
arising out of:
(i) any breach by either the Sellers or the
Stockholder of any of their representations, warranties, covenants or
agreements made in this Agreement, the exhibits hereto or any document
or paper delivered in connection with the transactions contemplated
hereby;
(ii) any attempt (whether or not successful) by any
person to cause or require the Indemnified Party to pay or discharge
any debt, obligation, liability or commitment inconsistent with any
such representation, warranty, covenant or agreement; or
(iii) any action, suit, proceeding, assessment or
judgment arising out of or incident to any of the matters indemnified
against in this Section 8, (including reasonable fees and
disbursements of counsel before and at trial and in appellate
proceedings in the event Purchaser is found liable as a result of such
action, suit, proceeding assessment or judgement) provided further
that the Indemnifying party chooses not to take responsibility for the
defense of such action, suit proceeding assessment or judgement.
(b) Claims for Indemnification. Whenever any claim shall arise
for indemnification under this Section 8, the Indemnified Party shall notify
the party or parties (as the case may be) against whom indemnification is
sought (whether one party or more, the "Indemnifying Party") in writing by
registered mail within 30 days after the Indemnified Party has actual knowledge
of the facts constituting the basis for such claim. Such notice shall specify
all facts known to the Indemnified Party giving rise to such indemnification
right and the amount or an estimate of the amount of the liability arising
therefrom. The right to indemnification hereunder and the amount or the
estimated amount thereof, as set forth in such notice, shall be deemed agreed
to by the Indemnifying Party unless, within 15 days after the receipt of such
notice, the Indemnified Party is notified in writing that the Indemnifying
Party disputes the right to indemnification as set forth or estimated in such
notice.
(c) Right to Defend; Third-Party Claims, Etc. If the facts
giving rise to any such indemnification right shall involve any actual or
threatened claim or demand by any third party against the Indemnified Party or
any possible claim by the Indemnified Party against any third party, such claim
by or against a third party shall be referred to as a "Third-Party Claim." If
the Indemnifying Party gives the Indemnified Party an agreement in writing, in
form and substance reasonably satisfactory to counsel to the Indemnified Party,
agreeing to indemnify and save the Indemnified Party harmless from all costs
and liability arising from any Third-Party Claim, the
9
<PAGE> 10
Indemnifying Party may at its own expense undertake full responsibility for the
defense or prosecution of such Third-Party Claim and may contest or settle it on
such terms as it may choose. If the Indemnifying Party fails to deliver such an
agreement of indemnity to the Indemnified Party, (A) the Indemnifying Party at
its own expense may nevertheless participate with the Indemnified Party in the
defense or prosecution of the Third-Party Claim in any and all settlement
negotiations relating thereto, and (B) the Indemnified Party may contest or
settle the Third-Party Claim on such terms as it may choose, although the
Indemnified Party shall not reach a settlement until it has consulted in good
faith with the Indemnifying Party. Any such participation shall not relieve the
Indemnifying Party of its obligations to indemnify the Indemnified Party under
this Section 8. If by reason of any Third-Party Claim a lien, attachment,
garnishment or execution is placed upon any of the property or assets of the
Indemnified Party, the Indemnifying Party, if it desires to exercise its right
to defend or prosecute such suit, shall furnish a satisfactory indemnity bond to
obtain the prompt release of such lien, attachment, garnishment or execution.
(d) Cooperation. The parties to this Agreement shall execute such
powers of attorney as may be necessary or appropriate to permit participation
of counsel selected by any party hereto and, as may reasonably be related to
any such claim or action, shall provide access to the counsel, accountants and
other representatives of each party during normal business hours to all
properties, personnel, books, tax records, contracts, commitments and all other
business records of such other party and will furnish to such other party
copies of all such documents as may reasonably be requested (certified, if
requested).
9. GENERAL.
(a) No Brokers. Each of the parties to this Agreement represents
and warrants, to the others, that it has not utilized the services of any
finder, broker or agent. Each of the parties agrees to indemnify the other
parties against and hold them harmless from any and all liabilities to any
person, firm or corporation claiming any broker's or finder's fee or commission
of any kind on account of services rendered on behalf of such corporation in
connection with the transactions contemplated by this Agreement.
(b) Survival of Representations, Warranties, Etc. Each of the
parties to this Agreement covenants and agrees that its representations,
warranties, covenants, statements and agreements contained in this Agreement
and the exhibits hereto and any document delivered in connection herewith shall
survive the Closing Date and terminate on November 25, 2001, except that the
representations and warranties contained in or made pursuant to Section 3(b)
shall survive the Closing indefinitely and the representations and warranties
contained in or made pursuant to Section 3(i) shall survive the Closing until
six months after the expiration of the applicable statutes of limitations
relating to taxes (including any extensions thereof). The expiration of any
representation or warranty shall not effect any claim made in writing prior to
the date of such expiration. All statements contained herein and any
certificate or exhibit delivered pursuant to this Agreement shall be deemed to
be representations and warranties.
(c) Waivers. No action taken pursuant to this Agreement,
including any investigation by or on behalf of any party, shall be deemed to
constitute a waiver by the party taking such action of compliance with any
representation, warranty, covenant or agreement contained herein, therein and
in any document delivered in connection herewith or therewith. The waiver by
any party to this Agreement of a breach of any provision of this Agreement
shall not operate or be construed as a waiver of any subsequent breach.
10
<PAGE> 11
(d) Specific Performance; Remedies. The parties to this Agreement
acknowledge that the performance of their respective obligations hereunder is
essential to the consummation of the transactions contemplated by this
Agreement. Each of them further acknowledges that the Assets are unique and
that no party will have an adequate remedy at law if any other party fails to
perform its or his obligations hereunder. In such event, each party shall have
the right, in addition to any other rights it may have, to compel specific
performance of this Agreement.
(e) Expenses. Except as otherwise provided in this Agreement,
each of the parties to this Agreement shall pay its own expenses in connection
with this Agreement and the transactions contemplated hereby, including the
fees and expenses of its counsel and its certified public accountants and other
experts. Cash expenses of the Sellers and the Stockholders incurred in
connection with the execution of this Agreement and the consummation of the
transactions contemplated hereby are specifically agreed to be liabilities that
will not be assumed by the Purchaser pursuant to this Agreement.
(b) Notices. All notices, requests, demands and other
communications which are required or may be given under this Agreement shall be
in writing and shall be deemed to have been duly given if personally delivered
or if mailed, first class mail, postage prepaid, to:
If to the Purchaser: The Parts Source, Inc.
1751 S. Missouri Avenue
Clearwater, FL 33616
Attn: Thomas D. Cox, President
with a copy to: William J. Schifino, Esquire
Schifino & Fleischer, P.A.
One Tampa City Center, Suite 2700
Tampa, FL 33602
If to the Sellers or William Stanley
the Stockholders: 1022 SW 112th Street
Gainesville, Florida 32607
with a copy to: Henry Barber, Esquire
Dell, Graham, Wilcox, Barber, et. al.
203 NE 1st Street
Gainesville, Florida 32602
or to such other address as such party shall have specified by notice in
writing to the other parties.
(c) Entire Agreement; Amendment. This Agreement (including the
exhibits hereto and all documents and papers delivered pursuant hereto and any
written amendments hereof executed by the parties to this Agreement)
constitutes the entire agreement, and supersedes all prior agreements and
understandings, oral and written, among the parties to this Agreement with
respect to the subject matter hereof.
(d) Assignability. This Agreement shall not be assignable by any
of the parties to this Agreement without the prior written consent of all other
parties to this Agreement.
11
<PAGE> 12
(e) Further Assurance. The parties to this Agreement will execute
and deliver, or cause to be executed and delivered, such additional or further
transfers, assignments, endorsements or other instruments as the Purchaser or
its counsel may reasonably request for the purpose of carrying out the
transactions contemplated by this Agreement.
(f) Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(g) Section and Other Headings. The section and other headings
contained in this Agreement are for reference purposes only and shall not
affect the meaning or interpretation of this Agreement.
(h) Governing Law. This Agreement has been negotiated and
prepared and will be performed in the State of Florida, and the validity,
construction and enforcement of, and the remedies under, this Agreement shall
be governed in accordance with the laws of the State of Florida (except any
choice of law provision of Florida law shall not apply if the law of a state or
jurisdiction other than Florida would apply thereby).
(i) Attorney's Fees. In the event it shall become necessary for
either party at any time to institute any legal action or proceedings of any
nature for the enforcement of this Agreement, or any provisions hereof, or to
employ an attorney-at-law therefor and said party prevails in such action or
proceedings, then the non-prevailing party shall pay to the prevailing party
such prevailing party's costs (including reasonable attorney's fees) incurred
in such action or proceedings.
IN WITNESS WHEREOF, this Agreement has been signed by each of the
individual parties hereto and signed by an officer thereunto duly authorized
and attested under the corporate seal by the Secretary of each of the corporate
parties hereto, all on the date first above written.
PURCHASER:
Attest: THE PARTS SOURCE, INC.
By: /s/ Robert A. Cox By: /s/ Thomas D. Cox
---------------------------- -------------------------------
Robert A. Cox, Secretary Thomas D. Cox, President
(CORPORATE SEAL)
SELLERS:
Attest: CENTRAL MOTOR SUPPLY, INC.
By: /s/ John W. Stanley By: /s/ John W. Stanley
---------------------------- -------------------------------
Title: President
(CORPORATE SEAL)
12
<PAGE> 13
CENTRAL MOTOR SUPPLY OF
Attest: ALACHUA, INC.
By: /s/ John W. Stanley By: /s/ John W. Stanley
---------------------------- -------------------------------
Title: President
(CORPORATE SEAL)
CENTRAL MOTOR SUPPLY OF
Attest: WILLISTON, INC.
By: /s/ John W. Stanley By: /s/ John W. Stanley
---------------------------- -------------------------------
Title: President
(CORPORATE SEAL)
CENTRAL MOTOR SUPPLY OF
Attest: HAWTHORNE, INC.
By: /s/ John W. Stanley By: /s/ John W. Stanley
---------------------------- -------------------------------
Title: President
(CORPORATE SEAL)
CENTRAL MOTOR SUPPLY OF
Attest: EAST GAINESVILLE, INC.
By: /s/ John W. Stanley By: /s/ John W. Stanley
---------------------------- -------------------------------
Title: President
(CORPORATE SEAL)
STOCKHOLDER:
/s/ William J. Schifino /s/ William Stanley
---------------------------- -------------------------------
Witness William Stanley
13
<PAGE> 14
Exhibit B
THE PARTS SOURCE, INC.
INCENTIVE STOCK OPTION GRANT
NOVEMBER 27, 1996
_________________________________
THE PARTS SOURCE, INC., a Florida corporation (the "Company"),
pursuant to action of its Board of Directors, hereby grants to WILLIAM STANLEY
the "Optionee"), in consideration of services as an employee, the right and
option (the "Option") to purchase from the Company all or any part of THIRTY
THOUSAND (30,000) shares of the Common Stock of the Company (the "Option
Shares"), par value $.01 per share, at an exercise price of Twelve Dollars
($12.00) per share, in accordance with and subject to the terms, conditions and
provisions of the Company's Stock Option Plan (the "Plan"), a copy of which is
attached hereto and further subject to the specific terms, conditions and
provisions set forth herein.
1. The Option shall vest and become exercisable as follows:
20% at November 27, 1997
20% at November 27, 1998
20% at November 27, 1999
20% at November 27, 2000
20% at November 27, 2001
After the Option has become exercisable, all or any part of the Option
Shares may be purchased at any time or from time to time thereafter during the
remainder of the term of the Option; provided, however, that no such purchase
shall be for less than ten (10) shares except as to any balance of the Option
Shares with respect to which the Option shall at the time be exercisable, that
no such purchase shall be for a fraction of a share and that, except as
otherwise permitted by Paragraph 3, below, the Option may not be exercised
unless the holder thereof shall at the time of such exercise be an employee of
the Company or one of its subsidiaries.
2. Unless the period of the Option shall have sooner ended, the
Option, to the extent not theretofore exercised, shall in all events terminate
upon the expiration of five (5) years from the date of this Option Grant.
3. (a) Upon the termination of the employment of the
Optionee other than as a result of his death, the Optionee shall have the
right, within thirty (30) days after the date on which he shall have ceased to
be an employee, to exercise the unexercised portion of the Option to the
extent, if any, that it shall have been exercisable by the Optionee on the date
of such termination of employment, but in no event later than the date set
forth in Paragraph 2, above.
(b) If the Optionee's employment shall have terminated as
the result of his death or if the Optionee shall die within ninety (90) days
after the termination of his employment, the person or persons to whom the
Option shall have been transferred by will or the laws of descent and
distribution shall have the right, within one hundred eighty (180) days from
the date of the Optionee's death, to exercise the unexercised portion of the
Option to the extent, if any, that it shall have been exercisable by the
Optionee on the date of the Optionee's death, but in no event later than the
date set forth in Paragraph 2, above.
(c) If an Optionee's employment or other relationship
with the Company terminates because of a disability, the Optionee's option
shall terminate on the earlier of the date of expiration thereof or six months
following the termination of such relationship; and unless by its terms it
sooner terminates
<PAGE> 15
and expires during such six-month period, the Optionee may exercise that
portion of his or her option which is exercisable the time of termination of
such relationship.
(d) Transfer from employment by the Company to a
subsidiary or from a subsidiary to the Company or from one subsidiary of the
Company to another subsidiary of the Company shall not constitute a termination
of employment hereunder.
4. (a) In no event shall the Option be exercisable in whole
or in part if exercise or delivery of shares upon exercise of the Option would
constitute a violation of any applicable federal, state or other law or
regulation.
(b) If necessary or desirable, in the opinion of counsel
to the Company, but not otherwise, there shall be delivered to the Company,
before the delivery of certificates for any shares pursuant to any exercise of
the Option, in whole or in part, (1) a representation in writing signed by the
person or persons who shall have so exercised the Option, and such evidence as
may be reasonably required by counsel to the Company, that such shares of stock
are being acquired in good faith for investment and not with a view to resale
or distribution and (2) such other representations or evidence as in the
opinion of counsel to the Company are or may be necessary to satisfy the
requirements of any federal, state or other law or regulation at the time in
effect relating to the acquisition of shares to which the Option relates.
5. (a) The Option shall be exercised by written notice
signed by the Optionee or, in the event of his death, by the person or persons
entitled to exercise the same under this Option Grant, and served on the
Company, specifying the number of shares in respect of which the Option is
being exercised. Such notice shall be deemed to have been served and the
Option duly exercised in respect of the shares specified in the notice if and
when such notice shall have been (a) mailed by certified mail addressed to
either the Secretary or the Treasurer of the Company at its principal office in
the State of Florida, or such other address as may hereafter be designated by
the Company for the purpose by notice in writing to the Optionee, or (b)
delivered directly to either such officer. Certificates for the shares in
respect of which this Option shall have been exercised shall not be delivered
unless and until the purchase price for such shares has been paid in full in
cash or in the form of a check, bank draft or postal or bank money order; the
purchase price may also be paid in stock of the Company.
6. The Option is not transferable by the Optionee otherwise than
by will or the laws of descent and distribution, and is exercisable during his
lifetime only by the Optionee. Any transferee of the Option shall take the
Option subject to the terms and conditions of this Option Grant. No such
transfer of the Option shall be effective to bind the Company unless the
Company shall have been furnished with written notice thereof and, if by will,
with a copy of the will, and such other evidence as counsel to the Company may
deem necessary to establish the validity of the transfer and the acceptance by
the transferee or transferees of the terms and conditions of this Option Grant.
No assignment or transfer of this Option, or of the rights represented thereby,
whether voluntary or involuntary, except a transfer by the Optionee by his will
or by the laws of descent and distribution, shall vest in the purported
assignee or transferee any interest or right hereunder whatsoever.
7. (a) The Optionee shall have no rights as a stockholder
with respect to any share covered by the Option until he shall have become the
holder of record of such share and, except subject to the provisions of
Paragraph 8, no adjustment shall be made for dividends (ordinary or
extraordinary, whether in cash or securities or other property) or other
distributions or other rights in respect of such share as to which the record
date is prior to the date upon which he shall have become the holder of record
thereof.
<PAGE> 16
(b) The existence of the Option shall not affect in any
way the right or power of the Company or its stockholders to make or authorize
any or all adjustments, recapitalizations, reorganizations or other changes in
the Company's capital structure or its business, or any merger or consolidation
of the Company, or any issue of bonds, debentures, preferred or prior
preference stocks or other securities ahead of or affecting the Common Stock or
the rights thereof, or the dissolution or liquidation of the Company, or any
sale or transfer of all or any part of its assets or business, or any other
corporate act or proceeding of any kind or nature, whether of a similar
character or otherwise.
8. (a) Each option shall become immediately fully
exercisable:
(i) if there occurs any transaction (which
shall include a series of transactions occurring within 60 days or occurring
pursuant to a plan), that has the result that stockholders of the Company
immediately before such transaction cease to own at least 51 percent of the
voting stock of the Company or of any entity that results from the
participation of the Company in a reorganization, consolidation, merger,
liquidation or any other form of corporate transaction;
(ii) if the stockholders of the Company shall
approve a plan of merger, consolidation, reorganization, liquidation or
dissolution in which the Company does not survive (unless the approved merger,
consolidation, reorganization, liquidation or dissolution is subsequently
abandoned); or
(iii) if the stockholders of the Company shall
approve a plan for the sale, lease, exchange or other disposition of all or
substantially all the property and assets of the Company (unless such plan is
subsequently abandoned).
(b) In the event of any other material change in the
capital structure of the Company or if the Board of Directors shall be of the
opinion that the foregoing provisions will for any other reason not result in
an equitable and proportionate adjustment in the number and class of securities
remaining subject to the Option or the purchase price to be paid therefor, the
Board of Directors may make such other or different adjustments, subject to the
provisions of Paragraph 8(c), below, as shall be deemed appropriate to effect
such an equitable and proportionate adjustment.
(c) Notwithstanding the foregoing provisions of this
Paragraph 8, no fractional shares shall be issued upon any exercise of this
Option, and the aggregate price paid upon the purchase of Option Shares shall
be appropriately reduced on account of any fractional share not issued.
9. The exercise of the Option shall be subject to the
requirement that if at any time the Board of Directors shall determine, in its
sole discretion, that (a) the listing, registration or qualification of the
Option Shares, or any of them, upon any securities exchange or under any
federal or state law or (b) the consent or approval of any governmental
regulatory body is necessary or desirable as a condition of, or in connection
with, the issue or purchase of the Option Shares, or any of them, the Option
may not be exercised in whole or in part unless such listing, registration,
qualification, consent or approval, as the case may be, shall have been
effected or obtained free of any conditions not acceptable to the Board of
Directors. The Company shall make reasonable efforts at its own cost to effect
any such listing, registration or qualification or to obtain any such consent,
approval or waiver.
10. Any dispute or disagreement which shall arise under or as
the result of this Option Grant shall be settled by an arbitrator. The
arbitrator shall have the power to interpret the provisions of this
<PAGE> 17
Option Grant and to make determinations under Paragraph 8, above. Any
determination or interpretation by the arbitrator, whether in settlement of a
dispute or disagreement or otherwise, shall be final, binding and conclusive
for all purposes.
11. This Option Grant and the provisions thereof shall be
binding upon and inure to the benefit of any successor or successors of the
Company and the person or persons to whom the Option may have been transferred
by will or the laws of descent and distribution. All terms and conditions of
this Option Grant imposed on the Optionee shall, unless the context clearly
indicates otherwise, be deemed, in the event of his death, to refer to and be
binding upon such last-mentioned person or persons.
12. This Option Grant is intended to be a statutory stock option
granted pursuant to the terms and conditions of the Company's Stock Option Plan
and each and every provision of this Option Grant shall be administered,
interpreted and construed so that the Option shall conform to the provisions of
such Plan. Any provision that cannot be so administered, interpreted or
construed shall be disregarded.
THE PARTS SOURCE, INC.
BY: /s/ THOMAS COX
------------------------------
THOMAS COX, PRESIDENT
<PAGE> 18
Exhibit J
CONFIDENTIALITY, NONCOMPETITION AND
NONSOLICITATION AGREEMENT
THIS AGREEMENT is made and entered into as of the 25th day of
November, 1996, by and between The Parts Source, Inc., d/b/a/ Ace Auto Parts, a
Florida corporation (the "Corporation") and Mr. William Stanley ("Stanley").
W I T N E S S E T H
WHEREAS, Stanley is the principal owner of the outstanding shares of
capital stock of Central Motor Supply, Inc., Central Motor Supply of Alachua,
Inc., Central Motor Supply of Williston, Inc., Central Motor Supply of
Hawthorne, Inc. and Central Motor Supply of East Gainesville, Inc., all
Florida corporations (collectively, the "Sellers");
WHEREAS, Stanley, the Sellers and the Corporation have entered into an
Asset Purchase Agreement dated as of November 25, 1996 (the "Purchase
Agreement");
WHEREAS, Stanley and the Corporation have entered into an Employment
Agreement of even date herewith (the "Employment Agreement"); and
WHEREAS, it is a condition to the Purchase Agreement and Employment
Agreement that this Agreement be executed by the parties hereto, and the
parties are willing to execute this Agreement and to be bound by the provisions
hereof;
NOW, THEREFORE, the undersigned, intending to be legally bound, and in
consideration of the covenants contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
mutually agree by and between each other as follows:
1. CONSIDERATION. As consideration for executing and delivering
this Agreement, the Corporation shall pay to Stanley $170,000 of which $85,000
is payable to him on the date of execution of this Agreement and $85,000 on
January 5, 1997.
2. CONFIDENTIALITY. Stanley agrees to keep in strict secrecy and
confidence any and all information he assimilates or to which he has access
during his employment with the Corporation and which has not been publicly
disclosed and is not a matter of common knowledge in the fields of work of the
Corporation. Stanley agrees that both during and after the term of his
employment with the Corporation, he will not, without prior written consent of
the Corporation, disclose any such confidential information to any third
person, partnership, joint venture, company, corporation or other organization.
3. NONCOMPETITION AND NONSOLICITATION.
(a) During the term of the Employment Agreement and for
a period of five (5) years after the termination of Stanley's
employment with the Corporation, regardless of the reason for his
termination, Stanley shall not, directly or indirectly, within a
radius of one hundred (100) miles of Gainesville, Florida, enter into,
engage in, be employed by, or consult with any business in competition
with the business of the Corporation as it is then carried on;
further, Stanley shall not sell to, market, produce or otherwise deal
with any customer of the Corporation. The restrictions of this
Section 3 shall extend to any and all activities of Stanley, whether
as an independent contractor, partner or joint venturer, or as an
officer, director, stockholder, agent, employee or salesman for any
<PAGE> 19
person, firm, partnership, corporation or other entity, or otherwise.
The restrictions of this Section 3 shall not be violated by the
ownership of no more than 2% of the outstanding securities of any
company whose stock is traded on a national securities exchange or is
quoted in the Automated Quotation System of the National Association
of Securities Dealers (NASDAQ). Solicitation or acceptance of orders
outside of any prohibited territory as described above for shipment
to, delivery in or service in any restricted territory shall also
constitute engaging in business within the restricted territories in
violation of this Section 3.
(b) During Stanley's employment with the Corporation and
for a period of five (5) years after the termination of his employment
with the Corporation, regardless of the reason for such termination,
Stanley agrees that he will refrain from and will not, directly or
indirectly, as independent contractor, employee, consultant, agent,
partner, joint venturer, or otherwise, (1) solicit any of the
employees of the Corporation to terminate their employment or (2)
accept employment with or seek remuneration by any of the clients or
customers of the Corporation with whom the Corporation did business
during the term of Stanley's employment.
4. SPECIFIC PERFORMANCE. Stanley agrees that damages at law will
be an insufficient remedy to the Corporation if he violates the terms of
Sections 2 or 3 of this Agreement and that the Corporation would suffer
irreparable damage as a result of such violation. Accordingly, it is agreed
that the Corporation shall be entitled, upon application to a court of
competent jurisdiction, to obtain injunctive relief to enforce the provisions
of such Sections, which injunctive relief shall be in addition to any other
rights or remedies available to the Corporation. If it is determined that such
violation has occurred, Stanley agrees to pay to the Corporation all costs and
expenses incurred by the Corporation relating to the enforcement of the terms
of Sections 2 or 3 of this Agreement, including reasonable fees and
disbursements of counsel (both at trial and in appellate proceedings).
5. EXTENSION. The period of time during which Stanley is
prohibited from engaging in the business practices specified in Section 3 shall
be extended by any length of time during which Stanley is in breach of Section
3 hereof.
6. ENFORCEMENT. It is agreed by the parties to this Agreement
that if any portion of the covenants set forth in Sections 2 or 3 is held to
be unreasonable, arbitrary or against public policy, then each such covenant
shall be considered divisible both as to time and geographical area, it being
the intention of the parties that a lesser period of time or geographical area
shall be enforced so long as the same is not unreasonable, arbitrary or against
public policy. The parties to this Agreement agree that, in the event any
court of competent jurisdiction determines that a specified time period or a
specified geographical area is unreasonable, arbitrary or against public
policy, a lesser time period or geographic area which is determined to be
reasonable, nonarbitrary and not against public policy may be enforced against
Stanley.
7. COMPLIANCE WITH OTHER AGREEMENTS. Stanley represents and
warrants that the execution of this Agreement and performance of his
obligations hereunder will not conflict with, result in the breach of any
provisions of or the termination of or constitute a default under any Agreement
to which he is a party or by which he is or may be bound.
8. WAIVER OR BREACH. The waiver by the Corporation of a breach
of any of the provisions of this Agreement by Stanley shall not be construed as
a waiver of any subsequent breach by Stanley.
2
<PAGE> 20
9. BINDING EFFECT; ASSIGNMENT. The rights and obligations of the
Corporation under this Agreement shall inure to the benefit of and shall be
binding upon the successors and assigns of the Corporation.
10. ENTIRE AGREEMENT. This Agreement contains the entire
agreement and supersedes all prior agreements and understandings, oral or
written, with respect to the subject matter hereof. This Agreement may be
changed only by an agreement in writing signed by the party against whom any
waiver, change, amendment, modification or discharge is sought.
11. HEADINGS. The headings contained in this Agreement are for
reference purposes only and shall not affect the meaning or interpretation of
this Agreement.
12. GOVERNING LAW. This Agreement shall be construed and enforced
in accordance with the laws of the State of Florida.
13. ATTORNEY'S FEES. In the event it shall become necessary for
either party at any time to institute any legal action or proceedings of any
nature for the enforcement of this Agreement, or any provisions hereof, or to
employ an attorney-at-law therefor and said party prevails in such action or
proceedings, then the non-prevailing party shall pay to the prevailing party
such prevailing party's costs (including reasonable attorney's fees) incurred
in such action or proceeding.
14. NOTICES. Any notice required or permitted to be given under
this Agreement shall be sufficient if in writing and if sent by certified or
registered mail, first class, return receipt requested, to the parties at the
following addresses:
To the Corporation: The Part Source, Inc., a/k/a Ace Auto Parts
1751 S. Missouri Avenue
Clearwater, Florida 34616
Attn: Thomas D. Cox, President
with copy to: William J. Schifino, Esq.
Schifino & Fleischer, P. A.
One Tampa City Center, Suite 2700
Tampa, Florida 33602
To the Stanleys: Mr. and Mrs. William Stanley
1022 SW 112th Street
Gainesville, Florida 32607
with copy to: Henry Barber, Esquire
Dell, Graham, Wilcox, Barber, et. al.
203 NE 1st Street
Gainesville, Florida 32602
3
<PAGE> 21
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the 25 th day of November, 1996.
CORPORATION:
THE PART SOURCE, INC.
d/b/a Ace Auto Parts
ATTEST:
/s/ Robert A. Cox By: /s/ Thomas D. Cox
- ------------------------------ ---------------------------------
Robert A. Cox, Secretary Thomas D. Cox, President
(CORPORATE SEAL)
STANLEY:
Witness as to Stanley:
/s/ William J. Schifino /s/ William Stanley
- ------------------------------ ---------------------------------
William Stanley
4
<PAGE> 22
Exhibit K
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made and entered into as of the 25th day
of November, 1996, by and between The Parts Source, Inc., d/b/a/ Ace Auto
Parts, a Florida corporation, and Mr. William Stanley, a resident of the State
of Florida (the "Employee").
W I T N E S S E T H:
1. EMPLOYMENT. The Employer hereby employs the Employee, and the
Employee hereby accepts such employment, upon the terms and subject to the
conditions set forth in this Agreement.
2. TERM. Subject to the provisions of termination as hereinafter
provided, the term of employment under this Agreement shall be for a five-year
term beginning as of the date of this Agreement and terminating on December 31,
2001 (the "Contract Termination Date"), unless employment is terminated as
otherwise provided in this Agreement.
3. COMPENSATION; REIMBURSEMENT, ETC.
(a) The basic compensation to the Employee shall be
initially payable (bi-weekly) based upon calendar year annual
compensation of $60,000.
(b) The Employer shall provide the Employee with an
automobile. In addition, the Employer shall also pay all related
automobile expenses, including but not limited to maintenance,
repairs, insurance and other costs. The Employee shall submit to the
Employer on a monthly basis an automobile expense report.
(c) The Employee may incur reasonable expenses for
travel, meals and lodging in connection with the performance of his
duties hereunder. The Employer will reimburse the Employee for all
such expenses upon the Employee's periodic presentation of an itemized
account of such expenditures.
(d) The Employee shall be eligible to receive an annual
bonus equal to five percent (5%) of the net earnings before taxes
attributable to the stores within the Northern Division (initially
covering Alachua and Levy County). Such bonus shall be calculated for
each period ended as of December 31 covered by the term of this
Agreement and shall be payable to the Employee no later than the
following June 30.
(e) The Employee shall be entitled to such other benefits
(e.g., health, life or disability insurance) as may be provided from
time to time by the Employer to other management employees of the
Employer. However, it is agreed that Employee may obtain his own
medical policy and Employer will pay the cost of such policy up to
$225.00.
(f) the Employee shall be granted simultaneously herewith
a stock option, granted under this Employee's Stock Option Plan, to
purchase 30,000 shares of the Employer's Common Stock in accordance
with the terms and conditions of an option agreement a copy of which
is attached hereto.
<PAGE> 23
4. DUTIES.
(a) The Employee is engaged as the Division Manager of
the Northern Division of the Employer and shall have such duties as
may from time to time be reasonably assigned to him by the President
or the Board of Directors of the Employer, provided such duties are
consistent with those duties of other Division Managers.
(b) The principal services for which the Employee is
engaged are to manage the business of the Employer within the Northern
Division assigned by the Employer to the Employee as determined by the
President.
5. EXTENT OF SERVICES. During the term of his employment under
this Agreement, the Employee shall devote such time and efforts to the business
of the Employer, as may be reasonably necessary in the normal course of
business.
6. VACATION AND DAYS OFF. The Employee shall be entitled to such
vacation time during each fiscal year of the Employer as he may qualify for in
accordance with the vacation policy established by the Employer's Board of
Directors from time to time. Notwithstanding the foregoing, the Employee shall
be entitled each year to a vacation of not less than two weeks, during which
time his compensation shall be paid in full. It is understood that in view of
Employee's position as a Division Manager, he will be entitled to a limited
number of additional vacation days to allow Employee enjoyment of a "long
weekend" from time to time and for time away from work for family matters.
7. DISABILITY, ILLNESS OR INCAPACITY.
(a) The Employee shall receive full compensation for any
period of disability, illness or incapacity during the term hereof
which renders the Employee at least temporarily unable to perform the
services required under this Agreement; provided, however, that if the
Employee's disability, illness or incapacity extends beyond a period
of sixty (60) days, the Employee shall not be entitled, after the
expiration of such sixty (60) day period, to any further compensation
hereunder until he returns to full time service hereunder, but he
shall be entitled only to such disability payments as may be provided
by a disability insurance policy or policies, if any, purchased by the
Employer.
(b) Successive periods of disability, illness or
incapacity will be considered separate periods unless the later period
of disability, illness or incapacity is due to the same or related
cause and commences less than one year from the ending of the previous
period of disability.
(c) If and when the period of disability, illness or
incapacity of the Employee totals 180 days, his employment with the
Employer shall terminate. Notwithstanding the foregoing, if the
Employee and the Employer agree, the Employee may thereafter be
employed by the Employer upon such terms as may be mutually agreeable.
(d) Any dispute regarding the existence, extent or
continuance of the disability, illness or incapacity shall be resolved
by the determination of a majority of three competent doctors who are
not employees of the Employer, one of which shall be selected by the
Employer, one of which shall be selected by the Employee and a third
selected by the other two doctors.
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<PAGE> 24
8. DEATH OR RETIREMENT.
(a) All rights of the Employee hereunder shall terminate
upon his death except that the Employer shall pay to the estate of the
Employee such compensation as would otherwise have been payable to the
Employee up to the end of the month in which his death occurs. The
Employer shall have no additional financial obligation under this
Agreement to the Employee or his estate.
(b) All rights of the Employee hereunder shall terminate
upon his retirement except that the Employer shall pay to the Employee
such compensation as would otherwise have been payable to the Employee
up to the end of the month in which his retirement occurs. The
Employer shall have no additional financial obligation under this
Agreement to the Employee.
9. TERMINATION.
(a) Either the Employee or the Employer may terminate
this Agreement on or after November 25, 1999 and prior to the
Contract Termination Date upon the giving of thirty (30) days' prior
written notice.
(i) In the event that the Employee gives notice
of termination, the Employer shall pay to the Employee any
compensation earned but not paid to the Employee prior to
such termination including a pro rata portion of any annual
bonus provided for in Section 3(d). Such payment shall be
in full and complete discharge of any and all liabilities or
obligations of the Employer to the Employee hereunder, and
the Employee shall be entitled to no further benefits under
this Agreement.
(ii) In the event that the Employer gives notice
of termination, the Employer shall pay to the Employee all
of the compensation provided for and at the times specified
in Section 3 hereof through the Contract Termination Date,
including the annual bonus provided in Section 3(d) hereof.
(b) (i) The Employer may terminate the employment of
the Employee hereunder (1) upon the Employee's failure to perform the
duties reasonably assigned to him by the Employer commensurate with
his position as Manager Division, (2) upon the Employee's material
breach of any provision of this Agreement, or (3) for other good cause
(as defined below).
(ii) The term "good cause" as used in this
Agreement shall include, but shall not necessarily be
limited to, habitual absenteeism, a pattern of conduct which
tends to hold the Employer up to ridicule in the community,
conduct disloyal to the Employer, conviction of any crime of
moral turpitude or substantial dependence, as determined by
the Board of Directors of the Employer, on any addictive
substance, including but not limited to alcohol,
amphetamines, barbiturates, methadone, cannabis, cocaine,
PCP, THC, LSD or illegal or narcotic drugs. If any
determination of substantial dependence by the Board of
Directors is disputed by the Employee, the parties hereto
agree to abide by the decision of a panel of three
physicians selected in the manner provided in Section 7(d)
of this Agreement. The Employee agrees to make himself
available for and submit to examinations by such physicians
as may be directed by the Employer. Failure to submit to
any such examination shall constitute a breach of a material
part of this Agreement.
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<PAGE> 25
(iii) If the employment of the Employee is
terminated pursuant to this Section 9(b)(i) 1 or 2, the
Employer shall pay to the Employee any compensation
earned but not paid to the Employee prior to such
termination and a pro rata portion of any annual bonus
provided for in Section 3(d). If the employment of the
Employee is terminated pursuant to this Section 9(b)(i) 3,
the Employer shall pay to the Employee any compensation
earned but not paid to the Employee prior to such
termination. Such payment shall be in full and complete
discharge of any and all liabilities or obligations of the
Employer to the Employee hereunder, and the Employee shall
be entitled to no further benefits under this Agreement,
except as otherwise specifically provided in this Section
and in Section 3 of this Agreement.
(iv) Prior to termination under (b)(i)(1) and (2)
above, Employee must be given written notice or such failure
of breach and allowed a fifteen day cure period. In the
event of termination under b(i)(3) notice will not be
required prior to termination.
10. CONFIDENTIALITY, NONCOMPETITION AND NONSOLICITATION. In
connection with the execution of this Agreement, the Employee shall enter into
a Confidentiality, Noncompetition and Nonsolicitation Agreement (the
"Noncompetition Agreement") in substantially the form attached hereto as
Exhibit "A."
11. COMPLIANCE WITH OTHER AGREEMENTS. The Employee represents
and warrants that the execution of this Agreement and performance of his
obligations hereunder will not conflict with, result in the breach of any
provisions of or the termination of or constitute a default under any Agreement
to which the Employee is a party or by which the Employee is or may be bound.
12. WAIVER OR BREACH. The waiver by the Employer of a breach of
any of the provisions of this Agreement by the Employee shall not be construed
as a waiver of any subsequent breach by the Employee.
13. BINDING EFFECT; ASSIGNMENT. The rights and obligations of
the Employer under this Agreement shall inure to the benefit of and shall be
binding upon the successors and assigns of the Employer. This Agreement is a
personal employment contract and the rights, obligations and interests of the
Employee hereunder may not be sold, assigned, transferred, pledged or
hypothecated.
14. ENTIRE AGREEMENT. This Agreement contains the entire
agreement and supersedes all prior agreements and understandings, oral or
written, with respect to the subject matter hereof. This Agreement may be
changed only by an agreement in writing signed by the party against whom any
waiver, change, amendment, modification or discharge is sought.
15. HEADINGS. The headings contained in this Agreement are for
reference purposes only and shall not affect the meaning or interpretation of
this Agreement.
16. GOVERNING LAW. This Agreement shall be construed and
enforced in accordance with the laws of the State of Florida.
17. ATTORNEY'S FEES. In the event it shall become necessary
for either party at any time to institute any legal action or proceedings of
any nature for the enforcement of this Agreement, or any provisions hereof, or
to employ an attorney-at-law therefor and said party prevails in such action or
proceedings, then the non-prevailing party shall pay to the prevailing party
such prevailing party's costs (including reasonable attorney's fees) incurred
in such action or proceedings.
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<PAGE> 26
18. NOTICES. Any notice required or permitted to be given under
this Agreement shall be sufficient if in writing and if sent by certified or
registered mail, first class, return receipt requested, to the parties at the
following addresses:
To the Employer: The Parts Source, Inc., a/k/a Ace Auto Parts
1751 S. Missouri Avenue
Clearwater, Florida 34616
Attn: Thomas D. Cox, President
with copy to: William J. Schifino, Esq.
Schifino & Fleischer, P. A.
One Tampa City Center, Suite 2700
Tampa, Florida 33602
To the Employee: Mr. William Stanley
1022 SW 112th Street
Gainesville, Florida 32607
with copy to: Henry Barber, Esquire
Dell, Graham, Wilcox, Barber, et. al.
203 NE 1st Street
Gainesville, Florida 32602
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the 25th day of November, 1996.
EMPLOYER
THE PARTS SOURCE, INC.
d/b/a/ Ace Auto Parts
ATTEST:
/s/ Robert A. Cox By: /s/ Thomas D. Cox
- ----------------------------- -------------------------------
Robert A. Cox, Secretary Thomas D. Cox, President
(CORPORATE SEAL)
Witness as to Employee: EMPLOYEE:
/s/ William J. Schifino /s/ William Stanley
- ----------------------------- -------------------------------
William J. Schifino William Stanley
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