SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest
event reported): July 7, 1995
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Republic Automotive Parts, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 0-6215 38-1455545
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(State or other (Commission file (I.R.S. Employer
jurisdiction of Number) Identification Number)
incorporation)
500 Wilson Pike Circle, Suite 115, Brentwood, Tennessee 37027
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(Address of principal executive offices)
615-373-2050
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(Registrant's telephone number, including area code)
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(Former name or former address, if changed since last report)
<PAGE>
Item 2. Acquisition or Disposition of Assets
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(a) On July 7, 1995, pursuant to an Agreement of Purchase and Sale
of Assets (the "Purchase Agreement") dated as of June 20, 1995 by and among
Beacon Auto Parts Company, a Delaware corporation ("BAP"), Beacon Auto Parts
Company, a Pennslyvania business trust ("Trust" and together with Trust
"Sellers"), Fred J. Pisciotta, an individual, Republic Automotive Parts
Sales, Inc. ("RAPSI), a wholly-owned subsidiary of Republic Automotive Parts,
Inc. (the Registrant") and the Registrant, RAPSI acquired certain assets
(including inventory, accounts receivable, vehicles, fixtures, equipment and
other non-real estate fixed assets) of Sellers, a privately held distributor
of automotive parts based in Export, Pennslyvania (near Pittsburgh), and the
Registrant acquired $1 million of accounts receivable of the business. The
Purchase Agreement is filed as Exhibit 1 hereto.
The estimated purchase price was $12,621,671 based on assumed levels
and valuations of closing date inventory and an estimated closing date
statement of assets and liabilities. In addition, RAPSI assumed an estimated
$3,340,644 of trade accounts payable and accrued expenses. Such purchase
price is subject to a definitive post-closing calculation and adjustment under
the terms of the Purchase Agreement to take place approximately 120 days after
the closing date (the "Settlement"). Of the purchase price, $1,000,000 was
paid through the issuance of 69,232 shares of the Registrant's common stock
and by the issuance of a $2,000,000 subordinated promissory note, payable
over four years in equal annual installments and bearing interest at 7.055
interest per annum payable quarterly. Of the balance of the purchase price
the sum of $8,659,504 was paid in cash at closing. The remainder of the
purchase price will be paid following settlement. In anticipation of the
acquisition, the Registrant increased the maximum availability under its
revolving bank credit facility with Comerica Bank from $20 million to $35
million, and utilized $8 million of borrowings thereunder to fund amounts
paid at closing. The Fifth Amended and Restated Revolving Credit Agreement
dated as of July 5, 1995 is filed as Exhibit 2 hereto.
In addition, the parties entered into a non-competition undertaking
providing for payments aggregating $500,000, payable to the Trust in twenty
equal quarterly installments of $25,000 each. Under the terms of the
Purchase Agreement, Trust will be entitled to receive additional contingent
purchase price payments over the next two and one-half years of up to $2.5
million based on the operations of the business meeting certain targets.
RAPSI has assumed or entered into leases for 23 locations used by Sellers,
including ten owned by BAP (or related parties).
(b) It is the intention of RAPSI, subject to a review of each
facility, to continue to use the purchased assets in substantially the same
manner as prior to the acquisition with certain changes to operating
procedures and upgrades to or changes of existing equipment.
<PAGE>
Item 7. Financial Statements and Exhibits
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(a) Financial Statements of Business Acquired - It is impractible
to provide the required financial statements for the acquired business at
this time. The required financial statements are to be filed by amendment
to this Report on Form 8-K/A as soon as practicable, but not later than sixty
(60) days after this Report is required to be filed.
(b) Pro Forma Financial Information - It is also impractible to
provide the required pro forma financial information relating to the acquired
business at this time. Such pro forma information are to be filed by
amendment to this Report on Form 8-K/A as soon as practicable, but not later
than sixty (60) days after this Report is required to be filed.
(c) Exhibits:
1. Agreement of Purchase and Sale of Assets dated as of
June 20, 1995 by and among Beacon Auto Parts Company,
a Delaware corporation, Beacon Auto Parts Company, a
Pennslyvania business trust, Fred J. Pisciotta, Republic
Automotive Parts Sales, Inc. and Republic Automotive
Parts, Inc., and various exhibits thereto.
2. Fifth Amended and Restated Revolving Credit Agreement,
dated as July 5, 1995, between Republic Automotive
Parts, Inc. and Comerica Bank.
<PAGE>
SIGNATURES
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 hereunto duly authorized.
REPUBLIC AUTOMOTIVE PARTS, INC.
(Registrant)
By:/s/Donald B. Hauk
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Donald B. Hauk
Executive Vice President and
Chief Financial Officer
Dated: July 21, 1995
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<PAGE>
EXHIBITS INDEX
Exhibits
1. Agreement of Purchase and Sale of Assets dated as of
June 20, 1995 by and among Beacon Auto Parts Company,
Fred J. Pisciotta, Republic Automotive Parts Sales, Inc.
and Republic Automotive Parts, Inc., and various exhibits
thereto.
2. Fifth Amended and Restated Revolving Credit Agreement,
dated as July 5, 1995, between Republic Automotive
Parts, Inc. and Comerica Bank.
<PAGE>
EXHIBIT 1
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AGREEMENT OF PURCHASE AND SALE OF ASSETS
This Agreement dated as of June 20, 1995, by and
among Beacon Auto Parts Company, a Delaware corporation having an
office at 6013 Enterprise Drive, Export, Pennsylvania 15632
("Company"), Beacon Auto Parts Company, a Pennsylvania business
trust having an office at 6013 Enterprise Drive, Export,
Pennsylvania 15632 ("Trust" and, together with Company,
"Sellers" and individually a "Seller"), and Fred J. Pisciotta, an
individual having an office at 6013 Enterprise Drive, Export,
Pennsylvania 15632 ("Stockholder"), and being the principal
stockholder of Company (Sellers and Stockholder being herein
sometimes referred to collectively as the "Selling Parties" and
each individually as a "Selling Party"), and Republic Automotive
Parts Sales, Inc., a Delaware corporation ("Buyer") and Republic
Automotive Parts, Inc., a Delaware corporation ("RAPI") and the
parent of Buyer, each having an office at 500 Wilson Pike Circle,
Suite 115, P.O. Box 2088, Brentwood, Tennessee 37024.
W I T N E S S E T H:
In consideration of the mutual covenants and agreements
hereinafter set forth, the parties hereto hereby agree as
follows:
ARTICLE 1
Purchase and Sale of Business and Assets
1.1 Purchased Assets. Subject to and upon the terms
and conditions of this Agreement, Sellers shall sell, transfer,
convey, assign, grant and deliver to Buyer and RAPI, and Buyer
and RAPI shall purchase, at the Closing (as defined in Section
3.1 hereof), all right, title and interest in and to all of the
respective businesses, properties, assets, inventories, accounts
receivable, machinery, equipment, furniture, fixtures,
franchises, goodwill and rights (accrued and contingent) of
Sellers as a going concern, of every nature, kind and
description, and wherever situated or located, including without
limitation all inventory, machinery, equipment, furniture,
fixtures, and other assets, property and rights described and/or
of the type described in the form of Bill of Sale annexed as
Exhibit 1.1 hereto (the "Bill of Sale"), but excluding those
assets and properties identified in Schedule 1.1 hereto (the
"Excluded Assets"). The businesses, properties, assets,
inventories, accounts receivable, machinery, equipment,
furniture, fixtures, franchises, goodwill and rights to be sold,
transferred, conveyed, assigned, granted and/or delivered to
Buyer pursuant hereto are hereinafter sometimes collectively
referred to as the "Purchased Assets". In this regard, it is
understood that the only Purchased Assets to be purchased by RAPI
pursuant hereto shall be accounts receivable equal to $1,000,000
in the aggregate as may be allocated to RAPI by agreement between
RAPI and Buyer. The balance of the Purchased Assets to be
purchased pursuant to this Agreement shall be purchased by Buyer.
1.2 Title to Purchased Assets. Sellers shall sell,
transfer, convey, assign, grant and deliver title to all of the
Purchased Assets to Buyer and RAPI free and clear of any liens,
pledges, charges, mortgages, security interests, restrictions,
easements, liabilities, claims, encumbrances or rights of others
of every kind and description (collectively, "Liens"), except
those Liens identified in Schedule 1.2 hereto (the "Permitted
Liens"). The business, operations, assets, properties, rights,
goodwill and activities of Sellers (other than the Excluded
Assets) are sometimes herein collectively referred to as the
"Business."
1.3 Assignments of Contracts. Buyer and the Selling
Parties acknowledge that certain of the agreements, contracts and
commitments to be included in the Purchased Assets, and the
rights and benefits thereunder (collectively, all of the
foregoing being herein sometimes referred to as the "Contracts"),
may not, by their terms, be assignable. Anything in this
Agreement to the contrary notwithstanding, this Agreement shall
not constitute an agreement to assign any such Contract if an
attempted assignment thereof, without the consent of a third
party thereto, would constitute a breach thereof or adversely
affect the rights under any such Contract of Buyer or Sellers
thereunder. In such event, the Selling Parties will cooperate
with Buyer and use their best efforts to provide for Buyer all
benefits to which any of Sellers is entitled under such
Contracts, and any transfer or assignment to Buyer by any Seller
of any such Contract or any right or benefit arising thereunder
or resulting therefrom which shall require the consent or
approval of any third party shall be made subject to such consent
or approval being obtained. The Selling Parties shall use their
best efforts to obtain such consents and approvals. If and when
any such consent or approval shall be obtained or such Contract
shall otherwise become assignable to Buyer, Sellers shall
promptly assign all of their rights thereunder to Buyer. Until
such time, none of Sellers shall enter into any amendment of any
such Contract without the prior written consent of Buyer.
Notwithstanding anything to the contrary herein, Sellers shall
not be obligated to incur any additional financial obligation or
liability to the party under any Contract for which such consent
or approval is required.
1.4 Satisfaction of Liabilities. At or prior to the
Closing, the Selling Parties shall cause all indebtedness of
Sellers to banks and/or other credit or lending institutions or
otherwise secured by any of the Purchased Assets, and all other
known liabilities of any of Sellers (other than those liabilities
expressly assumed by Buyer pursuant to the Liabilities
Undertaking, and other than the Permitted Liens and Permitted
Post-Closing Debt) to be paid and satisfied in full and shall
cause to be delivered to Buyer at the Closing releases and
discharges of all Liens and all other rights, claims and
interests in respect of the Purchased Assets relating to any of
such indebtedness and liabilities and of the holders of the
Permitted Post-Closing Debt (including without limitation all
required Form UCC-3 termination statements) in form and substance
reasonably required by Buyer. The term "Permitted Post-Closing
Debt" shall mean Sellers' mortgage and other indebtedness
identified in Schedule 1.4 of the Disclosure Schedule (as
hereinafter defined).
ARTICLE 2
Agreement Amount; Assumption of Liabilities;
Non-competition Undertaking
2.1 Agreement Amount. Subject to and upon the terms
and conditions of this Agreement, Buyer shall pay or deliver to
or for the benefit of Trust, in full payment and consideration
for the Purchased Assets and the Non-competition Undertaking (as
hereinafter defined), a total amount (the "Agreement Amount")
determined, and as the same may be adjusted, and payable, in
accordance with Schedule 2.1 hereto, the provisions of which
shall, effective upon the Closing, be deemed incorporated herein
by reference as if set forth in full herein.
2.2 Liabilities Undertaking. Buyer shall, at the
Closing, execute and deliver to Sellers a Liabilities Undertaking
(the "Liabilities Undertaking") in the form of Exhibit 2.2
hereto, the provisions of which shall, effective upon the
Closing, be deemed incorporated herein by reference as if set
forth in full herein. Except as expressly set forth in the
Liabilities Undertaking, neither Buyer nor RAPI shall assume or
be responsible for any debts, commitments, obligations or
liabilities of any nature whatsoever.
2.3 Non-Competition Undertaking. The Selling Parties
shall perform and comply with the provisions set forth in
Schedule 2.3 hereto (the "Non-competition Undertaking), which
provisions shall, effective upon the Closing, be deemed
incorporated herein by reference as if set forth in full herein.
Schedule 2.3 hereto also sets forth the terms of payment of the
sum of $500,000 (in 20 equal quarterly installments commencing
with the first day of the first full calendar quarter after the
Closing Date), which sum is to be payable by Buyer as part of the
Agreement Amount and as consideration for the Non-competition
Undertaking, all on the terms and conditions set forth in said
Schedule 2.3.
2.4 Allocation of Agreement Amount. The parties
hereto hereby agree that the Agreement Amount shall be allocated
in accordance with Schedule 2.4 hereto. The parties agree to
execute an IRS Form 8594 Acquisition Statement, under the
Internal Revenue Code, reflecting the said allocation.
2.5 Stockholders. Concurrently with the execution and
delivery hereof, each of the respective stockholders of and
holders of beneficial interests in Sellers has executed and
delivered to RAPI an agreement as to investment in shares of RAPI
Common Stock, in the form of Exhibit 2.5 hereto.
2.6 Insurance Proceeds. In the event any of the
Purchased Assets shall be damaged or destroyed by fire or any
other casualty or cause, and Buyer shall nevertheless proceed
with the Closing: (i) Buyer shall be entitled to, and Sellers
shall promptly pay over to Buyer, all insurance proceeds
pertaining to the same, and at the Closing shall assign to Buyer
all rights to receive and recover insurance proceeds pertaining
to the same, such insurance proceeds and rights to also
constitute Purchased Assets; and (ii) in the event such fire or
other casualty or cause does not permit Buyer to elect not to
close pursuant to Section 3.5(d) hereof and such insurance
proceeds shall not adequately compensate Buyer for the resulting
reduction in the fair market value of any equipment, vehicles,
fixtures or other fixed assets intended to be included in the
Purchased Assets, the Purchase Price (as defined in Schedule 2.1
hereto) shall be reduced by the amount by which such reduction in
fair market value in the aggregate exceeds such insurance
proceeds.
ARTICLE 3
Closing; Deliveries; Conditions Precedent
3.1 Closing.
(a) The Closing under this Agreement (the
"Closing") shall take place at the offices of Sellers' counsel,
Cohen & Grigsby, P.C., in Pittsburgh, Pennsylvania, at 10:00
a.m., local time, on the later of the third business day after
expiration of the H-S-R Waiting Period (as hereinafter defined)
or July 17, 1995, or such other date, place or time as the
parties hereto shall mutually agree upon (the date of the Closing
being called the "Closing Date").
(b) All proceedings to be taken and all documents
to be executed and delivered by the parties at the Closing shall
be deemed to have been taken and executed simultaneously and no
proceedings shall be deemed taken nor any documents executed or
delivered until all have been taken, executed and delivered.
3.2 Sellers' Deliveries. At the Closing, the Selling
Parties shall deliver to Buyer:
(a) the Bill of Sale, executed by Sellers;
(b) As to those Properties (as hereinafter
defined) for which leases directly with the landlord are to be
entered into effective as of the Closing, as indicated in
Schedule 3.2(b)(i) hereto, (i) leases in the forms included in
Exhibit 3.2(b)(i) hereto, executed by the respective landlords
thereunder (each a "New Lease"), and (ii) in the case of each of
the Properties which, as of the date hereof, is secured by a
mortgage in favor of Mellon Bank, N.A. or any affiliate thereof,
non-disturbance agreements from each mortgagee with respect to
each of such Properties in favor of Buyer in form and substance
reasonably required by Buyer as to each such New Lease, and (iii)
appropriate memoranda of lease, in duly recordable form, as to
each New Lease;
(c) As to those Properties for which the leases
currently in effect (with either of Sellers as tenant thereunder)
are to be assigned to and assumed by Buyer, as indicated in
Schedule 3.2(c) hereto, Instruments of Assignment and Assumption
in the forms included in Exhibit 3.2(c) hereto (each a "Lease
Assignment" and collectively the "Lease Assignments"), executed
by the appropriate Seller as assignor and (if such consent is
required by the terms of such lease) consented to in writing (in
form and substance reasonably required by Buyer) by each
applicable landlord;
(d) As to each lease (each an "Assigned Lease"
and collectively the "Assigned Leases") which is to be the
subject of a Lease Assignment, the estoppel agreement of the
landlord, in form and substance reasonably required by Buyer,
with respect to each such Assigned Lease and Lease Assignment,
and conforming to the form set forth as Exhibit 3.2(d) hereto;
(e) all Contracts, permits, approvals, licenses,
certificates, files and other items and documents in any Seller's
possession pertaining to the Purchased Assets;
(f) copies of corporate, stockholder, trust,
trustee and holder of beneficial interest resolutions and actions
of each of Sellers authorizing the execution and delivery of this
Agreement and each exhibit hereto and the consummation of the
transactions contemplated hereby and thereby, which stockholder
and holders of beneficial interests resolutions shall have been
unanimously approved and adopted by all stockholders and holders
of beneficial interest of each of Sellers, certified as such by
the President of Company and the trustee of Trust and by
Stockholder;
(g) good standing certificates with respect to
each of Sellers, issued as of a recent date by the Secretaries of
State of the States of Delaware and Pennsylvania.
(h) such other good and sufficient instruments of
conveyance, assignment and transfer (including duly endorsed
certificates of title for motor vehicles), as Buyer shall
reasonably require, and as shall be effective to vest in Buyer
good and marketable title to the Purchased Assets as contemplated
by this Agreement;
(i) Employment Agreements in the respective forms
included as Exhibit 3.2(i) hereto (the "Employment Agreements"),
executed by each of Stockholder and John Wieder, respectively;
and
(j) all other documents required by the terms of
this Agreement to be delivered to Buyer or RAPI at the Closing.
3.3 Buyer's Deliveries. At the Closing, Buyer will
deliver to Sellers:
(a) an amount equal to the "Cash Payment"
determined in accordance with paragraph (k) of Schedule 2.1
hereto, by payment thereof, by wire transfer, in accordance with
Schedule 3.3(a) hereto;
(b) the subordinated promissory note of Buyer in
the principal amount of $2,000,000 and referred to in paragraph
(k) of Schedule 2.1 hereof, in the form of Exhibit 3.3(b) hereto
(the "Note"), said Note inter alia to bear interest at 7.055% per
annum, payable quarterly, and to provide for the payment of the
principal sum thereof in four (4) equal annual installments
payable commencing on the first anniversary of the Closing Date,
all on the terms and conditions set forth therein, and guarantied
by RAPI in the form included as part of Exhibit 3.3(b) hereto;
(c) in consideration of the Purchased Assets
purchased by RAPI, a certificate, duly executed by RAPI and
registered in the name of Trust, representing the number of
shares of Common Stock, par value $.50 per share, of RAPI ("RAPI
Common Stock"), determined and to be issued in accordance with
paragraph (k) of Schedule 2.1 hereto (the "RAPI Shares").
(d) the New Leases, executed by the respective
lessee(s) thereunder;
(e) the Lease Assignments, executed by the
respective assignee(s) thereunder;
(f) the Liabilities Undertaking, executed by
Buyer;
(g) the Employment Agreements, executed by Buyer;
(h) certificates of good standing with respect to
each of Buyer and RAPI, issued as of a recent date by the
Secretary of State of Delaware;
(i) copies of resolutions of the board of
directors (or executive committee thereof) of Buyer and RAPI
authorizing the execution and delivery of this Agreement,
certified by and officer of each of them; and
(j) all other documents required by the terms of
this Agreement to be delivered to Sellers at the Closing.
3.4 Further Assurances. At any time and from time to
time after the Closing, at Buyer's request, and without further
consideration, the Selling Parties will execute and deliver such
other instruments of sale, transfer, conveyance, assignment and
confirmation, and take such actions, as Buyer may reasonably deem
necessary or desirable in order more effectively to transfer,
convey and assign to Buyer or RAPI, as the case may be, and to
confirm Buyer's or RAPI's, as the case may be, title to, all of
the Purchased Assets, to put Buyer or RAPI, as the case may be,
in actual possession and operating control thereof, and to assist
Buyer or RAPI, as the case may be, in exercising all rights with
respect thereto. The Selling Parties shall not be required to
incur out-of-pocket expenses in connection with the matters
referred to in this Section 3.4.
3.5 Buyer's and RAPI's Conditions Precedent. The
obligations of Buyer and RAPI under this Agreement to proceed
with the transactions contemplated hereby are, at the option of
Buyer and RAPI in their sole discretion, subject to the
fulfillment of the following conditions at or prior to the
Closing, and the Selling Parties shall use their best efforts to
cause each such condition to be fulfilled:
(a) no action, suit, proceeding or investigation
shall have been instituted against Buyer or RAPI or any of the
Selling Parties in, by or before any court, tribunal or
governmental body or agency, and be unresolved, to restrain or
prevent, or to obtain substantial damages by reason of, any of
the transactions contemplated hereby;
(b) the representations and warranties of the
Selling Parties contained in this Agreement, any Schedules and
Exhibits hereto and/or any certificates or documents delivered in
connection with this Agreement shall be true and correct when
made, and shall also be true and correct at the time of Closing
with the same force and effect as though such representations and
warranties were made at that time, except for changes expressly
permitted by this Agreement;
(c) each covenant, agreement and obligation
required by the terms of this Agreement to be complied with and
performed by any of the Selling Parties at or prior to the
Closing shall have been duly and properly complied with and
performed;
(d) since the date of this Agreement, there shall
not have occurred any material adverse change in the condition
(financial or otherwise), prospects or results of the operations
of any of Sellers or in the Business or the value of the
Purchased Assets taken as a whole, and no warehouse facility nor
more than one store operated by the Business shall have suffered
a substantial fire or other substantial casualty loss or damage;
(e) all consents necessary to the assignment to
Buyer of each of the Assigned Leases, and such consents necessary
to the assignment of Contracts, and such governmental consents
and assignments of governmental licenses and permits to be
transferred to Buyer, which are reasonably requested by Buyer to
be obtained prior to the Closing, shall have been obtained by
Sellers, and there shall have been delivered to Buyer executed
counterparts reasonably satisfactory in form and substance to
Buyer of such consents;
(f) all waiting periods, if any, applicable to
the consummation of the transactions contemplated by this
Agreement required by the Hart-Scott-Rodino Antitrust
Improvements Act (the "H-S-R Act") shall have been expired or
terminated; provided that Buyer and RAPI shall have submitted all
necessary applications under and otherwise complied with the
provisions of the H-S-R Act, as they apply to such transactions;
(g) the Selling Parties shall have delivered to
Buyer and RAPI the signed opinion of counsel to the Selling
Parties, dated the Closing Date, in form and substance reasonably
satisfactory to Buyer;
(h) Buyer and RAPI shall have obtained the
financing for and consent to the transactions contemplated by
this Agreement from RAPI's lending bank; and
(i) there shall be delivered to Buyer and RAPI a
certificate of the Selling Parties executed on the Closing Date
that the conditions set forth in subsections (b) through (e) of
this Section 3.5 have been fulfilled.
3.6 Sellers' Conditions Precedent. The obligations of
Sellers under this Agreement to proceed with the transactions
contemplated hereby are, at the option of Sellers in their sole
discretion, subject to the fulfillment of each of the following
conditions at or prior to the Closing, and Buyer and RAPI shall
use their best efforts to cause each such condition to be
fulfilled:
(a) the representations and warranties of Buyer
and RAPI contained in this Agreement or any certificates or
documents delivered by it to Sellers in connection with this
Agreement shall be true and correct when made, and shall also be
true and correct at the time of the Closing with the same force
and effect as though such representations and warranties were
made at that time, except for changes expressly permitted by this
Agreement;
(b) each covenant, agreement and obligation
required by the terms of this Agreement to be complied with and
performed by Buyer and RAPI at or prior to the Closing shall have
been duly and properly complied with and performed;
(c) since the date of this Agreement, there shall
not have occurred a material adverse change in the condition
(financial or otherwise), prospects or results of operations of
RAPI and its subsidiaries taken as a whole;
(d) all waiting periods, if any, applicable to
the consummation of the transactions contemplated by this
Agreement required by the Hart-Scott-Rodino Antitrust
Improvements Act (the "H-S-R Act") shall have been expired or
terminated; provided that the Selling Parties shall have
submitted all applications under and otherwise complied with the
provisions of the H-S-R Act, as they apply to such transactions;
(e) Buyer and RAPI shall have delivered to
Sellers the signed opinion of counsel to Buyer and RAPI, dated
the Closing Date, in form and substance reasonably satisfactory
to Sellers;
(f) there shall be delivered to Sellers a
certificate of Buyer and RAPI executed on the Closing Date that
the conditions set forth in subsections (a) through (c) of this
Section 3.6 have been fulfilled.
3.7 H-S-R Act. The Selling Parties, on the one hand,
and Buyer and RAPI on the other hand, shall within three (3)
business days after the date hereof duly prepare and file the
written notifications and submissions required to be made under
the H-S-R Act in connection with the consummation of the
transactions contemplated hereby and, promptly after any request
therefor, prepare and file any additional information requested
by the Federal Trade Commission or the Antitrust Division of the
Department of Justice to be filed or submitted under the H-S-R
Act in connection with such original notifications and
submissions, and shall diligently request and pursue early
termination of the required waiting period under the H-S-R Act
(the "H-S-R Waiting Period"). Anything to the contrary contained
in this Agreement notwithstanding, in no event shall any party be
required to take any adverse action regarding the disposition of
any of its businesses, assets or properties, or to incur any
material liability or expense, in order to obtain any approval
under the H-S-R Act or any termination of the H-S-R Waiting
Period.
3.8 Receivables. From and after the Closing, Buyer
and RAPI shall have the right and authority to collect for their
own account all account receivables and other items included in
the Purchased Assets and to endorse with the name of any Seller
any checks received on account of any such receivables or other
items. The Selling Parties shall promptly transfer and deliver
to Buyer any cash or other property which any of them may receive
in respect of any of such receivables or other items. In such
regard, at Closing Sellers shall deliver to Buyer a complete and
detailed statement showing the name, amount and age of each
Purchased Receivable (as defined in Schedule 2.1 hereto). After
the Closing, Buyer shall use its reasonable efforts to collect or
cause to be collected, in accordance with Buyer's normal
collection procedures as in effect from time to time (and without
being required to incur any out-of pocket cost or expense or
resort to litigation or any extraordinary means or efforts), the
Purchased Receivables. To the extent that any amounts are
received by Buyer from an obligor on both a Purchased Receivable
and any other receivable of Buyer, such amounts, in good faith,
shall be allocated to payment of the oldest of such receivables
first unless such obligor is, at such time, in good faith
disputing its obligation in respect of such Purchased Receivable
or such payment is otherwise to be allocated to a later
receivable in accordance with an arrangement established with
such obligor prior to the Closing or with the consent of
Stockholder after the Closing.
3.9 Access. After the Closing, at reasonable times
and on reasonable notice, the Selling Parties shall have access
to the books and records pertaining to the Business which they
delivered to Buyer at the Closing (and shall be permitted to make
copies thereof) for use solely in connection with the preparation
of Sellers' tax returns, and in all cases subject to such
confidentiality obligations of the Selling Parties as Buyer may
reasonably require from time to time, and Buyer shall retain such
books and records for a period of six years.
3.10 Proration. The parties shall prorate, between
Sellers on the one hand and Buyer on the other hand, rents,
license fees, utilities, charges and like items as of 11:59 p.m.
on the day immediately preceding the Closing Date.
ARTICLE 4
Representations and Warranties of the Selling Parties
The Selling Parties hereby jointly and severally make
each of the following representations and warranties:
4.1 Organization, Standing and Qualification; No
Subsidiaries. (a) Company is a corporation duly organized,
validly existing and in good standing under the laws of the State
of Delaware; Trust is a business trust duly organized, validly
existing and in good standing under the laws of Pennsylvania.
Stockholder is the sole trustee of the Trust ("Trustee"). Each
of Sellers has all requisite power and authority and is entitled
to own, lease and operate its properties and to carry on its
business in all material respects as and in the places such
properties are now or have heretofore been owned, leased or
operated and where such business is presently or has heretofore
been conducted. Company and Trust are qualified to do business
and each is in good standing in each State listed in Schedule 4.1
of the Disclosure Schedule delivered by the Selling Parties in
connection and concurrently with the execution and delivery of
this Agreement (the "Disclosure Schedule"), which States
constitute all States in which the failure of either Seller to be
so qualified could have a material adverse effect on the
condition (financial or otherwise), prospects, or results of the
operations of any of Sellers or of or on the Business or the
Purchased Assets taken as a whole. The copies of the Certificate
of Incorporation and By-Laws of Company and all trust and other
organizational documents of Trust delivered by Sellers to Buyer
are complete and correct.
(b) Except as set forth in Schedule 4.1(b) of the
Disclosure Schedule, none of Sellers has any subsidiaries and
none of Sellers has any interest, direct or indirect, and has no
commitment to purchase any interest, direct or indirect, in any
other corporation or in any partnership, joint venture or other
business enterprise or entity. Except as set forth in Schedule
4.1(b) of the Disclosure Schedule, the business carried on by
Sellers has not been conducted through any direct or indirect
subsidiary or any direct or indirect affiliate of any of Sellers
or of any stockholder or trustee of or holder of a beneficial
interest in any of Sellers.
4.2 Related Transactions. Except as set forth on
Schedule 4.2 of the Disclosure Schedule, during the past three
years none of Sellers has directly or indirectly, purchased,
leased from others or otherwise acquired any property or obtained
any services from, or sold, leased to others or otherwise
disposed of any property or furnished any services to, or
otherwise dealt with, except with respect to customary
remuneration for services rendered as an officer or employee of
Company in the ordinary course of business, (i) any stockholder
or trustee of or holder of a beneficial interest in any of
Sellers, or any member of the family of any such stockholder,
trustee or holder of a beneficial interest, or (ii) any person,
firm or corporation which, directly or indirectly, alone or
together with others, controls, is controlled by or is under
common control with any Seller or any stockholder or trustee of
or holder of a beneficial interest in any of Sellers, or any
member of the family of any such person. Except as set forth on
Schedule 4.2 of the Disclosure Schedule, no part of the property
or assets of any stockholder or trustee of or holder of a
beneficial interest in any of Sellers, or any direct or indirect
subsidiary or affiliate of any of Sellers or any stockholder or
trustee of or holder of a beneficial interest in any of Sellers,
is used by any of Sellers in connection with the Business.
4.3 Authority of Sellers; Stockholders. (a) The
Selling Parties have all requisite power, authority and legal
capacity to enter into this Agreement and each other agreement,
document and instrument to be executed or delivered by any of the
Selling Parties in connection with this Agreement (the "Seller
Documents") and to carry out the transactions contemplated hereby
and thereby. This Agreement constitutes, and, when executed and
delivered at the Closing, each other Seller Document will
constitute, the legal, valid and binding obligation of such of
the Selling Parties as are party thereto. All proceedings and
action required to be taken by the Selling Parties relating to
the execution, delivery and performance of this Agreement and the
Seller Documents and the consummation of the transactions
contemplated hereby and thereby have been duly taken. The
execution, delivery and performance of this Agreement, and the
consummation of the transactions contemplated hereby have been
unanimously approved by the holders of all shares of capital
stock of Company and all trustees of and holders of beneficial
interests in Trust.
(b) The presently authorized, issued and
outstanding shares of capital stock of Company and the names and
addresses of the lawful record and beneficial owners thereof, and
the names and addresses of all holders of beneficial interests in
Trust, are as set forth on Schedule 4.3(b) of the Disclosure
Schedule.
(c) Except as set forth on Schedule 4.3(c) of the
Disclosure Schedule, there are no outstanding subscriptions,
options, warrants, calls, puts, contracts, demands, commitments,
convertible securities or other agreements or arrangements of any
character or nature whatever under which any of Sellers or any
stockholder or trustee thereof or holder of a beneficial interest
therein is or may become obligated to issue, assign, purchase,
acquire or transfer, any shares of the capital stock or
securities of, or beneficial interest or equity interests in, any
Seller.
(d) None of the Selling Parties nor any affiliate
of any of them directly or indirectly beneficially owns any
shares of RAPI Common Stock.
4.4 No Violation. (a) Except as indicated on
Schedule 4.4 of the Disclosure Schedule:
(i) The execution, delivery and performance of
this Agreement and the Seller Documents by any of the respective
Selling Parties which is or shall be a party thereto and the
consummation of the transactions contemplated hereby and thereby,
will not (ii) conflict with or violate any provision of the
certificate of incorporation or by-laws or any trust or other
organizations document of any Seller, (iii) with or without the
giving of notice or the passage of time, or both, result in a
breach of, or violate, or be in conflict with, or constitute a
default under, or permit the termination of, or cause or permit
acceleration under, any material agreement, instrument, debt or
obligation to which any Seller is a party or to or by which it or
any of the Purchased Assets is subject or bound, or result in the
loss or adverse modification of any material license, franchise,
or other authorization granted to or otherwise held by any
Seller, (iv) require the consent of any party to any material
agreement or commitment to which any of the Selling Parties is a
party, or to or by which it or he or any of the Purchased Assets
is subject or bound, (v) result in the creation or imposition of
any Lien upon any of the Purchased Assets, or (vi) violate any
material law, rule or regulation or any order, judgment, decree
or award of any court, governmental authority or arbitrator to or
by which any Seller or any of the Purchased Assets is subject or
bound.
(b) No consent, approval or authorization of, or
declaration, filing or registration with, or notice to, any
governmental or regulatory authority or any other third party is
required to be obtained or made by any of the Selling Parties in
connection with the execution, delivery and performance of this
Agreement or the Seller Documents or the consummation of the
transactions contemplated hereby and thereby.
4.5 Financial Statements. (a) Sellers have delivered
to Buyer copies of the financial statements of Company listed on
Schedule 4.5(a) of the Disclosure Schedule (the "Financial
Statements"), including without limitation, the balance sheet of
Company as at December 31, 1994 (the "Balance Sheet"). All of
the Financial Statements have been prepared from the books and
records of Sellers in accordance with generally accepted
accounting principles consistently applied and maintained
throughout the periods indicated and fairly present in all
material respects the financial condition of Company as at their
respective dates and the results of operations of Company for the
periods covered thereby. Except as disclosed in Schedule
4.5(a)(i) of the Disclosure Schedule, the Financial Statements do
not contain any items of special or nonrecurring income or any
other income not earned in the ordinary course of business except
as expressly specified therein, and include all adjustments,
which consist only of normal recurring accruals, necessary for
such fair presentation.
(b) The Estimated Statement of Assets and
Payables set forth on Schedule 4.5(b) hereto sets forth Sellers'
good faith, reasonable estimate of the Statement of Assets and
Payables as of the scheduled Closing Date to be prepared pursuant
to Schedule 2.1 hereto.
(c) Trust has conducted no operations other than
those it has acquired from Company and has incurred no
liabilities or obligations other than those it has acquired from
Company.
4.6 Title to and Condition of Purchased Assets.
(a) Except for the Real Property Leases and the Personal
Property Leases (each as hereinafter defined), and except for the
Permitted Liens and except for inventory disposed of prior to
Closing in the ordinary and customary course of business, Sellers
have good and marketable title to all of the assets and
properties which either of them owns or uses or purports to own
or use. Except as set forth on Schedule 4.6 of the Disclosure
Schedule, none of the Purchased Assets is subject to any Lien.
(b) Except as set forth in said Schedule 4.6, the
Purchased Assets are in all material respects in good operating
condition and repair, ordinary wear and tear excepted.
(c) Sellers enjoy peaceful possession of all real
and personal property, including the buildings and improvements
thereon, owned or held under lease in connection with any aspect
of the Business. The Properties (as hereinafter defined)
constitute all real property and all the buildings, facilities
and improvements used by any of Sellers. No Seller is in
material default or breach of any of its obligations under any of
the leases or other agreements related to any of the Properties.
(d) Each of the New Leases will cover all of the
real property, buildings, improvements, parking areas and the
like located in or about and/or in the vicinity of the locations
indicated on Schedule 3.2(b)(i) hereof which have heretofore been
occupied and/or used by Company in the conduct of the Business.
4.7 Litigation; Liability Claims. (a) Except as set
forth on Schedule 4.7 of the Disclosure Schedule, there is no
action, suit, proceeding, arbitration, investigation or labor
organizing effort pending against or affecting any of Sellers or
any of any Seller's assets, properties or business, or of any
Seller's stockholders, employees, officers, directors or trustees
(in connection with their capacities as such), or the
transactions contemplated by this Agreement, nor, to the best of
each Selling Party's knowledge, any basis therefor or threat
thereof. There is not outstanding any order, writ, injunction,
award or decree of any court or arbitrator or any federal, state,
municipal or other governmental department, commission, board,
agency or instrumentality to which any of the Selling Parties is
subject or otherwise applicable to any of any Seller's business,
assets, or properties, or any Seller's stockholders, officers,
directors, employees, or trustees (in connection with their
capacities as such), nor is any of them in default with respect
to any such order, writ, injunction, award or decree.
(b) The Selling Parties do not believe that
product warranty claims and products sold and/or services
provided for a period of two years prior to the Closing will
exceed those historically experienced by Company and reflected on
the Financial Statements.
4.8 Compliance; Properties; Permits. (a) Except as
set forth in Schedule 4.8(a) of the Disclosure Schedule, Sellers
have complied, and all of the Properties and the Business are in
compliance, in all material respects, with all laws, rules,
regulations, ordinances, orders, judgments and decrees applicable
to any of Sellers, any of its employees, any of the Properties
and/or any aspect of the Business, including without limitation,
any laws, rules, regulations, ordinances, codes, orders,
judgments or decrees as to zoning, building requirements or
standards, hiring, wages, hours, import, export, environmental,
health and/or safety matters. Except as set forth in Schedule
4.8(a) of the Disclosure Schedule, neither the ownership nor use
of any of the properties and assets of any of Sellers nor the
conduct of the Business, in any material respect, conflicts with
the rights of any person or entity or violates, or with or
without the giving of notice or the passage of time, or both,
will violate, conflict with or result in a default, right to
accelerate or loss of rights under, any terms or provisions of
its charter or by-laws, or any material law, ordinance, rule or
regulation, or any material order, judgement or decree to which
any of Sellers is a party or by which it or any of the Purchased
Assets may be bound or affected.
(b) To the best of Sellers' knowledge, each of
Sellers has all material approvals, certificates, authorizations,
consents, licenses, franchises, orders and permits ("Licenses and
Approvals") necessary or useful to the conduct of the Business as
presently conducted, which Licenses and Approvals are identified
on Schedule 4.8(b) of the Disclosure Schedule. To the best of
the Selling Parties' knowledge, all applications for all Licenses
and Approvals were true and correct when made and continue to be
true and correct as they pertain to the Business and use of the
Properties.
(c) To the best of the Sellers' knowledge, none
of the Properties nor any of the Purchased Assets is subject to
any governmental decree or order to be sold or is being condemned
or otherwise taken by any public authority, nor has any such
sale, condemnation or taking been proposed.
4.9 Schedules. Schedule 4.9 of the Disclosure
Schedule contains a true, complete and accurate list and
description of the following:
(a) all real property, and all buildings and
improvements thereon owned, leased or used by any of Sellers (the
"Properties"), together with each lease, sublease or license
under which any of Sellers holds any leasehold or other interest
or right to the use thereof or pursuant to which any of Sellers
has assigned, sublet or granted any rights therein (the "Real
Property Leases"), together with a schedule of the current
amounts of all real estate and other tax and insurance
obligations of any of Sellers under each of the Real Property
Leases, which amounts may be subject to correction by the
landlord as permitted by such leases;
(b) all material items of machinery, tools,
equipment, vehicles, rolling stock and other tangible personal
property owned, leased or used by any of Sellers, except for
totes and except for items having a value of less than $5,000
which do not, in the aggregate, have a total value of more than
$25,000 (the "Personal Property Leases");
(c) all trademarks, trademark registrations, and
applications therefor, service marks, service names, trade names,
patents and patent applications, copyrights and copyright
registrations, and applications therefor, wholly or partially
owned, held or used by any of Sellers; and all contracts,
agreements, commitments or licenses relating to patents,
trademarks, trade names, copyrights, software, processes,
inventions, know-how, or trade secrets to which any of Sellers is
a party or by which it is bound;
(d) all agency, representative, supply or
distributorship agreements or franchises and all agreements
providing for the services of an independent contractor to which
any of Sellers is a party or by which it is bound;
(e) all guarantees, loan agreements, mortgages
and pledges, all conditional sale or title retention agreements,
security agreements, equipment obligations, leases or lease
purchase agreements as to items of personal property, in each
case to which any of Sellers is a party or by which it or any of
the Purchased Assets is bound;
(f) all contracts, agreements and commitments,
whether or not fully performed, in respect of the issuance, sale
or transfer of the capital stock, bonds or other securities of
any of Sellers or pursuant to which any of Sellers or Stockholder
has acquired or disposed of any substantial portion of the
business or assets of any Seller within the last three years;
(g) all contracts, agreements, commitments,
purchase orders, leases, licenses or other understandings or
arrangements to which any of Sellers is a party or by which it or
any of the property thereof is bound or affected, but excluding
(A) purchase and sale orders and commitments for the purchase or
sale of normal and customary supplies and inventory made in the
ordinary course of business (consistent with past practice)
involving payments or receipts by any of Sellers of less than
$20,000 in any single case or series of related orders but not
more that $100,000 in the aggregate, and (B) contracts entered
into in the ordinary course of business which are terminable by
Sellers on less than 30 days' notice without any penalty or
consideration and involving payments or receipts during the
entire life of such contracts by any of Sellers of less than
$5,000 in the case of any single contract but not more than
$50,000 in the aggregate;
(h) all collective bargaining agreements, all
employment and consulting agreements, and all executive
compensation, bonus, deferred compensation, severance, vacation,
sick pay, personal day, education, pension, retirement, welfare,
stock option or stock purchase, and group or individual life,
health, hospitalization, dental and accident insurance, and other
employee benefit plans, agreements, arrangements, commitments
and/or practices, to which any of Sellers is a party or bound or
which cover or relate to any of the employees of any of Sellers;
(i) the names and current annual salary rates of
all persons (including independent commission agents) employed or
engaged by any of Sellers, and showing separately for each such
person the amounts paid or payable as salary, bonus payments and
any indirect compensation for the year ended December 31, 1994;
and a separate listing of all employees of any of Sellers on
disability or other leave and of the basis for such leave;
(j) all fire, theft, casualty, liability and
other insurance policies insuring any of Sellers, specifying with
respect to each such policy the name of the insurer and of the
insured, the risk insured against, the limits of coverage, the
deductible amount (if any), the premium rate and the date through
which coverage will continue by virtue of premiums already paid.
True and complete copies of all contracts, agreements,
plans, arrangements, commitments and documents required to be
listed pursuant to this Section 4.9 (to the extent in writing or
if not in writing, an accurate summary thereof), together with
any and all amendments thereto, have been delivered to Buyer.
Except as set forth on Schedule 4.9 of the Disclosure
Schedule, all of the contracts, agreements and commitments
required to be listed pursuant to this Section 4.9 (other than
those which have been fully performed) are legal, valid and
binding, against Sellers, in full force and effect, do not
require the consent or approval of any party to the assignment
thereof and will be unaffected by the sale or other transfer of
the Purchased Assets to Buyer, and Buyer will be entitled to the
full benefits thereof. To the best of Sellers' knowledge, there
is not under any contract, agreement or commitment required to be
listed pursuant to this Section 4.9, any existing material
default or event which, after notice or lapse of time, or both,
would constitute a material default or result in a right to
accelerate or loss of rights thereunder.
4.10 Absence of Changes or Events. Except as set
forth on Schedule 4.10 of the Disclosure Schedule, since December
31, 1994, (the "Balance Sheet Date") Sellers have conducted their
business only in the ordinary course in a manner consistent in
all material respects with past practices of Company. Without
limiting the foregoing, since such date, no Seller has, except as
set forth on said Schedule 4.10:
(i) incurred any obligation or liability,
absolute, accrued, contingent or otherwise, whether due or to
become due, except current liabilities for trade or business
obligations incurred in the ordinary course of business and
consistent with its prior practice, none of which liabilities, in
any case or in the aggregate, materially and adversely affects
the condition (financial or otherwise), prospects or results of
operations of any of Sellers or the Business or the Purchased
Assets taken as a whole;
(ii) mortgaged, pledged or subjected to
any Lien any of its property, business or assets, tangible or
intangible;
(iii) sold, transferred, leased to others
or otherwise disposed of any of its assets, except for inventory,
or obsolete and unused fixed assets not exceeding $50,000 in
value in the aggregate, sold in the ordinary course of business
on customary terms and conditions, or canceled or compromised any
material debt or claim, or waived or released any right of
substantial value;
(iv) received any notice of actual or
threatened termination of any contract, lease or other agreement
or other business relationship or suffered any damage,
destruction or loss (whether or not covered by insurance) which,
in any case or in the aggregate, has had or could have a
materially adverse effect on the condition (financial or
otherwise), prospects or results of operations of any of Sellers
or of or on the Business or the Purchased Assets taken as a
whole;
(v) encountered any labor union organizing
activity, had any actual or threatened employee strikes, work-
stoppages, slow downs or lockouts, or had any material change in
its relations with its employees, agents, customers or suppliers
or any governmental regulatory authority or self-regulatory
authorities;
(vi) made any change in excess of 5% per
annum in the rate of compensation, commission, bonus or other
direct or indirect remuneration payable, or paid or agreed or
orally promised to pay, conditionally or otherwise, any bonus,
extra compensation, pension or severance or vacation pay, to any
shareholder, director, officer, employee, salesman, distributor
or agent of any Seller;
(vii) made any capital expenditures or
capital additions or betterment in excess of an aggregate of
$150,000;
(viii) transferred or granted any rights
under, or entered into any settlement regarding the breach or
infringement of, any license, patent, copyright, trademark, trade
name, service mark or other proprietary right, or modified any
then existing rights with respect thereto;
(ix) instituted, settled or agreed to settle
any litigation, action or proceeding before any court or
governmental body relating to any Seller or any of Sellers'
respective assets, properties or rights;
(x) suffered any damage, destruction, loss,
change, event or condition which, in any case or in the
aggregate, has had or may have a material adverse effect on the
condition (financial or otherwise), prospects or results of
operations of any of Sellers or of or on the Business or the
Purchased Assets taken as a whole, including, without limitation,
any change in revenues, costs, levels or types of warranty or
defective product claims, or relations with employees, landlords,
agents, customers or suppliers;
(xi) entered into any transaction, contract
or commitment other than in the ordinary course of business, or
paid or agreed to pay any brokerage, finder's fee, or other
compensation in connection with, or incurred any severance pay
obligations by reason of, this Agreement or the transactions
contemplated hereby;
(xii) received any notice from any customer
or supplier that it, nor has knowledge that any customer or
supplier, intends to cease doing business with any of Sellers,
which, in any case, has had or could have a material adverse
effect on the condition (financial or otherwise), prospects or
results of operations of any of Sellers or of or on the Business
or the Purchased Assets taken as a whole;
(xiii) failed to replenish its inventories
and supplies in a normal and customary manner consistent with
Company's prior practice in any material respect, or made any
purchase commitment in excess of the normal, ordinary and usual
requirements of its business or made any material change in its
selling, pricing, advertising or personnel practices inconsistent
with Company's prior practice; or
(xiv) changed in any material respect its
maintenance or repair policies with respect to its assets or
permitted any material deterioration in the condition thereof;
(xv) entered into any agreement or made any
commitment to take any of the types of actions described in any
of subsections (i) through (xiv) above.
4.11 Rights and Licenses. Except as indicated in
Schedule 4.11 of the Disclosure Schedule, Sellers own or possess
the perpetual and royalty free licenses and other rights to use
all copyrights, trademarks, service marks, service names, trade
names, trade secrets and other proprietary rights currently used
in connection with or necessary to the conduct of the Business as
presently operated, uncontested and free and clear of all Liens.
To the best of Sellers' knowledge, none of Sellers is infringing
upon or otherwise acting adversely to any copyrights, trademarks,
trademark rights, service marks, service names, trade names,
licenses or trade secrets or other proprietary rights owned by
any other person or persons.
4.12 Absence of Certain Business Practices. To the
best knowledge of Sellers, none of Sellers nor any officer,
trustee, employee or agent of any of Sellers, nor any other
person acting on its behalf, has, directly or indirectly, within
the past five years given or agreed to give any gift or similar
benefit to any customer, supplier, governmental employee or other
person who is or may be in a position to help or hinder the
Business (or assist any of Sellers in connection with any actual
or proposed transaction) which (a) might subject any of Sellers
to any damage or penalty in any civil, criminal or governmental
litigation or proceeding, (b) if not given in the past, might
have had a material adverse effect on any of the Sellers, or on
the Business or the Purchased Assets taken as a whole, (c) if not
continued in the future, might materially and adversely affect
any of Sellers, or the Business or the Purchased Assets taken as
a whole, or which might subject any of Sellers to suit or penalty
in any private or governmental litigation or proceeding or (d) is
or was known to be in violation of any policy or requirement of
the customer, supplier or governmental authority involved.
4.13 Environmental Matters.
(a) Except as set forth in Schedule 4.13 of the
Disclosure Schedule, no Hazardous Substance (as hereinafter
defined) is present or at any time has been stored (except for
sealed manufacturers containers held for resale and stored in
compliance with applicable laws, rules and regulations), treated,
recycled, released, disposed of or discharged on, about, from or
affecting any of the Properties in any material amounts, and none
of Sellers has any material liability which is based upon or
related to the environmental conditions under or about any of the
Properties, and there is no reasonable basis for any such
liability arising.
(b) Except as set forth in Schedule 4.13 of the
Disclosure Schedule, none of Sellers nor, to the knowledge of the
Selling Parties, any prior or current owner, tenant or occupant
of any part of the Properties, has received (i) any notification
or advice from or given or been required to have given any report
or notice to any governmental agency or authority or any other
person, firm or entity whatsoever involving the use, management,
handling, transport, treatment, generation, storage, spill,
escape, seepage, leakage, spillage, emission, release, discharge,
remediation or clean-up of any Hazardous Substance on or about
any of the Properties or caused by any Seller or any affiliate (a
"Hazardous Discharge") or (ii) any complaint, order, citation or
notice with regard to an air emission, water or ground discharge,
noise emission, solid or liquid or gas storage or disposal, a
Hazardous Substance or any other environmental health or safety
matter affecting any of the Properties, or any property or
location at any time occupied or used by any Seller or the
business or operations conducted thereat (an "Environmental
Complaint"), under the federal Comprehensive Environmental
Response, Compensation and Liability Act ("CERCLA") or under any
other federal, state or local law, ordinance, rule or regulation.
(c) Except as set forth in Schedule 4.13 of the
Disclosure Schedule, to the knowledge of the Selling Parties,
there are no fuel or gasoline storage tanks presently in use or
at any time abandoned in, on or under any of the Properties.
(d) Except as set forth in Schedule 4.13 of the
Disclosure Schedule, to the knowledge of the Selling Parties,
none of the Properties contains any asbestos or asbestos-
containing materials.
(e) Sellers have made available to Buyer at
Sellers' business locations true and complete copies of all
safety data sheets ("MSDS") under the Occupational Safety and
Health Act and/or the rules and regulations thereunder
(collectively "OSHA") for all Hazardous Substances stored,
processed or otherwise used in any material amount at any of the
Properties in respect of which an MSDS has been submitted to any
governmental agency or authority; a true and complete list of
other Hazardous Substances stored, manufactured, processed or
otherwise used at the Properties, specifying the amount thereof,
the chemical abstract service number, and the related threshold
quantity; true and complete copies of all materials (if any)
filed with or submitted under the OSHA Hazard Communication
Standard and all materials (if any) filed with or submitted to
the Department of Health, the Environmental Protection Agency or
any other federal, state or local agency or authority; and
Sellers have furnished to Buyer true and complete copies of all
insurance company and other investigations and reports relating
to any of the matters or conditions referred to in this Section
4.13.
(f) The term "Hazardous Substance" as used in
this Agreement shall include, without limitation, gasoline, oil
and other petroleum products, explosives, radioactive materials
and related and similar materials, and any other substance or
material defined as a hazardous, toxic or polluting substance or
material by any federal, state or local law, ordinance, rule or
regulation, including asbestos and asbestos-containing materials.
(g) The Selling Parties have delivered to Buyer
true and complete copies of all engineering and environmental
reports and studies, and all other reports, evaluations and
assessments, relating to any of the Properties and/or any matter
referred to in this Section 4.13.
4.14 Employee Benefits.
(a) All pension, retirement, profit-sharing,
deferred compensation, bonus and incentive plans, all medical,
vision, dental and other health insurance plans, all life
insurance plans and all other employee benefit plans required to
be listed in Schedule 4.9 of the Disclosure Schedule ("Employee
Benefit Plans") conform in all material respects to, and the
administration thereof is in compliance in all material respects
with, all applicable laws and regulations, and neither the
operation or administration of any Employee Benefit Plan, nor the
sale of the Purchased Assets under this Agreement, will result in
Buyer incurring or suffering any liability, or have any material
adverse effect on the condition (financial or otherwise),
prospects or results of operations of any of Sellers, or of
Buyer, or of or on the Business or the Purchased Assets taken as
a whole. Except as listed in Schedule 4.9 of the Disclosure
Schedule, none of Sellers participates, maintains or contributes
to nor has any liability or obligation under or with respect to
any single or multi-employer Employee Benefit Plan governed by or
subject to the Employee Retirement Income Security Act of 1974,
as amended ("ERISA") (whether by reason of being a member of an
affiliated group of companies, one of which maintains such a
plan, or otherwise) (a "Covered Plans"), nor has it participated,
maintained, contributed or incurred any liability or obligation
with respect to any such Covered Plan. Each funded Covered Plan
is a qualified plan under Section 401(a) of the Internal Revenue
Code of 1986, as amended (the "Code"), and complies in all
material aspects with all applicable requirements of ERISA.
There are no unfunded accrued benefits under any of the Employee
Benefit Plans and, except as set forth in Schedule 4.14(a) of the
Disclosure Schedule, no amounts are or will be required to be
contributed by any of Sellers in respect of any plan year under
any such Employee Benefit Plan. With respect to each Employee
Benefit Plan, complete copies, if any, of the last filed Form
5500, and all schedules attached thereto, have been furnished to
Buyer, and all reports required under ERISA or under any other
applicable law or regulation to be filed by any of Sellers with
the relevant governmental authority have been duly filed, and all
such reports were true and correct in all material respects.
None of Sellers, nor any other "party-in-interest" or
"disqualified person", has engaged in a "prohibited transaction,"
as such terms are defined in IRC Section 4975 and Title I of
ERISA, in connection with any Employee Benefit Plan maintained
by, or to which contributions are made by, any Seller which would
subject a party-in-interest or disqualified person (after giving
effect to any exemption) to the tax on prohibited transactions
imposed by section 4975 of the Code or any other liability. No
Covered Plan has been terminated (except that it is contemplated
that Company's profit sharing plan will be terminated in
connection with the transactions contemplated by this Agreement).
There has not been any "reportable event" (as defined under any
applicable provision of the Code or ERISA) ("Reportable Event")
with respect to any Employee Benefit Plan or any trust related
thereto.
(b) Except as disclosed in Schedule 4.14 (b) of
the Disclosure Schedule, Stockholder is not aware of serious
medical problems or conditions suffered by any of its employees
and other persons covered by its medical insurance plans.
4.15 Absence of Undisclosed Liabilities; Guarantees.
(a) Except as and to the extent reflected or reserved against on
the Balance Sheet (including the notes thereto), or set forth on
Schedule 4.15 of the Disclosure Schedule, as of the Balance Sheet
Date, none of Sellers has any material debts, liabilities or
obligations (whether absolute, accrued, contingent or otherwise)
relating to or arising out of any act, transaction, circumstance
or state of facts which occurred or existed on or before the
Balance Sheet Date, whether or not then known, due or payable
(other than contract obligations disclosed pursuant to Section
4.9 hereof or not required to be disclosed pursuant to said
Section 4.9, which in each case conform to the representations
and warranties with respect thereto in this Agreement).
(b) Except as and to the extent reflected or
reserved against on the Balance Sheet (including the notes
thereto), or set forth on Schedule 4.15(b) of the Disclosure
Schedule, and except for trade accounts payable and current
liabilities for accrued trade or business expenses incurred after
the Balance Sheet Date in the normal and ordinary course of
business and consistent with prior practice, none of Sellers has
any material debts, liabilities or obligations (whether absolute,
accrued, contingent or otherwise) relating to or arising out of
any act, transaction, circumstance or state of facts which
heretofore occurred or existed, whether or not then known, due or
payable (other than contract obligations disclosed pursuant to
Section 4.9 hereof, or not required to be disclosed pursuant to
said Section 4.9, which in each case conform to the
representations and warranties with respect thereto in this
Agreement).
(c) Except as indicated in Schedule 4.15(c) of
the Disclosure Schedule, none of the obligations or liabilities
of any Seller is guaranteed by any other person or entity, nor
has any of Sellers guaranteed any of the obligations or
liabilities of any other person or entity.
4.16 Taxes. All taxes, fees, assessments and charges,
including without limitation, income, property, sales, use,
franchise, added value, employees' income withholding and social
security taxes, imposed by the United States or by any foreign
country or by any state, municipality, subdivision or
instrumentality of the United States or of any foreign country,
or by any other taxing authority, which are due or payable by any
of Sellers, or for which any of Sellers may be liable (including
any for which any of Sellers may be liable by reason of its being
a member of an affiliated, consolidated or combined group with
any other company at any time on or prior to the Closing Date),
and all interest and penalties thereon (collectively, "Taxes" or
"Tax"), whether disputed or not, have been paid in full, all Tax
returns required to be filed in connection therewith have been
accurately prepared in all material respects and filed and all
deposits required by law to be made by any of Sellers with
respect to employees' and other withholding taxes have been duly
made. No pending notice of audit of any Tax return of any of
Sellers has been received, no questions have been raised by any
governmental authority in any pending audit, proceeding or review
of any Tax return of any of Sellers, and there is not now in
force any extension of time with respect to the date on which any
Tax return was or is due to be filed with respect to any of
Sellers, or any waiver or agreement by it for the extension of
time for the assessment of any Tax. To the best of Sellers'
knowledge, no deficiency for any Tax or claim for additional
Taxes has been proposed, asserted or assessed against any of
Sellers.
4.17 Inventory. Except as set forth on Schedule 4.17
of the Disclosure Schedule, all items of inventory and related
supplies now owned or hereafter acquired (and not subsequently
disposed of in the ordinary course of business) by any Seller and
to be included in the Purchased Assets are in all material
respects merchantable, for sale in the ordinary course of
business as first quality goods at normal mark-ups. The
Purchased Assets will not include in any material respect an
excessive quantity of any type of such inventory and supplies in
relation to the normal requirements of the Business consistent
with past practice. Sellers' inventory does not and shall not
include special order items and shop work, whether in process or
completed, in excess of $150,000 in the aggregate. Sellers'
practices and experience with regard to returned items from
customers and items returned by any of Sellers to the original
supplier thereof are and have been in conformity with and not in
excess, to any material degree, of normal, industry-wide return
practices in the ordinary course of business.
4.18 Receivables. Sellers have delivered to Buyer a
true and complete listing, as of a date no earlier than May 31,
1995, of all of Sellers' receivables, together with aging
information as to each such listed receivable which has been
outstanding for more than 30 days. Except as set forth on
Schedule 4.18 of the Disclosure Schedule, and except for a normal
and customary reserve for doubtful accounts consistent (as a
percentage of outstanding receivables) with past practice, all
receivables of Company which are reflected in the Balance Sheet,
and all receivables of Sellers which have arisen or will have
arisen since the date thereof, have and shall have arisen only
from bona fide transactions with unrelated third parties in the
ordinary course of business and are believed by the Selling
Parties to be collectible in accordance with their terms and not
subject to any set off, defense, reduction or counterclaim.
4.19 Records. The books of account, minute books,
stock certificate books and stock transfer ledgers of each of
Sellers are complete and correct in all material respects, and
there have been no transactions involving the business of any of
Sellers which properly should have been set forth therein and
which have not been accurately so set forth.
4.20 Investment. (a) Trust will receive the RAPI
Shares pursuant to this Agreement with the intent of holding the
same for investment and with no intention of distributing or
reselling the same or any part thereof, or interest therein,
understand that the issuance of the RAPI Shares. The sale of the
RAPI Shares pursuant to this Agreement is intended to be exempt
from registration under the Securities Act of 1933, as amended
(the "Securities Act"), pursuant to Section 4(2) of the
Securities Act, and pursuant to various exemptions from
registration or qualification under the securities or blue sky
laws of various states.
(b) The Selling Parties acknowledge that RAPI has
made available to them all documents and information relating to
RAPI and an investment in shares of RAPI Common Stock requested
by or on behalf of the Selling Parties. In evaluating the
suitability of an investment in shares of RAPI Common Stock, the
Selling Parties have not relied upon any representation or other
information (whether oral or written) made by or on behalf of
RAPI, other than the representations and warranties expressly set
forth in this Agreement. Each of the Selling Parties is an
"accredited investor" within the meaning of Regulation D
promulgated under the Securities Act, and has such knowledge and
experience in financial and business matters as to be capable of
evaluating the merits and risks of the transactions contemplated
by this Agreement and investment in shares of RAPI Common Stock.
4.21 Disclosure. No representation or warranty by any
of the Selling Parties contained in this Agreement nor any
written statement or certificate furnished or to be furnished by
or on behalf of any of the Selling Parties to Buyer or its
representatives pursuant to or in connection with this Agreement
contains or will contain any untrue statement of a material fact,
or omits or will omit to state any material fact required to make
the statements herein or therein contained, under the
circumstances under which made, not misleading or necessary in
order to provide a prospective purchaser of the Purchased Assets
and the Business with adequate information as to each of Sellers,
the Business, the Properties and the Purchased Assets, it being
understood that Sellers have made certain disclosures in Schedule
4.21 of the Disclosure Schedule. The representations and
warranties contained in this Agreement or any document delivered
in connection with this Agreement shall not be affected or deemed
waived by reason of the fact that RAPI or Buyer and/or any of its
representatives knew or should have known that any such
representation or warranty is or might be inaccurate in any
respect.
ARTICLE 5
Representations and Warranties of Buyer and RAPI
Buyer and RAPI jointly and severally represent and
warrant that:
5.1 Organization and Standing. Each of Buyer and RAPI
is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Delaware and has all
requisite corporate power and authority to enter into this
Agreement and to carry out the transactions contemplated hereby.
5.2 Authority of Buyer. The execution, delivery and
performance of this Agreement and the agreements and instruments
of Buyer and RAPI executed and delivered by them pursuant hereto
(the "Buyer Documents") and the consummation of the transactions
contemplated hereby shall have been duly authorized by all
necessary corporate action on the part of Buyer and RAPI at or
prior to the Closing; this Agreement has been duly executed by a
duly authorized officer of Buyer and RAPI; and this Agreement
constitutes, and the Buyer Documents, when executed and delivered
by the parties thereto, shall constitute, the legal, valid and
binding obligations of such of Buyer and RAPI which is a party
thereto.
5.3 Compliance; Consents; Approvals.
Assuming the accuracy of the representations set
forth in Section 4.4 hereof, and except as indicated in Schedule
5.3 of the Disclosure Schedule:
(a) The execution, delivery and performance by
Buyer and RAPI of this Agreement and the Buyer Documents, and the
consummation of the transactions contemplated hereby and thereby,
by Buyer and RAPI, will not (i) conflict with or violate any
provision of the certificate of incorporation or by-laws of Buyer
or RAPI, (ii) with or without the giving of notice or the passage
of time, or both, result in a breach of, or violate, or be in
conflict with, or constitute a default under, or permit the
termination of, or cause or permit acceleration under, any
material agreement, instrument, debt or obligation (other than
the Assigned Leases and the Contracts) to which Buyer or RAPI is
a party or by which it is bound, (iii) require the consent of any
party to any material agreement or commitment (other than the
Assigned Leases and the Contracts) to which Buyer or RAPI is a
party any of them is subject or bound, or (iv) violate any
material law, rule or regulation or any order, judgment, decree
or award of any court, governmental authority or arbitrator to or
by which Buyer or RAPI is subject or bound.
(b) Except for compliance with the H-S-R Act and
any applicable requirements of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and the rules and
regulations promulgated thereunder, and compliance with any
applicable State's securities or blue sky laws, no consent,
approval or authorization of, or declaration, filing or
registration with, any governmental or regulatory authority or
any other third party (other than parties to any of the Assigned
Leases or the Contracts) is required to be obtained or made by
RAPI or Buyer in connection with the execution, delivery and
performance by RAPI or Buyer of this Agreement and the Buyer
Documents, or the consummation of the transactions contemplated
hereby and thereby.
5.4 Financial Statements. Except as indicated in
Schedule 5.4 of the Disclosure Schedule: (i) the audited
consolidated financial statements of RAPI and its subsidiaries as
at and for the fiscal year ended December 31, 1994 and the notes
thereto, which appeared in the Annual Report on Form lO-K of RAPI
for the fiscal year ended December 31, 1994, were prepared in
accordance with generally accepted accounting principles
consistently applied and maintained throughout the periods
covered thereby and fairly present, in all material respects, the
consolidated financial position of RAPI and its subsidiaries as
at the dates thereof and the consolidated results of their
operations for the periods then ended; and (ii) the unaudited
consolidated financial statements of RAPI and its subsidiaries as
at and for the three-month period ended March 31, 1995, which
appeared in the Quarterly Report on Form lO-Q of RAPI for the
quarter ended March 31, 1995, were prepared in accordance with
generally accepted accounting principles (except for the
exclusion of notes to said financial statements) consistently
applied and maintained throughout the periods covered thereby and
fairly present, in all material respects, the consolidated
financial position of RAPI and its subsidiaries as at the dates
thereof and the consolidated results of their operations for the
period then ended, subject to year-end audit adjustments which in
the opinion of management thereof will consist solely of normal
recurring adjustments.
5.5 Validity of RAPI Shares; Authorized RAPI Shares.
The shares of RAPI Common Stock to be issued pursuant to this
Agreement shall, at the Closing, have been duly authorized by all
necessary corporate action of RAPI and, when issued and delivered
to Trust as provided by this Agreement, will be validly issued,
fully paid and nonassessable.
5.6 Changes. Except as set forth in Schedule 5.6 of
the Disclosure Schedule, there has been no material adverse
change in the consolidated condition (financial or otherwise),
prospects, or consolidated results of operations of RAPI and its
subsidiaries taken as a whole since March 31, 1995.
5.7 Litigation. Except as indicated in Schedule 5.7
of the Disclosure Schedule, there is no action, suit, proceeding
or arbitration pending, or the knowledge of RAPI or Buyer
threatened, against RAPI or Buyer, nor is RAPI or Buyer subject
to any order, writ, injunction, award or decree of any court,
arbitrator or governmental agency or instrumentality, which is
reasonably expected to have a material adverse effect on the
condition (financial or otherwise), prospects or results of
operations of or on RAPI and its subsidiaries taken as a whole.
5.8 Undisclosed Liabilities. Except as and to the
extent reflected or reserved against on the consolidated balance
sheet of RAPI and its subsidiaries as at March 31, 1995 (the
"RAPI Balance Sheet Date") (including the notes thereto) or in
the notes to the consolidated balance sheet of RAPI and its
subsidiaries as at December 31, 1994, or as indicated in Schedule
5.8 of the Disclosure Schedule, RAPI and its subsidiaries had no
debts, liabilities or obligations as of the RAPI Balance Sheet
Date of the type required, in accordance with generally accepted
accounting principles, to be set forth on a consolidated balance
sheet thereof as at the RAPI Balance Sheet Date which were not so
set forth and which are reasonably expected to have a material
adverse effect on the condition (financial or otherwise),
prospects or results of operations of or on RAPI and its
subsidiaries taken as a whole.
5.9 SEC Filings. Since January 1, 1995, RAPI has filed
with the Securities and Exchange Commission (the "SEC") all
reports and proxy statements required to be filed by RAPI under
the Exchange Act and the rules and regulations promulgated
thereunder (other than reports or proxy statements as to which
the required filing date has not yet passed), and, to the
knowledge of RAPI's senior management, such reports and proxy
statements as of the respective dates thereof did not contain an
untrue statement of material facts or omit to state material
facts required to be stated therein or necessary to make the
statements therein not misleading in a material respect at the
time when and in light of the circumstances under which they were
made.
ARTICLE 6
Further Agreements
6.1 Securities Act Compliance. The RAPI Shares issued
pursuant to this Agreement shall not be transferable except upon
the conditions specified in this Article 6, which conditions are
intended to ensure compliance with the provisions of the
Securities Act in respect of the transfer of any such RAPI
Shares. The Selling Parties will cause any proposed transferee
of the RAPI Shares, other than a transferee who purchases
pursuant to an effective registration statement satisfying the
requirements of the Securities Act or in an open market sale
pursuant to Rule 144 under the Securities Act, to agree to take
and hold such RAPI Shares subject to the provisions and upon the
conditions specified in this Article 6.
6.2 Legends. Each certificate for shares of RAPI
Common Stock delivered pursuant to this Agreement or to a
subsequent transferee shall (unless otherwise permitted by the
provisions of this Article 6) include a legend in substantially
the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE
SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER
SAID ACT AND THE RULES AND REGULATIONS THEREUNDER.
BY ITS ACCEPTANCE HEREOF, THE HOLDER OF THIS CERTIFICATE
AGREES TO COMPLY IN ALL RESPECTS WITH THE PROVISIONS OF
ARTICLE 6 OF THE AGREEMENT OF PURCHASE AND SALE OF ASSETS,
DATED AS OF JUNE , 1995, IN RELATION TO WHICH THESE SHARES
WERE ISSUED. COPIES OF SUCH ARTICLE 6 MAY BE OBTAINED AT NO
COST BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF THIS
CERTIFICATE TO THE SECRETARY OF THIS COMPANY AT ITS
PRINCIPAL EXECUTIVE OFFICES.
6.3 Proposed Transfers. The Selling Parties (and any
transferee(s) thereof) shall comply with the provisions of this
Section. Prior to any proposed sale, transfer or other
disposition of RAPI Common Stock issued pursuant to this
Agreement (other than a sale, transfer or other disposition
permitted under and made pursuant to Rule 144(k) under the
Securities Act or after the restrictive legend referred to in
Section 6.2 hereof shall have been removed from the certificate
representing such shares to be so sold, transferred or disposed
of), the registered holder thereof shall give written notice to
RAPI of such holder's intention to effect such sale, transfer or
other disposition. Each such notice shall describe the manner and
circumstances of the proposed sale, transfer or other disposition
in reasonable detail, and shall be accompanied by, and, in
connection with any such sale, transfer or other disposition of
such RAPI Common Stock, the holder thereof shall deliver to RAPI,
either (i) an opinion of counsel, and in form and substance,
reasonably acceptable to RAPI, addressed to RAPI, to the effect
that the proposed sale, transfer or other disposition of such
RAPI Common Stock may be effected without registration under and
pursuant to an exemption from the registration requirements of
the Securities Act (and specifying such exemption as shall be
applicable), other than an exemption afforded by Regulation S
under the Securities Act (or any successor to Regulation S), or
(ii) a "no action" letter, in form and substance reasonably
acceptable to RAPI, from the SEC to the effect that such sale,
transfer or other disposition of such RAPI Common Stock without
registration will not result in a recommendation by the staff of
the SEC that action be taken with respect thereto, whereupon such
holder of such RAPI Common Stock shall be entitled to transfer
such RAPI Common Stock (in accordance with the terms of the
notice delivered by such Holder to RAPI, if such notice so
required as aforesaid), subject, however, to any other agreement
with or for the benefit of RAPI as shall apply to the sale,
transfer, or other disposition of RAPI Common Stock.
6.4 Removal of Legend. After the third anniversary of
the Closing, if the registered holder of shares of RAPI Common
Stock issued pursuant to this Agreement shall so request (and
provided such holder could not be considered an affiliate of
RAPI), which request shall be accompanied by an opinion of
counsel, and in form and substance, acceptable to RAPI to the
effect that the legend referred to in Section 6.2 hereof may be
removed from the certificate representing such shares and that
such removal is not inconsistent with the requirements of the
Securities Act and the rules and regulations thereunder, then
RAPI shall remove such legend from such certificate.
ARTICLE 7
Certain Covenants of the Selling Parties
7.1 Conduct of Business. During the period from the
date of this Agreement to and including the Closing Date, the
Selling Parties shall cause the operations and business of
Sellers to be conducted in the ordinary and usual course of
business and consistent with past practices. Without limiting
the foregoing, prior to the Closing, the Selling Parties will
not, without the prior written consent of Buyer, permit any
Seller to:
(a) dissolve, liquidate, merge or consolidate or
sell or otherwise dispose of all or any substantial portion of
its assets or obligate itself to do so;
(b) sell, transfer, lease or otherwise dispose of
any assets or properties, other than inventory in the ordinary
course of business on standard terms, conditions and operating
procedures customarily used by Sellers;
(c) amend, modify, change, alter, terminate,
rescind or waive any rights or benefits under any contract,
agreement or commitment required to be listed, or enter into any
contract, agreement or commitment which, if in existence as of
the date of this Agreement would have been required to be listed,
under Schedule 4.9 hereto;
(d) fail to maintain the Purchased Assets in good
repair and condition, reasonable and ordinary wear and tear
excepted; or cancel or fail to renew any of the current insurance
policies or any of the coverage thereunder maintained for the
protection of any of Sellers, the Properties, the Business or any
of the Purchased Assets; or
(e) perform, take any action or incur or permit
to exist any of the acts, transactions, events or occurrences of
the type described in clauses (i), (ii), (iii), (vi), (vii),
(viii), (ix), (xi), (xiii) or (xiv) of Section 4.10 hereof which
would have been inconsistent with the representations and
warranties set forth in Section 4.10 hereof had the same occurred
after the Balance Sheet Date and prior to the date hereof.
7.2 Changes in Information. During the period from
the date of this Agreement to the Closing Date, the Selling
Parties shall give Buyer prompt written notice of any change in,
or any of the information contained in, the representations and
warranties made in or pursuant to this Agreement or of any event
or circumstance which, if it had occurred on or prior to the date
hereof, would cause any of such representations or warranties not
to be true and correct in any material respect.
7.3 Access to Information. During the period from the
date of this Agreement to the Closing Date, Buyer and its
counsel, accountants and other representatives shall be given
full access during normal business hours to all of the
facilities, properties, books, tax returns and records of each of
Sellers relating to or constituting any part of the Purchased
Assets or the Business and all personnel of each of Sellers and
they shall be furnished with such documents and information with
respect to the affairs of each of Sellers as may from time to
time reasonably be requested. Prior to the Closing, Buyer will
hold in confidence all confidential or proprietary information so
obtained from the Selling Parties, except for such disclosure as
may be required under applicable laws, regulation or order. The
confidentiality letter from RAPI to Company (the "Confidentiality
Letter") shall be deemed modified in the following respects:
(a) Buyer and RAPI and their respective
employees, representatives and agents shall be entitled after
consultation with Sellers' management to communicate with
vendors, customers and others having business relations with any
of Sellers regarding the transactions contemplated by this
Agreement as believed by Buyer or RAPI in good faith to be
appropriate in order to facilitate such transactions and its
rights under this Agreement.
(b) Buyer and RAPI shall be entitled to make such
public announcements, issue such press releases and file such
documents as they shall in good faith deem appropriate in order
to comply with applicable securities law and self-regulatory body
imposed obligations. Prior to the Closing, RAPI shall consult
with Company regarding the proposed text of the foregoing.
(c) Upon the Closing the Confidentiality Letter
and the obligations thereunder shall terminate and be of no force
or effect.
(d) If the Closing shall not occur, Buyer and
RAPI shall continue to maintain the confidentiality of
Information (as defined in the Confidentiality Letter) which is
not then in the public domain (except as otherwise therein
provided), but, notwithstanding the Confidentiality Letter, Buyer
and RAPI shall not be obligated to return documents or to destroy
any analyses or other documents prepared by them or their
employees, agents or representatives, and Buyer and RAPI shall be
entitled to use Information in connection with any dispute which
may arise out of this Agreement or the termination thereof. If
within one year after the termination of this Agreement there is
no such dispute, Buyer and RAPI will use their best efforts to
destroy or return such documents.
7.4 Preservation of Business. During the period from
the date of this Agreement to the Closing Date, the Selling
Parties shall use their best efforts to preserve intact the
goodwill of Sellers, the relationships of Sellers with customers,
suppliers, contracting parties, governmental authorities and
others having business relations with it.
7.5 Environmental Notices. In the event that, on or
prior to the Closing, any of the Selling Parties receives any
notice or advice from any governmental agency or authority or any
other source whatsoever with respect to a Hazardous Discharge or
presence of a Hazardous Substance, they shall immediately notify
Buyer and furnish to Buyer a copy of all such notices,
correspondence and other documentation. If required to do so by
any governmental agency or authority, the Selling Parties shall
conduct and complete all investigations, studies, sampling, and
testing, and, if reasonable under the circumstances, take all
remedial actions necessary to clean up and remove all Hazardous
Substances from the Properties in accordance with all applicable
federal, state and local laws, ordinances, rules and regulations.
7.6 Employees. (a) Buyer will offer employment
promptly after Closing to those employees of Sellers who are
currently active employees of Sellers in the Business and who
remain active employees in the Business at the Closing (the
"Designated Employees"). Notwithstanding any offer or
determination to so employ any employee, Buyer shall not be
obligated to maintain any employee for any specific length of
time after the Closing Date and all such employees shall be
employees at will.
(b) Sellers shall promptly pay all amounts due
and payable to, or accrued in respect of, its employees in the
nature of wages, salary, insurance and other benefits (other than
accrued vacation and sick pay and unearned bonuses), and shall
pay all withholding tax and similar obligations in each case with
respect to all employees of each of Sellers and all periods
ending on or prior to the Closing Date.
(c) The Selling Parties shall indemnify and hold
harmless Buyer from all claims, liabilities, damages, costs and
expenses suffered or incurred in respect of or resulting from (i)
any and all claims for life insurance, disability and medical
benefits based on occurrences before the Closing Date (including
claims for continuing treatment with respect to any accident or
illness for which coverage was so provided), whether such claims
are asserted before, on or after the Closing Date, (ii) any and
all other welfare and fringe benefits claims based on occurrences
before the Closing Date, whether such claims are asserted before,
on or after the Closing Date, (iii) any and all life insurance,
disability, medical or other welfare and fringe benefits claims
of any individual (or his or her covered dependents) who retired
from any of Sellers on or before the Closing Date or who died
before the Closing Date, and/or claims based on any denial of or
failure to provide coverage or benefits under any of the Welfare
Plans prior to the Closing, regardless in each case of whether
such claim is asserted before, on or after the Closing Date.
(d) Nothing in this Section 7.6 or elsewhere in
this Agreement, express or implied, shall be construed to confer
any rights or remedies on any employee (whether or not a
Designated Employee).
7.7 Change of Corporate Name. Effective on the
Closing Date, Sellers shall change their corporate and trust
names to such names as shall have no resemblance to any of the
names listed on Schedule 7.7 of the Disclosure Schedule. The
Selling Parties consent, from and after the Closing Date, to the
use by Buyer of such listed names and/or any derivatives thereof
and from and after the Closing Date shall execute and deliver to
Buyer or such federal, state and local authorities as Buyer shall
specify, such instruments as Buyer shall reasonably request from
time to time consenting to the filing by Buyer or its affiliates
of one or more certificates of incorporation and/or assumed or
business names or similar certificates and/or applications as to
the use or registration of assumed or business names pertaining
to one or more of such names and/or derivatives thereof.
7.8 Brokerage or Finder's Fee. Buyer represents and
warrants to the Selling Parties, and the Selling Parties
represent and warrant to Buyer, that no person is entitled to any
brokerage commissions or finder's fees in connection with the
transactions contemplated by this Agreement as a result of any
action taken by the representing party or any of the affiliates,
officers, directors or employees thereof.
7.9 Profit Sharing Plan. Prior to July 1, 1995,
Sellers shall take all actions necessary to amend the Beacon Auto
Parts Company Profit Sharing and 401(k) Plan to eliminate all
rights and provisions pertaining to employee salary deferral
contributions pursuant to Section 401(k) of the Code.
ARTICLE 8
Further Agreements
8.1 Sales and Other Taxes. Buyer shall pay all sales
taxes applicable to the transfer of title by Trust to Buyer of
the Purchased Assets. The foregoing shall not apply to, and
Sellers shall pay, all taxes relating to or arising out of any
transfer of assets or properties to Trust and all income and
other taxes applicable to or computed on the basis of any gain(s)
or profit(s) arising from any of the transactions contemplated by
this Agreement. Buyer and Sellers will cooperate to prepare and
file with the proper public officials, as and to the extent
necessary, all appropriate sales tax exemption certificates or
similar instruments as may be necessary to avoid the imposition
of sales taxes on the transfer of Purchased Assets pursuant
hereto.
8.2 No Shop. The Selling Parties agree that from
after the date hereof and until the Closing (but in the event one
or more conditions to the obligations of the Selling Parties
pursuant to Section 3.6 shall not be satisfied, then until August
31, 1995), none of the Selling Parties will sell, transfer or
otherwise dispose of any capital stock or assets (except for
dispositions of assets in the ordinary course of business as
expressly permitted elsewhere in this Agreement) of any of
Sellers (or any rights in any such stock or assets), and none of
the Selling Parties will respond to inquiries or proposals, or
enter into or pursue any discussions, or enter into any
agreements (oral or written), with respect to, the issuance, sale
or purchase of any capital stock of or beneficial interests in
any of Sellers, any security convertible into or exchangeable for
such stock or interests, or any option or warrant with respect to
such stock or interests, or the merger, consolidation, sale,
lease or other disposition of all or any portion of the assets or
business of any of Sellers. The provisions of this Section 8.2
shall not be deemed to limit or negate any other obligations of
the Selling Parties under this Agreement.
8.3 Final Financial Statements. The Selling Parties
shall cause to be prepared and deliver to Buyer within forty-five
(45) days after the Closing, financial statements of Sellers for
the period from the end of the period for which financial
statements of Sellers shall previously have been delivered to
Buyer pursuant to this Agreement until the Closing Date (the
"Final Financial Statements"). The Final Financial Statements
shall be prepared in a manner consistent with the Financial
Statements and in accordance with generally accepted accounting
principles, but need not be audited. From and after the Closing,
the Selling Parties shall also provide to Buyer access to such
financial books, records and workpapers as Buyer may reasonably
request to assist it in its review and analysis of the Final
Financial Statements.
8.4 Post-Closing Environmental Notices. From and
after the Closing, Buyer shall furnish the Selling Parties, and
Selling Parties shall furnish Buyer, with copies of all notices,
correspondence or other documentation which any of them shall
receive from any governmental agency or authority regarding
Hazardous Discharges or the presence of Hazardous Substances, at
or about any of the Properties and which relate to any period, or
any activity of any of Sellers, prior to the Closing.
8.5 Post-Closing Benefits. Buyer and RAPI shall
indemnify and hold harmless Sellers from all liabilities,
damages, costs and expenses suffered or incurred by Sellers, in
respect of or resulting from any and all claims by those
employees of Sellers who as of the Closing become employees of
Buyer, for life insurance, disability and medical benefits under
Buyer's plans based on occurrences after the Closing Date (other
than claims for continuing treatment with respect to any accident
or illness for which coverage was provided or should have been
provided under applicable law by any of Sellers prior to the
Closing and other than matters for which Buyer and RAPI are
entitled to indemnification under Section 7.6 hereof).
ARTICLE 9
Indemnification
9.1 Obligation to Indemnify. (a) Buyer and RAPI
hereby jointly and severally agree to indemnify and hold harmless
Sellers and Sellers' trustees, officers and directors
(collectively the "Seller Indemnitees") from and against, and
shall on demand reimburse the Seller Indemnitees for:
(i) any failure by Buyer to comply with
the Liabilities Undertaking;
(ii) any and all loss, liability, damage or
deficiency suffered or incurred by any of the Seller Indemnitees
by reason of any misrepresentation or breach of warranty by Buyer
or RAPI under this Agreement or any exhibit, certificate,
document or instrument executed by Buyer or RAPI and delivered to
Sellers pursuant to or in connection with this Agreement, or the
nonfulfillment of any covenant, agreement or obligation set forth
in this Agreement required to be performed or complied with by
Buyer or RAPI; and
(iii) any and all actions, suits,
proceedings, claims, demands, assessments, judgments, costs and
expenses, including reasonable attorneys' fees, incident to any
of the foregoing, or incurred in investigating or attempting to
avoid the same or to oppose the imposition thereof, or in
enforcing any of the obligations under this Section 9.1(a).
(b) The Selling Parties hereby jointly and
severally agree to indemnify and hold harmless Buyer from,
against and in respect of, and shall on demand reimburse Buyer,
RAPI and their respect officers and directors (collectively the
"Buyer Indemnitees") for:
(i) any and all loss, liability, damage or
deficiency suffered or incurred by any of the Buyer Indemnitees
by reason of any misrepresentation breach of warranty by any of
the Selling Parties under this Agreement or any exhibit,
certificate, document or instrument executed by any of the
Selling Parties and delivered to Buyer or RAPI pursuant to or in
connection with this Agreement, or the nonfulfillment of any
covenant, agreement or obligation set forth in this Agreement
required to be performed or complied with by any of the Selling
Parties;
(ii) any and all loss, liability or damage
suffered or incurred by any of the Buyer Indemnitees in respect
of or in connection with any and all debts, liabilities and
obligations of, and any and all violations of laws, rules,
regulations, codes or orders by any of Sellers, direct or
indirect, fixed, contingent, legal, statutory, contractual or
otherwise, which exist at or as of the Closing Date or which
arise after the Closing Date but which are based upon or arise
from any act, transaction, circumstance, sale of goods or
services, state of facts or other condition which occurred or
existed on or before the Closing Date, whether or not then known,
due or payable, except to the extent specifically assumed by
Buyer pursuant to the Liabilities Undertaking;
(iii) any and all loss, liability, damage,
cost or expense suffered or incurred by any of the Buyer
Indemnitees based on or arising from (A) the presence of any
Hazardous Substance on any of the Properties or any Hazardous
Discharge on or prior to the Closing Date, and/or any
Environmental Complaint, and/or the failure to obtain any license
or permit required in connection with any Hazardous Substance or
Hazardous Discharge or the retention, disposal, treatment or use
thereof, and/or arising out of any noncompliance with any
environmental, health or safety law, ordinance, rule or
regulation (each, an "Environmental Requirement"), in each case,
based on or arising from any act, transaction, state of facts or
other condition which occurred or existed on or before the
Closing Date, whether or not then known, (B) any personal injury
(including wrongful death) or property damage (real or personal)
arising out of or related to any Hazardous Discharge, the
presence, use, disposal or treatment of a Hazardous Substance, or
noncompliance with any Environmental Requirement, on or prior to
the Closing Date, and/or (C) any Environmental Complaint and/or
any demand of any government agency or authority prior to, on or
after the Closing Date which is based upon or in any way related
to any Hazardous Discharge, the presence, use, disposal or
treatment of a Hazardous Substance, and/or noncompliance with any
Environmental Requirement on or prior to the Closing Date, and
including, without limitation and in each such case under this
clause (iii), the reasonable costs and expenses of all remedial
action and clean-up, attorney and consultant fees, investigation,
sampling and laboratory fees, court costs and litigation expense
and costs arising out of emergency or temporary assistance or
action undertaken by or as required by any regulatory body in
connection with any of the foregoing;
(iv) any and all Taxes which are payable
by any of Sellers, or which arise out of the operations of any of
Sellers on or prior to the Closing Date and/or the transaction
contemplated by this Agreement, except to the extent specifically
assumed by Buyer pursuant to the Liabilities Undertaking;
(v) any and all loss, liability, damage,
cost or expense suffered or incurred by any of the Buyer
Indemnitees by reason of noncompliance with the provisions of any
bulk transfer law of any jurisdiction in connection with any of
the transactions contemplated by this Agreement, except to the
extent of liabilities specifically assumed by Buyer pursuant to
the Liabilities Undertaking;
(vi) any and all loss, liability, damage,
cost or expense suffered or incurred by any of the Buyer
Indemnitees by reason of or in connection with any transfer or
assignment of any assets, properties, leases, contracts, rights
or franchises, including without limitation any of the Purchased
Assets, from Company to Trust, and/or any Taxes or other
liabilities or obligations relating thereto or arising therefrom;
and
(vii) any and all actions, suits,
proceedings, claims, demands, assessments, judgments, costs and
expenses, including, without limitation, reasonable attorneys'
fees, incident to any of the foregoing or incurred in
investigating or attempting to avoid the same or to oppose the
imposition thereof, or in enforcing any of the obligations under
this Section 9.1(b).
9.2 Survival and Other Matters.
(a) Each representation, warranty, indemnity,
covenant and agreement made by any of the Selling Parties in this
Agreement or in any agreement, certificate or instrument
delivered by or on behalf of any of the Selling Parties to Buyer
pursuant to or in connection with this Agreement, are, and shall
be deemed, joint and several representations, warranties,
indemnities and covenants of each of the Selling Parties. Each
representation, warranty, indemnity, covenant and agreement of
each of the parties hereto shall survive the Closing; provided,
however, that no party shall be entitled to assert claims against
any other for misrepresentations or breach of warranty under or
pursuant to this Agreement unless the party asserting such claim
shall notify the other in writing of such claim within three (3)
years after the Closing Date; provided, however that the
foregoing limitations on the survival of representations and
warranties shall not apply to any of the representations and
warranties in or pursuant to Section 4.3, 4.6(a), 4.13 or 4.16
hereof. Notwithstanding the foregoing, in no event shall the
Selling Parties on the one hand, or Buyer and RAPI on the other
hand, have any liabilities under or pursuant to this Agreement
for any misrepresentations or breaches of warranties hereunder
until such liabilities shall exceed in the aggregate $125,000, at
which time such indemnifying party shall be fully liable for
$62,500 of such first $125,000 of liabilities and for all
liabilities in excess of such first $125,000 of liabilities.
(b) With respect to the indemnification
obligations of the Selling Parties under Section 9.1(b)(iii)
hereof, the following provisions shall apply: (i) the Selling
Parties shall not be liable for costs or expenses of
investigation voluntarily incurred by Buyer or RAPI in the
absence of an actual Environmental Complaint; (ii) Buyer and RAPI
will act reasonably under the circumstances and will consult with
the Selling Parties regarding investigations and remedial actions
which they propose to take; and (iii) the Selling Parties shall
not be responsible under said Section 9.1(b)(iii) for voluntary
remedial actions taken by Buyer or RAPI which are neither
required in order to comply with an applicable Environmental
Requirement nor in reasonable response to an Environmental
Complaint.
9.3 Covered Proceedings.
(a) If any action or proceeding be commenced by a
third party against a party entitled to indemnification under
this Article 9 (an "Indemnitee") in respect of which the
Indemnitee proposes to hold the parties obligated to provide such
indemnification with respect thereto (the "Indemnitors") liable
under the provisions of this Article 9 (a "Covered Proceeding"),
the Indemnitee shall give the Indemnitor prompt written notice of
such Covered Proceeding and copies of all pleadings filed
relating thereto within twenty (20) days after the Indemnitee's
receipt thereof.
(b) If the Indemnitors shall, at their option,
elect by prompt written notice to each Indemnitee to contest or
defend any such Covered Proceeding, the Indemnitors shall,
subject to the provisions of this Section 9.3, be entitled, at
their sole cost and expense, to contest or defend the same with
counsel of their own choosing, but reasonably satisfactory to the
Indemnitee, and in such event the Indemnitee shall not settle,
compromise, pay or discharge the same without the prior written
consent of the Indemnitor (which consent shall, however, not be
unreasonably withheld or delayed), so long as the Indemnitors is
actively contesting or defending the same in good faith.
(c) Notwithstanding the foregoing provisions of
this Section 9.3, if:
(A) the Covered Proceeding does not
seek only monetary damages, but seeks any injunction or other
equitable relief against any Buyer Indemnitee; or
(B) the Covered Proceeding involves any
matter, cause of action or claim covered by clause (iii) of
Section 9.1(b) hereof in which any governmental or regulatory
authority, agency or body of any other person or entity seeks or
may seek remediation or other action which would adversely affect
any business or operations of any Indemnitee (an "Environmental
Proceeding"); then, Buyer or RAPI shall be entitled to elect not
to contest, and shall be entitled to settle and discharge, any
claim arising thereunder; provided that if RAPI or Buyer shall
elect not to contest or to settle or discharge any such particular
claim,the indemnity obligation of the Selling Parties with respect
thereto shall be limited to that portion ofthe liability arising
from the election of RAPI or Buyer not to contest or to settle and
discharge the same (without the consent of the Selling Parties)
which is reasonable after taking into account the substantive
merits of the position taken by the Selling Parties in opposing
such claim, as compared to the risks of litigation or other
opposition.
(d) Notwithstanding anything to the contrary
contained in this Section 9.3:
(i) Even if the Indemnitee fails to give the
Indemnitors timely notice of a Covered Proceeding or otherwise
defaults in its obligations under this Section 9.3, the
Indemnitors' sole remedy for such default shall be to offset
against the indemnification liability otherwise payable by the
Indemnitors to the Indemnitee the amount of damages actually
suffered by the Indemnitors as a result of such default.
(ii) The Indemnitors shall not have any right
to defend, or control the settlement of, any Covered Proceeding
if (A) the Indemnitors do not unconditionally acknowledge in
writing, within a reasonable period of time after the Indemnitee
gives notice of the Covered Proceeding, that the Indemnitors are
jointly and severally obligated to indemnify the Indemnitee in
full with respect to the Covered Proceeding as provided in
Section 9.1 hereof or (B) any of the Indemnitors is then in
default in any of its material obligations under this Agreement.
(iii) In the event the Indemnitors elect
(and are entitled as provided herein) to defend a Covered
Proceeding, the Indemnitee shall be entitled to participate in
the defense thereof with its own separate counsel and receive
copies of all pleadings and other papers in connection therewith.
In such event, the fees and expenses of such Indemnitee's counsel
shall, except as otherwise provided in this Section 9.3, be borne
by the Indemnitee, unless the Indemnitee shall have reasonably
determined that there may be one or more defenses available to it
which are different from or in addition to those available to the
Indemnitors or that the Covered Proceeding also involves or could
have an effect upon matters beyond the scope of the
indemnification obligations set forth in this Agreement. In the
event of any such determination, the Indemnitors shall, to the
extent made necessary by any such other defense or such effect,
not have the right to direct the defense thereof, but in such
latter case, only that portion of the fees and expenses of such
Indemnitee's counsel reasonably related to matters covered by the
indemnification obligations under this Agreement shall be borne
by the Indemnitor.
(iv) If the Indemnitors do not (or are not
entitled to) elect to contest or defend a Covered Proceeding, or
after so electing does not actively contest and defend the same
in good faith, and in conformity with the requirements of this
Section 9.3, the Indemnitee shall be entitled to contest, defend
and/or settle such Covered Proceeding on such terms and with such
counsel as the Indemnitee deems appropriate, and at the sole cost
and expense of the Indemnitors.
(v) The Indemnitors will in any event be
entitled to control the settlement of a Covered Proceeding
(subject to the requirements and limitations of this Section 9.3)
only if (A) the terms of such settlement require no more than the
payment of money (i.e., such settlement does not require the
Indemnitee to admit any wrongdoing or take or refrain from taking
any action), (B) the full amount of such monetary settlement will
be paid by the Indemnitors, and (C) the Indemnitee receives as
part of such settlement a legally binding and enforceable
unconditional satisfaction and/or release, in form and substance
reasonably satisfactory to the Indemnitee, providing that the
Covered Proceeding and any claimed liability or obligation of the
Indemnitee with respect thereto is being fully satisfied by
reason of such settlement and that the Indemnitee is being
released from any and all obligations or liabilities it may have
with respect thereto.
9.4 Offsets. Without limiting its other rights and
remedies, Buyer or RAPI shall have the right to set off the
amount of any claims asserted by Buyer or RAPI in good faith that
it is entitled to (i) an adjustment to the Agreement Amount in
accordance with Schedule 2.1 hereof, or (ii) a deduction or
setoff in respect of any obligation under Section 9.1(b) or
otherwise under this Agreement, against amounts payable by it
under the Note (as defined in Schedule 2.1 hereto), in each case
at the option of Buyer or RAPI up to an aggregate of $750,000.
No such setoff shall constitute a default under this Agreement or
under any other agreement or instrument, or otherwise, it being
agreed that Buyer and RAPI shall have a period of ten (10) days
after the final and binding resolution of all good faith claims
and/or disputes relating to such non-payment to pay the amounts
determined as a result of such resolution to be due and payable.
If it shall be determined that Buyer or RAPI improperly (despite
Buyer's or RAPI's good faith belief that such setoff was proper)
withheld any payment by reason of this Section, such amount shall
bear interest at the rate of ten percent (10%) per annum from the
date such amount was due. The foregoing rights of setoff shall
not apply to amounts payable to Sellers under the Noncompetition
Undertaking or the New Leases. The remedies provided for in this
Agreement are not exclusive and shall be in addition to any other
remedies that Buyer or RAPI may have at law, in equity or
otherwise.
9.5 Prevailing Party. In the event that any party
(the "Defaulting Party") defaults in his or its obligations under
this Agreement and, as a result thereof, any other party (the
"Non-Defaulting Party") seeks to legally enforce its rights
hereunder against the Defaulting Party, then, in addition to all
damages and other remedies to which the Non-Defaulting Party is
entitled by reason of such default, the Defaulting Party shall
promptly pay to the Non-Defaulting Party an amount equal to all
reasonable attorneys' fees paid or incurred by the Non-Defaulting
Party in connection with such enforcement.
ARTICLE 10
TERMINATION
10.1 Right of Termination Without Breach. This
Agreement may be terminated without further liability of any
party at any time prior to the Closing:
(a) By mutual written agreement of the Buyer and
the Sellers; or
(b) By either Buyer or the Selling Parties, as
the case may be, if the Closing shall not have occurred on or
before August 31, 1995, provided that such terminating party or
parties (i) have not, through breach or violation of a
representation, warranty or covenant or any other provision of
this Agreement, prevented the Closing from occurring on or before
such date and (ii) is (are) not in violation or breach of any of
the agreements, representations, warranties or covenants of this
Agreement and has (have) not refused to permit the Closing to
proceed.
10.2 Termination for Breach.
(a) If (i) there has been a material violation or
material breach by any of the Selling Parties of any agreements,
representations or warranties contained in this Agreement which
is then continuing and has not been waived in writing by Buyer,
or (ii) there has been a failure of satisfaction of a condition
to the obligations of Buyer which has not been so waived, or
(iii) the Selling Parties shall have attempted to terminate this
Agreement under this Article 10 or otherwise without grounds
under this Article 10 to do so, then Buyer, at its option, may by
written notice to Sellers, at any time prior to the Closing, that
such violation, breach, failure or wrongful termination attempt
is continuing, terminate this Agreement with the effect set forth
in Section 10.3 below.
(b) If (i) there has been a material violation or
breach by Buyer or RAPI of any agreements, representations or
warranties contained in this Agreement which is then continuing
and has not been waived in writing by Sellers, or (ii) there has
been a failure of satisfaction of a condition to the obligations
of Sellers which has not been so waived, or (iii) Buyer shall
have attempted to terminate this Agreement under this Article 10
or otherwise without grounds under this Article 10 to do so, then
Sellers, at their option, may, by written notice to Buyer, at any
time prior to the Closing, that such violation, breach, failure
or wrongful termination attempt is continuing, terminate this
Agreement with the effect set forth in Section 10.3 below.
10.3 Effect of Termination. Termination of this
Agreement pursuant to Section 10.2 hereof shall not in any way
terminate, limit or restrict the rights and remedies of any party
hereto against any other party and the remedy of termination
under this Article 10 is cumulative with any and all other rights
and remedies which any party may have, whether under this
Agreement (including without limitation Section 11.1 hereof) or
otherwise.
ARTICLE 11
Miscellaneous
11.1 Specific Performance. The Selling Parties agree
that the Purchased Assets include unique property that cannot be
readily obtained on the open market and that Buyer and RAPI will
be irreparably injured if this Agreement is not specifically
enforced. Therefore, Buyer and RAPI shall have the right
specifically to enforce the performance of the Selling Parties
under this Agreement without the necessity of posting any bond or
other security, and the Selling Parties hereby waive the defense
in any such suit that Buyer or RAPI has an adequate remedy at law
and agree not to interpose any opposition, legal or otherwise, as
to the propriety of specific performance as a remedy. The remedy
of specifically enforcing any or all of the provisions of this
Agreement in accordance with this Section 11.1 shall not be
exclusive of any other rights which Buyer or RAPI may have to
terminate this Agreement, or of any other rights or remedies
which Buyer or RAPI may otherwise have under this Agreement or
otherwise, all of which rights and remedies shall be cumulative.
11.2 Binding Agreement; Assignment. All the terms and
provisions of this Agreement shall be binding upon, inure to the
benefit of, and be enforceable by, the parties hereto and their
respective heirs, legal representatives, successors and assigns.
Prior to the Closing, this Agreement shall not be assignable by
any party hereto other than to one or more subsidiaries of RAPI.
No assignment shall relieve the Assignor of any of its
obligations under this Agreement.
11.3 Law To Govern. This Agreement shall be construed
and enforced in accordance with the internal laws of the State of
Pennsylvania, without regard to principles of conflict of laws.
11.4 Notices. All notices shall be in writing and
shall be deemed to have been duly given to a party hereto if
delivered personally, then on the date of such delivery, or on
the fifth day after being deposited in the mail if mailed via
registered or certified mail, return receipt requested, postage
prepaid, or on the next business day after being sent by
recognized national overnight courier services, in each case, to
such party, at the following respective addresses:
if to the Selling Parties, to:
Mr. Fred J. Pisciotta
6013 Enterprise Drive
Export, Pennsylvania 15632
with a copy to:
Cohen & Grigsby, P.C.
2900 CNG Tower
625 Liberty Avenue
Pittsburgh, PA 15222
Attention: Mark I. Baseman, Esq.
if to Buyer or RAPI, to:
c/o Republic Automotive Parts Inc.
500 Wilson Pike Circle, Suite 115
Post Office Box 2088
Brentwood, Tennessee 37024
Attention: Keith M. Thompson, President
with a copy to:
Berner & Berner, P.C.
515 Madison Avenue
20th Floor
New York, New York 10022
or to such other address as any such party may designate in
writing in accordance with this Section 11.4.
11.5 Fees and Expenses. Except as expressly set forth
in this Agreement, each of the parties shall pay its own fees and
expenses with respect to the transactions contemplated hereby.
11.6 Entire Agreement. This Agreement sets forth the
entire understanding of the parties hereto in respect of the
subject matter hereof and may not be modified, amended or
terminated except by a written agreement specifically referring
to this Agreement signed by all of the parties hereto. This
Agreement supersedes all prior agreements and understandings
among the parties with respect to such subject matter.
11.7 Waivers. Any failure by any party to this
Agreement to comply with any of its obligations hereunder may be
waived by any Seller in the case of a default by Buyer or RAPI
and by Buyer or RAPI in case of a default by any of the Selling
Parties. No waiver shall be effective unless in writing and
signed by the party granting such waiver, and no such waiver
shall be deemed a waiver of any subsequent breach or default of
the same or similar nature.
11.8 Severability. If any provision of this Agreement
would be held to be invalid, prohibited or unenforceable in any
jurisdiction for any reason, such provision, as to such
jurisdiction only, shall be ineffective to the extent of such
invalidity, prohibition, unenforceability, without invalidating
the remaining provisions of this Agreement, and the validity,
legality and enforceability of such remaining provisions shall
not be affected in any way thereby.
11.9 No Third-Party Beneficiaries. Nothing herein,
express or implied, is intended or shall be construed to confer
upon or give to any person, firm, corporation or legal entity,
other than the parties hereto, any rights, remedies or other
benefits under or by reason of this Agreement or any documents
executed in connection with this Agreement.
11.10 Counterparts. This Agreement may be executed
in any number of counterparts, each of which shall be deemed an
original but all of which shall constitute one and the same
agreement.
11.11 Headings. The Section and paragraph headings
contained herein are for the purposes of convenience only and are
not intended to define or limit the contents of said Sections and
paragraphs.
IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the date first above written.
BEACON AUTO PARTS COMPANY
By:/s/Fred J. Pisciotta
----------------------------
Fred J. Pisciotta, President
BEACON AUTO PARTS COMPANY
By:/s/Fred J. Pisciotta
---------------------------
Fred J. Pisciotta, Trustee
STOCKHOLDER:
/s/Fred J. Pisciotta
--------------------
Fred J. Pisciotta
REPUBLIC AUTOMOTIVE PARTS
SALES, INC.
By:/s/Donald B. Hauk
------------------------
Donald B. Hauk
Executive Vice President
REPUBLIC AUTOMOTIVE PARTS, INC.
By:/s/Donald B. Hauk
------------------------
Donald B. Hauk
Executive Vice President
SCHEDULE 1.1
Excluded Assets (as of 12/31/94):
1. Cash in bank accounts and marketable securities
2. Deposits and prepaid assets of Sellers, if not reflected in
the Statement of Assets and Payables (as defined in Schedule 2.1
to the Agreement)
3. Seller's tax returns and back-up materials therefor
4. Seller's respective corporate and trust franchises and
minute and stock record books
5. Seller's credit card receivables
6. All real property owned by Company (subject to the
leaseholds in favor of Buyer contemplated by the New Leases
7. The following notes receivable due to Company:
a. Note payable by Fred J. Pisciotta in the principal
amount of $345,519
b. Note payable by John Wieder in the principal amount of
$77,566
c. Note payable by Fred J. Pisciotta, trustee f/b/o
Randolph James Pisciotta in the principal amount of $135,387
d. Note payable by Fred J. Pisciotta, trustee f/b/o Gina
Renee Lovett in the principal amount of $135,387
e. Note payable by Fred J. Pisciotta, trustee f/b/o Lisa
Ann Pisciotta in the principal amount of $135,387
f. Note payable by Fred J. Pisciotta, trustee f/b/o Brenda
Elaine Pisciotta in the principal amount of $135,387
8. Snappy Car Rental Sublease Deposit ($1,333)
9. Interest Rate Cap 16,750
10. Federal Kemper Life Ins. Policy FK2216515
11. Trans American Occidental Life Ins. Policy 92439942
Exhibit 1.1
BILL OF SALE
BEACON AUTO PARTS COMPANY, a Delaware corporation
(hereinafter called "Company"), and BEACON AUTO PARTS COMPANY, a
Pennsylvania business trust ("Trust", and, together with Company,
"Assignors"), for One Dollar ($1.00) and other valuable
consideration to it in hand paid, receipt of which is hereby
acknowledged, by these presents do jointly and severally sell,
assign, transfer and convey unto Republic Automotive Parts Sales,
Inc., a Delaware corporation (hereinafter called "Assignee"),
and, to the extent hereinafter provided, to Republic Automotive
Parts, Inc., a Delaware corporation ("RAPI"), and their
respective successors and assigns, the following described
properties, assets and rights, accrued and contingent, and
wherever situated or located, owned by any of Assignors or to
which any of Assignors has any right, title or interest as of
[the Closing Date], as well as all other "Purchased Assets" as
such term is defined in that certain Agreement of Purchase and
Sale of Assets, dated as of ____________, 1995, among Assignors,
Assignee, RAPI and Fred J. Pisciotta (the "Agreement"), excepting
only those Excluded Assets listed on Schedule 1.1 to the
Agreement:
(a) all machinery, equipment, furniture, fixtures,
tools, parts, shelving, conveyors, raised metal flooring and
related systems, cars, trucks, motor vehicles and fixed assets,
including without limitation those referred to on Schedule "A"
annexed hereto;
(b) all automotive parts and accessories and other
inventories and supplies, as well as all trade, advertising and
promotional literature and displays;
(c) all accounts and other amounts receivable of
Assignors (but excluding credit card accounts receivable) and all
other rights to payment, causes of action, claims and rights of
recovery, including without limitation under warranties and the
like;
(d) those contracts, leases and agreements assumed by
Assignee pursuant to the Agreement and Assignors' rights and
benefits thereunder;
(e) all transferable licenses and permits and all
patents, trademarks, trade names, service names, service marks,
copyrights, know-how and other proprietary information and
rights, including the entire right to use the names "Beacon",
"Beacon Auto Parts", "Greene Motor Equipment Company" and "Auto
Parts Distributors";
(f) all computer equipment, computer software,
programs, manuals, documentation, user guides, files, discs and
other storage media;
(g) all customer and vendor lists and files, the right
to receive mail and other communications and shipments of
merchandise addressed to any of Assignors;
(h) all insurance proceeds and rights to insurance
proceeds relating to any of the foregoing;
(i) all of the business and goodwill of each of
Assignors as a going concern; and
(j) all customer and vendor sales and purchase records
and all other financial and other books and records relating to
any of the Purchased Assets and/or Assumed Liabilities (as
defined in the Liabilities Undertaking executed and delivered
pursuant to the Agreement) and/or any other aspect the Business
(as defined in the Agreement).
It is acknowledged that the Purchased Assets sold,
assigned, transferred and conveyed to RAPI hereunder are limited
to accounts receivable having an aggregate value of $1,000,000
and that all other properties, assets and rights sold, assigned,
transferred and conveyed hereunder are sold, assigned,
transferred and conveyed to Assignee, its successors and assigns.
Each of Assignors hereby authorizes and grants its
power of attorney to Assignee and appoints Assignee and the
officers thereof as each of Assignors' attorney-in-fact to take
any appropriate action in connection with any of the
aforementioned properties, assets and rights, in the name of any
of Assignors or in its own or any other name but at its own
expense, it being understood that this authorization and power of
attorney are coupled with an interest and irrevocable.
TO HAVE AND TO HOLD the aforementioned properties,
assets and rights unto the said Assignee, its successors and
assigns, and to the extent herein provided to RAPI, its
successors and assigns, to and for the use thereof forever.
IN WITNESS WHEREOF, Assignors have caused this
instrument to be duly executed as of _____________________.
BEACON AUTO PARTS COMPANY
By:______________________________
Fred J. Pisciotta, President
BEACON AUTO PARTS COMPANY
By:____________________________
Fred J. Pisciotta, Trustee
SCHEDULE A TO BILL OF SALE
[Assets listed in attachment to Schedule 4.9(b) of the
Disclosure Schedule.]
SCHEDULE 1.2
PERMITTED LIENS
None.
Schedule 2.1
Computation and Payment of Agreement Amount
(a) Agreement Amount. The Agreement Amount shall
consist of the sum of the Purchase Price (as hereinafter
defined), plus the Buyer Contingent Amount (as hereinafter
defined), minus the Seller Contingent Amount (as hereinafter
defined), plus the $500,000 in respect of and allocated to the
Non-Competition Undertaking (as provided therein).
(b) Purchase Price. The Purchase Price shall be equal
to the sum of (i) an amount equal to the Fixed Assets/Goodwill
Value, plus (ii) an amount equal to the "Inventory Value", plus
(iii) an amount equal to the "Receivables Value", plus (iv) an
amount equal to the "Prepaids Value", minus (iv) the amount of
all "Accounts Payable and Other Liabilities".
(c) Fixed Asset/Goodwill Value. For purposes hereof,
the "Fixed Asset/Goodwill Value" shall be fixed at $5,172,000, as
the same may be adjusted pursuant to this paragraph (c), and, if
applicable, as the same may be reduced pursuant to Section 2.6 of
the Agreement. The portion of the Fixed Asset/Goodwill Value
allocable to the machinery, equipment and other depreciable
tangible fixed assets included in the Purchased Assets (the
"Fixed Asset Value") shall be determined on the basis of a third
party appraisal procured by RAPI. In the event the Fixed Asset
Value established shall exceed the aggregate net book value of
the machinery, equipment and other depreciable tangible fixed
assets included in the Purchased Assets by more than $1,000,000,
then there shall be added to the Fixed Asset/Goodwill Value an
amount equal to 15.278% of the lesser of (i) such excess and (ii)
the amount of the depreciation deductions theretofore recognized
by Company in respect of such fixed assets which are subject to
recapture by virtue of the asset sale transaction provided for in
the Agreement.
(d) Inventory Value. The term "Inventory Value" shall
mean the aggregate net value of those items of Sellers' inventory
included in the Purchased Assets, as hereinafter determined and
as reflected on the "Statement of Assets and Payables".
(e) Receivables Value. The term "Receivables Value"
shall mean the net value of all trade account receivable (other
than credit card receivables) of Sellers as of the Closing Date,
to the extent arising from bona fide transactions in the ordinary
course of business, with third parties not directly or indirectly
affiliated with any of Sellers or any stockholder of Company, and
to the extent the same have not been written off and are not
eligible for write-off in accordance with Company's customary
practice (the "Purchased Receivables"). The Purchased
Receivables shall be initially valued at 100% of the face amount
thereof as of the Closing Date, net of and after deduction of the
amount of all discounts and other applicable adjustments allowed
by Seller (but there shall be no deduction for prompt payment
discounts) (the "Initial Purchased Receivables Value"). If by
the 120th day after the Closing the Initial Purchased Receivables
Value shall exceed the sum of (i) the aggregate amount of
Purchased Receivables in fact collected, or credited as
collected, by Buyer, plus (ii) the uncollected amount of those
long term receivables listed on Annex A hereto which are not then
due and payable (the "Long Term Receivables"), such excess shall
reduce dollar-for-dollar the value of the Purchased Receivables
and accordingly the Purchase Price. If, on the other hand, the
aggregate amount of Purchased Receivables in fact collected, or
credited as collected, by Buyer by such 120th day shall exceed
the Initial Purchased Receivables Value, the value of the
Purchased Receivables and accordingly the Purchase Price shall be
increased by the amount of such excess.
(f) Prepaids Value. The term "Prepaids Value" shall
be the net cost basis as of the Closing Date of those prepaid
items designated on Annex B hereto and included in the Purchased
Assets which are usable in the ordinary course of Buyer's
Business.
(g) Accounts Payable and Other Liabilities. The term
"Accounts Payable and Other Liabilities" shall mean the aggregate
anticipated future amount of all accounts payable and accrued
expenses payable (including without limitation accrued vacation
and sick pay and an appropriately prorated accrual for
anticipated future bonuses) and other indebtedness and
liabilities of any of Sellers as of the Closing Date of the type
covered by the Liabilities Undertaking and required in accordance
with generally accepted accounting principles to be reflected on
a balance sheet of any of Sellers as of the Closing Date.
(h) Statement of Assets and Payables. The term
"Statement of Assets and Payables" shall mean a statement showing
the Fixed Asset/Goodwill Value (allocated as provided in Schedule
2.4 to the Agreement), the Inventory Value, the Receivables
Value, the Prepaids Value, and the amount of the Accounts Payable
and Other Liabilities, all as of the Closing Date, and to be
prepared within 120 days after the Closing Date, jointly by Buyer
and Sellers from the books and records of Sellers and in
accordance with this Schedule 2.1.
(i) Computation of Inventory Value. In computing the
Inventory Value, the following shall apply: (i) Except as
provided and subject to the adjustments set forth herein,
Sellers' automotive parts and accessories inventory (excluding
items referred to in any of clauses (ii) through (viii) below,
which shall be valued if and as indicated in said clauses (ii)
through (viii), as the case may be) constituting Purchased Assets
will be valued at current jobber net price as of the Closing Date
for such items, less all normal line and warehouse discounts
(such price less such discounts being herein called the
"Warehouse Price" for the item in question), and, in all such
cases, will, if and as may be required by Buyer, be computed and
so valued on the basis of complete physical counts conducted no
later than the close of business on or about the last business
day preceding the Closing Date, or on the basis of the quantities
reflected in Sellers' records as tested and adjusted on the basis
of such sampling technique(s) as Buyer shall reasonably select,
supplemented by a rolling forward to the Closing Date based on
actual invoices and receipts; it being understood, however, that
Excluded Inventory (as hereinafter defined) shall not be included
or valued on the Statement of Assets and Payables; and it being
further understood that if Sellers are not satisfied with the
results of Buyer's sampling, and wish to rely instead on a
complete physical inventory, Sellers may so elect to require such
complete physical inventory by prompt written notice from Sellers
to Buyer prior to the Closing, in which event such complete
physical inventory shall be conducted, at the election of Buyer,
prior to the Closing or on the first weekend after the Closing,
and the results thereof shall be adjusted by a rolling forward or
back, as the case may be, to the Closing Date based on actual
invoices and receipts.
(ii) Obsolete Inventory (as hereinafter defined)
and damaged inventory will be reflected on the Statement of
Assets and Payables at no dollar value. As used herein,
"Obsolete Inventory" means inventory designated on its
manufacturer's or vendor's catalog or price sheet or any
supplement to any of the foregoing, or on any supplemental
product literature or sales bulletin, as not eligible for a
return for full cash credit or with any designation of similar
effect, or inventory (other than oils, chemicals and certain
accessories items which under standard industry practice are not
customarily returnable to the third party supplier thereof in the
first instance) which is otherwise not returnable by Buyer for
full cash credit at then current Warehouse Price to the original
third party supplier thereof to Sellers.
(iii) Special order items and shop work, both
completed and in-process, to the extent ordered or performed
pursuant to outstanding bona fide orders, shall be valued at
actual net cost of parts, transportation and direct labor
expended as of the Closing Date.
(iv) Cores and defective items under warranty
awaiting return to the vendor for full credit shall be valued at
cost.
(v) No value shall be reflected for any debit
memoranda or similar items relating to inventory returned to
manufacturers or vendors for credit. Debit memoranda which are
specifically identified in writing by Trust to Buyer prior to the
Closing shall be deemed property of Trust and any amounts in
respect thereof collected by Buyer or credits received by Buyer
after the Closing shall be remitted by Buyer to Trust.
(vi) "Excluded Inventory" shall mean all products
(A) not included and reported on Company's most recent sales
analysis report prepared in the ordinary course of business and
as heretofore delivered to Buyer in connection with the execution
and delivery of this Agreement or thereafter not continuously
included and reported through the Closing on each subsequent
sales analysis prepared in the ordinary course of business
consistent with past practice, or (B) listed on Annex C to this
Schedule 2.1.
(vii) Rebates received after the Closing and
earned in respect of purchases of inventory by any Seller prior
to the Closing Date shall be included in the Purchased Assets but
shall not be given any dollar value on the Statement of Assets
and Payables.
(viii) No value will be assigned to consignment
inventory.
(j) Estimated Purchase Price. During the period from
the fifth day to the first day before the Closing, Trust and
Buyer, on the basis of regularly prepared accounts receivables
runs, physical inventories and other inventory records as shall
then be available to them, shall cooperate to mutually determine
in good faith an estimate of the Purchase Price based on an
estimated Statement of Assets and Payables as of the Closing
Date, and utilizing the valuation measures set forth in this
Schedule 2.1 (the "Estimated Purchase Price"). If the parties
are unable to so agree on such estimated Statement of Assets and
Payables, Buyer at its option may require that the Estimated
Statement of Assets and Payables set forth as Schedule 4.5(b) of
the Disclosure Schedule be used for the purposes of this
paragraph (j) and as the basis for the calculation of the
Estimated Purchase Price.
(k) RAPI Shares; Note; Cash Payment. At the Closing,
Buyer will (A) deliver to Trust a number of whole shares of
common stock of RAPI ("RAPI Common Stock"), such that the product
of such number of shares (the "RAPI Shares"), multiplied by the
Per Share Value (determined as hereinafter provided), shall equal
$1,000,000 (after taking into consideration the value of any
fractional share), and (B) deliver to Trust a subordinated
promissory note of Buyer in the principal amount of $2,000,000
bearing interest at an annual rate of 7.055% and in the form of
Exhibit 3.3(b) to the Agreement (the "Note"), and (C) pay in
accordance with Schedule 3.3(a) to this Agreement, by wire
transfer, a sum (the "Cash Payment") equal the amount by which
90% of the Estimated Purchase Price exceeds $3,000,000.
(l) Per Share Value. The term "Per Share Value" shall
mean the average of the Market Prices per share of RAPI Common
Stock for the 40 consecutive Trading Days ending with the fifth
day before the Closing Date. The term "Market Price per share of
RAPI Common Stock" for any Trading Day shall mean the closing
sale price for the RAPI Common Stock on such Trading Day as
published by the National Association of Securities Dealers
Automated Quotation System ("NASDAQ") (or, if no such closing
sale price is so published, the average of the closing bid and
asked prices for the RAPI Common Stock on such Trading Day, as
furnished by any New York Stock Exchange member firm selected by
RAPI from time to time for such purpose. The term "Trading Day"
shall mean any day on which trading takes place and prices
reflecting such trading are generally published by NASDAQ.
Anything to the contrary contained herein, notwithstanding, if
the calculation under paragraph (k) above requires a fractional
share to reach such $1,000,000 in aggregate Per Share Value for
the RAPI Shares, no such fractional share shall be issued and in
lieu thereof the value of such fractional share (based on Per
Share Value) shall be paid in cash at the Closing.
(m) Adjustment in Favor of Trust. At the Settlement
(as hereinafter defined), Buyer will promptly pay to Trust (A)
the amount (the "Buyer Adjustment Amount") by which the Purchase
Price exceeds the sum of (i) the Cash Payment plus (ii)
$3,000,000, plus (B) interest on the Buyer Adjustment Amount, at
the rate of 10% per annum from the Closing Date to the date of
payment thereof.
(n) Adjustment in Favor of Buyer. In the event the
sum of (i) the Cash Payment plus (ii) $3,000,000 shall exceed the
Purchase Price, the Selling Parties shall promptly pay to Buyer
at the Settlement (A) an amount (the "Seller Adjustment Amount")
equal to such excess, plus (B) interest on the Seller Adjustment
Amount at the rate of 10% per annum from the Closing Date to the
date of payment thereof.
(o) Uncollected Receivables. At the Settlement, Buyer
shall deliver to Trust a list of the Purchased Receivables, other
than the Long Term Receivables, that remain uncollected as of the
Settlement Date (the "Uncollected Receivables"). The Long Term
Receivables shall remain the property of Buyer. Following the
Settlement Date, the Uncollected Receivables shall be deemed the
property of Trust and Buyer shall remit to Trust on a monthly
basis all amounts in fact collected by Buyer in respect of the
Uncollected Receivables, net of all out-of-pocket costs and
reasonable expenses incurred by Buyer in connection with the
collection thereof (it being understood that Buyer will in no
event be required to incur any cost or expense or resort to
litigation or similar collection efforts). Trust shall from and
after the 180th day after the Closing be entitled, at its sole
cost and expense, to collect the Uncollected Receivables in its
own name and as it deems appropriate.
(p) Settlement. The Settlement shall take place at
10:00 a.m., local time, at the offices of Buyer on a date no
later than 10 business days after the completion of the Statement
of Assets and Payables, but in no event earlier than the 120th
day, or later than the 180th day, after the Closing Date (such
day being called the "Settlement Date"), or such other time and
place as the parties may agree upon.
(q) Disputes. Trust and Buyer agree to use their best
efforts to reach agreement upon any disputed portion of the
Statement of Assets and Payables (the "Disputed Items"). Any
Disputed Items remaining unresolved on the 30th day after the
originally scheduled Settlement Date shall forthwith be submitted
to Deloitte & Touche in Pittsburgh, Pa., or to such other person
or firm as the parties shall mutually select (said named firm or
such other person or firm being herein called the "Arbitrator").
Trust and Buyer shall promptly present their positions with
respect to the Disputed Items to the Arbitrator, together with
such other materials as the Arbitrator may deem appropriate. Any
determination by the Arbitrator with respect to any Disputed Item
shall be final and binding on each party. The cost of the
Arbitrator shall be borne 50% by the Selling Parties and 50% by
Buyer.
(r) Buyer Contingent Amount; Seller Contingent Amount.
The "Buyer Contingent Amount" shall mean the amount determined to
be payable by Buyer to Trust in accordance with this paragraph
(r) (as an addition to the Agreement Amount). The "Seller
Contingent Amount" shall mean the amount determined to be payable
by the Selling Parties to Buyer in accordance with this paragraph
(r) (as a reduction of the Agreement Amount). The Buyer
Contingent Amount and the Seller Contingent Amount shall be
computed as follows:
(i) (A) If EBITDA (as hereinafter defined) for
the Business as conducted by Buyer ("Business EBITDA") for the
period from the Closing until December 31, 1995, (the "1995
Period") shall exceed the product of (x) $1,139,000 times (y) a
fraction, the numerator of which is the number of days from the
Closing Date to December 31, 1995 and the denominator of which
shall be 184 (the "1995 Base Amount"), then Buyer shall pay to
Trust an amount (the "1995 Buyer Payment") equal to the product
of (x) 1.45 times (y) such excess.
(B) If the 1995 Base Amount shall exceed
Business EBITDA for the 1995 Period, then the Selling Parties
shall pay to the Buyer an amount (the "1995 Seller Payment")
equal to the product of (x) 0.58 times (y) such excess.
(ii) (A) If the cumulative Business EBITDA for the
period from the Closing until December 31, 1996 (the "1996
Period") shall exceed the sum (the "1996 Base Amount") of (x) the
1995 Base Amount plus (y) $2,360,000, then Buyer shall pay to
Trust the amount (the "1996 Buyer Payment") by which (1) the sum
of (A) the product of (x) 1.45 times (y) such excess, plus (B)
the 1995 Seller Payment, exceeds (2) the 1995 Buyer Payment.
(B) If the 1996 Base Amount shall exceed the
cumulative Business EBITDA for the 1996 Period, then the Selling
Parties shall pay to Buyer the amount (the "1996 Seller Payment")
by which (1) the sum of (A) the product of (x) 0.58 times (y)
such excess, plus (B) the 1995 Buyer Payment, exceeds (2) the
1995 Seller Payment.
(iii) (A) If the cumulative Business EBITDA for
the period from the Closing Date to December 31, 1997 (the "1997
Period") shall exceed the sum (the "1997 Base Amount") of (x) the
1996 Base Amount plus (y) $2,471,000, then Buyer shall pay to
Trust the amount (the "1997 Buyer Payment") by which (1) the sum
of (A) the product of (x) 1.45 times (y) such excess, plus (B)
the sum of the 1995 Seller Payment plus the 1996 Seller Payment,
exceeds (2) the sum of (x) the 1995 Buyer Payment plus (y) the
1996 Buyer Payment.
(B) If the 1997 Base Amount exceeds the
cumulative Business EBITDA for the 1997 Period, then the Selling
Parties shall pay to Buyer the amount (the "1997 Seller Payment")
by which (1) the sum of (A) the product of (x) 0.58 times (y)
such excess, plus (B) the sum of the 1995 Buyer Payment plus the
1996 Buyer Payment, exceeds (2) the sum of (x) the 1995 Seller
Payment plus (y) the 1996 Seller Payment.
(iv) "EBITDA" shall mean earnings before interest,
taxes, depreciation and amortization fairly allocable to the
Business as operated and conducted by Buyer from and after the
Closing, and as determined and adjusted in accordance with this
Schedule 2.1. EBITDA shall be determined by Buyer for each of
the 1995 Period, the 1996 Period and the 1997 Period (each a
"Period") in good faith, in accordance with generally accepted
accounting principles consistently applied with those accounting
principles used in the 1994 audited Financial Statements, and
with adjustments similar to those provided for in the final pro
forma calculation of Company's 1994 net income used by the
parties to arrive at the original Base Amounts, subject, however,
to the modifications and other matters referred to in paragraph
(v) below.
(v) For purposes of determining Business EBITDA,
the following points and modifications shall apply:
(A) There shall be no allocation of a
headquarter's fee or RAPI or RAPSI general corporate overhead to
Business EBITDA (it being understood, however, that costs and
expenses fairly allocable to the Business even if incurred, paid
or managed by Buyer's or RAPI's headquarters or general office
staff shall nevertheless be deemed costs and expenses of and
allocated to the Business for purposes of computing Business
EBITDA).
(B) All rebates received after the Closing
in respect of purchases of inventory by Sellers prior to the
Closing (as contemplated by subparagraph (i)(vii) above) or by
the Business after the Closing will be considered earnings for
purposes of the Business EBITDA calculation and will be allocated
to the Period in which they are received.
(C) Operating leases entered into by the
Business after Closing for motor vehicles and for other equipment
(as well as the leases for five motor vehicles entered into
between 1/1/95 and the date hereof) will be excluded for Business
EBITDA and treated as if they had been acquired as is consistent
with Company's historical treatment of such items, and motor
vehicles and other equipment purchased by the Business but which
are of a type or which replace items historically leased by
Company shall be treated as if leased in a manner consistent with
past practice for purposes of determining Business EBITDA.
(D) The Base Amounts contemplate that the
Business, as a division of Buyer, may continue to acquire an
average of one store per calendar year including the expectation
that one additional store may be acquired prior to December 31,
1995. It is also understood that if a store is not acquired in
any Period, the Base Amounts nevertheless reflect the possibility
of the acquisition of an additional store in a subsequent Period.
(E) Business EBITDA will not reflect any
expense for the allocation of outside accounting audits, general
corporate legal services or interest or fees associated with
RAPI's general credit facility. However, expenses associated
with bookkeeping and accounting for the Business and/or with
legal fees attributable to matters directly relating to or
involving the Business, and banking fees and expenses either
associated with the maintenance or use of bank accounts or
services by or for, or otherwise directly related to, the
Business shall be charged to Business EBITDA.
(F) Any discretionary bonuses or similar
compensation paid to Fred Pisciotta or John Wieder in addition to
their base salaries will not be allocated to the Business.
However, general employment benefits and charges allocable to
either of such individuals, including benefits under group or
Business-wide or company-wide plans or arrangements shall be
allocated to the Business.
(G) Cost of products sold shall be
determined using the last in, first out ("LIFO") method in
accordance with Buyer's past practices; provided that the LIFO
reserve calculation for the 1995 Period will be based either on
actual price increases during the 1995 Period or on a prorated
portion of Buyer's annual rate(s) of price increases for 1995
(based on the portion of the 1995 calendar year represented by
the 1995 Period).
(H) Cost and expense savings, attributable
to RAPI's or Buyer's superior buying power, including for example
insurance cost savings and other cost savings based on volume
purchases, shall be excluded from the computation of Business
EBITDA, it being understood that for this purpose Business EBITDA
is to be computed, to the extent feasible, as if the Business
were a stand-alone entity.
(I) All wages, salary and other compensation
shall be maintained, and future increases or decreases thereto
shall be made, in accordance with Buyer's general policies.
(vi) It is anticipated, based on information
heretofore furnished to Buyer by Seller, that the Business will
continue to require capital expenditures (including expenditures
for the purchase of additional vehicles and replacement of
obsolete vehicles or other fixed assets) of up to $500,000 per
annum in the aggregate (including for this purpose as if
purchased the fair market value of items obtained under operating
leases). The 1995 Base Amount, the 1996 Base Amount and the 1997
Base Amount referred to in this Section 2.1 (collectively the
"Base Amounts") are based on the assumption that such practice
will continue.
(vii) In the event Buyer shall discharge
Stockholder from his employment with Buyer prior to the end of
the 1997 Period, other than (x) for "cause" (as defined in his
employment agreement with Buyer), or (y) by reason of
Stockholder's disability or death, or (z) following written
notice from Stockholder of his intention to terminate employment
with Buyer, then:
(A) Depending on when such discharge shall
occur: (1) if such discharge occurs during the 1995 Period, the
1995 Base Amount shall be reduced to 80% of the 1995 Base Amount
specified in paragraph (r)(i) above (the "Adjusted 1995 Base
Amount); the 1996 Base Amount shall be reduced to the sum of the
Adjusted 1995 Base Amount plus $1,888,000 (the "Adjusted 1996
Base Amount"); and the 1997 Base Amount shall be reduced to the
sum of the Adjusted 1996 Base Amount plus $1,976,800; (2) if such
discharge occurs during the 1996 Period, the 1996 Base Amount
shall be reduced to the sum of the 1995 Base Amount (without
adjustment pursuant to clause (1) immediately above) plus
$1,888,000); and the 1997 Base Amount shall be reduced to the sum
of the 1995 Base Amount (without adjustment pursuant to clause
(1) immediately above) plus $1,888,000 plus $1,976,800; and (3)
if such discharge occurs during the 1997 Period, the 1997 Base
Amount shall be reduced to the sum of the 1996 Base Amount
(without adjustment pursuant to clause (2) immediately above)
plus $1,976,800.
(B) Sellers shall cease to have any
obligation to pay any Seller Contingent Amount in respect of the
Period in which such discharge occurs or any subsequent Period.
(viii) In no event shall the sum of (1) the 1995
Buyer Payment, plus (2) the 1996 Buyer Payment, plus (B) the 1997
Buyer Payment, exceed, in the aggregate, the sum of (A)
$2,500,000 plus (B) the sum of (x) the 1995 Seller Payment plus
(y) the 1996 Seller Payment.
(ix) In no event shall the sum of the (1) 1995
Seller Payment, plus (2) the 1996 Seller Payment plus (3) the
1997 Seller Payment, exceed, in the aggregate, the sum of (A)
$500,000 plus (B) the sum of (x) the 1995 Buyer Payment plus (y)
the 1996 Buyer Payment.
(x) Buyer shall provide the Selling Parties with
detailed worksheets reflecting its determination of Business
EBITDA not later than 90 days after the end of the relevant
Period. In the event the Selling Parties shall dispute the
compliance of Buyer's calculation of Business EBITDA with the
provisions of this Schedule 2.1, the parties shall endeavor in
good faith, for a period of 30 days from the providing of such
worksheets, to resolve such dispute amicably. If they are unable
to so effect such resolution within such 30-day period, the
dispute shall be promptly submitted to the Arbitrator. The
determination of the Arbitrator shall be final and binding on
each party, and the cost of the Arbitrator shall be borne 50% by
the Selling Parties and 50% by Buyer.
(xi) Each installment of the Buyer Contingent
Amount shall be paid by Buyer to Trust within 10 days after the
determination thereof with respect to the Period to which such
installment applies. Each installment of the Seller Contingent
Amount shall be paid by the Selling Parties to Buyer within 10
days after the determination thereof with respect to the Period
to which such installment applies. Each payment of the Buyer
Contingent Amount or the Seller Contingent Amount shall include
interest thereon at a rate of ten (10) percent per annum thereon
accruing from and after the 120th day after the end of the Period
to which such payment relates to the date of payment.
ANNEX A
Maximum Amount
Mitchell Long Computer Acct. $ 19,000
Store Consignment Accounts $ 40,000 (in the
aggregate)
Store Premium Accounts with
preferred customers $ 20,000 (in the
aggregate)
ANNEX B
Maximum Amount
(in the aggregate)
Sales Premiums/Promotional items $ 1,000
Prepaid Advertising Costs $50,000
Deposits (Utility, UPS, Leases)
(in event transferable to Maker) $ 3,000
Claims Receivable $20,000
Prepaid Supplies $50,000
ANNEX C
None
Exhibit 2.2
LIABILITIES UNDERTAKING
LIABILITIES UNDERTAKING, dated as of ____________,
1995, by Republic Automotive Parts Sales, Inc., a Delaware
corporation ("Buyer"), in favor of Beacon Auto Parts Company, a
Delaware corporation ("Company") and Beacon Auto Parts Company, a
Pennsylvania business trust ("Trust", and, together with Company,
"Sellers").
W I T N E S S E T H:
WHEREAS, pursuant to an Agreement of Purchase and Sale
of Assets, dated as of _________, 1995, among Buyer, Sellers and
certain other parties (the "Agreement"; capitalized terms used
but not defined herein are used with the definitions given them
in the Agreement), Sellers have concurrently herewith sold,
assigned, transferred, conveyed and delivered the Purchased
Assets to Buyer; and
WHEREAS, in partial consideration therefor, the
Agreement requires Buyer to execute and deliver to Sellers this
Liabilities Undertaking;
NOW, THEREFORE, in consideration of the premises and
other good and valuable consideration, the receipt of which by
Buyer is hereby acknowledged, Buyer hereby agrees as follows:
1. Buyer hereby undertakes, assumes and agrees,
subject to the limitations contained herein, to perform, pay or
discharge, in accordance with the terms thereof and as and when
due, the following (the "Assumed Liabilities"):
(a) the unperformed and unfulfilled obligations
of Sellers accruing from and after [the Closing Date] (with
respect to periods commencing on or after [the Closing Date]
under the contracts, leases and agreements listed on Schedule A
hereto and expressly assigned to Buyer pursuant to the Agreement,
and which, in all cases, conform to the representations and
warranties with respect thereto contained in the Agreement; and
(b) all trade accounts payable and accrued
business expenses of Sellers (including without limitation,
accrued vacation and sick pay) as of [the Closing Date], and the
indebtedness of Company under the capitalized leases identified
in Schedule B hereto, but in each case only to the extent of the
amount thereof in fact set forth in the definitive Statement of
Assets and Payables prepared pursuant to Schedule 2.1 of the
Agreement and accordingly deducted in computing the Purchase
Price under the Agreement.
Notwithstanding anything to the contrary contained
herein, the Assumed Liabilities shall not include any:
(A) brokerage, finder's fee and other costs
and expenses incurred in connection with the negotiation,
execution and/or consummation of the Agreement and/or the
transactions contemplated thereby; or
(B) debts, liabilities or obligations of any
nature to any past or present stockholder of or holder of any
beneficial interest in any of Sellers or to any direct or
indirect affiliate or member of the family of any of them; or
(C) income or franchise Taxes;
(D) liabilities or obligations under, with
respect to, or arising out of any of the Employee Benefit Plans;
or
(E) liabilities or obligations of Sellers in
respect of or resulting or arising from or out of any claims for
personal injury or property damage, any litigation, arbitration
or other legal proceeding, any environmental, health or safety
matter or any Hazardous Substance, any antitrust or
anticompetition matter or claim, any actual or alleged
infringement or violation of any proprietary right, any actual or
alleged breach, violation, non-performance or non-compliance of
or with any contract, commitment or obligation, whether imposed
by law, rule, regulation, order, decree or otherwise.
2. Nothing contained herein shall require Buyer to
pay, perform or discharge any liabilities or obligations
expressly assumed hereby so long as Buyer shall in good faith
contest the amount or validity thereof.
3. Other than as specifically stated herein, Buyer
does not assume any account payable, debt, commitment, Tax
payable, liability or obligation of, or claim or cause of action
against, any of Sellers, of any kind or nature whatsoever,
whether by this Liabilities Undertaking or the Agreement, whether
absolute or contingent, whether known or unknown, whether or not
connected with the Business or the Purchased Assets, and whether
arising out of any debt, liability or obligation in respect of
any act, occurrence, agreement or state of facts in effect
before, on or after the Closing Date, and it is expressly
understood and agreed that all accounts payable, debts,
commitments, Taxes payable, liabilities, obligations, claims and
causes of action not expressly assumed hereunder by Buyer shall
remain the sole obligation and responsibility of Sellers.
4. This Liabilities Undertaking shall be binding upon
the successors and assigns of Buyer.
5. No person, firm or corporation other than the
Selling Parties shall have any rights under or by reason of this
Liabilities Undertaking or the provisions contained herein.
REPUBLIC AUTOMOTIVE PARTS SALES,
INC.
By: ___________________________
Schedule 2.3
NON-COMPETITION UNDERTAKING
1. Each of the Selling Parties will not and will not
permit any or any person or entity directly or indirectly (alone
or together with others) controlling, controlled by, affiliated
with or related to, any of the Selling Parties (collectively
"Seller Affiliates"), to, for a period of five years from the
Closing Date (the "Limited Period"):
(a) directly or indirectly, anywhere within the
Commonwealth of Pennsylvania (the "Territory"), own, manage,
operate or control, or participate in the ownership, management,
operation or control of, or be connected with or have any
interest in, as a stockholder, agent, consultant, partner or
otherwise, or refer or exploit any customers, business or
opportunities to or with, or otherwise assist in any manner, (i)
any business which sells, distributes or provides automotive
products or any other products or services which have been sold,
distributed or provided by any of Sellers or which are
competitive therewith or (ii) any other business which is
competitive within the Territory with any business heretofore
conducted by any of Sellers and/or hereafter conducted by Buyer
or any of its subsidiaries or affiliates and related or similar
to any of the business activities heretofore conducted by any of
Sellers; provided that the foregoing shall not prohibit the
Selling Parties from owning in the aggregate less than 1% of any
class of securities listed on a national securities exchange or
traded publicly in the over-the-counter market; and provided
further that the foregoing shall not apply to the acceptance by
Stockholder of a position with, or the acquisition of or of an
interest in, an automotive parts manufacturer or the acceptance
by Stockholder of a position with, or the acquisition of or an
interest in, a business engaged exclusively in owning or
operating retail automotive repair and service centers; or
(b) without the express prior written consent of
Buyer, directly or indirectly employ or attempt to employ, or
knowingly arrange or solicit to have any other person or entity
employ, any person who heretofore has been, or is, on the date
hereof or hereafter, in the employ of Buyer, or who has
heretofore been in their employ of Seller and becomes or has
become an employee of Buyer; provided that this clause (b) shall
not apply to the son of Stockholder to the extent applicable to
the employment of such named individual in an enterprise which is
not engaged in any business which sells, distributes or provides
automotive products or any other products or service which have
been sold, distributed or provided by any of Sellers or which are
competitive therewith in the Territory or in any of the states
contiguous thereto.
2. Each of the Selling Parties will not, and will not
permit any of the Seller Affiliates to, during the Limited Period
and at all times thereafter, divulge or make available to any
person or entity, except as expressly consented to in writing by
Buyer, or use, any confidential information or any documents,
files or other papers concerning the business or financial
affairs of Buyer and/or the Business and/or any assets,
properties or rights relating to or derived from the Business,
except such disclosure which is otherwise required by applicable
law or regulations.
3. In the event that any of the provisions contained
in this Schedule would be held to be invalid, prohibited or
unenforceable in any jurisdiction for any reason because of the
scope, duration or area of its applicability or for other
reasons, unless narrowed by construction, such provision shall
for purposes of such jurisdiction only, be construed as if such
invalid, prohibited or unenforceable provision had been more
narrowly drawn so as not to be invalid, prohibited or
unenforceable (or if such language cannot be drawn narrowly
enough, the court making any such determination shall have the
power to modify, to the extent necessary to make such provision
or provisions enforceable in such jurisdiction, such scope,
duration or area or all of them, and such provision shall then be
applicable in such modified form). If, notwithstanding the
foregoing, any such provision would be held to be invalid,
prohibited or unenforceable in any jurisdiction for any reason,
such provision, as to such jurisdiction only, shall be
ineffective to the extent of such invalidity, prohibition or
unenforceability, without invalidating the remaining provisions
of this Schedule. No narrowed construction, court-modification
or invalidation of any provision shall affect the construction,
validity or enforceability of such provision in any other
jurisdiction. Subject to the foregoing, in case any one or more
of the provisions contained in this Schedule should be invalid,
illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein
shall not be affected in any way thereby.
4. Since Buyer will be irreparably damaged if the
provisions hereof are not specifically enforced, Buyer shall be
entitled to an injunction restraining any violation or attempted
violation of any of the provisions of this Schedule (without any
bond or other security being required), or any other appropriate
decree of specific performance. Such remedies shall not be
exclusive and shall be in addition to any other remedy which
Buyer may have.
5. If the Closing shall occur under the Agreement,
then in consideration for the obligations set forth in this
Schedule, and the Selling Parties' continuing compliance with the
provisions hereof, Buyer will pay to Trust the sum of $500,000 in
twenty (20) equal quarterly installments of $25,000 each, on or
before the last day of each of the 20 consecutive calendar
quarters, commencing with the first full calendar quarter after
the Closing Date. Buyer shall be entitled, at its option, to
prepay any or all of such installments.
SCHEDULE 2.4
Purchase Assets Allocation of Purchase Price
Inventories As valued pursuant to Schedule
2.1
Accounts receivable As valued pursuant to Schedule
2.1
Prepaid Assets As valued pursuant to Schedule
2.1
Machinery, equipment, As valued by third party
fixtures, vehicles and other appraisal to be obtained by
tangible fixed assets Buyer
Intangible property and good Balance of purchase price not
will allocated as provided above
Exhibit 2.5
AGREEMENT AND QUESTIONNAIRE
Republic Automotive Parts, Inc.
500 Wilson Pike Circle,
Suite 115
Brentwood, Tennessee 37024
Gentlemen:
The undersigned (the "undersigned" or "Stockholder"),
being a stockholder of Beacon Auto Parts Company, acknowledges
that neither the issuance of shares of Common Stock, par value
$.50 per share (the "Shares"), of Republic Automotive Parts, Inc.
("RAPI") to a proposed Agreement of Purchase and Sale of Assets
among RAPI, Republic Automotive Parts Sales, Inc., Beacon Auto
Parts Company, a Delaware corporation ("Company"), Beacon Auto
Parts Company, Pennsylvania business trust ("Trust"), and certain
other parties (the "Purchase Agreement"), and the asset sale
transaction contemplated thereby (the "Asset Sale"), nor any
transfer of the Shares by Company to the stockholders of Company
or by Trust to the holders of beneficial interests in Trust, upon
the full or partial liquidation of Company or Trust, or
otherwise, is or will be registered under the Securities Act of
1933, as amended (the "Securities Act"), but rather that the
Shares are to be issued privately on behalf of RAPI (and if
transferred to the stockholders of the Company, will be
transferred privately), and solely in reliance upon exemptions
from the Securities Act and applicable state securities laws.
The undersigned further acknowledges that the
information contained herein is needed by RAPI in order to enable
it to conclude that the exemptions are available and to determine
(a) whether an indirect or direct investment in the Shares is
suitable for the undersigned and (b) whether the undersigned has
such knowledge and experience in financial and business matters
that the undersigned is capable of evaluating the merits and
risks of an indirect or direct investment in the Shares.
The undersigned also understands that RAPI and its
representatives will rely on the information contained herein for
purposes of such determination. Accordingly, the undersigned
represents and warrants to RAPI and its representatives that the
information contained herein is complete and accurate and may be
relied upon by RAPI and its representatives, and hereby agrees to
notify RAPI immediately if there is any material change in the
information provided herein occurring prior to the consummation
of the transactions contemplated by the Purchase Agreement or
prior to any transfer of Shares to the undersigned and to furnish
to RAPI any other information which RAPI may request in
connection with the matters contemplated hereby.
The undersigned also understands and agrees that,
although RAPI will endeavor to keep the information provided in
this Agreement and Questionnaire confidential, RAPI may present
this Agreement and Questionnaire and the information provided in
answer to it to such persons or entities as it deems advisable if
called upon to establish the availability under any federal or
state securities laws of an exemption from registration of the
issuance of Shares.
Finally, the undersigned has been advised that the
consummation of the transactions contemplated by the Purchase
Agreement and the issuance of Shares pursuant thereto is among
other things conditioned upon the covenants and agreements of the
undersigned set forth herein.
Accordingly, in order to induce RAPI to enter into and
proceed with the transactions contemplated by the Purchase
Agreement and for other good and valuable consideration, the
receipt of which is hereby acknowledged, the undersigned hereby
represents, warrants, covenants and agrees, and provides certain
information, as follows:
A. The undersigned hereby represents, warrants and covenants to
RAPI as follows:
(i) The undersigned, if an individual, is 21
years of age or older. The undersigned, if a partnership,
corporation, trust or other entity, is authorized and otherwise
duly qualified to consent to the Asset Sale and was not formed in
order to acquire Shares or in connection with the Asset Sale.
(ii) The undersigned is a stockholder of Company,
has reviewed the merits of the transactions contemplated by the
Purchase Agreement and an investment in the Shares with the
management of Company and Trust and with legal and tax counsel
and with an investment advisor to the extent deemed advisable.
The undersigned has not received or relied on any statement,
advice or representation by RAPI or any of its representatives
regarding the income tax consequences of the Asset Sale or any
liquidation of Company or Trust or any transfer of Shares to the
undersigned, and has consulted with his own legal and tax counsel
and investment advisors regarding such consequences.
(iii) The undersigned alone, or together with the
undersigned's Stockholder Representative indicated below, and who
has completed the Stockholder Representative Certificate attached
as Exhibit A hereto, has such knowledge and experience in
financial and business matters that the undersigned is capable of
evaluating the merits and risks of an investment in the Shares,
and, if a resident of, or domiciled in, a certain state, meets
any additional suitability standards applicable to the
undersigned under state law.
(iv) The undersigned has had a full opportunity
to ask questions of and to receive answers from a representative
of RAPI concerning the terms and conditions of the transactions
contemplated by the Purchase Agreement and the business of RAPI
and its subsidiaries, and in connection therewith has been
provided with (a) RAPI's annual report on Form 10-K for its 1994
fiscal year, (b) RAPI's proxy statement from its 1995 Annual
Meeting of Stockholders, (c) RAPI's quarterly report on Form 10-Q
for the quarter ended March 31, 1995, (d) RAPI's certificate of
incorporation and bylaws, and (e) all such other information as
the undersigned desired in order to evaluate an investment in the
Shares, and all such questions have been answered to the full
satisfaction of the undersigned.
(v) The undersigned has been advised and
understands that an investment in RAPI is speculative and, in
connection with the matters contemplated hereby, the undersigned
has relied solely upon the information contained in RAPI's public
filings and upon independent investigations made by the
undersigned. The undersigned has not relied upon any
representation or warranty as to the period of time the
undersigned may be required to hold the Shares, or as to
projected or forecasted profits or losses which may be earned or
incurred by RAPI, or any other representation or warranty from
RAPI or any of its affiliates, employees or agents. In addition,
the undersigned is not acquiring any Shares as a result of or
subsequent to (a) any advertisement, article, notice or other
communication published in any newspaper, magazine or similar
media or broadcast over television or radio or (b) any seminar or
meeting whose attendees, including the undersigned, had been
invited as a result of, subsequent to or pursuant to any of the
foregoing.
(vi) If Company or Trust is liquidated or
otherwise transfers any Shares to the undersigned, the
undersigned will acquire the Shares in good faith solely for the
undersigned's own account, and for investment purposes, and not
with a view to, or for, subdivision, distribution,
fractionalization or resale, or for the account, in whole or in
part, of others.
(vii) The undersigned understands that the Shares
have not been and will not be registered under the Securities Act
or the securities laws of certain states, in reliance upon
specific exemptions from registration thereunder, and the
undersigned agrees that no Shares may be sold, offered for sale,
transferred, pledged, hypothecated or otherwise disposed of by
the Company or the undersigned, except in compliance with the
Securities Act and applicable state securities laws and in
compliance with the provisions of Article 6 of the Purchase
Agreement. The undersigned has been advised that RAPI has no
obligation to cause the Shares to be registered under the
Securities Act or to comply with any exemption under the
Securities Act, including but not limited to that set forth in
Rule 144 promulgated under the Securities Act, which otherwise
might permit the Shares to be sold by the undersigned. The
undersigned understands that all certificates representing the
Shares will bear legends restricting the transfer thereof, and
indicating that the holder thereof is bound by the applicable
terms of the Purchase Agreement and this Agreement and
Questionnaire.
(viii) The undersigned will cause any proposed
transferee of Shares from the undersigned, other than a
transferee who purchases pursuant to an effective registration
statement satisfying the requirements of the Securities Act or
pursuant to Rule 144 under the Securities Act to agree to take
and hold such Shares subject to the provisions and upon the
conditions specified herein.
(ix) Prior to any proposed sale, transfer or
other disposition of any Shares (other than a sale, transfer or
other disposition permitted under and pursuant to Rule 144(k)
under the Securities Act), the undersigned shall give written
notice to RAPI of such intention to effect such sale, transfer or
other disposition. Each such notice shall describe the manner
and circumstances of the proposed sale, transfer or other
disposition in reasonable detail, and shall be accompanied by
either (i) an opinion of counsel, and in form and substance,
reasonably acceptable to RAPI, addressed to RAPI, to the effect
that the proposed sale, transfer or other disposition of such
Shares may be effected without registration under the Securities
Act, or (ii) a "no action" letter, in form and substance
reasonably acceptable to RAPI, from the Securities and Exchange
Commission (the "SEC") to the effect that such sale, transfer or
other disposition of such Shares without registration will not
result in a recommendation by the staff of the SEC that action be
taken with respect thereto, whereupon the undersigned shall be
entitled to transfer such Shares in accordance with the terms of
such notice delivered to RAPI, subject in all cases, however, to
any other agreement with or for the benefit of RAPI regarding the
sale, transfer or other disposition of Shares.
(x) The undersigned understands that no federal
or state agency has made any finding or determination as to the
fairness of the Asset Sale or the Purchase Agreement or any
recommendation or endorsement of the Shares.
(xi) All information which the undersigned has
provided RAPI, including (but not limited to) the information,
representations and warranties of the undersigned contained
herein, is true, correct and complete in all respects as of the
date set forth below and the undersigned agrees to furnish any
additional information which RAPI may request and to notify RAPI
immediately should any material change occur.
B. Stockholder Information.
1. Name and Tax I.D. Number
Name of Stockholder:
Social Security or Tax I.D. Number:
Name and Title of Person completing this Questionnaire:
2. Address and Telephone Number
Address (post office box is not acceptable)
(Street)
(City) (State) (Zip Code)
Telephone Number: ( )
3. Individual Stockholder
(a) Type of Ownership (check as appropriate):
Individual
Joint tenants with rights of survivorship
Tenants in common
Community property
Other (indicate):
(b) Date of Birth:
(c) Citizenship:
(d) State in which Registered to Vote:
(e) Occupation or Profession:
(f) Name and Address of Employer:
(g) Current Position or Title:
(h) Office Telephone Number: ( )
(i) Nature of Employer's Business:
(j) How long have you been employed at your current
position?
(k) If you have had more than one job in the last five
years, give the same information (name and address of employer,
nature of business, position or title, principal responsibility
and years of service) with respect to each such job:
4. Partnership, Corporation, Trust or Other Entity
Stockholder.
(a) Type of Entity:
(b) Date of Organization or Incorporation:
(c) State or other Jurisdiction in which Organized or
Incorporated:
(d) Was this partnership, corporation, trust or other
entity formed for the specific purpose of acquiring or holding
shares of RAPI?
Yes No
(e) Number of shareholders, partners or beneficiaries:
(f) Indicate whether individual shareholders, partners
or beneficiaries within the entity may elect whether to
participate in each investment of the entity.
Yes No
5. Investment Background.
(a) Qualifications (you may answer "Yes" to more than
one of the following questions)
(i) The undersigned by reason of his business or
financial experience considers himself able to protect his own
interests in connection with the investment in the Shares by the
Company pursuant to the transactions contemplated by the Purchase
Agreement and/or any transfer of Shares by Company or Trust to
the undersigned.
Yes No
(ii) The undersigned by reason of the business or
financial experience of his professional advisors (including
those advisors identified below who have been consulted in
connection with the transactions contemplated by the Purchase
Agreement) has the capacity to protect his own interests in
connection with the investment in the Shares pursuant to the
transactions contemplated by the Purchase Agreement and/or any
transfer of Shares by Company or Trust to the undersigned.
Yes No
Please identify the name, address and telephone number
of each professional advisor consulted with respect to the
proposed investment.
(iii) The undersigned by reason of the business
or financial experience of his Stockholder Representative (if
any) is capable of evaluating the merits and risk of the
investment in the Shares pursuant to the transactions
contemplated by the Purchase Agreement and/or any transfer of
Shares by Company or Trust to the undersigned.
Yes No
Please identify the name, address and telephone number
of the Stockholder Representative(s), if any. Each Stockholder
Representative is required to complete the Stockholder
Representative Certificate attached as Exhibit A hereto.
(iv) The undersigned is able to bear the economic
risk of an investment in the Shares.
Yes No
(v) The undersigned can afford a complete loss of
any investment in the Shares.
Yes No
(vi) Please provide additional information which
reflects your overall business, investment and financial
experience or knowledge (e.g., special training, additional
investments):
The information requested in paragraphs (B)(3) and
(B)(5) above, respectively, should be provided in regard to the
individual(s) who is (are) making investment decisions on behalf
of the partnership, corporation, trust or other entity.
C. Accredited Investor Criteria.
RAPI does not intend to rely upon the exemption from
registration afforded by Regulation D under the Securities Act.
However, representations and information as to the qualification
of the undersigned under Regulation D, and as an Accredited
Investor (as defined in Rule 501 of Regulation D), as set forth
below, are to be made and provided by the undersigned in order
for RAPI to better determine whether the issuance or transfer of
Shares may be made in light of the requirements of Section 4(2)
under the Securities Act.
For purposes of determining whether you are an Accredited
Investor, please check the applicable box below:
[ ] (a) the undersigned is a natural person whose
individual net worth*, or joint net worth* with that
person's spouse, at the time of the undersigned's purchase
exceeds $1,000,000;
[ ] (b) the undersigned is a natural person who had an
individual income* in excess of $200,000 in each of the two
most recent years or joint income with that person's spouse
in excess of $300,000 in each of those years and has a
reasonable expectation of reaching the same income level in
the current year;
[ ] (c) the undersigned is (i) a bank as defined in
Section 3(a)(2) of the Securities Act, or a savings and loan
association or other institution as defined in Section
3(a)(5)(A) of the Securities Act whether acting in its
individual or fiduciary capacity; (ii) a broker or dealer
registered pursuant to Section 15 of the Securities Exchange
Act of 1934; (iii) an insurance company as defined in
Section 2(13) of the Securities Act; (iv) an investment
company registered under the Investment Company Act of 1940
or a business development company as defined in Section
2(a)(48) of the Act; (v) a Small Business Investment Company
licensed by the U.S. Small Business Administration under
Section 301(c) or (d) of the Small Business Investment Act
of 1958; (vi) a plan established and maintained by a state,
its political subdivisions, or any agency or instrumentality
of a state of its political subdivisions for the benefit of
its employees, if such plan has total assets in excess of
$5,000,000, or (vii) an employee benefit plan within the
meaning of Title I of the Employee Retirement Income
Security Act of 1974, if the investment decision is made by
a plan fiduciary, as defined in Section 3(21) of such Act,
which is either a bank, savings and loan association,
insurance company, or registered investment adviser, or if
the employee benefit plan has total assets in excess of
$5,000,000 or if a self-directed plan, with investment
decisions made solely by persons that are Accredited
Investors;
* For purposes of the foregoing, "net worth" means the
excess of total assets at fair market value, including home and
personal property, over total liabilities. For purposes of the
foregoing, "individual income" means adjusted gross income, as
reported for federal income tax purposes, less any income
attributable to a spouse or to property owned by a spouse,
increased by the following (but not including amounts
attributable to a spouse or to property owned by a spouse): (i)
the amount of tax exempt interest income received, (ii) the
amount of losses claimed as a limited partner in a limited part-
nership, (iii) any deduction claimed for depletion, (iv) amounts
contributed to an IRA or Keogh retirement plan, (v) alimony paid,
and (vi) any amount by which income from long-term capital gains
has been reduced in arriving at adjusted gross income pursuant to
the provisions of Section 1202 of the Internal Revenue Code.
[ ] (d) the undersigned is a private business development
company as defined in Section 202(a)(22) of the Investment
Advisers Act of 1940;
[ ] (e) the undersigned is an organization described in
Section 501(c)(3) of the Internal Revenue Code, corporation,
Massachusetts or similar business trust, or partnership, not
formed for the specific purpose of acquiring the Shares
offered, with total assets in excess of $5,000,000;
[ ] (f) the undersigned is a trust, with total assets in
excess of $5,000,000, not formed for the specific purpose of
acquiring the Shares offered, whose purchase is directed by
a person who has such knowledge and experience in financial
and business matters that he is capable of evaluating the
merits and risks of the prospective investment;
[ ] (g) the undersigned is a entity in which all of the
equity owners are accredited investors under paragraphs (a),
(b), (c), (d), (e) or (f) above; or
[ ] (h) none of the above.
D. The undersigned acknowledges having reviewed and agrees to
be bound by and to comply with the provisions of Article 6 of the
Purchase Agreement.
E. This Agreement and Questionnaire shall be binding upon the
heirs, personal representatives, successors and assigns of the
undersigned and shall inure to the benefit of RAPI and its
successors and assigns.
F. Signature.
The undersigned has executed this Agreement and
Questionnaire this ____ day of _____________, 199__.
_____________________________
Print Name
_____________________________
Signature
_____________________________
Print state of residence
If the Investor is a PARTNERSHIP,
CORPORATION, TRUST or OTHER ENTITY,
complete the following:
_____________________________ _____________________________
Print name of partnership, Capacity of authorized
corporation, trust or entity representative
By:__________________________ _____________________________
Signature of authorized Print jurisdiction of
representative organization or incorporation
_____________________________
Print name of authorized
representative
IMPORTANT: Signatures must be NOTARIZED on one of the
following pages.
[Individual Acknowledgment]
STATE OF )
) ss.:
COUNTY OF )
On the ____ day of _____________, 19__, before me personally
came ____________________, to me personally known and known to me
to be the individual described in and who executed the foregoing
instrument, and (s)he duly acknowledged to me that (s)he executed
the same.
Given under my hand and seal this ____ day of __________,
19__.
_____________________________
Notary Public
[Corporate Acknowledgement]
STATE OF )
) ss.:
COUNTY OF )
On the ____ day of _______________________, 19__, before me
personally came ______________________________, to me personally
known, who being by me sworn, did depose and say that (s)he
resides in ________________________; that (s)he is of
________________, the corporation described in and which executed
the above instrument; and that (s)he signed such instrument by
order of the board of directors of said corporation.
Given under my hand and seal this ____ day of __________,
19__.
_____________________________
Notary Public
[Partnership Acknowledgement]
STATE OF )
) ss.:
COUNTY OF )
On the ____ day of ___________________, 19__, before me
personally came _____________________, one of the partners of
__________________, to me personally known and known to me to be
the individual described in and who executed the foregoing
instrument, and (s)he duly acknowledged to me that (s)he executed
the same in the aforesaid capacity.
Given under my hand and seal this ____ day of __________,
19__.
_____________________________
Notary Public
[Trust Acknowledgement]
STATE OF )
) ss.:
COUNTY OF )
On the ____ day of _______________, 19__, before me
personally came _____________________, trustee under
________________________ _______________, to me personally known
and known to me to be the individual described in and who
executed the foregoing instrument, and (s)he duly acknowledged to
me that (s)he executed the same in the aforesaid capacity.
Given under my hand and seal this ____ day of __________,
19__.
_____________________________
Notary Public
Exhibit A
STOCKHOLDER REPRESENTATIVE CERTIFICATE
The undersigned does hereby represent that the
responses to the questions contained herein are complete and
accurate and may be relied upon by Republic Automotive Parts,
Inc. ("RAPI") in connection with the proposed issuance of common
stock, par value $.50 per share, of RAPI (the "RAPI Common
Stock"), pursuant to a certain Agreement of Purchase and Sale of
Assets, among RAPI, Beacon Auto Parts Company, a Delaware
corporation ("Company"), of which the referenced person is a
stockholder ("Stockholder"), Beacon Auto Parts Company, a
Pennsylvania business trust ("Trust"), and certain other parties
(the "Agreement"), and the asset sale transaction contemplated
thereby. The undersigned further agrees to notify RAPI
immediately of any material change in any of the information
provided below occurring prior to any transfer of shares of RAPI
Common Stock to the below named Stockholder on whose behalf the
undersigned is acting as Stockholder Representative.
1. Name of Stockholder represented:
2. Name of Stockholder Representative:
3. Business address and telephone number
of Stockholder Representative:
Tel.:
4. Names and addresses of your employers, if any, the positions
held with such employers and the length of time such
positions were or have been held for the past five years:
Employer Position Held Length of Time
5. All licenses you hold as a broker-dealer or as an
investment adviser:
Name of Licenses Issuing Authority Date Granted
6. All memberships in professional organizations pertaining to
your occupation (e.g., the NASD, Bar Association and
Committees, Accounting Societies and Committees):
7. Please state whether or not within the past ten years:
(a) You have been convicted, indicted or investigated in
connection with any past or present criminal proceeding
(excluding traffic violations and other minor offenses)?
Yes No
(b) You have been the subject of any order, judgment or a
decree of any court of competent jurisdiction permanently or
temporarily enjoining you from acting as an investment
adviser, underwriter, broker or dealer in securities or as
an affiliated person, director or employee of an investment
company, bank, savings and loan association or insurance
company, or from engaging in or continuing any conduct or
practice in connection with any such activity, or in
connection with the purchase or sale of any security, or the
subject of any order of a federal or state authority barring
or suspending your right to be engaged in any such activity,
or to be associated with persons engaged in any such
activity, which order has not been reversed?
Yes No
(c) If yes to either (a) or (b) please describe the
circumstances more fully:
8. Education:
College or Date Degree
Degree(s) University Received
9. What experience in financial and business matters do you
believe makes you capable of evaluating the merits and risks
of the Stockholder holding an investment in shares of RAPI
Common Stock?
10. Except as set forth in subparagraph (a) below, neither the
undersigned nor any of my affiliates has any material
relationship with RAPI, Company or Trust, or any of their
respective subsidiaries or affiliates, and no such material
relationship is mutually understood to be contemplated or
has existed at any time during the previous two years.
(a)
(b) If a material relationship is disclosed in subparagraph
(a) above, indicate the amount of compensation received or
to be received as a result of such relationship:
11. In advising the Stockholder in connection with the
transactions contemplated by the Agreement and/or any
possible future investment of the Stockholder in shares of
RAPI Common Stock, the undersigned will be relying in part
on the Stockholder's own expertise in certain areas:
Yes__________ No__________
If yes, state the areas of expertise:
12. In advising the Stockholder in connection with the
transactions contemplated by the Agreement and/or any
possible future investment of the Stockholder in shares in
RAPI Common Stock, will you be relying in part on the
expertise of an additional representative or
representatives?
Yes__________ No__________
If yes, give the name and address of such additional
representative or representatives and describe the areas
where you will be relying on their expertise:
The undersigned understands that RAPI will be relying on the
accuracy and completeness of the responses to the foregoing
questions and the undersigned further represents, warrants and
certifies to RAPI as follows:
1. The undersigned has had the opportunity to and has taken
such steps as the undersigned has deemed necessary to become
familiar with the business and financial affairs of RAPI.
The undersigned acknowledges receipt of copies of RAPI's
annual report on Form 10-K for its 1994 fiscal year, RAPI's
proxy statement for its 1995 annual meeting of stockholders
and RAPI's quarterly report on Form 10-Q for the quarter
ended March 31, 1995 and RAPI's certificate of incorporation
and bylaws, and that the undersigned has read each of them
and has had an opportunity to consult with representatives
of RAPI. The undersigned has such knowledge and experience
in financial and business matters as to be capable of
evaluating on behalf of the Stockholder the merits and risks
of an indirect or direct investment in shares of RAPI Common
Stock.
2. The undersigned is not, nor is any affiliate of the
undersigned, an affiliate, director, officer or other
employee of RAPI or Company or Trust, or a beneficial owner
of 10 percent or more of any class of the equity securities
or 10 percent or more of the equity interest in RAPI or
Company or Trust.
3. The undersigned has such knowledge and experience in
financial and business matters that he is capable of
evaluating alone, or together with other representatives
named above of the Stockholder or together with the
Stockholder, the merits and risks of an indirect or direct
investment in shares of RAPI Common Stock.
4. There is no material relationship between either the
undersigned or any affiliate of the undersigned and RAPI's
or any of the subsidiaries and affiliates of RAPI or Company
or Trust which now exists, is mutually understood to be
contemplated, or has existed at any time during the previous
two years, and the undersigned has so advised the
Stockholder.
5. The undersigned has been designated in writing by the
Stockholder as his Stockholder Representative in connection
with evaluating the merits and risks of the prospective
investment in the shares of RAPI Common Stock, such
designation having been made after the disclosure referred
to in paragraph 4 above.
6. The undersigned shall not receive any compensation of any
sort whatsoever from RAPI as a result of this transaction.
Date: , 1995
______________________________________
Stockholder Representative's signature
I acknowledge that the person(s) signing the foregoing
portion of this certificate has/have served as my Stockholder
Representative(s) in connection with evaluating the merits and
risks of the transactions contemplated by the Agreement of
Purchase and Sale of Assets referred to above and an indirect or
direct prospective investment of mine in shares of Common Stock
of RAPI and that said Stockholder Representative(s) has/have
previously disclosed to me, in writing, any material relationship
between the Stockholder Representative(s) (or his/her or their
affiliates) and RAPI or Company or Trust or any of their
respective subsidiaries and affiliates which now exists or is
mutually understood to be contemplated or which has existed at
any time during the previous two years, and any compensation
received or to be received as a result of such relationship.
_____________________________ _____________________________
Date Stockholder's signature
SCHEDULE 3.2(b)(i)
Taxes for
1994 calendar
Address of Square Footage year (or to
Leased of Subject the extent
Premises* Building Annual Rent known for 1995
calendar year)
2701 College Avenue 5,000 $ 23,750 $ 2,972
Beaver Falls, PA
112 Pittsburgh Street 4,700 $ 25,850 $ 5,551
Cheswick, PA
1005 Lincoln Highway 7,600 $ 41,800 $ 6,346
Irwin, PA
907 Lowry Avenue 14,000 $ 63,000 $12,730
Jeannette, PA
4375 Old Wm. Penn. 11,475 $ 68,850 $ 9,730
Hwy.
Monroeville, PA
5151 Baum Blvd. 13,000 $ 63,250 $15,726
Pittsburgh, PA
Route 981 South 5,400 $ 29,700 $ 3,465
Latrobe, PA
1789 W. Liberty Avenue 8,400 $ 54,600 $ 9,678
Pittsburgh, PA
6013 Enterprise Dr. Office: 12,000 $297,000 $30,000
Export, PA Whse.: 54,000 (approx. for
1995)
140 E. Pittsburgh St. 3,000 $ 24,000 $ 3,669
Greensburg, PA
* The Leased Premises include the property and areas reflected in Schedule
3.2(b)(i) of the Disclosure Schedule.
FORM LEASE
THIS LEASE, executed as of the ____ day of ___________, 1995,
between BEACON AUTO PARTS COMPANY, a Delaware corporation
(hereinafter, "Lessor"), and REPUBLIC AUTOMOTIVE PARTS SALES,
INC., a Delaware corporation (hereinafter "Lessee");
WITNESSETH: That Lessor, for and in consideration of the rent,
covenants and agreements hereinafter specified to be paid, kept
and performed by Lessee, hereby leases to Lessee, and Lessee
hereby leases from Lessor, the premises hereinafter described
upon the terms and conditions herein set forth.
I. DESCRIPTION OF PREMISES
1. The Leased Premises includes that certain real
property situated at ________________________________________,
Pennsylvania, including without limitation the building (the
"Building") located thereon containing approximately ______
square feet and also including the parking area adjacent thereto
(the "Parking Lot"), all as more particularly described on
Exhibit "A" attached hereto and made a part hereof.
2. The above described real property, including the
Building and Parking Lot, is herein referred to as the "Leased
Premises".
Included in the term "Leased Premises" are also all
machinery, equipment and fixtures necessary for the general
operation and maintenance of the Leased Premises and forming a
part of the Building, whether installed by Lessor or by Lessee.
Without limiting the generality of the foregoing, heating and
lighting shall be considered necessary to the general operation
and maintenance of the Leased Premises. All other machinery,
equipment and trade fixture, including without limitation
shelving, conveyors and raised metal flooring and related systems
installed by Lessee in the conduct of its business or acquired by
Lessee in connection with the Asset Purchase Agreement (as
defined below) are not included in this Lease, shall remain the
property of Lessee and may be removed by Lessee at any time
during the term of this Lease, and, if required by Lessor, shall
be removed at the expiration of the term of this Lease. Any
damage caused by such removal shall be repaired by Lessee at its
own expense.
3. This Lease is entered into in connection with that
certain Agreement of Sale of Assets, dated as of ____________,
1995, among Lessor, Lessee and certain other parties (the "Asset
Purchase Agreement").
II. TERM OF LEASE
1. The initial term of this Lease shall be for a
period of twelve (12) years, commencing on ___________________
(the "Commencement Date"), and terminating on
____________________, unless said term shall be sooner terminated
or extended as hereinafter provided.
2. Provided no Event of Default is then in existence,
the term of this Lease shall be extended for up to two additional
four (4) year terms beyond the original term hereof (the "First
Extension Term" and the "Second Extension Term" and,
collectively, the "Extension Terms") upon the same terms and
conditions as contained in this Lease if Lessee gives written
notice to Lessor not later than one hundred twenty (120) days
prior to the expiration of the original term hereof or the
appropriate Extension Term of Lessee's election to extend the
term of this Lease.
3. Lessee shall immediately surrender possession of
the Leased Premises at the expiration of the term or Extension
Terms, if any, hereof or upon its prior termination. Lessee
shall return the Leased Premises broom clean and free of debris,
and in order and condition substantially consistent with the
condition of the Leased Premises as of the date hereof,
reasonable wear and tear and damage by fire or other hazard not
occurring through any willful misconduct or illegal act or
omission of Lessee, its employees, agents or invitees, alone
excepted. Lessee agrees to give up quiet and peaceable
possession of the Leased Premised at the end of the term or of
any renewal term without further notice from Lessor.
4 Upon the failure of Lessee to surrender possession
of the Leased Premises upon the expiration of the Term or upon
the sooner termination hereof, Lessee shall pay to Lessor, as an
occupancy charge, an amount equal to 150% of the rate of monthly
minimum rent with respect to the year immediately preceding the
expiration or sooner termination of the Term of this Lease, as
applied to any period during which Lessee shall remain in
possession after such expiration or sooner termination of this
Lease; provided, that in such event Lessee shall not be released
from any further costs, damages or liabilities, suffered by
Lessor and occasioned by Lessee's holding over. In the event of
such holding over, Lessee shall be considered a tenant-at-will.
III. RENT
1. Throughout the initial term hereof, Lessee agrees
to pay to Lessor rental as follows: (i) during the first six
years of this Lease, annual minimum rent in the amount of
_________________ shall be payable in Seventy-Two (72) equal
monthly installments in the amount of ___________ Dollars
($_______), and (ii) during the second six years of this Lease,
annual minimum rent shall be adjusted as follows: Beginning on
the first day of the Seventy third (73) month of this Lease, the
minimum rent payable for each of the final Seventy-Two (72)
months of the initial term shall be adjusted to reflect the
proportion by which the monthly Producer's Price Index (which
Index may be referred to hereinafter as the "PPI"), published by
the Bureau of Labor Statistics, U.S. Department of Labor, for
_________, 2001 shall have increased over the comparable PPI for
_______, 1995. Notwithstanding the foregoing, in no event shall
the minimum rent for such monthly period increase by an amount in
excess of twenty-five percent (25%) of the monthly minimum rent
payable during the first six years of this Lease. All monthly
payments of the Rent during the term and any extended terms of
this Lease shall be payable in advance, without demand, offset or
deduction, on the first of the month and payable at the address
of Lessor indicated below.
2. Throughout the First Extension Term hereof, if
applicable, Lessee agrees to pay to Lessor a minimum rent as
follows:
(a) Beginning on the commencement date of the First
Extension Term, the monthly payments of minimum rent shall be
adjusted to reflect the proportion by which the monthly PPI for
________, 2005 shall have increased over the comparable PPI for
_______, 2001.
(b) The redetermination of the minimum rent under this
Section shall be made as soon as possible after the PPI for the
relevant month shall have been published.
(c) No delay in the issuance of the PPI shall delay or
excuse the Lessee's obligation to pay the monthly installments of
minimum rent when due. Such amount as provided in Section III
shall be paid, and upon issuance of the PPI, any balance of
minimum rent due and owing by the Lessee to Lessor for previous
months shall be paid within thirty (30) days after Lessee's
receipt of written notice from Lessor of the resulting adjustment
of the minimum rent and the amount due by reason thereof.
(d) In the event the PPI should cease to be published,
there shall be substituted therefor the most nearly similar
economic indicator then published by the Bureau of Labor
Statistics, United States Department of Labor. In the event
Lessor and Lessee cannot agree as to such substitute, the
appropriate substitute index shall be determined by arbitration
under the prevailing rules of the American Arbitration
Association.
3. Throughout the Second Extension Term hereof, if
applicable, Lessee agrees to pay to Lessor a minimum rent as
follows:
(a) Beginning on the commencement date of the Second
Extension Term, the minimum rent shall be adjusted to reflect the
proportion by which the monthly PPI, for ______, 2009 shall have
increased over the comparable PPI for _____, 2005.
(b) The redetermination of the minimum rent under this
Section shall be made as soon as possible after the PPI for the
relevant month shall have been published.
(c) No delay in the issuance of the PPI shall delay or
excuse the Lessee's obligation to pay the monthly installments of
minimum rent when due. Such amount as provided in Section III
shall be paid, and upon issuance of the PPI, any balance of
minimum rent due and owing by the Lessee to Lessor for previous
months shall be paid within thirty (30) days after Lessee's
receipt of written notice from Lessor of the resulting adjustment
of the minimum rent and the amount due by reason thereof.
(d) In the event the PPI should cease to be published,
there shall be substituted therefor the most nearly similar
economic indicator then published by the Bureau of Labor
Statistics, United States Department of Labor. In the event
Lessor and Lessee cannot agree as to such substitute, the
appropriate substitute index shall be determined by arbitration
under the prevailing rules of the American Arbitration
Association.
(e) For the purposes of this Lease, the term "Rent"
shall mean all minimum rent as well as all other taxes, charges,
payments or other sums which are required to be paid by Lessee
hereunder.
4. Lessee shall contract for and pay when due to the
applicable party all charges for water and sewer, electricity,
gas, telephone and other utility services furnished to the Leased
Premises. Lessor warrants that all such facilities and services
will be available to the Leased Premises on the Commencement
Date; provided, however, Lessor shall have no obligation to
provide such services after the Commencement Date, but shall
cooperate with Lessee in its efforts to arrange for same.
5. Each and every payment required to be made by
Lessee pursuant to this Article III shall be made before such
payment becomes delinquent.
6. If the Commencement Date or the termination date
shall be other than the first day or last day of a calendar year
or calendar month, respectively, then the Rent and other payments
to be made by Lessee hereunder shall be prorated accordingly on a
per diem basis.
IV. INSURANCE
1. Lessee shall maintain the following insurance on
or in connection with the Leased Premises:
(a) All Risk insurance against loss or damage to the
Leased Premises and equipment by fire and other risks from time
to time included under standard extended and additional extended
coverage policies, including vandalism and malicious mischief,
and flood insurance, to the extent any of the Leased Premises are
in a flood zone, but only to the extent such flood insurance is
available at reasonable rates and in amounts available under
applicable government programs, in amounts not less than the
actual replacement value of the Leased Premises and equipment.
Such policies shall contain replacement cost endorsements.
Lessor represents that as of the date hereof, no flood insurance
is required with respect to the Leased Premises.[[For Jeannette
and Baum Blvd. Leased Premises only add the following:
Notwithstanding the foregoing, Lessor shall reimburse Lessee for
(50% - Jeannette) (8.33% - Baum Blvd.) of the cost of the
insurance referred to in this paragraph (a), promptly upon
notification by Lessee of each premium payment therefor.
(b) General commercial public liability insurance
against claims for bodily injury, death or property damage
occurring on, in or about any of the Leased Premises in an amount
not less than $3,000,000 per occurrence and in the aggregate.
All such policies shall be written as "occurrence" policies.
(c) Worker's compensation insurance covering all
persons employed by Lessee in connection with any work done on or
about any of the Leased Premises for which claims for death or
bodily injury could be asserted against Lessor, Lessee or any of
the Leased Premises or, in lieu of such workers' compensation
insurance, a program of self-insurance complying with applicable
law.
(d) Boiler and pressure vessel insurance on any
equipment on or in the Leased Premises which by reason of its use
or existence is capable of bursting, erupting, collapsing or
exploding, in an amount not less than $1,000,000 for damage to
property, bodily injury or death resulting from such perils.
(e) Such other insurance on or in connection with any
of the Leased Premises as Lessor or its lender may reasonably
require and which at the time is commonly and reasonably obtained
in connection with properties of this size and type similarly
situated.
2. The insurance required by paragraph 1 above shall
be written by companies reasonably acceptable to Lessor and which
are authorized to conduct an insurance business in the
Commonwealth of Pennsylvania. The insurance policies (i) shall
be for such terms as shall be reasonable and customary in the
automobile supply and distribution industry, and (ii) shall,
except for the worker's compensation insurance, name Lessor,
Lessee and any named mortgagee of Lessor as additional insured
parties, as their respective interests may appear. If said
insurance or any part thereof shall expire, be withdrawn, become
void, voidable, unreliable or unsafe for any reason, including a
breach of any condition thereof by Lessee or the failure or
impairment of the capital of any insurer, other than because such
insurance is not reasonably and customarily available to parties
similarly situated, Lessee shall immediately obtain reasonable
replacement insurance reasonably satisfactory to Lessor.
3. Each insurance policy referred to in clause (a) of
paragraph (1) above shall contain standard non-contributory
mortgagee clauses in favor of and acceptable to any named
mortgagee of Lessor. Each policy required by any provision of
paragraph 1 above, shall provide that it may not be canceled
except after 30 days' prior notice to Lessor. Each such policy
shall also provide, to the extent reasonably available, that any
loss otherwise payable thereunder shall be payable
notwithstanding (i) any act or omission of Lessor or Lessee which
might, absent such provision, result in a forfeiture of all or a
part of such insurance payment, (ii) the occupation or use of any
of the Leased Premises for purposes more hazardous than those
permitted by the provisions of such policy, or (iii) any
foreclosure or other action or proceeding taken by any mortgagee
of Lessor pursuant to any provision of its mortgage upon the
happening of an event of default thereunder.
4. Lessee shall pay as they become due all premiums
for the insurance required by paragraph 1(a) and (b) above, shall
renew or replace each such policy and deliver to Lessor evidence
of the payment of the full premium therefor or installment then
due at least 30 days prior to the expiration date of such policy
and shall promptly deliver to Lessor original certificates for
such policies.
5. Anything in this Section to the contrary
notwithstanding, any insurance which Lessee is required to obtain
pursuant to paragraph 1 above may be carried under a "blanket" or
umbrella policy or policies covering other properties or
liabilities of Lessee, provided that such "blanket" or umbrella
policy or policies otherwise comply with the provisions of this
Section and provided further that such policies under paragraph
1(a) above shall provide for a reserved amount thereunder with
respect to the Leased Premises so as to assure that the amount of
insurance required by this Section will be available
notwithstanding any losses with respect to other property covered
by such policies. The amount of the total insurance under
paragraph 1(a) above allocated to the Leased Premises, which
amount shall be not less than the amounts required pursuant to
this Section, shall be specified either (i) in each such
"blanket" or umbrella policy or (ii) in a written statement,
which Lessee shall deliver to Lessor, from the insurer thereunder.
6. If any event occurs which gives rise to any claim
by Lessee under any insurance policy which Lessee is required to
maintain hereunder, Lessee shall give Lessor immediate notice of
such event and shall promptly proceed to adjust and collect such
claim, unless such claim is with respect to Lessor's property
required to be insured by Lessee hereunder, in which case Lessor
may promptly proceed to adjust and collect such claim. Lessor
shall have the right to participate in such adjustment and
collection at its own expense. In the event such claim is with
respect to Lessor's property required to be insured by Lessee
hereunder, Lessee shall sign, upon the request of Lessor, all
such proofs of loss, receipts, vouchers, releases and drafts in
connection with any such claim and hereby irrevocably appoints
Lessor as its attorney-in-fact to so execute any such item if
Lessee shall fail to do so.
7. Lessor and Lessee and all parties claiming under
them mutually release and discharge each other from all injury,
damage, claims and liabilities arising from or caused by any
casualty or hazard to the extent covered by proceeds of insurance
on the Leased Premises or in connection with property on or
activities conducted on the Leased Premises to the extent covered
by proceeds of insurance in connection with the Leased Premises,
and waive any right of subrogation which might otherwise exist in
or accrue to any person on account thereof; provided, that such
release shall not operate in any case where the effect is to
invalidate or increase the cost of such insurance coverage if the
party whose insurance has been invalidated or the cost increased
shall have given the other party written notice thereof; and
further provided, that in the case of increased cost, the other
party shall have the right, within 30 days following written
notice, to pay such increased cost, thereby keeping such release
and waiver in full force and effect.
V. USE AND MAINTENANCE OF LEASED PREMISES
1. At the commencement of the term, Lessor shall
deliver the Building, improvements, and any equipment on or in
the Leased Premises, in good working condition. Lessor warrants
that the water, electrical, gas, and heating and air conditioning
systems shall be in good working order at the commencement of the
term of this Lease and when said system is utilized for the first
time after said Commencement Date and for a term of thirty (30)
days thereafter. Any warranties for any equipment on or in the
Leased Premises that are assignable by Lessor are hereby assigned
to Lessee.
2. The Lessee shall have the peaceful and quiet
enjoyment of the Leased Premises without hindrance on the part of
Lessor, and Lessor will warrant and defend Lessee in such
peaceful and quiet enjoyment of the Leased Premises against the
lawful claims of all persons claiming by, through or under
Lessor.
3. On or before any applicable due date (provided
Lessee is under reasonable prior notice thereof), Lessee shall
pay to the applicable taxing authority [or to Lessor for
Jeannette and Baum Blvd.] all [Jeannette - 50%, Baum Blvd. -
91.67%] real estate taxes, assessments, and other similar public
charges of whatsoever kind, which may hereafter be levied or
assessed upon or against the Leased Premises, fixtures or
improvements now or hereafter located thereon, or which may arise
from or by virtue of Lessee's occupancy, use or possession of the
Leased Premises. Any tax, assessment or charge which is
applicable to any period before or after the period of such
occupancy, use or possession shall, to the extent so applicable,
be the sole and exclusive responsibility of Lessor. Lessee shall
have no obligation for any tax, assessment or charge relating to
any profits or net income of Lessor or any transfer, sale,
disposition or encumbering of or any lien (not caused by Lessee)
on the Leased Premises.
4. Lessor agrees to make, at its sole cost and
expense, all necessary repairs or replacements to the structural
parts of the Leased Premises, including the bearing walls, beams,
roof and foundations, so long as such repairs or replacements
were not required as a result of the negligence or willful
misconduct of Lessee. If Lessor or Lessee shall fail to make any
necessary repairs or replacements as required under the
provisions hereof, Lessor or Lessee may, at its election make
such repairs or replacements for the account, and at the expense,
of the other party, after first giving written notice to the
other party of its intention to do so. If Lessor or Lessee at
any time elects to pay any sum or do any act which requires the
payment of any sum or entails any expense by reason of the
failure of the other party to make any repairs or replacements,
or if either party is compelled to incur any expense, including
reasonable attorneys' fees, in commencing, prosecuting or
defending any action or proceeding instituted by reason of any
such default of the other party, the sum or sums so paid and the
expenses and reasonable attorneys' fees so incurred shall be due
from such other party, plus fifteen (15%) percent for the cost of
administration and overhead, within thirty (30) days following
the other party's receipt of written notice from the non-
defaulting party of the incurring of such expenses. Lessee
covenants throughout the term or any renewal hereof, at its sole
cost and expense, to keep and maintain the Leased Premises and
all other fixtures and equipment therein, and the interior lobby
and all show window glass, and the ceilings, doors and door
frames, walls, windows and window frames, sidewalks and Parking
Lot of the Leased Premises, and all signs of Lessee erected
outside of the Leased Premises, in repair, order and condition
substantially consistent with the condition of the Leased
Premises as of the date hereof, making all repairs thereto as may
be required, all repairs to be of substantially similar quality,
design and class as the original work; but the provisions of this
Article shall not require Lessee to make repairs to the
structural parts of the Leased Premises, including but not
limited to the bearing walls, beams, roof and foundations.
Lessee shall keep the sidewalk and Parking Lot of the Building
free from ice and snow and debris. Except as otherwise provided
in this Lease, at the expiration of this Lease, Lessee shall
surrender the Leased Premises in condition substantially
consistent with the condition of the Leased Premises as of the
date hereof, broom clean, reasonable wear and tear excepted.
5. Anything to the contrary contained in this Lease
notwithstanding, Lessee shall have no obligation or
responsibility under Article V or otherwise for or with respect
to any portions of the property of which the Leased Premises form
a part which do not constitute the Leased Premises or which are
occupied by any person or entity other than Lessee, its
successors and/or assigns, or which are retained by Lessor, or
any activities thereat.
6. Except as provided in this Lease, Lessee shall not
make or permit to be made any alterations, improvements, and/or
additions of any kind or nature to the Leased Premises except by
and with the prior written consent of Lessor which consent shall
not be unreasonably withheld. Notwithstanding the foregoing,
Lessor's consent shall not be required for interior, non-
structural, alterations, improvements, and/or additions,
provided, however, Lessee shall be obligated to remove any such
interior, non-structural, alterations, improvements, and/or
additions and repair any damage occasioned by such removal at the
expiration or earlier termination of this Lease.. All
alterations, improvements and additions to the Leased Premises
shall be made in accordance with all applicable laws. In the
event Lessee desires to make any alterations, improvements,
and/or additions of any kind or nature to the Leased Premises
which require the consent of Lessor, Lessee shall make a written
request for such consent, which request shall also inquire as to
whether the Lessor shall require the removal of such alterations,
improvements, and/or additions at the expiration or earlier
termination of this Lease. Following its receipt of such
requests, at the time Lessor consents to any of such alterations,
improvements, and/or additions, Lessor shall inform Lessee
whether Lessee shall be obligated to remove any such alterations,
improvements, and/or additions and repair any damage occasioned
by such removal at the expiration or earlier termination of this
Lease. In the event Lessee fails to remove any alterations,
improvements, and/or additions of any kind or nature to the
Leased Premises which Lessor has not expressly permitted to
remain at the expiration or earlier termination of this Lease,
Lessor may effect said removals and repairs at Lessee's expense.
In the event of Lessee, its agents, invitees or employees, making
such alterations, improvements, and/or additions as herein
provided, Lessee shall indemnify and save harmless Lessor from
all expenses, liens, claims or damages to either persons or
property arising out of, or resulting from the undertaking or
making of said alterations, additions, and improvements.
7. Except as specifically set forth herein, all trade
fixtures, equipment and personal property of any nature which may
be installed or placed in or upon the Leased Premises by Lessee
shall remain the property of Lessee. Lessor waives any right it
may have in said trade fixtures, equipment and personal property
and waives all liens, statutory or otherwise, with respect
thereto. Lessee may assign, lien, encumber, mortgage or create a
security interest in or upon its trade fixtures, equipment and
personal property in the Leased Premises without the consent of
Lessor and may remove said property at any time during the
initial term or any extension terms. Upon the request of Lessee,
Lessor agrees to provide Lessee, within ten (10) days of such
request, a written waiver in form reasonably satisfactory to
Lessee evidencing Lessor's waiver of any rights and liens it has
or may have in or with respect to Lessee's trade fixtures,
equipment and personal property.
8. Lessee may at its expense place and maintain in
and about the Leased Premises such neat and appropriate signs
advertising its business as it shall desire and shall be
permitted by local, state or federal law, ordinance or
regulation. Upon the termination of this Lease, Lessee shall
remove all signs and repair any damage to the Leased Premises
caused by the erection, maintenance, or removal of the signs;
normal wear and tear, acts of God and other such casualties
excepted.
9. Except as otherwise provided in this Lease, Lessee
may use and occupy the Leased Premises for any lawful purpose and
may conduct thereon any lawful business. Lessee shall in all
material respects comply with and observe all laws, ordinances or
regulations of duly constituted public authorities, which are now
or which may hereafter be enacted or promulgated, and which in
any manner affect the Leased Premises or the use thereof. Lessee
shall, however, be entitled to a reasonable opportunity to
contest the validity of any such laws, ordinances or regulations
adversely affecting its use or occupancy of the Leased Premises,
provided Lessee shall give such reasonable security to Lessor as
may be reasonably demanded by Lessor to insure against any loss
which might be suffered by Lessor by reason of such contest.
10. Lessee shall not permit any mechanic's, laborer's,
materialmen's or other liens to remain outstanding against the
Building for any labor performed or material furnished to or at
the instance of Lessee, or claimed to have been so performed or
furnished. Lessee may, however, contest the validity of any such
lien or claim, provided Lessee shall give such reasonable
security to Lessor as may be reasonably demanded by Lessor to
insure the payment of such lien or claimed lien and to prevent
any sale, foreclosure or forfeiture of the Building or any part
thereof by reason of such lien or claims, and to indemnify Lessor
against any loss, reasonable attorneys' fee and other cost and
expense suffered or incurred by Lessor as a result of such
contest of the lien or claim. Upon the final determination of
the validity of any such lien or claims, Lessee shall immediately
pay any judgment or decree rendered in favor of the lienor or
claimant.
11. Lessor shall have the right upon twenty-four (24)
hours notice, except for emergencies, to enter upon the Leased
Premises to inspect the same, and to make any repairs which are
necessary. If representatives of Lessee shall not be present to
open and permit entry into the Leased Premises at any time when
such entry by Lessor is reasonably necessary, Lessor may enter
forcibly in the event of an emergency without liability to Lessee
and without such entry constituting either an eviction of Lessee
or termination of this Lease.
12. Lessee shall not commit, or suffer to be
committed, any waste on the Leased Premises, nor shall it
maintain, commit or permit the maintenance or commission of any
nuisance on the Leased Premises.
13. Lessor represents and warrants to Lessee that he
has good and marketable title to the Building and that he is
fully authorized to enter into this Lease.
14. Anything to the contrary contained in this lease
notwithstanding, (i) in the event any applicable law, ordinance,
regulation or code becoming effective following the date hereof
shall require the installation and/or improvement or modification
of any sprinkler system or any other improvement in or about the
Leased Premises, the same shall be effected by Lessee and the
cost thereof shall be amortized over a ten (10) year period, with
Lessee bearing the cost attributable to that portion of such ten
(10) year period included in the Lease Term and/or if this Lease
shall be extended, any resulting Extension Term(s), and Lessor
bearing the remaining cost [In the Lease for the Export
Warehouse, this provision will provide that Tenant will not be
responsible for the costs in respect of any sprinkler system];
provided however any change to the Leased Premises required by
any applicable law, ordinance, regulation or code which relate to
or is required by Lessee's use or business in and about the
Leased Premises shall be the sole responsibility of Lessee.
VI. ENVIRONMENTAL REPRESENTATION
1. Without limiting any representation, warranty or
covenant set forth in the Asset Purchase Agreement, Lessor
represents and warrants to Lessee that to the best of Lessor's
knowledge, the Leased Premises does not contain any hazardous
materials, toxic substances, hazardous air pollutants or toxic
pollutants, as those terms are used in the Resource Conservation
and Recovery Act, the Comprehensive Environmental Response,
Compensation and Liability Act, the Hazardous Materials
Transportation Act, the Toxic Substances Control Act, the Clean
Air Act and the Clean Water Act, or in any regulations
promulgated pursuant thereto, or in any other applicable law
(collectively, "Hazardous Substances") in violation of applicable
law.
2. Except as otherwise provided in this Lease, Lessee
covenants that it will comply in all material respects with all
laws with respect to Hazardous Substances affecting the Leased
Premises. Lessee shall not cause or permit any Hazardous
Substance to be used, stored, generated, or disposed of on or in
the Leased Premises in violation of any law. Except as otherwise
provided in this Lease, if Lessee causes or permits Hazardous
Substances to be used, stored, released, generated, or disposed
of on or in the Leased Premises in violation of this Article VI,
or if the Leased Premises becomes contaminated in any way which
violates any law or which would likely result in an action by any
governmental unit (other than that caused by (i) Lessor, its
agents, employees, representatives or other tenants, and/or (ii)
the emanation of hazardous materials from neighboring parcels, if
not caused by Lessee), Lessee shall indemnify and hold harmless
Lessor from any and all claims, damages, fines, judgments,
penalties, costs, liabilities, or lawsuits, including without
limitation, a decrease in value of the Leased Premises and/or
Lessor's interest therein, and any and all sums paid for
settlement of claims, attorneys fees, consulting and expert fees
arising at any time prior to, during or after the term or
extended term of this Lease and including, without limitation,
any and all costs incurred because of any investigation of the
Leased Premises or any cleanup, removal, or restoration mandated
by any governmental unit, and, in addition to any other remedy
set forth herein or available at law or in equity, the right to
require Lessee to satisfy all obligations imposed by such
governmental units at Lessee's sole cost and expense.
3. Notwithstanding anything contained in this Lease
to the contrary, it shall not be a default or breach of this
Lease if, nor shall Lessee have any liability under this Lease
if, Lessee shall not be in compliance with or shall violate any
environmental or other law or regulation, or shall cause or
permit any Hazardous Substances to be used, stored, generated or
disposed of, if such noncompliance or violation or such act or
condition shall be a result or continuation of, nor shall Lessee
have any indemnification obligation which arises with respect to,
any state of facts, condition, circumstance or operating
procedure or practice with respect to the Leased Premises or any
of the operations thereat, prior to the date hereof, or which
shall result from any act, practice or condition which shall be
undertaken or permitted with the direct consent and knowledge of
Fred J. Pisciotta while he shall be an executive of Lessee.
VII. DESTRUCTION OR CONDEMNATION OF LEASED PREMISES
1. The provisions of this Article VII shall apply
notwithstanding, and shall supersede any provisions of this Lease
to the contrary. If the Leased Premises should be damaged or
destroyed by storm, fire, tornado, earthquake, flood or other
casualty, Lessee shall give prompt written notice thereof to
Lessor. In the event the Leased Premises shall be totally
destroyed, Lessee and Lessor shall each have the option of
forthwith terminating the Lease by giving written notice to the
other party within ninety (90) days of the occurrence of such
destruction in the case of Lessee's termination and within ninety
(90) days of the Lessor's receipt of notice of the occurrence of
such destruction in the case of Lessor's termination and in such
event the insurance proceeds for the building's replacement or
repair shall be delivered to Lessor and Lessor and Lessee shall
have no further obligation to each other under this Lease. In
the event the Leased Premises shall be totally or partially
destroyed (and this Lease is not terminated pursuant to the
previous sentence) or is rendered totally or partially
untenantable or not fit for use as intended (and is not so
terminated) by storm, fire, tornado, earthquake or other
casualty, during the period prior to repair, rent shall abate in
proportion to the portion of the Building as shall have been so
damaged or destroyed or rendered totally or partially
untenantable or not fit for use as intended. In the case of such
destruction of, or any damage whatsoever to the Leased Premises,
or any portion thereof, by reason of any such casualty, Lessor,
at Lessor's own cost and expense, shall restore or repair the
Leased Premises as soon as practicable to substantially the same
condition as existed immediately prior to such casualty provided
the same can be completed within one hundred twenty (120) [In
Lease for Export Warehouse - 180 days] days after the date of
notification to Lessor of the occurrence of the damage or
destruction, and for that purpose shall be entitled to the
benefit of all insurance provided for by Article IV hereof
covering such destruction or damage less the cost, if any, of
Lessor in collecting the insurance. If the amount of the
insurance proceeds is insufficient to pay the cost of necessary
repairs, replacement, or rebuilding the Leased Premises, Lessor
may, in addition to any rights or remedies it may have hereunder,
elect to retain such proceeds unless Lessee elects to pay any
additional sum required, in which case Lessor shall repair the
Leased Premises as set forth above. Should the necessary repairs
or such condition of untenantability or lack of fitness for its
intended use require a time period in excess of one hundred
twenty (120) [In Lease for Export Warehouse - 180 days] days to
complete or correct, Lessee and Lessor shall each have the option
of forthwith terminating the Lease and in such event the
insurance proceeds for the building's replacement or repair shall
be delivered to Lessor and Lessor and Lessee shall have no
further obligation to each other under this Lease; provided,
however, if the casualty occurs during the final one (1) year of
the Lease Term, and Lessee shall not have exercised its right to
extend the Lease Term, Lessor shall not be required to rebuild or
repair such damage and Lessor may retain all such insurance
proceeds.
2. If a part of the Leased Premises shall be
condemned and taken for any public or quasi-public use, leaving a
remaining portion sufficient for use by Lessee for its purposes,
then upon such condemnation or taking, there shall be such
abatement in rent, as shall be just and equitable under all the
circumstances; provided that in such event Lessee shall not be
entitled to and expressly waives all claim to any condemnation
award granted for such taking, provided, however, that Lessee
shall have the right, to the extent that it shall not reduce
Lessor's award, to claim from the condemnor, but not from Lessor,
such compensation as may be recoverable in its own right for
damage to Lessee's business and fixtures and moving expenses.
If the Leased Premises are wholly condemned or are
condemned to such extent that the remaining portion thereof shall
be unfit or inadequate for use by Lessee for its purposes (or for
such other use as was being made of the Leased Premises at the
time of such condemnation), this Lease and the term herein shall
cease and terminate as of the date when Lessee shall vacate the
Premises or when possession of the same shall be given to the
condemning authority, whichever should first occur, and in such
event Lessee shall not be entitled to and expressly waives all
claim to any condemnation award granted for such taking,
provided, however, that Lessee shall have the right, to the
extent that it shall not reduce Lessor's award, to claim from the
condemnor, but not from Lessor, such compensation as may be
recoverable in its own right for damage to Lessee's business and
fixtures and moving expenses.
VIII. ASSIGNMENTS AND SUBLEASES
1. Lessee may not, without obtaining Lessor's consent
(which shall not be unreasonably withheld or delayed), sublease
or assign the whole or any part of the Leased Premises to any
person, entity or group; provided that any such sublease or
assignment shall not relieve Lessee of any of Lessee's
obligations hereunder. Notwithstanding the foregoing, Lessee
shall be entitled to assign this Lease, without such consent, but
upon notice to Lessor, to any entity controlling, controlled by
or under common control with Lessee; provided however, Lessee
shall remain fully liable for all of their respective obligations
hereunder.
2. Lessor shall have the right at any time and
without prior notice to Lessee to sell, dispose of, or encumber
the Leased Premises and/or to sell and/or assign any or all of
its rights under this Lease.
IX. DEFAULTS AND REMEDIES
1. The occurrence of any of the following shall
constitute an Event of Default by Lessee:
(a) A failure by Lessee to pay any minimum rent or
insurance premiums when due hereunder, where such failure
continues for ten days;
(b) A failure by Lessee to pay any sums (other than
minimum rent and insurance premiums) when due hereunder, where
such failure continues for thirty days after written notice
thereof from Lessor to Lessee;
(c) A failure by Lessee to fully observe and perform
any other provision or covenant of this Lease to be observed or
performed by Lessee, where such failure continues for 30 days
after written notice thereof from Lessor to Lessee or, if such
failure cannot be cured within such 30-day period and Lessor will
not be materially harmed by such delay, for such longer period as
may be required for such cure so long as such cure is commenced
within such 30-day period and diligently prosecuted to
completion; or
(d) The making by Lessee of any assignment for the
benefit of creditors; the filing by or against Lessee of a
petition under any bankruptcy, insolvency, reorganization or
other similar law (unless in the case of a petition filed against
Lessee, the same is dismissed or stayed within 90 days after the
filing thereof); the appointment of a trustee or receiver to take
possession of substantially all of Lessee's assets located in the
Leased Premises or of Lessee's interest in this Lease (unless
possession is restored to Lessee within 90 days after such
appointment); or the attachment, execution or levy against, or
other judicial seizure of, substantially all of Lessee's interest
in this Lease (unless the same is discharged or stayed within 90
days after the issuance thereof).
2. If an Event of Default shall occur and be
continuing, Lessor, at its sole option, shall have the following
remedies:
(a) Lessor may, after giving Lessee ten (10) days
prior written notice, accelerate the Rent due hereunder for the
following two (2) year period of the Term, whereupon such Rent
shall be immediately due and payable.
(b) Lessor may terminate this Lease by written notice
to Lessee to such effect, whereupon Lessee shall immediately
surrender the Leased Premises to Lessor in accordance with the
terms hereof, and Lessor shall be entitled to commence an action
to recover all damages incurred by it on account of such default
and termination.
(c) Lessor may enter the Leased Premises (with or
without process of law and without thereby incurring any
liability to Lessee and without such entry being constituted an
eviction of Lessee or termination of this Lease) and take
possession of the Leased Premises and, at any time at its sole
option, relet the Leased Premises or any part thereof for the
account of Lessee, for such terms, upon such conditions and at
such rental as Lessor may reasonably elect. In the event of such
reletting (i) Lessor shall receive and collect the rent therefrom
and shall first apply such rent against such reasonable expenses
as Lessor may at any time or from time to time have incurred in
recovering possession of the Leased Premises, placing the same in
good order and condition, altering or repairing the same for
reletting and such other reasonable expenses, commissions and
charges, including without limitation brokers' and attorneys'
fees, which Lessor may at any time or from time to time have paid
or incurred in connection with such repossession and reletting,
and then shall apply such rent against Lessee's other obligations
to Lessor hereunder, and (ii) Lessor may execute any lease in
connection with such reletting in Lessor's name or in Lessee's
name, as Lessor may see fit, and the tenant of such reletting
shall be under no obligation to see to the application by Lessor
of any rent collected by Lessor, nor shall Lessee have any right
to collect any rent under such reletting. No re-entry by Lessor
shall be deemed to be an acceptance of a surrender by Lessee of
this Lease or of the Leased Premises.
(D) FOR VALUE RECEIVED AND UPON THE OCCURRENCE AND
CONTINUANCE OF AN EVENT OF DEFAULT HEREUNDER, OR UPON TERMINATION
OF THE TERM OF THIS LEASE AND THE FAILURE OF LESSEE TO DELIVER
POSSESSION TO LESSOR, LESSEE, AT THE OPTION OF LESSOR, AUTHORIZES
AND EMPOWERS ANY ATTORNEY OF ANY COURT OF RECORD WITHIN THE
COMMONWEALTH OF PENNSYLVANIA TO APPEAR FOR LESSEE AND ANY OTHER
PERSON CLAIMING UNDER, BY OR THROUGH LESSEE, AND CONFESS JUDGMENT
FORTHWITH AGAINST LESSEE AND SUCH OTHER PERSONS AND IN FAVOR OF
LESSOR IN AN AMICABLE ACTION OF EJECTMENT FOR THE LEASED
PREMISES, WITH RELEASE OF ALL ERRORS. LESSOR MAY UPON NOT LESS
THAN TEN (10) DAYS PRIOR WRITTEN NOTICE TO LESSEE FORTHWITH ISSUE
A WRIT OR WRITS OF EXECUTION FOR POSSESSION OF THE LEASED
PREMISES, WITHOUT LEAVE OF COURT, AND LESSOR MAY, BY LEGAL
PROCESS, WITHOUT NOTICE, RE-ENTER AND EXPEL LESSEE FROM THE
LEASED PREMISES, AND ALSO ANY PERSONS HOLDING UNDER, BY OR
THROUGH LESSEE.
(e) Lessor may exercise any other remedy available to
it at law or in equity.
The foregoing remedies are intended to provide Lessor
with means of recovering any damages incurred by Lessor by reason
of the occurrence and continuance of an Event of Default by
Lessee. To the extent that any one of such remedies is
insufficient for such purpose, Lessor may exercise any other
remedy available to it.
3. If Lessee defaults in the payment of any
installment of rent hereunder, following the passage of all
applicable cure periods, such installment shall bear interest at
a rate per annum, computed on the basis of a three hundred sixty
(360) day year applied to the actual number of days elapsed,
equal to the interest rate announced by Mellon Bank, N.A.,
Pittsburgh, Pennsylvania, from time to time for short-term
unsecured commercial loans to its largest and best commercial
borrowers ("prime rate") plus 200 basis points, from the day such
installment is due until actually paid. In like manner, all
other and monies which may become due to Lessor from Lessee under
the terms hereof, or which are paid by Lessor because of Lessee's
default hereunder, shall, following the passage of all applicable
cure periods, bear interest at the aforesaid prime rate plus 200
basis points, from the due date until paid, or, in the case of
sums paid by Lessor because of Lessee's default hereunder, from
the date such payments are made by Lessor until the date Lessor
is reimbursed by Lessee therefor.
4. Each of the parties hereto shall use its
reasonable efforts to mitigate its damages in the event of a
default by the other party hereto. The parties hereto
acknowledge that it is not the intention of the parties to permit
the recovery by Lessor of more than its actual damages upon the
occurrence of an Event of Default hereunder and no provision of
this Lease shall be construed to permit any such result. Without
limiting the foregoing, any sums received by Lessor from any
reletting of the Leased Premises shall be offset by Lessor
against amounts payable by Lessee and/or shall be returned to
Lessee to the extent amounts recovered from Lessee shall exceed
Lessor's actual damages under this Lease.
X. INDEMNIFICATION AND EXONERATION
1. Subject to the provisions of this Lease, and
except for matters covered elsewhere in this Lease, Lessee shall
defend, indemnify and hold Lessor harmless from and against any
and all claims, losses, liabilities, expenses, damages, fines or
penalties (including court costs and reasonable attorney's fees)
to any person or property in or upon the Leased Premises arising
out of Lessee's use or occupancy of said Leased Premises, or any
act or neglect of Lessee or Lessee's servants, employees or
agents in connection with, or any change, alteration or
improvement made by Lessee in, the Leased Premises.
2. Lessor shall not be liable for injury or damage to
person or property occurring within or about the Leased Premises,
unless caused by or resulting from the gross negligence of Lessor
or its agents, servants or employees in the operation or
maintenance of the Leased Premises. Subject to the provisions of
this Lease, Lessor shall defend, indemnify and hold Lessee
harmless from and against any and all claims, losses,
liabilities, expenses, damages, fines or penalties (including
court costs and reasonable attorney's fees) to any person or
property in or upon the Leased Premises arising out of the gross
negligence of Lessor. its agents, servants or employees.
3. All Lessee's personal property of every kind which
may at any time be in the Leased Premises shall be at Lessee's
sole risk, or at the risk of those claiming under Lessee, and
Lessor shall, except for its gross negligent acts or omissions,
not be liable for any damage to said property or loss suffered by
the business or occupation of Lessee caused by water from any
source whatsoever or from the bursting, overflowing or leaking of
sewer or steam pipes or from the heating or plumbing fixtures or
from electric wires or from gas or odors or caused in any other
manner whatsoever.
4. Except as otherwise specifically provided herein,
this Lease and the rights of Lessor and obligations of Lessee
hereunder shall not be affected by any interference with Lessee's
occupancy or use of the Leased Premises for any reason, including
without limitation the following: (i) any damage to or theft,
loss or destruction of any of the Leased Premises; (ii) any
taking of any of the Leased Premises by eminent domain or similar
proceedings; (iii) any prohibition of or limitation or
restriction on Lessee's use of the Leased Premises; (iv) any
bankruptcy, reorganization, insolvency or similar proceeding
affecting Lessor, so long as the same does not affect Lessee's
right to possession; or (v) any foreclosure or exercise of any
other remedy by a mortgagee of the Leased Premises, so long as
the same does not affect Lessee's right to possession.
5. Lessor's obligations hereunder shall be binding
upon Lessor only with respect to the period of time that Lessor
is the owner of the Leased Premises and, upon termination of that
ownership, Lessee shall look solely to Lessor's successor in
interest in the Leased Premises for the satisfaction of each and
every obligation of Lessor hereunder accruing and/or arising
after such time.
6. Anything contained in this Lease to the contrary
notwithstanding, Lessee agrees that in any judicial proceeding
pertaining to this Lease involving the collection of any judgment
(or other judicial process) requiring the payment of money by
Lessor or any director, officer or employee of Lessor in
connection therewith, Lessee shall look solely to the estate and
property of Lessor in the Leased Premises and to no other
property or assets of Lessor, nor to any property of any
director, officer, employee or agent of Lessor, nor shall any
property of either Lessor (with the exception of the Leased
Premises) or any director, officer, employee or agent of Lessor
become subject to levy, execution, attachment or other
enforcement procedures for the satisfaction of Lessee's remedies.
In addition, Lessee covenants and agrees that no personal
liability or responsibility under this lease is assumed by, nor
shall at any time be asserted or enforceable against, any
director, officer or employee of Lessor on account of any
covenant, undertaking or obligation under or with respect to this
Lease, all such personal liability and responsibility, if any,
being expressly waived and released.
7. If any claim, action or proceeding is initiated or
asserted against any indemnified party, and such indemnified
party intends to seek indemnification under this Agreement on
account of its involvement in or with respect to such claim,
action or proceeding, then such indemnified party shall give
prompt notice to the indemnifying party of such claim, action or
proceeding; provided, that the failure to so notify the
indemnifying party shall not relieve the indemnifying party from
its obligations under this Agreement, but shall reduce such
obligations by the amount of damages or increased costs and
expenses attributable to such failure to give notice. Upon
receipt of such notice, the indemnifying party shall diligently
defend against such claim, action or proceeding on behalf of such
indemnified party at its own expense using counsel reasonably
acceptable to such indemnified party; provided, that if such
indemnified party has been advised by counsel that it may have
defenses available to it which are different from or in addition
to those available to the indemnifying party, or that its
interests in such claim, action or proceeding are adverse to the
indemnifying party's interests, then such indemnified party may
assert such defense or adverse interest in such or in connection
with such claim, action or proceeding at the indemnifying party's
expense. The indemnifying party or such indemnified party, as
applicable, may participate in any claim, action or proceeding
being defended against by the other at its own expense, and shall
not settle any claim, action or proceeding without the prior
consent of the other, which consent shall not be unreasonably
withheld. The indemnifying party and such indemnified party
shall cooperate with each other in the conduct of any such claim,
action or proceeding.
8. Nothing contained in this Article X shall affect
or negate any rights or obligations under the Asset Purchase
Agreement.
XI. NOTICES
Any notice provided for herein shall be given by
recognized overnight courier service, addressed to the parties at
the addresses set forth below or to such addresses as such party
may have fixed by notice:
To Lessee: Republic Automotive Parts Sales, Inc.
500 Wilson Pike Circle
Suite 115
P.O. Box 2088
Brentwood, Tennessee 37024
To Lessor: Beacon Auto Parts Company
6013 Enterprise Drive
Export, PA 15632
Attention: Fred J. Pisciotta
XII. CANCELLATION AND MODIFICATION - SUCCESSORS IN INTEREST
1. This Lease shall not be modified, nor shall any of
the terms and conditions hereof in any manner be changed,
suspended, or canceled, except by written agreement signed by the
parties hereto.
2. This Lease shall be binding upon and inure to the
benefit of the successors in interest of the parties hereto.
XIII. WAIVER
A waiver by either party of any default, breach or
failure of the other party shall not be construed as a continuing
waiver or as a waiver of any subsequent default, breach or
failure. Failure by either party to enforce any of the terms,
covenants or conditions of this Lease for any length of time
shall not be deemed to waiver or to decrease the right of such
party to insist thereafter upon strict performance by the other
party. Waiver by either party of any term, covenant or condition
contained in the Lease may only be made by a written document
signed by such party. Whenever in this Lease either party
reserves or is given the right and power to give or withhold its
consent to any action on the part of the other party, such right
and power shall not be exhausted by its exercise on one or more
occasions, but shall be a continuing right and power for the full
term of this Lease.
XIV. COUNTERPARTS, VENUE
This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original but all
of which, when taken together, shall constitute one of the same
document. This Agreement is to be interpreted according to the
laws of the Commonwealth of Pennsylvania.
XV. MEMORANDUM OF LEASE
Upon the request of either party, the other party will
in good faith cooperate in the prompt preparation, execution,
delivery and recording of a reasonable and recordable short-form
memorandum of this Lease.
XVI UNAVOIDABLE DELAY
If either party shall be delayed or hindered in, or
prevented from, the performance of any work, service or other act
required under this Lease to be performed by the party and such
delay or hindrance is due to strikes, lockouts, acts of God,
governmental restrictions, enemy act, civil commotion, fire or
other casualty, or other causes of a like nature beyond the
control of the party so delayed or hindered, then performance of
such work, service, or other act shall be excused for the period
of such delay and the period for the performance of such work or
other act shall be extended for a period equivalent to the period
of such delay. In no event shall such delay constitute a
termination of this Lease. The provisions of this Article shall
not operate to excuse either party from the prompt payment of any
Rent or other sums due and owing under this Lease.
XVII SUBORDINATION, NONDISTURBANCE AND ATTORNMENT.
Lessee accepts this Lease subject and subordinate in
all respects to all [for Leased Premises not currently subject to
mortgages of Mellon Bank, N.A., insert "future mortgages"]
mortgages which may [now or][for Leased Premises not currently
subject to mortgages of Mellon Bank, N.A., delete "now or"]
hereafter be placed on or affect the Leased Premises or any part
thereof, irrespective of any obligations which may be secured
thereby; provided however, with respect to mortgages held by
Mellon Bank, N.A. and any other future mortgages encumbering the
Leased Premises, the mortgagee shall deliver to Lessee, following
the written request of Lessee, a written agreement in form and
substance reasonably satisfactory to Lessee and in recordable
form providing that so long as no Event of Default shall exist
hereunder, Lessee's possession of the Leased Premises and
Lessee's rights under this Lease shall not be disturbed or
affected. Such subordination shall be self-operative, and no
further instrument of subordination shall be required by any
mortgagee. However, in confirmation of such subordination,
within fifteen (15) days after request by Lessor, Lessee shall
execute and deliver promptly any certificates or other written
assurances which Lessor may reasonably request designed to give
effect to or provide evidence of the same. In the event of a
sale in foreclosure of any mortgage to which this Lease is
subordinate, or a transfer in lieu of foreclosure, or a taking of
possession of the Leased Premises by the mortgagee or other
person acting for or through the mortgagee under any mortgage to
which this Lease is subordinate, Lessee shall attorn to and
recognize the purchaser as the Lessor under this Lease.
LESSEE EXPRESSLY WAIVES TO LESSOR THE BENEFIT TO LESSEE OF 68
P.S. SECTION 250.501, BEING SECTION 501 OF THAT ACT, APPROVED
APRIL 6, 1951, ENTITLED "LANDLORD AND TENANT ACT OF 1951", AS MAY
BE AMENDED FROM TIME TO TIME, REQUIRING NOTICE TO QUIT UPON THE
EXPIRATION OF THE TERM OF THIS LEASE OR AT THE EXPIRATION OF ANY
EXTENSION OR RENEWAL THEREOF, OR UPON ANY EARLIER TERMINATION OF
THIS LEASE, AS HEREIN PROVIDED. LESSEE COVENANTS AND AGREES TO
VACATE, REMOVE FROM AND DELIVER UP AND SURRENDER THE POSSESSION
OF THE LEASED PREMISES TO LESSOR UPON THE EXPIRATION OF THE LEASE
TERM OR UPON THE EXPIRATION OF ANY EXTENSION OR RENEWAL THEREOF,
OR UPON ANY EARLIER TERMINATION OF THIS LEASE, AS HEREIN
PROVIDED, WITHOUT SUCH NOTICE, IN THE CONDITION AS REQUIRED
ABOVE.
IN WITNESS WHEREOF, and intending to be legally bound
hereby, the parties hereto have caused this Lease to be executed
in duplicate by their respective officers thereunto duly
authorized as of the day and year first above written.
LESSOR:
ATTEST: BEACON AUTO PARTS COMPANY
_____________________________ By:____________________________
Fred J. Pisciotta, President
[Corporate Seal]
LESSEE:
ATTEST: REPUBLIC AUTOMOTIVE PARTS
SALES, INC.
_____________________________ By:____________________________
_______________, President
[Corporate Seal]
EXHIBIT A
LEASED PREMISES
_______________________________
SCHEDULE 3.2(c)
1. Lease, dated April 11, 1988, between Elly and Isadore
Friedman, Lessors and Beacon, Lessee, as amended by an
Amendment to Lease Agreement, dated June 21, 1991 among
Scott M. Rodgers, Colleen J. Rodgers and Beacon Auto
Parts Company, a Delaware corporation ("Beacon"); and
extended by letter from Beacon to Scott M. Rodgers and
Colleen J. Rodgers, dated December 27, 1994.
2. Lease, dated May 20, 1991 between Finleyville Auto
Parts, Inc., a Pennsylvania corporation, Lessor and
Beacon, Lessee.
3. Lease, dated April 11, 1988 between Elly and Isadore
Friedman, Lessor and Beacon, Lessee, as extended and
amended pursuant to Letter Agreement, dated January 3,
1995 from Beacon to Elly and Isadore Friedman.
4. Lease, dated August 1, 1985 between Realco Development
Company, a general partnership, Lessor ("Realco"), and
Green Motor Equipment Company, Inc., a Pennsylvania
corporation, Lessee ("Green"), as assigned by the Lease
Assignment Agreement, dated April 11, 1988 by Green in
favor of Beacon; and extended by Lease Extension
Agreement, dated August 14, 1992 between Realco and
Beacon.
5. Lease, dated April 11, 1988 between Unity Auto Parts,
Inc., Lessor and Beacon, Lessee, as extended by letter,
dated November 1, 1994 from Beacon to Unity Auto Parts,
Inc.
6. Lease, dated June 15, 1990 among John Morgan, Richard
Morgan, Lessors and Beacon, Lessee as extended by
letter, dated March 15, 1995 from Beacon to John Morgan
and Richard Morgan.
7. Lease, dated December 11, 1989 between John T.
Flaherty, Lessor and Beacon, Lessee, as extended by
letter, dated August 4, 1994 from Beacon to John
Flaherty.
8. Lease, dated April 11, 1988 among Elly and Isadore
Friedman, Paul J. and Lois Armstrong, Lessors and
Beacon, Lessee, as extended by letter, dated November
1, 1994 from Beacon to Elly and Isadore Friedman.
9. Lease, dated May 5, 1992 by and between Jack Schempp,
Lessor and Beacon, Lessee.
10. Lease, dated January 23, 1986 by and between Union Real
Estate Company of Pittsburgh, agent for Estate of B.B.
Aberman, Lawrence Leyton, Paul Kossman, Murray S.
Levine, Fred Weinstock and Irene Weinstock, Lessor and
Beacon Auto Parts of Penn Hills, Inc., a Pennsylvania
corporation, Lessee, guaranteed by Isadore and Elly
Friedman pursuant to a guarantee, dated January 23,
1986; as assigned by Assignment of Lease, dated April
11, 1988 by Isadore and Elly Friedman in favor of
Beacon; and as extended by Lease Extension Agreement
No. 2, dated December 27, 1993 between Union Real
Estate Company of Pittsburgh and Beacon.
11. Lease, dated October 29, 1990 by and between Fieldbrook
Foods, Inc., Lessor and Beacon, Lessee; as extended by
letter from Beacon to Fieldbrook Foods, Inc., dated
November 22, 1993.
12. Lease, dated August 26, 1994 among Barry E. Burkhart
and Kimberly Ann Burkhart, Lessors and Beacon, Lessee.
13. Lease Agreement, dated October 1, 1993 between Al
Lorenzi Lumber Company, Inc., Lessor and Beacon, Lessee
and Addendum to Lease Agreement, dated October 6, 1993
between Al Lorenzi Lumber Company, Inc. and Beacon.
Exhibit 3.2(c)
LEASEHOLD ASSIGNMENT AGREEMENT
This Leasehold Assignment Agreement, dated as
of ____________, 1995, between Beacon Auto Parts Company, a
Delaware corporation ("Assignor"), and Republic Automotive Parts
Sales, Inc. a Delaware corporation ("Assignee").
For good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged:
I. Effective as of the date of the Closing (the
"Effective Date") under that certain Agreement of Purchase and
Sale of Assets among Assignor and Assignee and certain other
parties (the "Purchase Agreement"), Assignor does hereby assign,
bargain, transfer, convey and set over unto Assignee, free and
clear of all liens, pledges, charges, mortgages, security
interests, restrictions, easements, liabilities, claims,
encumbrances and rights of others with every kind and
description, Assignor's entire interest in and under that certain
Lease Agreement (the "Lease"), dated _____________ between
_________________________________ ("Lessor") and Assignor, and
demising certain premises more fully described in the Lease,
which description is hereby incorporated herein by reference,
II. Effective as of the Effective Date, Assignee
assumes as at said date, and agrees to discharge following said
date, all of the unperformed and unfulfilled obligations of
Assignor accruing under the Lease, but in all cases only to the
extent that such duties accrue after said date.
III. Nothing contained herein shall be deemed to
relieve Assignor of any of its obligations under the Lease with
respect to any and all periods, occurrences and matters prior to
or ending with the Effective Date.
IV. This Leasehold Assignment Agreement and the
obligations of the parties hereunder shall be of no force or
effect if the Closing under the Purchase Agreement does not occur
by _____________, 1995. Assignee will notify Lessor if and when
the Closing shall occur and, if so, of the Effective Date.
V. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same agreement.
IN WITNESS WHEREOF, Assignor has caused this Lease
Assignment Agreement to be duly executed as of the date first
above written.
ASSIGNOR:
BEACON AUTO PARTS COMPANY
By:_______________________
ASSIGNEE:
REPUBLIC AUTOMOTIVE PARTS SALES, INC.
By:________________________________
LESSOR CONSENT
The undersigned, being the lessor under the above
specified Lease, hereby consents to the above Leasehold
Assignment Agreement and acknowledges that from and after the
Effective Date (as defined above) it will recognize Assignor as
the Lessee under the Lease with respect to periods, and
obligations of the lessee arising, from and after the Effective
Date.
Dated:_____________________________
By:________________________________
Exhibit 3.2(d)
ESTOPPEL CERTIFICATE
The undersigned, as Landlord (Landlord") under the
lease agreement, as the same may have heretofore been amended,
with ______________, as tenant ("Tenant"), a true and correct
copy of which is attached as Exhibit A hereto (the "Lease"), does
hereby certify the following:
1. That the Lease is in full force and effect
and, except as noted in Exhibit B hereto, has not otherwise been
amended, modified, supplemented or superseded.
2. That there is no defense, offset, claim or
counterclaim by or in favor of Landlord against Tenant under the
Lease or against the obligations of Landlord under the Lease.
3. That the Landlord is not aware of any default
now existing of Landlord or of Tenant under the Lease, or of any
event which with notice or the passage of time or both would
constitute a default of Landlord or of Tenant under the Lease.
4. That the Landlord has not received notice of a
prior sale, transfer, assignment, hypothecation or pledge of the
Lease by Tenant.
5. That the monthly rent of $
due under the Lease has been paid through , 199__ and
all additional rent due under the Lease has been paid on through
__________________, 19__.
6. That Landlord is holding the amount of $
as security under the Lease for the performance of Tenant's
obligations thereunder, no part of any such security, if any, has
been attached, released or otherwise encumbered.
7. The commencement date of the term of the Lease
was
.
8. That the landlord hereby consents to the
assignment of the Lease by Tenant to Republic Automotive Parts
Sales, Inc. ("Republic").
9. That the above certifications are made by
Landlord knowing that it shall be relied upon by Republic.
Landlord:_____________________________
By:
Title:
Exhibit 3.2(i)
EMPLOYMENT AGREEMENT, dated as of _____________,
1995, by and between, Republic Automotive Parts Sales, Inc., a
Delaware corporation ("RAPSI"), and Fred J. Pisciotta, an
individual (the "Executive").
In consideration of the mutual covenants herein
contained and other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged by the parties
hereto, the parties hereto hereby agree as follows:
1. Employment. RAPSI hereby agrees to employ the
Executive, and the Executive hereby accepts and agrees to such
employment, commencing as of the date hereof, upon the terms and
conditions hereinafter set forth.
2. Term. The term of the Executive's employment
under this Agreement shall commence as of the date hereof and
shall continue for a period of ____ months until December 31,
1997, unless sooner terminated as provided elsewhere in this
Agreement (the "Term"). The term of the Executive's employment
hereunder may be renewed for an additional term or terms only by
express written agreement of the parties, on the terms set forth
in any such renewal agreement.
3. Duties and Services. The Executive agrees,
from and after the date hereof, to serve RAPSI faithfully,
diligently and to the best of his ability, subject to and under
the direction and control of the president of RAPSI, with
principal general management responsibility for the business and
operations acquired by RAPSI pursuant to that certain Agreement
of Purchase and Sale of Assets, dated as of _________, 1995,
among Beacon Auto Parts Company, a Delaware corporation, Beacon
Auto Parts Company, a Pennsylvania business trust, RAPSI and
certain other parties (the "Purchase Agreement"), as such
business and operations may be expanded or contracted or changed
from time to time (the "Western PA Business"). The Executive
shall devote his entire business time, energy and skill to such
employment and shall perform and discharge such duties and
responsibilities and exercise such authority, as the president of
RAPSI shall specify from time to time.
4. Compensation. (a) During the Term of the
Executive's employment hereunder, RAPSI agrees to pay to the
Executive, and the Executive agrees to accept, a salary for all
his services (the "Salary") at the rate of $150,000 per annum,
payable in accordance with RAPSI's standard payroll policies from
time to time.
(b) The Executive expressly acknowledges
that he shall not be entitled to receive or participate in any
plan or program for bonus, incentive or additional compensation
as an executive of RAPSI, and that any such bonus, incentive or
additional compensation, if paid to the Executive, shall be at
the sole discretion of RAPSI and if paid in or for any period
shall not constitute an addition to Salary or create any
expectation as to compensation in or for any subsequent period.
5. Employee Benefits. (a) RAPSI shall
reimburse the Executive for his reasonable business expenses,
including travel and entertainment, incurred by him for or on
behalf of RAPSI in furtherance of the performance of his duties
hereunder. Such reimbursement shall be subject to receipt by
RAPSI from the Executive of an itemized accounting therefor,
together with such vouchers and other reasonable verifications as
RAPSI shall require satisfactorily evidence such expenses, and
such policies as RAPSI shall establish from time to time.
(b) The Executive shall be entitled to
participate, in accordance with the terms thereof, in any
employee benefit plans maintained by RAPSI generally for the non-
union employees of RAPSI or of the Western PA Business, as RAPSI
may determine, including any life, health, hospitalization and
medical plans and any retirement, savings, or other similar
plans. The foregoing shall not be construed to require RAPSI to
establish any such plan, or to prevent RAPSI from modifying or
terminating any such plan once established.
6. Termination of Benefits. (a) Notwithstanding
anything to the contrary contained herein, the employment of the
Executive under this Agreement, as well as the Executive's right
to receive Salary not then accrued, shall terminate upon the
earliest to occur of the following events:
(i) The death or disability (as defined
below) of the Executive.
(ii) The expiration of the Term.
(iii) Upon written notice to the
Executive from RAPSI of such termination, for Cause.
(iv) Upon written notice to the
Executive by RAPSI, if the Executive advises RAPSI in writing of
his intention to terminate his employment.
(b) For the purposes of this Agreement: (i)
The Executive shall be deemed "disabled" if, by reason of
physical or mental disability or illness, the Executive is unable
to perform his duties hereunder for a continuous period of 180
days during the Term or for an aggregate of 210 days during any
twelve month period during the Term, and RAPSI or the Executive
so notifies the other in writing of the termination of the
Executive's employment hereunder by reason thereof.
(c) The occurrence of any of the following
events or circumstances shall constitute "Cause" for termination,
at the election of the Board of Directors of RAPSI, of the term
of employment of the Executive under this Agreement, to wit:
(i) the Executive shall voluntarily
resign as an employee of RAPSI without approval of the Board of
Directors of RAPSI other than by reason of a breach of this
Agreement in any material respect by RAPSI which has not been
cured within 30 calendar days after RAPSI's receipt of written
notice of such breach given to RAPSI by the Executive;
(ii) the commission by the Executive of
a felony, or Executive engaging in theft, embezzlement or fraud
with respect to significant rights or property of RAPSI or any of
its employees, affiliates, customers or suppliers;
(iii) the repeated and deliberate
failure by the Executive to comply with reasonable policies or
directives of the president or board of directors of RAPSI or
Republic after written notice to him of such conduct; or
(iv) the Executive shall breach this
Agreement in any material respect and fail to cure such breach
within 30 calendar days after written notice of such breach is
given by RAPSI to the Executive;
it being understood that the inability of the Executive to
achieve favorable results of operations for reasons unrelated to
the events or circumstances described in clauses (i), (ii), (iii)
and (iv) hereof shall not in an of itself be deemed to constitute
Cause for termination hereunder.
7. Deductions and Withholding. The Executive
agrees that RAPSI shall withhold from any and all payments
required to be made to the Executive pursuant to this Agreement
all federal, state, local and/or other taxes which are required
to be withheld in accordance with applicable statutes and/or
regulations from time to time in effect.
8. Non-Competition, Restrictive Covenants,
Confidentiality and Injunctive Relief. (a) Without limiting in
any manner any non-competition or similar undertaking or
obligation entered into by the Executive in connection with the
Purchase Agreement, the Executive agrees that, commencing as of
the date hereof and during the term of the Executive's employment
with RAPSI, the Executive shall not, without the prior written
approval of the board of directors of RAPSI, directly or
indirectly through any other person, firm or corporation, whether
for himself or as agent on behalf of any other person or entity,
and whether as employee, consultant, principal, lender, partner,
officer, director, stockholder or otherwise:
(A) engage or participate in, or become
employed by, or render any services in connection with, the
operation, promotion and/or management of any automotive
products, parts or accessories distribution, sale, marketing or
services enterprise or business; or
(B) solicit, raid, entice or induce any
person who presently is, or any time during the Executive's
employment with RAPSI shall be or shall have been, an employee of
Republic Automotive Parts, Inc. ("Republic") or any of its direct
or indirect subsidiaries (collectively the "Republic Group") at
any time during the twelve (12) months preceding such
solicitation, raid, enticement or inducement, to become employed
or retained by any other person or entity.
(b) Recognizing that the Executive's
knowledge, information and relationship with existing or
prospective suppliers, accounts, customers and representatives
of, to or for any member of the Republic Group, and the knowledge
of the business, personnel, methods, systems, customers,
accounts, suppliers, plans and policies of the Republic Group,
which he currently has and shall hereafter establish, receive or
obtain as an employee, or in connection with services performed
for any member of the Republic Group, are valuable and unique
assets of the Republic Group, the Executive agrees that, at all
times during and after the Executive's employment with RAPSI, he
shall not (otherwise than pursuant to his duties hereunder),
directly or indirectly, use, divulge, furnish or make accessible
to anyone, without the prior written consent of the board of
directors of RAPSI, any confidential or proprietary knowledge or
information pertaining to any member of the Republic Group, or
the business, personnel, methods, systems, customers, accounts,
suppliers, plans or policies thereof, to any person or entity,
for any reason or purpose whatsoever.
(c) The Executive acknowledges that the
services to be rendered by him are of a special, unique and
extraordinary character and, in connection with such services, he
will have access to confidential information vital to the
business of the Republic Group. By reason of the foregoing, the
Executive consents and agrees that, if he violates any of the
provisions of this Section 8, the Republic Group would sustain
irreparable harm and, therefore, in addition to any other
remedies which RAPSI may have under this Agreement or otherwise,
the Republic Group shall be entitled to apply (without the
necessity of posting any bond) to any court of competent
jurisdiction for an injunction restraining the Executive or any
other party from committing or continuing any such violation (or
participating therein) of this Agreement, and the Executive shall
not object to any such application.
9. Warranty. The Executive warrants and
represents that he is not a party to any agreement, contract or
understanding, whether of employment or otherwise, which would in
any way restrict or prohibit him from undertaking his position as
an executive of RAPSI and complying with his obligations in
accordance with the terms and conditions of this Agreement.
10. Key-man Insurance. The Executive agrees that
RAPSI may from time to time and for RAPSI's own benefit apply for
and take out life insurance covering the Executive, either
independently or together with others, in any amount and form
which RAPSI may deem to be in its best interests. RAPSI shall
own all rights in such insurance and in the cash values and
proceeds thereof and the Executive shall not have any right,
title or interest therein. The Executive agrees to assist RAPSI,
at RAPSI's expense, in obtaining any such insurance by, among
things, submitting to the customary examinations and correctly
preparing, signing and delivering such applications and other
documents as reasonably may be required.
11. Notices. All notices, requests, demands and
other communications hereunder shall be in writing and shall be
delivered personally or by registered or certified mail, return
receipt requested, or by recognized over-night courier service to
the other party hereto, in the case of the Executive at his
address as set forth in RAPSI's records, and in the case of
RAPSI, at its principal executive office from time to time. Any
such notice shall be deemed given at such time as it shall be
delivered. Either party may change the address to which notices,
requests, demands and other communications hereunder shall be
sent by giving written notice of such change of address in the
manner hereinabove provided.
12. Assignability and Binding Effect. This
Agreement shall inure to the benefit of and shall be binding upon
the heirs, executors, administrators, successors and legal
representatives of the Executive, and shall inure to the benefit
of and be binding upon RAPSI and its successors and assigns. The
Executive may not assign, transfer, pledge, encumber, hypothecate
or otherwise dispose of this Agreement, or any of his rights or
obligations hereunder, and any such attempted delegation or
disposition shall be null and void and without effect. A
successor to substantially all the business and assets of RAPSI
shall assume in writing the obligations of RAPSI under this
Agreement.
13. Severability. In the event that any
provisions of this Agreement would be held to be invalid,
prohibited or unenforceable in any jurisdiction for any reason,
(including, but not limited to, any provisions which would be
held to be unenforceable because of the scope, duration or area
of its applicability), unless narrowed by construction, this
Agreement shall, as to such jurisdiction only, be construed as if
such invalid, prohibited or unenforceable provision had been more
narrowly drawn so as not to be invalid, prohibited or
unenforceable (or if such language can not be drawn narrowly
enough, the court making any such determination shall have the
power to modify such scope, duration or area or all of them, but
only to the extent necessary to make such provision or provisions
enforceable in such jurisdiction, and such provision shall then
be applicable in such modified form). If, notwithstanding the
foregoing, any provision of this Agreement would be held to be
invalid, prohibited or unenforceable in any jurisdiction, such
provision shall be ineffective to the extent of such invalidity,
prohibition or unenforceability, without invalidating the
remaining provisions of this Agreement or affecting the validity
or enforceability of such provision in any other jurisdiction.
14. Governing Law. This Agreement shall be
governed by and construed in accordance with the internal laws of
the State of Pennsylvania, without regard to principles of
conflict of laws and regardless of where actually executed,
delivered or performed.
15. Complete Understanding; Counterparts. This
Agreement constitutes the complete understanding and supersedes
any and all prior agreements and understandings between the
parties with respect to its subject matter, and no statement,
representation, warranty or covenant has been made by either
party with respect thereto except as expressly set forth herein.
This Agreement shall not be altered, modified, amended or
terminated except by written instrument signed by each of the
parties hereto. The Section and paragraph headings contained
herein are for convenience only, and are not part of and are not
intended to define or limit the contents of said Sections and
paragraphs. This Agreement may be executed in counterparts, each
of which shall be deemed an original and all of which, when taken
together, shall constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have
executed this Agreement as of the day and year first above
written.
REPUBLIC AUTOMOTIVE PARTS SALES, INC.
By:
________________________________
____________________________________
Fred J. Pisciotta
Exhibit 3.2(i)
EMPLOYMENT AGREEMENT, dated as of _____________, 1995,
by and between, Republic Automotive Parts Sales, Inc., a Delaware
corporation ("RAPSI"), and John Wieder, an individual (the
"Executive").
In consideration of the mutual covenants herein
contained and other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged by the parties
hereto, the parties hereto hereby agree as follows:
1. Employment. RAPSI hereby agrees to employ the
Executive, and the Executive hereby accepts and agrees to such
employment, commencing as of the date hereof, upon the terms and
conditions hereinafter set forth.
2. Term. The term of the Executive's employment under
this Agreement shall commence as of the date hereof and shall
continue for a period of ____ months until December 31, 1997,
unless sooner terminated as provided elsewhere in this Agreement
(the "Term"). The term of the Executive's employment hereunder
may be renewed for an additional term or terms only by express
written agreement of the parties, on the terms set forth in any
such renewal agreement.
3. Duties and Services. The Executive agrees, from
and after the date hereof, to serve RAPSI faithfully, diligently
and to the best of his ability, subject to and under the
direction and control of the president of RAPSI, in an executive
capacity in connection with the business and operations acquired
by RAPSI pursuant to that certain Agreement of Purchase and Sale
of Assets, dated as of _________, 1995, among Beacon Auto Parts
Company, a Delaware corporation, Beacon Auto Parts Company, a
Pennsylvania business trust, RAPSI and certain other parties (the
"Purchase Agreement"), as such business and operations may be
expanded or contracted or changed from time to time (the "Western
PA Business"). The Executive shall devote his entire business
time, energy and skill to such employment and shall perform and
discharge such duties and responsibilities and exercise such
authority, as the president of RAPSI shall specify from time to
time.
4. Compensation. (a) During the Term of the
Executive's employment hereunder, RAPSI agrees to pay to the
Executive, and the Executive agrees to accept, a salary for all
his services (the "Salary") at the rate of $60,000 per annum,
payable in accordance with RAPSI's standard payroll policies from
time to time.
(b) The Executive expressly acknowledges that he
shall not be entitled to receive or participate in any plan or
program for bonus, incentive or additional compensation as an
executive of RAPSI, and that any such bonus, incentive or
additional compensation, if paid to the Executive, shall be at
the sole discretion of RAPSI and if paid in or for any period shall
not constitute an addition to Salary or create any expectation as
to compensation in or for any subsequent period.
5. Employee Benefits. (a) RAPSI shall reimburse the
Executive for his reasonable business expenses, including travel
and entertainment, incurred by him for or on behalf of RAPSI in
furtherance of the performance of his duties hereunder. Such
reimbursement shall be subject to receipt by RAPSI from the
Executive of an itemized accounting therefor, together with such
vouchers and other reasonable verifications as RAPSI shall
require satisfactorily evidence such expenses, and such policies
as RAPSI shall establish from time to time.
(b) The Executive shall be entitled to
participate, in accordance with the terms thereof, in any
employee benefit plans maintained by RAPSI generally for the non-
union employees of RAPSI or of the Western PA Business, as RAPSI
may determine, including any life, health, hospitalization and
medical plans and any retirement, savings, or other similar
plans. The foregoing shall not be construed to require RAPSI to
establish any such plan, or to prevent RAPSI from modifying or
terminating any such plan once established.
6. Termination of Benefits. (a) Notwithstanding
anything to the contrary contained herein, the employment of the
Executive under this Agreement, as well as the Executive's right
to receive Salary not then accrued, shall terminate upon the
earliest to occur of the following events:
(i) The death or disability (as defined
below) of the Executive.
(ii) The expiration of the Term.
(iii) Upon written notice to the Executive
from RAPSI of such termination, for Cause.
(iv) Upon written notice to the Executive by
RAPSI, if the Executive advises RAPSI in writing of his intention
to terminate his employment.
(b) For the purposes of this Agreement: (i) The
Executive shall be deemed "disabled" if, by reason of physical or
mental disability or illness, the Executive is unable to perform
his duties hereunder for a continuous period of 180 days during
the Term or for an aggregate of 210 days during any twelve month
period during the Term, and RAPSI or the Executive so notifies
the other in writing of the termination of the Executive's
employment hereunder by reason thereof.
(c) The occurrence of any of the following events
or circumstances shall constitute "Cause" for termination, at the
election of the Board of Directors of RAPSI, of the term of
employment of the Executive under this Agreement, to wit:
(i) the Executive shall voluntarily resign
as an employee of RAPSI without approval of the Board of
Directors of RAPSI other than by reason of a breach of this
Agreement in any material respect by RAPSI which has not been
cured within 30 calendar days after RAPSI's receipt of written
notice of such breach given to RAPSI by the Executive;
(ii) the commission by the Executive of a
felony, or Executive engaging in theft, embezzlement or fraud
with respect to significant rights or property of RAPSI or any of
its employees, affiliates, customers or suppliers;
(iii) the repeated and deliberate failure by
the Executive to comply with reasonable policies or directives of
the president or board of directors of RAPSI or Republic after
written notice to him of such conduct; or
(iv) the Executive shall breach this
Agreement in any material respect and fail to cure such breach
within 30 calendar days after written notice of such breach is
given by RAPSI to the Executive;
it being understood that the inability of the Executive to
achieve favorable results of operations for reasons unrelated to
the events or circumstances described in clauses (i), (ii), (iii)
and (iv) hereof shall not in an of itself be deemed to constitute
Cause for termination hereunder.
7. Deductions and Withholding. The Executive agrees
that RAPSI shall withhold from any and all payments required to
be made to the Executive pursuant to this Agreement all federal,
state, local and/or other taxes which are required to be withheld
in accordance with applicable statutes and/or regulations from
time to time in effect.
8. Non-Competition, Restrictive Covenants,
Confidentiality and Injunctive Relief. (a) Without limiting in
any manner any non-competition or similar undertaking or
obligation entered into by the Executive in connection with the
Purchase Agreement, the Executive agrees that, commencing as of
the date hereof and during the term of the Executive's employment
with RAPSI, the Executive shall not, without the prior written
approval of the board of directors of RAPSI, directly or
indirectly through any other person, firm or corporation, whether
for himself or as agent on behalf of any other person or entity,
and whether as employee, consultant, principal, lender, partner,
officer, director, stockholder or otherwise:
(A) engage or participate in, or become
employed by, or render any services in connection with, the
operation, promotion and/or management of any automotive
products, parts or accessories distribution, sale, marketing or
services enterprise or business; or
(B) solicit, raid, entice or induce any
person who presently is, or any time during the Executive's
employment with RAPSI shall be or shall have been, an employee of
Republic Automotive Parts, Inc. ("Republic") or any of its direct
or indirect subsidiaries (collectively the "Republic Group") at
any time during the twelve (12) months preceding such
solicitation, raid, enticement or inducement, to become employed
or retained by any other person or entity.
(b) Recognizing that the Executive's knowledge,
information and relationship with existing or prospective
suppliers, accounts, customers and representatives of, to or for
any member of the Republic Group, and the knowledge of the
business, personnel, methods, systems, customers, accounts,
suppliers, plans and policies of the Republic Group, which he
currently has and shall hereafter establish, receive or obtain as
an employee, or in connection with services performed for any
member of the Republic Group, are valuable and unique assets of
the Republic Group, the Executive agrees that, at all times
during and after the Executive's employment with RAPSI, he shall
not (otherwise than pursuant to his duties hereunder), directly
or indirectly, use, divulge, furnish or make accessible to
anyone, without the prior written consent of the board of
directors of RAPSI, any confidential or proprietary knowledge or
information pertaining to any member of the Republic Group, or
the business, personnel, methods, systems, customers, accounts,
suppliers, plans or policies thereof, to any person or entity,
for any reason or purpose whatsoever.
(c) The Executive acknowledges that the services
to be rendered by him are of a special, unique and extraordinary
character and, in connection with such services, he will have
access to confidential information vital to the business of the
Republic Group. By reason of the foregoing, the Executive
consents and agrees that, if he violates any of the provisions of
this Section 8, the Republic Group would sustain irreparable harm
and, therefore, in addition to any other remedies which RAPSI may
have under this Agreement or otherwise, the Republic Group shall
be entitled to apply (without the necessity of posting any bond)
to any court of competent jurisdiction for an injunction
restraining the Executive or any other party from committing or
continuing any such violation (or participating therein) of this
Agreement, and the Executive shall not object to any such
application.
9. Warranty. The Executive warrants and represents
that he is not a party to any agreement, contract or
understanding, whether of employment or otherwise, which would in
any way restrict or prohibit him from undertaking his position as
an executive of RAPSI and complying with his obligations in
accordance with the terms and conditions of this Agreement.
10. Key-man Insurance. The Executive agrees that RAPSI
may from time to time and for RAPSI's own benefit apply for and
take out life insurance covering the Executive, either
independently or together with others, in any amount and form
which RAPSI may deem to be in its best interests. RAPSI shall
own all rights in such insurance and in the cash values and
proceeds thereof and the Executive shall not have any right,
title or interest therein. The Executive agrees to assist RAPSI,
at RAPSI's expense, in obtaining any such insurance by, among
things, submitting to the customary examinations and correctly
preparing, signing and delivering such applications and other
documents as reasonably may be required.
11. Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be
delivered personally or by registered or certified mail, return
receipt requested, or by recognized over-night courier service to
the other party hereto, in the case of the Executive at his
address as set forth in RAPSI's records, and in the case of
RAPSI, at its principal executive office from time to time. Any
such notice shall be deemed given at such time as it shall be
delivered. Either party may change the address to which notices,
requests, demands and other communications hereunder shall be
sent by giving written notice of such change of address in the
manner hereinabove provided.
12. Assignability and Binding Effect. This Agreement
shall inure to the benefit of and shall be binding upon the
heirs, executors, administrators, successors and legal
representatives of the Executive, and shall inure to the benefit
of and be binding upon RAPSI and its successors and assigns. The
Executive may not assign, transfer, pledge, encumber, hypothecate
or otherwise dispose of this Agreement, or any of his rights or
obligations hereunder, and any such attempted delegation or
disposition shall be null and void and without effect. A
successor to substantially all the business and assets of RAPSI
shall assume in writing the obligations of RAPSI under this
Agreement.
13. Severability. In the event that any provisions of
this Agreement would be held to be invalid, prohibited or
unenforceable in any jurisdiction for any reason, (including, but
not limited to, any provisions which would be held to be
unenforceable because of the scope, duration or area of its
applicability), unless narrowed by construction, this Agreement
shall, as to such jurisdiction only, be construed as if such
invalid, prohibited or unenforceable provision had been more
narrowly drawn so as not to be invalid, prohibited or
unenforceable (or if such language can not be drawn narrowly
enough, the court making any such determination shall have the
power to modify such scope, duration or area or all of them, but
only to the extent necessary to make such provision or provisions
enforceable in such jurisdiction, and such provision shall then
be applicable in such modified form). If, notwithstanding the
foregoing, any provision of this Agreement would be held to be
invalid, prohibited or unenforceable in any jurisdiction, such
provision shall be ineffective to the extent of such invalidity,
prohibition or unenforceability, without invalidating the
remaining provisions of this Agreement or affecting the validity
or enforceability of such provision in any other jurisdiction.
14. Governing Law. This Agreement shall be governed
by and construed in accordance with the internal laws of the
State of Pennsylvania, without regard to principles of conflict
of laws and regardless of where actually executed, delivered or
performed.
15. Complete Understanding; Counterparts. This
Agreement constitutes the complete understanding and supersedes
any and all prior agreements and understandings between the
parties with respect to its subject matter, and no statement,
representation, warranty or covenant has been made by either
party with respect thereto except as expressly set forth herein.
This Agreement shall not be altered, modified, amended or
terminated except by written instrument signed by each of the
parties hereto. The Section and paragraph headings contained
herein are for convenience only, and are not part of and are not
intended to define or limit the contents of said Sections and
paragraphs. This Agreement may be executed in counterparts, each
of which shall be deemed an original and all of which, when taken
together, shall constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the day and year first above written.
REPUBLIC AUTOMOTIVE PARTS SALES, INC.
By: ________________________________
____________________________________
John Wieder
Schedule 3.3(a)
The Cash Payment shall be paid as follows:
(1) The amounts necessary to satisfy in full the
indebtedness of Sellers to its lending banks and
other creditors whose indebtedness is secured by
any Lien on the Purchased Assets (other than the
Permitted Post-Closing Debt), to the accounts of
such creditors.
(2) The balance, after giving effect to clause (1)
immediately above, to the account of Trust.
[Form of Note Delivered at Closing --
reflects certain changes from original Exhibit 3.3(b)]
Exhibit 3.3(b)
SUBORDINATED PROMISSORY NOTE
, 1995
FOR VALUE RECEIVED, Republic Automotive Parts Sales,
Inc., a Delaware corporation (the "Maker"), with offices at 500
Wilson Pike Circle, Suite 115, P.O. Box 2088, Brentwood,
Tennessee 37024, promises to pay to Beacon Auto Parts Company, a
Pennsylvania business trust ("Payee"), at such place as is
designated in writing by the holder of this Note, a principal sum
of $2,000,000 (the "Principal Sum"), in four (4) equal annual
installments of $500,000, commencing on the first anniversary of
the Closing Date (as defined in the Agreement referred to below),
and on each of the three subsequent anniversaries of the Closing
Date, with the entire unpaid balance of the Principal Sum of this
Note being due and payable on the fourth anniversary of the
Closing Date. From and after the Closing Date, the balance of
the Principal Sum outstanding from time to time shall bear
interest at 7.055% per annum, all then accrued but unpaid
interest being due and payable on or before the last day of each
calendar quarter commencing with September 30, 1995. Any
payments or prepayments received in respect of this Note shall be
applied first against accrued interest payable hereunder, with
the balance being applied against the remaining scheduled
installments of the Principal Sum in order of maturity thereof.
This Note is issued pursuant to that certain Agreement
of Purchase and Sale of Assets, dated as of June 20, 1995 among
the Maker, Payee and certain other parties (the "Agreement"),
and, among other matters, is subject to the provisions of Section
9.4 of the Agreement; provided that nothing contained in the
Agreement shall impair the rights of the holders of Senior
Indebtedness, as hereinafter defined, under this Note.
Notwithstanding any provision of this Note to the
contrary, the indebtedness evidenced by this Note (including all
interest thereon), and all renewals, extensions and modifications
thereof and hereof, is and shall remain subordinate and junior in
right of payment, to the extent set forth in this Note, to the
prior payment in full of all indebtedness (including principal,
interest, fees and other charges), and any other obligations,
whether direct or contingent, presently existing or hereafter
incurred, of the Maker or its parent company, Republic Automotive
Parts, Inc. ("RAPI"), for money borrowed from, and/or arising out
of any credit facilities and/or any loan agreement(s) with,
Comerica Bank ("Bank") and/or to any successor to Bank and/or to
any one or more banks or other lending institutions which shall
repay a portion or all of the indebtedness or obligations of the
Maker or RAPI to Bank or any such successor in the future, or
which otherwise shall become the primary institutional lenders to
RAPI or the Maker, and/or under guaranties from time to time by
the Maker and/or RAPI of any of such indebtedness or obligations,
all as the same may be refinanced, restated, modified or amended
from time to time (collectively, "Senior Indebtedness"). No
payments of, nor any cancellation, set-off or discharge of, nor
any transfer of collateral in respect of, any principal or
interest shall be made, given or received hereunder or in respect
of the indebtedness evidenced by this Note, nor shall any holder
of this Note be entitled to demand or accept payment of any
amount due or payable under this Note, whether by acceleration or
upon demand by reason of the occurrence of an Event of Default
(as hereinafter defined), at maturity, or otherwise, nor shall
the holder hereof be entitled to declare an acceleration or
demand immediate payment of the indebtedness evidenced by this
Note, until the Senior Indebtedness shall have been paid in full,
if there shall have occurred and be continuing a default in the
payment of principal and/or interest under Senior Indebtedness,
or a default under any financial covenant of the Maker or RAPI
under Senior Indebtedness which shall have occurred and be
continuing or would occur or exist by reason of such payment
under this Note which has not been waived by Bank or the then
holder(s) of such Senior Indebtedness. All payments and
distributions which would otherwise be payable or deliverable in
respect of this Note (but for the terms hereof) shall be paid or
delivered directly to the holders of Senior Indebtedness at the
time outstanding, ratably, until all such Senior Indebtedness
shall have been paid in full. If any payment, distribution or
collateral shall be received by any holder of this Note in
contravention of any of the terms hereof and before all Senior
Indebtedness shall have been paid in full, such payment,
distribution or collateral shall be held in trust for the benefit
of, and shall be paid over or delivered to, the holders of the
Senior Indebtedness at the time outstanding for application to
the payment of all Senior Indebtedness remaining unpaid, ratably,
to the extent necessary to pay all such Senior Indebtedness in
full. Nothing in this paragraph shall impair or qualify, as
among the Maker and the holder hereof, the obligation of the
Maker to pay the holder hereof the principal of and interest on
this Note when and as due as set forth elsewhere herein, subject,
however, to the rights of the holders of Senior Indebtedness, and
to the provisions as to subordination, as provided herein.
In the event of any liquidation, dissolution or any
other winding up of the Maker or in the event of any
receivership, insolvency, bankruptcy, assignment for the benefit
of creditors, reorganization or arrangement with creditors,
whether or not pursuant to bankruptcy laws, or any other
marshalling of the assets or liabilities of the Maker, or any
proceeding as to any of the foregoing, (i) Senior Indebtedness
shall first be paid in full before the holder of this Note shall
be entitled to receive any moneys, dividends or assets in any
such proceeding, and (ii) the holder of this Note will at the
request of the holders of the Senior Indebtedness file any claim,
proof of claim or other instrument of similar character necessary
to enforce the obligations of the Maker in respect of this Note
and will hold in trust for the holders of the Senior Indebtedness
and pay over to them, in the form received, to be applied to
Senior Indebtedness, pro rata, any and all moneys, dividends or
other assets, received in any such proceeding on account of this
Note, until the Senior Indebtedness shall be paid in full. In
the event that the holder of this Note shall fail to take such
action requested by the holders of Senior Indebtedness, such
holders may, as attorneys-in-fact for the holder of this Note,
and are hereby irrevocably authorized by the holder hereof to,
take such action on behalf of the holder of this Note as shall be
necessary to effect or in furtherance of the provisions of this
paragraph, and without limiting the generality of the foregoing:
(i) to enforce claims under this Note either in
their own name or the name of the holder hereof by proof of debt,
proof of claim, suit or otherwise;
(ii) to vote in their sole discretion in
connection with any resolution, arrangement, plan of
reorganization, compromise, settlement or extension and to take
all such other action, including, without limitation, the right
to participate in any composition of creditors and the right to
vote this Note at creditors' meetings; and
(iii) to take generally any action in connection
with any such proceeding or meeting which the holder hereof might
otherwise take.
No payment or distribution to the holder of any Senior
Indebtedness as contemplated by the provisions of this Note shall
entitle the holder hereof to exercise any rights of subrogation
in respect thereof until all Senior Indebtedness shall have been
paid in full; and, for the purposes of such subrogation, payments
or distributions to the holder of any Senior Indebtedness of any
cash, property or securities to which the holder hereof would be
entitled except for the provisions of this Note shall, as between
the Maker and its creditors other than the holders of Senior
Indebtedness and the holder hereof, be deemed to be a payment by
the Maker to or on account of the Senior Indebtedness, it being
understood that the provisions of this Note are for the purpose
of defining the relative rights of the holder hereof, on the one
hand, and the holders of Senior Indebtedness on the other hand.
The holders of the Senior Indebtedness may, at any time
and from time to time, without consent of or notice to the holder
of this Note and without impairing or releasing any of the rights
of the holders of Senior Indebtedness under this Note, effect,
consent to and/or permit, and the rights and interests of the
holders of the Senior Indebtedness under this Note shall remain
in full force and effect irrespective of, any of the following:
(i) any change in the terms of the Senior
Indebtedness, including the amount, time, place, manner or terms
of payment, or any amendment or waiver of any agreement relating
to Senior Indebtedness;
(ii) any sale, exchange or release of or any
other dealing with any property by whomsoever at any time pledged
or mortgaged to secure the Senior Indebtedness, other than a
provision expressly prohibiting the payment of this Note as a
device to avoid the obligation hereunder to make such payment;
(iii) any release of anyone liable in any manner
for the payment and collection of Senior Indebtedness;
(iv) any exercise or refraining from the
exercise of any rights against the Maker or others, including the
holder of this Note;
(v) any application of any funds received by
holders of Senior Indebtedness by whomsoever paid or however
realized to the Senior Indebtedness; or
(vi) any other circumstance which might
otherwise constitute a defense available to any holder hereof as
against any holder of Senior Indebtedness.
The provisions of this Note as to the rights of the
holders of Senior Indebtedness and the obligations of the holder
hereof with respect to the Senior Indebtedness shall continue to
be effective or be reinstated, as the case may be, if at any time
any payment of any of the Senior Indebtedness is rescinded or
must otherwise be returned by the holder thereof upon the
insolvency, bankruptcy or reorganization of any party hereto or
otherwise, all as though such payment had not been made.
Without intending in any manner to limit or affect the
subordination of Payee's rights to the rights and interests of
Bank and any other holder(s) of Senior Indebtedness, and subject
to the limitations set forth herein, if the Maker shall grant to
Bank or any other holder(s) of Senior Indebtedness security
interests in any substantial portion of the accounts receivable
and inventory and other assets of the Maker, as collateral
security for the Senior Indebtedness (subject to the exceptions
set forth herein the "Senior Indebtedness Collateral"), the Maker
shall promptly notify Payee of such grant, and agrees to promptly
grant to Payee a security interest in such Senior Indebtedness
Collateral as security for the indebtedness evidenced by this
Note, subject, however, to the satisfaction and with the
restrictions of each of the following conditions and
requirements, each of which shall be binding upon Payee:
(i) The Senior Indebtedness Collateral shall not include
any deposits or credits of the Maker or other assets in
the possession or control of Bank or any other
holder(s) of Senior Indebtedness or any proceeds
thereof and the granting by the Maker of security
interests therein or liens thereon to Bank or such
holder(s) shall not give rise to any of rights of Payee
hereunder.
(ii) The Maker shall be entitled to grant one or more
security interests to Bank or other holder(s) of Senior
Indebtedness in connection with the financing of
specific real estate and/or construction projects or
acquisitions, and/or vehicle, computer or other
equipment financing(s), without giving rise to any
rights of Payee hereunder and such real estate,
vehicles and computers and other equipment and any
proceeds thereof shall not be considered Senior
Indebtedness Collateral and the granting of any
security interests therein or liens thereon to Bank or
other holder(s) of Senior Indebtedness shall not give
rise to any rights of Payee hereunder.
(iii) The grant of such security interest(s) to Payee shall
be in the Senior Indebtedness Collateral only, as
limited hereby and subordinate to Bank or other
holder(s) of Senior Indebtedness.
(iv) Any and all documents necessary or appropriate to grant
and perfect such security interest(s) to Payee in the
Senior Indebtedness Collateral shall be executed by the
Maker in form and substance satisfactory to Payee and
the Maker and, with respect to the subordination
provisions herein, subject to approval as to form and
substance by Bank or other holder(s) of Senior
Indebtedness.
(v) In any event, the following provisions shall apply,
without further notice, writing, consent or
acknowledgement of Payee, the Maker, Bank or the
holder(s) of Senior Indebtedness, to the subordination
of any and all security interest(s) which may be
granted to Payee in any Senior Indebtedness Collateral:
1. Bank or the holder(s) of Senior Indebtedness may
take possession of and may exercise all of its
rights to realize upon the Senior Indebtedness
Collateral without regard to any interest of Payee
in the Senior Indebtedness Collateral. Bank's or
the holder(s)' of Senior Indebtedness rights shall
include without limit the right to liquidate the
Senior Indebtedness Collateral in whatever order
and manner as Bank or the holder(s) of Senior
Indebtedness deems advisable, the right to
compromise claims for the Senior Indebtedness
Collateral, and the right to incur expenses in
connection with the exercise of these rights,
without consulting with, notifying, or obtaining
the approval of Payee, except to the extent, if
any, required by law and not waived in writing by
Payee. Payee will not take any action, make any
demand, give any notice or exercise any right in
connection with any foreclosure of, or realization
upon, the Senior Indebtedness Collateral.
2. Should any of the Senior Indebtedness Collateral
be received by Payee, Payee shall promptly notify
Bank or the holder(s) of Senior Indebtedness and,
upon demand by Bank or the holder(s) of Senior
Indebtedness, immediately deliver the same to Bank
or the holder(s) of Senior Indebtedness in the
form received (except for endorsement or
assignment by Payee where required by Bank or the
holder(s) of Senior Indebtedness) and, until so
delivered, the same shall be held in trust by
Payee as the property of Bank or the holder(s) of
Senior Indebtedness. In the event of failure of
Payee to make any endorsement or assignment, Bank
or the holder(s) of Senior Indebtedness, or any
Bank or the holder(s) of Senior Indebtedness agent
or employee, is irrevocably authorized and
appointed as attorney-in-fact for Payee to make
the same in the name of Payee.
3. Payee, without the written consent of Bank or the
holder(s) of Senior Indebtedness, shall not make
or permit any assignment, transfer, pledge or
disposition of all or any part of any interest
which Payee may acquire with respect to the Senior
Indebtedness Collateral or any part of it (except
that Payee may release its interest). Payee
agrees to execute a UCC-3 and all other financing
statements requested by Bank or the holder(s) of
Senior Indebtedness in order to evidence and
perfect Bank's or the holder(s)' of Senior
Indebtedness rights and interests.
4. The relative priorities of Bank or the holder(s)
of Senior Indebtedness and Payee with respect to
the Senior Indebtedness Collateral as set forth
herein shall control irrespective of the time,
method or order of attachment or perfection of the
liens and security interests acquired by any of
such parties in the Senior Indebtedness Collateral
and irrespective of the priorities as would
otherwise be determined by reference to the
Uniform Commercial Code or other applicable laws.
5. From time to time, Bank or the holder(s) of Senior
Indebtedness may enter into any agreements with
the Maker or any party who may have pledged
property or be responsible for payment of any
Senior Indebtedness, as Bank or the holder(s) of
Senior Indebtedness may determine, extending the
time of payment or renewing or otherwise altering
the terms of all or any of the Senior Indebtedness
and the agreements related to it or the Senior
Indebtedness Collateral or affecting any security
(including without limit the Senior Indebtedness
Collateral), pledge, or guaranty for it, or may
exchange, sell, release, surrender or otherwise
deal with any such security (including without
limit the Senior Indebtedness Collateral), pledge,
or guaranty or may release any balance of funds of
the maker with Bank or the holder(s) of Senior
Indebtedness, without notice to Payee and without
in any way impairing or affecting the
subordination provided for herein.
6. Payee further waives any and all other notices
from Bank or any holder(s) of Senior Indebtedness
to which Payee might otherwise be entitled. Payee
acknowledges and agrees that Bank's or the
holder(s)' of Senior Indebtedness rights under
this subordination are not conditioned upon
pursuit by Bank or the holder(s) of Senior
Indebtedness of any remedy Bank or the holder(s)
of Senior Indebtedness may have against the Maker
or any other person or any other security.
7. Payee acknowledges and agrees that Bank or the
holder(s) of Senior Indebtedness has no obligation
to acquire or perfect any lien on or security
interest in any assets, whether realty or
personalty, to secure payment of the Senior
Indebtedness.
8. Bank or the holder(s) of Senior Indebtedness shall
have no duty to enforce or protect any rights
which Payee may have against the Maker or any
other person.
9. If after receipt of any payment of any part of the
Senior Indebtedness, Bank or the holder(s) of
Senior Indebtedness is for any reason compelled to
surrender that payment to any person or entity,
because that payment is determined to be void or
voidable as a preference, impermissible setoff,
diversion of trust funds or for any other reason,
then to the extent of that payment, the Senior
Indebtedness shall be automatically revived and
Bank's or the holder(s)' of Senior Indebtedness
rights under this subordination shall be
automatically continued in effect without
reduction or discharge for that payment. Further,
this subordination shall continue in full force
notwithstanding any contrary action which may have
been taken by Bank or the holder(s) of Senior
Indebtedness in reliance upon that payment
(including, without limit, surrender or
termination of this subordination) and any such
contrary action so taken, shall be without
prejudice to Bank's or the holder(s)' of Senior
Indebtedness's rights under this subordination and
shall be deemed to have been conditioned upon that
payment having become final and irrevocable.
10. Payee waives any right to require Bank or the
holder(s) of Senior Indebtedness to: (a) give
notice of the terms, time and place of any public
or private sale of personal property security held
from the Maker or any other person, or otherwise
comply with the provisions of Section 9-504 of the
Michigan or other applicable Uniform Commercial
Code; and (b) pursue any other remedy in Bank's or
the holder(s)' of Senior Indebtedness power.
11. The priorities of any liens or security interests
of the parties in any property of the Maker other
than the Senior Indebtedness Collateral are not
affected by this subordination and shall be
determined by reference to applicable law. The
Bank's or the holder(s)' of Senior Indebtedness
rights under this subordination are in addition
to, and not in substitution of, its rights under
any other subordination agreement of the Payee.
12. Payee waives all rights to require Bank or the
holder(s) of Senior Indebtedness to marshall the
Senior Indebtedness Collateral or any other
property Bank or the holder(s) of Senior
Indebtedness may at any time have as security for
the Senior Indebtedness and waives all right to
require Bank or the holder(s) of Senior
Indebtedness to first proceed against any
guarantor or other person before proceeding
against the Senior Indebtedness Collateral.
13. Payee shall not contest the validity, priority or
perfection of any security interest in the Senior
Indebtedness Collateral of Bank or the holder(s)
of Senior Indebtedness. The priorities of the
parties in the Senior Indebtedness Collateral
shall be in accordance with this subordination,
regardless of whether any security interest in the
Senior Indebtedness Collateral of Bank or the
holder(s) of Senior Indebtedness is valid or
perfected.
14. Except as otherwise provided in this
subordination, all terms in this subordination
have the meanings as assigned to them in Article 9
(or, absent definition in Article 9, in any other
Article) of the Uniform Commercial Code, as of the
date of this Note.
15. Payee agrees to reimburse Bank or the holder(s) of
Senior Indebtedness for any and all costs and
expenses (including, without limit, court costs
and reasonable attorney fees whether inside or
outside counsel is used, whether or not suit is
instituted and, if instituted, whether at the
trial or appellate level, in a bankruptcy, probate
or administrative proceeding, or otherwise)
incurred in enforcing any of the duties and
obligations of Payee under this subordination.
16. PAYEE AND BANK OR THE HOLDER(S) OF SENIOR
INDEBTEDNESS ACKNOWLEDGE THAT THE RIGHT TO TRIAL
BY JURY IS A CONSTITUTIONAL ONE, BUT THAT IT MAY
BE WAIVED. EACH PARTY, AFTER CONSULTING (OR
HAVING HAD THE OPPORTUNITY TO CONSULT) WITH
COUNSEL OF THEIR CHOICE, KNOWINGLY AND
VOLUNTARILY, AND FOR THEIR MUTUAL BENEFIT, WAIVES
ANY RIGHT TO TRIAL BY JURY IN THE EVENT OF
LITIGATION REGARDING THE PERFORMANCE OR
ENFORCEMENT OF, OR IN ANY WAY RELATED TO, THIS
SUBORDINATION.
Anything to the contrary contained in the preceding
provisions regarding Senior Indebtedness Collateral
notwithstanding, in lieu of agreeing to grant to Payee any
security interests in the Senior Indebtedness Collateral, the
Maker, at its option, shall be entitled to elect to declare all
subordination provisions of this Note to be of no further force
or effect, and if Bank or the holder(s) of the Senior
Indebtedness shall, in their sole discretion, consent in writing
to such declaration, this Note shall no longer be deemed
subordinate to Senior Indebtedness and any and all rights with
respect to the granting of security interests in the Senior
Indebtedness Collateral shall be deemed of no further force or
effect.
The holder of this Note, by acceptance of same,
absolutely agrees to be bound by all of the provisions hereof
relating to the subordination of the indebtedness evidenced by
this Note to the Senior Indebtedness and/or the rights of the
holders of Senior Indebtedness and the obligations of the holder
hereof with respect thereto, in each case for the benefit of the
holders of such Senior Indebtedness. Such provisions of this
Note shall inure to the benefit of the holders of the Senior
Indebtedness and their respective successors and assigns and
shall be binding upon the holder hereof and its successors and
assigns.
If an Event of Default (as hereinafter defined) shall
occur: then, at the option of the holder hereof, but subject
always to the subordination provisions hereof and/or the rights
of the holders of Senior Indebtedness and the obligations of the
holder hereof with respect thereto, this Note shall upon
presentment become immediately due and payable.
Payee accepts this Note based solely on Payee's
independent investigation of (or decision not to investigate) the
financial condition of the Maker or RAPI and is not relying on
any information furnished by Bank. Payee assumes full
responsibility for obtaining any further information concerning
the Maker's or RAPI's financial condition, the status of the
Senior Indebtedness or any other matter which Payee may deem
necessary or appropriate now or later. Payee waives any duty on
the part of the Maker or Bank or any other holder of Senior
Indebtedness, and agrees that Payee is not relying upon nor
expecting any of them to disclose to Payee any fact now or later
known by Bank or any other holder of Senior Indebtedness, whether
relating to the operations or condition of the Maker or RAPI, the
existence, liabilities or financial condition of any guarantor of
the Senior Indebtedness, the occurrence of any default with
respect to the Senior Indebtedness, or otherwise, notwithstanding
any effect such fact may have upon Payee's risk or Payee's rights
against the Maker or RAPI. Payee knowingly accepts the full
range of risk encompassed in this Note, which risk includes,
without limit, the possibility that the Maker or RAPI may incur
Senior Indebtedness to Bank or any other holder of Senior
Indebtedness after the financial condition of the Maker or RAPI,
or its ability to pay the Maker's or RAPI's debts as they mature,
has deteriorated. Payee represents that neither Bank or any
other holder of Senior Indebtedness has made any representation
to Payee as to the creditworthiness of the Maker or RAPI.
An "Event of Default" shall be deemed to have occurred
hereunder if and only if (a), except as provided in Section 9.4
of the Agreement, the Maker shall fail to make any payment under
this Note when due and such failure shall not be cured within 30
days following written notice thereof from the holder of this
Note to the Maker; or (b) the Maker shall approve of, consent to
or acquiesce in the appointment of a trustee, receiver,
liquidator, custodian, sequestrator or similar official
(collectively, "Custodians") for itself or substantially all of
its assets; or (c) a Custodian shall be appointed for the Maker
without its consent, or for substantially all of its assets, and
such appointment shall not be terminated or stayed within 90
days; or (d) any voluntary bankruptcy proceeding shall be
commenced by the Maker, as debtor; or (e) any involuntary
bankruptcy proceeding commenced against the Maker shall not be
dismissed or stayed within 90 days or an order for relief is
granted against the Maker in such proceeding.
If an Event of Default shall occur and be continuing,
the interest rate of this Note shall, from the date of such Event
of Default and thereafter so long as such Event of Default shall
continue unwaived or uncured, be increased to ten percent (10%)
per annum.
This Note may be prepaid in whole or in part at any
time without penalty or premium.
Payee shall be entitled to recover reasonable
attorneys' fees incurred in the collection of the indebtedness
evidenced by this Note.
This Note may not be changed or terminated orally.
This Note is being entered into for the benefit of the holders
from time to time of the Senior Indebtedness and the provisions
hereof may be enforced by such holders. The provisions of this
Note pertaining to the subordination hereof to the Senior
Indebtedness and the rights of the holders of the Senior
Indebtedness set forth herein may not be amended or modified in
any manner which will impair or adversely affect the rights of
the holders of Senior Indebtedness without the written consent of
the holders of Senior Indebtedness.
REPUBLIC AUTOMOTIVE PARTS SALES,
INC.
By:____________________________
Its:___________________________
ACCEPTED AND AGREED TO:
BEACON AUTO PARTS COMPANY
By:__________________________
Fred J. Pisciotta, Trustee
GUARANTY
GUARANTY, dated as of _____________, 1995, made by
Republic Automotive Parts, Inc., a Delaware corporation
("Guarantor"), in favor of Beacon Auto Parts Company, a
Pennsylvania business trust ("Obligee").
W I T N E S S E T H:
For good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged by Guarantor,
Guarantor hereby agrees as follows:
1. Guarantor, as primary obligor and not merely as
surety, hereby unconditionally and irrevocably guarantees to
Obligee and its successors and assigns, the due and punctual
payment when and as due of all obligations of Republic Automotive
Parts Sales, Inc., a Delaware corporation ("Obligor"), under the
foregoing Subordinated Promissory Note (the "Note") issued as of
the date hereof by Obligor to Obligee, pursuant to that certain
Agreement of Purchase and Sale of Assets dated as of June ____,
1995, among Obligor, Guarantor, Obligee and certain other
parties, unless payment thereof is then suspended pursuant to the
terms of the Note, it being understood that Guarantor's
obligations under this Guaranty shall be subject to, and governed
by, the subordination provisions set forth in the Note, as if set
forth in full herein.
2. Subject to the provisions of paragraph 1 above,
Guarantor hereby waives any requirement that Obligee make any
demand, commence suit, or exercise any other right or remedy
under the Note prior to enforcing its rights against Guarantor
hereunder and Guarantor hereby understands and consents to
Obligee proceeding directly against Guarantor in the first
instance without prior claim or demand on Obligor. Guarantor
waives diligence, presentment, protest, demand for payment and/or
notice of default or nonpayment to or upon Guarantor or of any
other type whatsoever with respect to the Note.
IN WITNESS WHEREOF, the undersigned has duly executed
and delivered this Guaranty as of the day and year first above
written.
REPUBLIC AUTOMOTIVE PARTS,
INC.
By:____________________________
ACCEPTED AND AGREED TO:
BEACON AUTO PARTS COMPANY
By: ______________________________
Fred J. Pisciotta, Trustee
SCHEDULE 7.7
Beacon Auto Parts Company
Distributor Sales Company
Greene Motor Equipment Company
Auto Parts Distributors
SCHEDULE 4.5(b)
ESTIMATED STATEMENT OF ASSETS AND PAYABLES
Prepared in accordance with Schedule 2.1(i)
At Closing Date
(c) Fixed Asset/Goodwill Value $5,172,000.00
(d)(i) Inventory Value
Beaver Falls x.xx
Cheswick x.xx
Cranberry x.xx
Export x.xx
Finleyville x.xx
Forest Hills x.xx
Greene x.xx
Greensburg x.xx
Irwin x.xx
Jeannette x.xx
Latrobe x.xx
Monroeville x.xx
New Castle x.xx
North Hills x.xx
Oakland x.xx
Oakmont x.xx
Penn Hills x.xx
Pittsburgh x.xx
Plum x.xx
Shaler x.xx
Unity Auto x.xx
Washington x.xx
West Liberty x.xx
Vendor rebates 0.00
---------
$9,060,000.00
(e) Receivables Value x.xx
100.00%
---------
1,731,000.00
(f) Prepaids Value
Supplies/forms x.xx
Prepaid rent x.xx
Petty cash at stores x.xx
Other prepaids x.xx
---------
118,000.00
(g) Accounts Payable and
Other Liabilities
Trade payables x.xx
Accrued expenses x.xx
---------
(3,895,000.00)
-------------
(j) Estimated Purchase Price 12,186,000.00
(k) RAPI Shares (1,000,000.00)
Note (2,000,000.00)
-------------
9,186,000.00
90%
Cash Payment ------------
$8,267,400.00
============
EXHIBIT 2
---------
FIFTH AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
THIS AGREEMENT, dated as of the 5th day of July, 1995 by and
between REPUBLIC AUTOMOTIVE PARTS, INC., a Delaware corporation,
of Brentwood, Tennessee (herein called "Company") and COMERICA
BANK, a Michigan banking corporation, successor in interest by
reason of merger to Manufacturers Bank, N.A., formerly known as
Manufacturers National Bank of Detroit, of Detroit, Michigan
(herein called "Bank");
WHEREAS, Company and Bank entered into a Fourth Amended and
Restated Revolving Credit Agreement dated May 1, 1994 ("Existing
Revolving Credit Agreement").
WHEREAS, Company and Bank desire to amend and restate the
Existing Revolving Credit Agreement;
NOW THEREFORE, the Existing Revolving Credit Agreement is
hereby amended and restated in its entirety as follows:
WITNESSETH:
1. DEFINITIONS
For the purposes of this Agreement the following terms will
have the following meanings:
"Acquisition Capital Expenditures" shall mean with respect
to any period, capital expenditures during such period which are
made as part of an acquisition by Company or a Subsidiary which
is permitted pursuant to the provisions of Section 8.5.
"Activation Fee" shall mean the fee payable to the Bank in
connection with each activation of the Unutilized Commitment in
the amount of 2.5 basis points times that portion of the
Unutilized Commitment thereby activated.
"Adjusted Total Liabilities to Worth Ratio" shall mean the
ratio of the sum of (a) Consolidated total liabilities plus (b)
guarantees of notes executed by jobbers under the terms and
conditions of the Company's presently existing jobber financing
program, to Tangible Net Worth.
"Advance" shall mean a borrowing requested by Company and
made by Bank under this Agreement, including any refunding or
conversions of such borrowing pursuant to Section 2.7 hereof, and
shall include a Quoted Rate Advance, a Eurodollar-based Advance,
and/or a Prime-based Advance.
"Alternate Base Rate" shall mean for any day a rate per
annum equal to the Federal Funds Effective Rate in effect on such
day plus one percent (1%).
"Applicable Interest Rate" shall mean the Quoted Rate, the
Eurodollar-based Rate, or the Prime-based Rate, as selected by
Company from time to time subject to the terms and conditions of
this Agreement.
"Business Day" shall mean any day on which commercial banks
are open for domestic and international business (including
dealings in foreign exchange) in Detroit, London and New York.
"Cash Flow Coverage Ratio" shall mean as of any date of
determination, a ratio, the numerator of which is earnings for
the four preceding fiscal quarters ending as of such date of
determination before interest expense for such period, taxes for
such period and depreciation and amortization for such period,
plus the increase if any in the LIFO Reserve during such period
and the denominator of which is interest expense and taxes for
such period, plus an amount equal to all scheduled payments of
principal with respect to Long Term Debt during such period, plus
all scheduled payments with respect to capitalized leases during
such period, plus the amount of all capital expenditures (except
Acquisition Capital Expenditures) during such period, all as
determined in accordance with GAAP on a Consolidated basis for
Company and its Consolidated Subsidiaries. In determining the
Cash Flow Coverage Ratio, principal payments with respect to
Advances shall be excluded.
"Consolidated" shall be construed to include all of
Company's Subsidiaries as hereafter defined.
"Current Ratio" shall mean the ratio of current assets to
current liabilities.
"Eligible Account" shall mean an account arising in the
ordinary course of Company's or any Subsidiary's business which
meets each of the following requirements:
(a) it is not owing more than sixty (60) days after the
date of the original invoice or other writing
evidencing such account;
(b) it is not owing by an account debtor who shall have
failed to pay twenty five percent (25%) or more of the
aggregate amount of its accounts then owing to Company
or any Subsidiary within sixty (60) days after the date
of the respective invoices or other writings evidencing
such accounts;
(c) if it arises from the sale or lease of goods, such
goods have been shipped or delivered to the account
debtor under such account; if it arises from services
rendered, such services have been performed;
(d) it is evidenced by an invoice, dated not later than
five (5) days after the date of shipment or
performance, rendered to such account debtor or some
other evidence of billing acceptable to Bank and is not
evidenced by any instrument or chattel paper;
(e) it is a valid, legally enforceable obligation of the
account debtor thereunder, and is not subject to any
offset, counterclaim or other defense on the part of
such account debtor or to any claim on the part of such
account debtor denying liability thereunder in whole or
in part;
(f) it is not owing by Company or any Subsidiary to the
other;
(g) it is not owing by an account debtor whose obligations
Bank, acting in its sole discretion and in good faith,
shall have notified Company in writing are not deemed
to constitute Eligible Accounts; and
(h) it is not subject to any sale of accounts, assignment,
lien or security interest whatsoever other than to
Bank.
An account which is at any time an Eligible Account, but which
subsequently fails to meet any of the foregoing requirements,
shall forthwith cease to be an Eligible Account.
"Eligible Inventory" shall mean all of Company's or any
Subsidiary's inventory, excluding (i) any raw materials or work
in process and (ii) inventory subject to any liens (including
without limitation, liens permitted under this Agreement), and
shall be valued at the lesser of cost (on a first-in, first-out
basis) or present market value and without giving effect to any
LIFO Reserve adjustments.
"ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended, or any successor act or code.
"Environmental Laws" shall mean all federal, state and local
laws including statutes, regulations, ordinances, codes, rules,
and other governmental restrictions and requirements, relating to
environmental pollution, contamination or other impairment of any
nature, any hazardous or other toxic substances of any nature,
whether liquid, solid and/or gaseous, including smoke, vapor,
fumes, soot, acids, alkalis, chemicals, wastes, by-products, and
recycled materials. These Environmental Laws shall include but
not be limited to the Federal Solid Waste Disposal Act, the
Federal Clean Air Act, the Federal Clean Water Act, the Federal
Resource Conservation and Recovery Act of 1976, the Federal
Comprehensive Environmental Response, Compensation and Liability
Act of 1980, the Federal Superfund Amendments and Reauthorization
Act of 1986, regulations of the Environmental Protection Agency,
regulations of the Nuclear Regulatory Agency, regulations of any
state department of natural resources or state environmental
protection agency now or at any time hereafter in effect and
local health department ordinances.
"Eurodollar-based Advance" shall mean an Advance which bears
interest at the Eurodollar-based Rate.
"Eurodollar-based Rate" means a per annum interest rate
which is the sum of the Margin, plus the quotient of:
(a) the per annum interest rate at which Bank's Euro-dollar
Lending Office offers deposits to prime banks in the
eurodollar market in an amount comparable to the
relevant Eurodollar-based Advance and for a period
equal to the relevant Eurodollar-Interest Period at
approximately 11:00 a.m. Detroit time two (2) Business
Days prior to the first day of such Eurodollar-Interest
Period;
divided by
(b) a percentage equal to 100% minus that percentage which
is in effect on the date of such Eurodollar-based
Advance, as prescribed by the Board of Governors of the
Federal Reserve System (or any successor) for
determining the maximum reserve requirements for a
member bank of the Federal Reserve System with deposits
exceeding five billion dollars in respect of "Euro-
currency Liabilities" (or in respect of any other
category of liabilities which includes deposits by
reference to which the interest rate on Eurodollar
loans is determined or any category of extensions of
credit or other assets which includes loans by a non-
United States Eurodollar Lending Office of Bank to
United States residents).
"Eurodollar-Interest Period" shall mean an Interest Period
of one (1), two (2), three (3) or six (6) months as selected by
Company pursuant to Section 2.5 or 2.7 of this Agreement.
"Eurodollar Lending Office" shall mean Bank's office located
at Grand Cayman Island, British West Indies or such other branch
of Bank, domestic or foreign, as it may hereafter designate as
its Eurodollar Lending Office by notice to Company.
"Federal Funds Effective Rate" shall mean, for any day, a
fluctuating interest rate per annum equal to the weighted average
of the rates on overnight Federal funds transactions with members
of the Federal Reserve System arranged by Federal funds brokers,
as published for such day (or, if such day is not a Business Day,
for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day
which is a Business Day, the average of the quotations for such
day on such transactions received by Bank from three Federal
funds brokers of recognized standing selected by it.
"Guaranty" shall mean a guaranty of payment in the form
attached hereto as Exhibit "C".
"Interest Period" shall mean either a Eurodollar-Interest
Period or a Quoted Rate-Interest Period commencing on the day a
Quoted Rate Advance or a Eurodollar-based Advance is made, as the
case may be, provided that:
(a) any Interest Period which would otherwise end on a day
which is not a Business Day shall be extended to the
next succeeding Business Day, except that as to a
Eurodollar-Interest Period, if the next succeeding
Business Day falls in another calendar month, the
Eurodollar-Interest Period shall end on the next
preceding Business Day, and when a Eurodollar-Interest
Period begins on a day which has no numerically
corresponding day in the calendar month during which
such Eurodollar-Interest Period is to end, it shall end
on the last Business Day of such calendar month, and
(b) no Interest Period shall extend beyond the maturity
date set forth in the Revolving Credit Note.
"Letter(s) of Credit" shall have the meaning set forth in
Section 3.1.
"Loan Document" shall mean this Agreement, the Notes (as
defined below) and any collateral document and other documents
and instruments executed and delivered in connection therewith.
"Long Term Debt" shall mean the Consolidated long term
indebtedness of Company, excluding all debt specifically
subordinated to the indebtedness under this Agreement, in form
satisfactory to the Bank, but including the following:
(a) all payments for Consolidated long term debt which
shall become due within one year (except to the extent
such debt is specifically subordinated to the
indebtedness under this Agreement, in form satisfactory
to the Bank);
(b) unfunded ERISA liability;
(c) capitalized leases;
(d) any Subsidiary's indebtedness for borrowed money
(except to the extent such debt is specifically
subordinated to the indebtedness under this Agreement,
in form satisfactory to the Bank), including any
capitalized leases, including said debt or capitalized
leases whether or not they have been guaranteed by
Company.
"Long Term Debt to Worth Ratio" shall mean the ratio of Long
Term Debt to Tangible Net Worth.
"Margin" shall mean, as of any date of determination
thereof, the applicable interest rate margin, determined in
accordance with the provisions of Section 4.7 hereof by reference
to the appropriate columns in the pricing matrix attached to this
Agreement as Schedule 4.7.
"Material Adverse Change or Effect" shall mean with respect
to any matter that such matter could reasonably be expected to
materially and adversely affect the business, properties,
condition (financial or otherwise), or results of operations of
Company and its Subsidiaries, in each case considered as a whole.
"Net Working Capital" shall mean the dollar amount computed
by subtracting current liabilities from current assets, including
in current liabilities all payments under the Revolving Credit
Note which shall fall due within one year; provided, however, for
purposes of this computation, all prepaid items shall be excluded
from current assets.
"Pension Plans" shall mean all pension plans of Company or
any Subsidiary which are subject to ERISA whether existing on the
date of this Agreement, or hereinafter created, maintained or
assumed.
"Prime Rate" shall mean the per annum interest rate
established by Bank as its prime rate for its borrowers as such
rate may vary from time to time, which rate is not necessarily
the lowest rate on loans made by Bank at any such time.
"Prime-based Rate" shall mean that per annum rate of
interest which is the sum of the Margin plus the greater of (i)
the Prime Rate, or (ii) the Alternate Base Rate.
"Prime-based Advance" shall mean an advance which bears
interest at the Prime-based Rate.
"Quoted Rate" means for any day a per annum rate of
interest, other than the Prime-based Rate or Eurodollar-based
Rate, which is quoted by Bank and accepted by Company as the
applicable interest rate with respect to a Quoted Rate Advance
hereunder.
"Quoted Rate Advance" means an Advance which bears interest
at the Quoted Rate.
"Quoted Rate-Interest Period" shall mean an Interest Period
of one (1) to one hundred eighty (180) days as selected by
Company pursuant to Section 2.5 or 2.7 of this Agreement.
"Request for Advance" shall mean a Request for Advance
issued by Company under this Agreement in the form annexed to
this Agreement as Exhibit "B".
"Revolving Credit Commitment" shall mean Thirty Five Million
Dollars ($35,000,000), subject to termination under Sections 10
and 11.2 hereof.
"Revolving Credit Note" shall mean the Revolving Credit Note
issued by Company under this Agreement in the form annexed hereto
as Exhibit "A".
"Subsidiary" shall mean a corporation of which more than
fifty percent (50%) of the outstanding voting stock is owned by
Company, either directly or indirectly through one or more
intermediaries.
"Tangible Net Worth" shall mean the dollar amount computed
by subtracting total liabilities from total assets and
subtracting from such amount goodwill and other intangible
assets.
"Unsecured Obligations" shall mean all indebtedness and
obligations for borrowed money of Company or any Subsidiary,
determined on a consolidated basis, including without duplication
or limitation:
(a) unfunded ERISA liability;
(b) any letter of credit reimbursement obligations and any
obligations under any guaranty of any obligation of
persons other than Company and the Subsidiaries for
borrowed money or which has been incurred in connection
with the acquisition of assets, including without
limitation any and all agreements, contingent or
otherwise, to support the obligations of such persons;
and
(c) capitalized leases;
but excluding:
(a) endorsement by Company or any Subsidiary in the
ordinary course of business of negotiable instruments
or documents for deposit or collection;
(b) guaranties of Subsidiaries' or Company's indebtedness
to Bank;
(c) indebtedness of Company and/or any one or more
Subsidiaries or guaranties thereof by Company and/or
any one or more Subsidiaries to third party sellers or
designees or assignees incurred solely for the purpose
of an acquisition by Company or any one or more
Subsidiaries permitted pursuant to Section 8.5(a), (b)
and (c) hereof;
(d) indebtedness (including capitalized lease obligations)
secured by the liens permitted in Section 8.6 hereof.
"Utilized Commitment" shall mean that portion of the
Revolving Credit Commitment designed by Company from time to time
in writing to Bank pursuant to Section 2.10 hereof as the active
portion thereof and shall be an amount equal to the Revolving
Credit Commitment less the Unutilized Commitment. As of the date
of this Agreement, the Utilized Commitment shall be $35,000,000.
"Unutilized Commitment" shall mean the amount designated by
Company from time to time in writing to Bank pursuant to Section
2.9 hereof as the inactive portion of the Revolving Credit
Commitment, and shall be an amount equal to the Revolving Credit
Commitment less than Utilized Commitment. As of the date of this
Agreement, the Unutilized Commitment shall be $0.
2. THE INDEBTEDNESS: Revolving Credit
2.1 Bank agrees to make Advances to Company at any time and
from time to time from the effective date hereof until April 30,
1999, not to exceed the Revolving Credit Commitment in aggregate
principal amount at any one time outstanding (subject to
reduction as provided in Section 11.2 hereof). All of the
Advances hereunder shall be evidenced by the Revolving Credit
Note under which advances, repayments and readvances may be made,
subject to the terms and conditions of this Agreement.
2.2 The Revolving Credit Note shall mature on April 30,
1999, and each Advance from time to time outstanding thereunder
shall bear interest at its Applicable Interest Rate. The amount
and date of each Advance, its Applicable Interest Rate, its
Interest Period, and the amount and date of any repayment shall
be noted on Bank's records, which records shall be conclusive
evidence thereof. Advances outstanding under the Existing
Revolving Credit Agreement shall be deemed to be Advances
hereunder with the same Applicable Interest Rates and Interest
Periods, if any. Interest accrued and unpaid under the Existing
Revolving Credit Agreement shall be deemed to have accrued under
this Agreement.
2.3 Interest on the unpaid balance of all Prime-based
Advances from time to time outstanding, shall be payable
quarterly commencing on October 1, 1995. Interest accruing at the
Prime-based Rate shall be computed on the basis of a year of 360
days and assessed for the actual number of days elapsed, from the
first day of any Prime-based Advance to but not including the
last day thereof and in such computation effect shall be given to
any change in the Prime-based Rate resulting from a change in the
Prime-based Rate on the date of such change in the Prime-based
Rate.
2.4 Interest on each Quoted Rate Advance and each
Eurodollar-based Advance shall be payable on the last day of the
Interest Period applicable thereto and if such Interest Period is
longer than three (3) months, interest shall be payable at
intervals of three (3) months after the first day thereof.
Interest accruing at the Quoted Rate or the Eurodollar-based Rate
shall be computed on the basis of a 360 day year and assessed for
the actual number of days elapsed from the first day of the
Interest Period applicable thereto to but not including the last
day thereof.
2.5 Company may request an Advance upon the delivery to
Bank of a Request for Advance executed on behalf of Company by an
authorized officer of Company, subject to the following:
(a) each such Request for Advance shall set forth the
information required on the Request for Advance form
annexed hereto as Exhibit "B";
(b) each such Request for Advance shall be delivered to
Bank by 12 noon four (4) Business Days prior to the
proposed date of Advance in the case of Eurodollar-
based Advances, and by 11:00 a.m. on the proposed date
of Advance in the case of Prime-based Advances and
Quoted Rate Advances;
(c) except with respect to Prime-based Advances, the
principal amount of such Advance, plus the amount of
any outstanding indebtedness to be then combined
therewith having the same Applicable Interest Rate and
Interest Period, if any, shall be at least Five Hundred
Thousand Dollars ($500,000);
(d) a Request for Advance, once delivered to Bank, shall
not be revocable by Company.
2.6 Company may prepay all or part of the outstanding
balance of the Prime-based Advance(s) under the Revolving Credit
Note at any time. Upon four (4) Business Days prior notice to
Bank, Company may prepay all or part of any Quoted Rate Advance
or Eurodollar-based Advance on the last day of the Interest
Period applicable thereto, provided that the amount of any such
partial prepayment shall be at least Five Hundred Thousand
Dollars ($500,000) and the unpaid portion of such Advance which
is refunded or converted under Section 2.7 shall be subject to
the limitations set forth in subsection (c) thereof. Any
prepayment made in accordance with this Section 2.6 shall be
without premium, penalty or prejudice to Company's right to
reborrow under the terms of this Agreement. Any other prepayment
shall be restricted by Section 4.1 hereof.
2.7 Company may refund any Advance in the same type of
Advance or convert any Advance to any other type of Advance upon
the delivery to Bank of a Request for Advance, subject to the
following:
(a) each such Request for Advance shall set forth the
information required on the Request for Advance form
annexed hereto as Exhibit "B";
(b) each such Request for Advance shall be delivered to
Bank by 12 noon four (4) Business Days prior to the
proposed date of refunding or conversion in the case of
Eurodollar-based Advances, and by 11:00 a.m. on the
proposed date of refunding or conversion in the case of
Prime-based Advances and Quoted Rate Advances;
(c) except with respect to Prime-based Advances, the amount
to be converted or refunded, plus the amount of any
outstanding indebtedness to be then combined therewith
having the same Applicable Interest Rate and Interest
Period, if any, shall be at least Five Hundred Thousand
Dollars ($500,000);
(d) the proposed date of any refunding or conversion of any
outstanding Quoted Rate Advance or Eurodollar-based
Advance shall only be on the last day of the Interest
Period applicable thereto;
(e) a Request for Advance, once delivered to Bank, shall
not be revocable by Company.
If, as to any outstanding Quoted Rate Advance or Eurodollar-based
Advance, Bank shall not receive a timely Request for Advance with
regard to the refunding or conversion thereof the principal
amount thereof which is not then prepaid shall be automatically
converted to a Prime-based Advance on the last day of the
Interest Period applicable thereto.
2.8 From the date hereof to (but excluding) April 30, 1999,
Company shall pay to Bank a revolving credit commitment fee
consisting of the sum of:
(a) Twenty basis points (.20%) per annum times the
average daily amount by which the Utilized Commitment then
in effect exceeds the sum of (i) the aggregate principal
amount of Advances outstanding from time to time during such
period, and (ii) the aggregate daily undrawn amount of any
Letters of Credit during such period, calculated on a daily
basis; and
(b) Ten basis points (.10%) per annum times the
Unutilized Commitment then in effect (if any) calculated on
a daily basis.
The revolving credit commitment fee shall be payable quarterly in
arrears commencing October 1, 1995, and on the first day of each
calendar quarter thereafter and on April 30, 1999, and shall be
computed on the basis of a year of three hundred sixty (360) days
and assessed for the actual number of days elapsed. Whenever any
payment of the revolving credit commitment fee shall be due on a
day which is not a Business Day, the date for payment thereof
shall be extended to the next Business Day. The revolving credit
commitment fee shall not be refundable under any circumstances.
Commitment fees accrued and unpaid under the Existing Revolving
Credit Agreement shall be deemed to have accrued hereunder and
shall be payable on October 1, 1995.
2.9 Company may at any time and from time to time, upon at
least three (3) Business Days' prior written notice to the Agent,
subject to the provisions of Section 2.10, designate a portion of
the Utilized Commitment portion of the Revolving Credit
Commitment at any time so designated, to be a portion of the
Unutilized Commitment portion of the Revolving Credit Commitment
as not presently available for borrowing hereunder, provided that
(i) each such designation shall be in an aggregate amount equal
to at least One Million Dollars ($1,000,000) or a larger amount
in multiples of One Million Dollars ($1,000,000); provided,
however, the Unutilized Commitment may not exceed Fifteen Million
Dollars ($15,000,000); (ii) Company shall prepay in accordance
with the terms hereof the amount, if any, by which the aggregate
unpaid principal amount of Advances, plus the aggregate amount of
any outstanding Letters of Credit, exceeds the amount of the
Utilized Commitment portion of the Revolving Credit Commitment,
taking into account the aforesaid designation under this Section
2.9, together with accrued but unpaid interest on the principal
amount of such prepaid Advances to the date of prepayment; (iii)
if the designation under this Section 2.9 requires the prepayment
of a Eurodollar-based Advance or Quoted Rate Advance, such
designation may be effective only on the last Business Day of the
then current Interest Period applicable to such Eurodollar-based
Advance or Quoted Rate Advance and (iv) no such designation shall
reduce the amount of the Utilized Commitment to an amount which
is less than the sum of the aggregate undrawn amount of any
Letters of Credit outstanding at such time. The Utilized
Commitment shall be reduced by the aggregate amount so designated
under this Section 2.9 as the Utilized Commitment upon the
effective date of each such designation and the Unutilized
Commitment shall increase by the amount so designated.
2.10 Provided that no default or event of default has
occurred and is continuing on both the date of request and the
date of proposed activation, Company may, upon not less than
three (3) Business Days' prior written notice to the Bank elect
to activate all or any part of the Unutilized Commitment,
provided that on or before the requested date for activation,
Company shall pay to the Bank, the Activation Fee; and provided
further that each such activation shall be in an aggregate amount
of at least One Million Dollars ($1,000,000) or a larger amount
in multiples of One Million Dollars ($1,000,000). Each activation
of the Unutilized Commitment shall remain in effect (and shall
not be reduced by a subsequent designation under Section 2.9
hereof) for a period of not less than ninety (90) consecutive
days. Upon the effectiveness of any activation of the Unutilized
Commitment under this Section 2.10, the Unutilized Commitment
shall decrease by the amount so activated and the Utilized
Commitment shall increase by the amount so activated.
3. LETTERS OF CREDIT
3.1 In addition to Advances under the Revolving Credit Note
to be provided to Company by Bank under and pursuant to Section
2.1 of this Agreement, Bank agrees to issue, or commit to issue,
from time to time, standby and trade letters of credit for the
account of Company (herein individually called a "Letter of
Credit" and collectively, "Letters of Credit") in aggregate
undrawn amounts not to exceed Five Million Dollars ("5,000,000)
at any one time outstanding; provided, however, that the sum of
the aggregate amount of Advances outstanding under the Revolving
Credit Note plus the aggregate amount of outstanding Letters of
Credit shall not exceed at any one time the then amount of the
Utilized Commitment; and provided further that each Letter of
Credit shall be in form acceptable to Bank and no Letter of
Credit shall, by its terms, have an expiration date which extends
beyond the earlier to occur of (i) one year after its date of
issuance and (ii) April 30, 1999. In addition to the terms and
conditions of this Agreement, the issuance of any Letters of
Credit shall also be subject to the terms and conditions of any
letter of credit applications and agreements executed and
delivered by Company unto Bank with respect thereto. Company
shall pay to Bank annually in advance a fee of 3/4% per annum of
the amount of each standby Letter of Credit. Fees for trade
letters of credit shall be as quoted by Bank to Company and shall
be paid upon issuance of each such trade letter of credit.
4. SPECIAL PROVISIONS, CHANGES IN CIRCUMSTANCES AND YIELD
PROTECTION.
4.1 If Company makes any payment of principal with respect
to any Eurodollar-based Advance or Quoted Rate Advance on any day
other than the last day of the Interest Period applicable thereto
(whether voluntarily, by acceleration, or otherwise), or if the
Company fails to borrow any Eurodollar-based Advance or Quoted
Rate Advance after notice has been given by the Borrower to Bank
in accordance with the terms hereof requesting such Advance, or
the Company fails to make any payment when due of principal or
interest in respect of a Eurodollar-based Advance or Quoted Rate
Advance, the Company shall reimburse Bank on demand for any
resulting loss, cost or expense incurred by Bank as a result
thereof, including, without limitation, any such loss, cost or
expense incurred in obtaining, liquidating, employing or
redeploying deposits from third parties, whether or not the Bank
shall have funded or committed to fund such Advance. Such amount
payable by the Company to Bank may include, without limitation,
an amount equal to the excess, if any, of (a) the amount of
interest which would have accrued on the amount so prepaid, or
not so borrowed, refunded or converted, for the period from the
date of such prepayment or of such failure to borrow, refund or
convert, through the last day of the relevant Interest Period, at
the applicable rate of interest for said Advance(s) provided
under this Agreement, over (b) the amount of interest (as
reasonably determined by Bank) which would have accrued to Bank
on such amount by placing such amount on deposit for a comparable
period with leading banks in the interbank eurodollar market.
Calculation of any amounts payable to Bank under this paragraph
shall be made as though Bank shall have actually funded or
committed to fund the relevant Eurodollar-based Advance or Quoted
Rate Advance through the purchase of an underlying deposit in an
amount equal to the amount of such Advance and having a maturity
comparable to the relevant Interest Period; provided, however,
that Bank may fund any Eurodollar-based Advance or Quoted Rate
Advance in any manner it deems fit and the foregoing assumptions
shall be utilized only for the purpose of the calculation of
amounts payable under this paragraph. Upon the written request of
the Company, Bank shall deliver to the Borrower a certificate
setting forth the basis for determining such losses, costs and
expenses, which certificate shall be conclusively presumed
correct, absent manifest error.
4.2 For any Interest Period for which the Applicable
Interest Rate is the Eurodollar-based Rate, if Bank shall
designate a Eurodollar Lending Office which maintains books
separate from those of the rest of Bank, Bank shall have the
option of maintaining and carrying the relevant Advance on the
books of such Eurodollar Lending Office.
4.3 If, with respect to any Interest Period, Bank
determines that, by reason of circumstances affecting the foreign
exchange and interbank markets generally, deposits in Eurodollars
in the applicable amounts are not being offered to the Bank for
such Interest Period, then Bank shall forthwith give notice
thereof to the Company. Thereafter until Bank notifies Company
that such circumstances no longer exist, the obligation of Bank
to make Eurodollar-based Advances, and the right of Company to
convert an Advance to or refund an Advance as a Eurodollar-based
Advance shall be suspended.
4.4 If, after the date hereof, the introduction of, or any
change in, any applicable law, rule or regulation or in the
interpretation or administration thereof by any governmental
authority charged with the interpretation or administration
thereof, or compliance by Bank (or its Eurodollar Lending Office)
with any request or directive (whether or not having the force of
law) of any such authority issued after the date hereof, shall
make it unlawful or impossible for the Bank (or its Eurodollar
Lending Office) to honor its obligations hereunder to make or
maintain any Advance with interest at the Eurodollar-based Rate,
Bank shall forthwith give notice thereof to Company. Thereafter
(a) the obligations of Bank to make Eurodollar-based Advances and
the right of Company to convert an Advance or refund an Advance
as a Eurodollar-based Advance shall be suspended, and thereafter
Company may select as Applicable Interest Rates only those which
remain available, and (b) if Bank may not lawfully continue to
maintain an outstanding Advance to the end of the then current
Interest Period applicable thereto, the Prime-based Rate shall be
the Applicable Interest Rate for the remainder of such Interest
Period with respect to such outstanding Advance(s).
4.5 If the adoption after the date hereof, or any change
after the date hereof in, any applicable law, rule or regulation
of any governmental authority, central bank or comparable agency
charged with the interpretation or administration thereof, or
compliance by Bank (or its Eurodollar Lending Office) with any
request or directive (whether or not having the force of law)
made by any such authority, central bank or comparable agency
after the date hereof:
(a) shall subject Bank (or its Eurodollar Lending Office)
to any tax, duty or other charge with respect to the
Revolving Credit Note or any Advance hereunder or shall
change the basis of taxation of payments to Bank (or
its Eurodollar Lending Office) of the principal of or
interest on any Advance or any other amounts due under
the Revolving Credit Note or this Agreement in respect
thereof (except for changes in the rate of tax on the
overall net income of Bank or its Eurodollar Lending
Office imposed by the jurisdiction in which Bank's
principal executive office or Eurodollar Lending Office
is located) or
(b) shall impose, modify or deem applicable any reserve
(including, without limitation, any imposed by the
Board of Governors of the Federal Reserve System),
special deposit or similar requirement against assets
of, deposits with or for the account of, or credit
extended by Bank (or its Eurodollar Lending Office) or
shall impose on Bank (or its Eurodollar Lending Office)
or the foreign exchange and interbank markets any other
condition affecting any Advance or the Revolving Credit
Note under this Agreement;
and the result of any of the foregoing is to increase the cost to
Bank of maintaining any part of the indebtedness hereunder or to
reduce the amount of any sum received by Bank hereunder or under
the Revolving Credit Note by an amount deemed by the Bank to be
material, then Bank shall, after demand by Bank, promptly notify
Company of such fact and demand compensation therefor and, within
fifteen (15) days after demand by Bank, Company agrees to pay to
Bank such additional amount or amounts as will compensate Bank
for such increased cost or reduction. Bank will promptly notify
Company of any event of which it has knowledge which will entitle
Bank to compensation pursuant to this Section. A certificate of
Bank setting forth the basis for determining such additional
amount or amounts necessary to compensate Bank shall be deemed
conclusively correct save for manifest error.
4.6 In the event that at any time after the date of this
Agreement any change in law such as described in Sections 4.4 and
4.5, hereof, shall, in the opinion of Bank require that the
unused portion of the credit provided under this Agreement be
treated as an asset or otherwise be included for purposes of
calculating the appropriate amount of capital to be maintained by
Bank or any corporation controlling Bank, Bank shall notify
Company. Company and Bank shall thereafter negotiate in good
faith an agreement to increase the commitment fee payable to
Bank, which will adequately compensate the Bank for the costs
associated with such change in law. If such increase is approved
in writing by Company within thirty (30) days from the date of
the notice to Company from Bank, the commitment fee payable by
Company under this Agreement shall, effective from the date of
such agreement, include the amount of such agreed increase. If
Company and Bank are unable to agree on such an increase within
thirty (30) days from the date of the notice to Company, Company
shall have the option, exercised by written notice to Bank within
sixty (60) days from the date of the aforesaid notice to Company
from Bank, to terminate this Agreement, in which event, all sums
then outstanding to Bank hereunder shall be due and payable in
full. If (a) Company and Bank fail to agree on an increase in the
commitment fee, or (b) Company fails to give timely notice that
it has elected to exercise its option to terminate this Agreement
as set forth above, then this agreement shall automatically
terminate as of the last day of the aforesaid sixty (60) day
period, in which event all sums then outstanding to Bank
hereunder shall be due and payable in full.
4.7 Adjustments in the Margin, based on the financial
covenants as set forth in Schedule 4.7, shall be implemented on a
quarterly basis as follows:
(a) Such Margin adjustments shall be given prospective
effect only, effective on the first day of the first
month following the required date of delivery of the
financial statements under Section 7.1(a) and 7.1(b)
hereof, establishing applicability of the appropriate
adjustments, of any. In any event the Borrower fails
timely to deliver the financial statements required
under Section 7.1(a) and 7.1(b), then from the date
such financial statements were required to be delivered
until the date of delivery of such financial
statements, the Margin shall be the highest Margin set
forth in the pricing matrix attached as Schedule 4.7.
(b) An adjustment hereunder, after becoming effective,
shall remain in effect only until the first day of the
first month following the delivery of quarterly
financial statements, as aforesaid, demonstrating any
change in the applicable financial covenants or the
occurrence of any event which under the terms hereof
causes such adjustment no longer to be applicable, then
any such subsequent adjustment or no adjustment, as the
case may be, shall be effective (and said pricing shall
thereby be adjusted up or down, as applicable), in
accordance with subparagraph (a), above.
(c) Such Margin adjustments under this Section 4.7 shall be
made irrespective of, and in addition to, any other
interest rate or Margin adjustments hereunder.
4.8 Notwithstanding anything contained herein to the
contrary, amounts reserved by Company for payment in connection
with a certain previously disclosed litigation shall not be
considered Long Term Debt or a contingent, current or long-term
liability of Company for purposes of this Agreement until, and
then only to the extent of, such amount, if any, shall be paid or
actually become due and payable (after the termination of all
appeals).
5. CONDITIONS
5.1 Company agrees to furnish Bank at the time of the
initial borrowing hereunder with (i) certified copies of
resolutions of the Board of Directors of the Subsidiaries
evidencing approval of their respective guaranties, and (ii) a
Guaranty of each Subsidiary guarantying to Bank the repayment of
the indebtedness of Company hereunder; and, prior to any
borrowing under this Agreement following the refinancing of the
Company's outstanding indebtedness under the Existing Revolving
Credit Agreement, in form to be satisfactory to Bank, (a) with an
opinion of Company's and Subsidiaries' counsel to the effect that
the execution, delivery and performance of this Agreement, and
the issuance of the Revolving Credit Note by Company, and the
execution, delivery and performance by Subsidiaries of the
Guaranties, are within their respective corporate powers, have
been duly authorized by all necessary corporate action thereof
and are not in contravention of the terms of Company's or
Subsidiaries' respective certificates of incorporation or bylaws,
and (b) with certified copies of the resolutions of the Board of
Directors of Company evidencing approval of the borrowing
hereunder.
5.2 Bank shall not be obligated to make any Advance if at
the time of the Request for Advance, the Unsecured Obligations,
plus the amount requested should exceed the sum of:
(a) seventy percent (70%) of Company's and Subsidiaries'
Eligible Accounts; and
(b) fifty percent (50%) of Company's and Subsidiaries'
Eligible Inventory, with no maximum limit.
5.3 Bank shall not be obligated to make any Advance if at
the time of the Request for Advance, the outstanding Advances,
plus the undrawn amount of outstanding Letters of Credit, plus
the aggregate amount of unreimbursed drawings under Letters of
Credit when added to the requested Advance exceeds the Utilized
Commitment.
6. REPRESENTATIONS AND WARRANTIES
Company represents and warrants and such representations and
warranties shall be deemed to be continuing representations and
warranties during the entire life of this Agreement:
6.1 Company and each Subsidiary is a corporation duly
organized and existing in good standing under the laws of their
respective jurisdictions, of incorporation; they are duly
qualified and authorized to do business as a foreign corporation
in each jurisdiction where the character of its assets or the
nature of its activities makes such qualification necessary.
6.2 The execution, delivery and performance of this
Agreement, any other documents and instruments required under
this Agreement to which Company is a party, and the issuance of
the Revolving Credit Note by Company, and the execution, delivery
and performance by Subsidiaries of the Guaranties, are within
their respective corporate powers, have been duly authorized, are
not in contravention of law or the terms of Company's or
Subsidiaries' Articles of Incorporation or Bylaws, and do not
require the consent or approval of any governmental body, agency
or authority; and this Agreement, the Revolving Credit Note, any
other documents and instruments required under this Agreement to
which Company is a party, and the Guaranties when issued and
delivered under this Agreement, will be valid and binding in
accordance with their terms.
6.3 The execution, delivery and performance of this
Agreement and any other documents and instruments required under
this Agreement to which Company is a party, and the issuance of
the Revolving Credit Note by Company, and the execution, delivery
and performance by Subsidiaries of the Guaranties are not in
contravention of the unwaived terms of any indenture, agreement
or undertaking to which Company or any Subsidiary is a party or
by which it is bound.
6.4 No litigation or other proceeding before any court or
administrative agency is pending, or to the knowledge of the
officers of Company is threatened against Company, the outcome of
which is likely to result in a Material Adverse Change or Effect.
6.5 There are no security interests in, liens, mortgages,
or other encumbrances on any of Company's or Subsidiaries'
assets, except to Bank, or as permitted in this Agreement.
6.6 There exists no material default under the provisions
of any instrument evidencing any permitted debt or of any
agreement relating thereto.
6.7 As of the date of this Agreement there are no
Subsidiaries of Company other than those executing Guaranties to
Bank as of the date of this Agreement and Company shall not
create any additional Subsidiaries unless at the time the
Subsidiary is created the Subsidiary executes and delivers a
Guaranty to Bank.
6.8 As of the date of this Agreement, neither Company nor
any Subsidiary maintains or contributes to any employee pension
benefit plan subject to title IV of ERISA except the following
plans: (a) Republic Automotive Parts, Inc. Employees' Retirement
Plan; (b) Republic Automotive Parts, Inc. Savings Plan. There is
no "unfunded past service liability" of these Pension Plans as of
the date of this Agreement and there is no accumulated funding
deficiency with respect to the meaning of ERISA, or any existing
liability with respect to the Pension Plans owed to the Pension
Benefit Guaranty Corporation or any successor thereto.
6.9 The consolidated balance sheet of Company and
Subsidiaries and the related income statement, both dated
December 31, 1994, previously furnished Bank, fairly present in
all material respects the financial condition of Company and
Subsidiaries as of the date thereof; since said date there has
been no Material Adverse Change or Effect in the consolidated
financial condition of Company and Subsidiaries; to the knowledge
of Company's president and chief financial officer and except as
disclosed to and accepted in writing by Bank, neither Company nor
any of its Subsidiaries has any material contingent obligations
(including any liability for taxes) of a type required to be
disclosed or reserved against on said financial statements which
has not been so disclosed by or reserved against in said
financial statements or, with respect to subsequent fiscal years,
is not disclosed by or reserved against in the financial
statements delivered pursuant to Section 7.1 for the most recent
fiscal year then ending.
6.10 To the knowledge of Company, Company and the
Subsidiaries are in the conduct of their respective businesses in
all material respects in compliance with all Environmental Laws
and all other federal, state or local laws, statutes, ordinances
and regulations applicable to Company and the Subsidiaries, and
Company and the Subsidiaries has all approvals, authorizations,
consents, licenses, orders and other permits of all governmental
agencies and authorities, whether federal, state or local,
required to permit the operation of its business as presently
conducted, the absence of which would result in a Material
Adverse Change or Effect.
6.11 As of the date of execution of this Agreement, to the
knowledge of Company and except as disclosed to and accepted in
writing by Bank, Company is not, and no Subsidiary is, a party to
any litigation or administrative proceeding, nor is any
litigation or administrative proceeding threatened against
Company or any Subsidiary, which in either case (i) asserts or
alleges that Company or any Subsidiary violated Environmental
Laws, (ii) asserts or alleges that Company or any Subsidiary is
required to clean up, remove, or take remedial or other response
action due to the disposal, depositing, discharge, leaking or
other release of any hazardous substances or materials, (iii)
asserts or alleges that Company or any Subsidiary is required to
pay all or a portion of the cost of any past, present, or future
cleanup, removal or remedial or other response action which
arises out of or is related to the disposal, depositing,
discharge, leaking or other release of any hazardous substances
or materials.
6.12 As of the date of execution of this Agreement, to the
knowledge of Company and except as disclosed to and accepted in
writing by Bank, there are no conditions existing currently or
likely to exist during the term of this Agreement which would
subject Company or any Subsidiary to damages, penalties,
injunction relief or cleanup costs under any applicable
Environmental Laws or which require or are likely to require
cleanup, removal, remedial action or other response pursuant to
applicable Environmental Laws by Company or any Subsidiary.
6.13 As of the date of execution of this Agreement, to the
knowledge of the Company and except as disclosed to and accepted
in writing by Bank, Company is not, and no Subsidiary is, subject
to any judgment, decree, order or citation related to or arising
out of applicable Environmental Laws and Company has not, and no
Subsidiary has, been named or listed as a potentially responsible
party by any governmental body or agency in a matter arising
under any applicable Environmental Laws.
7. AFFIRMATIVE COVENANTS
Company covenants and agrees that it will, so long as Bank
is committed to make any advances under this Agreement and
thereafter so long as any indebtedness remains outstanding under
this Agreement:
7.1 Furnish Bank:
(a) within one hundred twenty (120) days after and as of
the end of each of Company's fiscal years, an audit
report of Company without material qualification
certified to by independent certified public
accountants satisfactory to Bank;
(b) within sixty (60) days after and as of the end of each
quarter, including the last quarter of each fiscal
year, a balance sheet and statement of profit and loss
and surplus reconciliation of Company certified on
behalf of Company by an authorized officer of Company;
(c) within twenty (20) days after and as of the end of each
month, a certificate showing compliance with the
formula required in Section 5.2 hereof, and summary
schedule identifying the Eligible Accounts and aging of
accounts by location, all in form and detail
satisfactory to Bank, and certified on behalf of
Company by a duly authorized officer of Company;
(d) concurrently with the delivery of each of the financial
statements required by Section 7.1(a) and (b) hereof, a
statement prepared and certified on behalf of Company
by the chief financial officer of Company (or in his
absence, a responsible senior officer of Company) (a)
setting forth all computations necessary to show
compliance by Company with each of the covenants
contained in Sections 7.2, 7.3, 7.4, 7.5, 8.3 and 8.4
of this Agreement, (b) stating that as of the date
thereof, no condition or event which constitutes an
event of default hereunder or which with the running of
time and/or the giving of notice would constitute an
event of default hereunder has occurred and is
continuing, or if any such event or condition has
occurred and is continuing or exists, specifying in
detail the nature and period of existence thereof and
any action taken with respect thereto taken or
contemplated to be taken by Company and (c) stating
that the signer has personally reviewed this Agreement
on behalf of Company and that such certificate is based
on an examination sufficient to assure that such
certificate is accurate;
(e) promptly, and in form to be satisfactory to Bank, such
other information as Bank may request from time to
time.
7.2 Maintain Net Working Capital of not less than Twenty
Million Dollars ($20,000,000.00)
7.3 Maintain a Current Ratio of not less than 2.0 to 1.
7.4 Maintain Tangible Net Worth of not less than Twenty
Seven Million Dollars ($27,000,000.00) plus fifty percent (50%)
of Quarterly Net Earnings. "Quarterly Net Earnings" shall mean as
of any date of determination the cumulative positive net earnings
(but not cumulative net loss) of Company computed for the period
beginning April 1, 1995 and ending with the last day of the
fiscal quarter immediately preceding such date of determination.
7.5 Maintain as of the end of each fiscal quarter a Cash
Flow Coverage Ratio of not less than 1.25 to 1.
7.6 Pay and discharge and cause each Subsidiary to pay and
discharge all taxes and other governmental charges and all
contractual obligations calling for the payment of money, before
the same shall become overdue, unless and to the extent only that
such payment is being contested in good faith.
7.7 Maintain and cause each Subsidiary to maintain
insurance coverage on its physical assets and against other
business risks in such amounts and of such types as are
customarily carried by companies similar in size and nature, and
in the event of acquisition of additional property, real or
personal, or of incurrence of additional risks of any nature,
increase such insurance coverage in such manner and to such
extent as prudent business judgment and present practice would
dictate; and in the case of all policies covering property
mortgaged or pledged to Bank or property in which Bank shall have
a security interest of any kind whatsoever, other than those
policies protecting against casualty liabilities to strangers,
all such insurance policies shall provide that the loss payable
thereunder shall be payable to Company and Bank as their
respective interests may appear; all said policies or copies
thereof, including all endorsements thereon and those required
hereunder, to be deposited with Bank.
7.8 Permit Bank, through its authorized attorneys,
accountants, and representatives, to examine Company's and
Subsidiaries' books, accounts, records, ledgers and assets of
every kind and description at all reasonable times upon oral or
written request of Bank.
7.9 Promptly notify Bank of any condition or event which to
the knowledge of Company constitutes or with the running of time
and/or the giving of notice would constitute a default under this
Agreement, and promptly inform Bank of any Material Adverse
Change or Effect.
7.10 Subject to the provisions of Section 9.7 below,
maintain and cause each Subsidiary to maintain in good standing
all licenses required by the states in which they own and operate
assets or carry on their business, or any agency thereof, or
other governmental authority that may be necessary or required
for Company or Subsidiaries to carry on its general business
objects and purposes, except where the failure to maintain such
licenses will not result in a Material Adverse Change or Effect.
7.11 Comply, and cause each Subsidiary to comply in all
material respects with all requirements imposed by ERISA as
presently in effect or hereafter promulgated including, but not
limited to, the minimum funding requirements of any Pension
Plans.
7.12 Promptly notify Bank upon the occurrence thereof of any
of the following events:
(a) the termination of any Pension Plan pursuant to
Subtitle C of Title IV of ERISA or otherwise;
(b) the appointment of a trustee by a United States
District Court to administer any Pension Plan;
(c) the commencement by the Pension Benefit Guaranty
Corporation, or any successor thereto, of any
proceeding to terminate any Pension Plan;
(d) the failure of any Pension Plan to satisfy the minimum
funding requirements for any plan year as established
in Section 412 of the Internal Revenue Code of 1954, as
amended;
(e) the withdrawal of the Company or any of the
Subsidiaries from any Pension Plan;
(f) a reportable event, within the meaning of Title IV of
ERISA, or
(g) the creation of any Pension Plan after the date of this
agreement or the acquisition of the stock or assets of
any entity which maintains a pension plan subject to
ERISA. Nothing set forth in this subsection 7.11(g)
shall be construed to permit Company or any Subsidiary
to create, maintain or assume a Pension Plan or acquire
the stock or assets of any entity not otherwise
permitted under this Agreement.
7.13 Maintain the formulas as set forth in Sections 5.2 and
5.3 of this Agreement and in the event the Unsecured Obligations
shall exceed such formula then Company shall forthwith either pay
to Bank sufficient sums to reduce the indebtedness hereunder, or
pay, reduce, or eliminate other Unsecured Obligations, to comply
with said formula.
8. NEGATIVE COVENANTS
Company covenants and agrees that so long as Bank is
committed to make any advances under this Agreement and
thereafter so long as any indebtedness remains outstanding under
this Agreement, it will not, without the prior written consent of
Bank:
8.1 Enter into any merger or consolidation or sell, lease,
transfer, or dispose of all, substantially all, or any material
part of its assets, except:
(a) in the ordinary course of its business;
(b) a merger or consolidation permitted in Section 8.5
hereof; or
(c) the sale, lease or transfer of assets between Company
and any Subsidiary or between Subsidiaries, provided
that such Subsidiary or Subsidiaries have prior thereto
executed and delivered to Bank a Guaranty and the
assets sold, leased or transferred are not subject to
any security interest or lien (except for liens
permitted under this Agreement).
8.2 Guarantee, endorse, or otherwise become secondarily
liable for or upon the obligations of others, or allow any
Subsidiary to do the same except:
(a) by endorsement for deposit in the ordinary course of
business;
(b) guarantees of Subsidiaries' indebtedness to Bank;
(c) guarantees of notes executed by jobbers under the terms
and conditions of the Company's then existing jobber
financing program; provided, however, that the
outstanding principal and interest outstanding under
said guaranteed notes shall not exceed One Million
Dollars ($1,000,000.00) as of each year;
(d) guaranties by Company or a Subsidiary of obligations of
Company or any Subsidiary so long as the aggregate
liability of Company and its Subsidiaries under such
guarantees does not exceed Fifteen Million Dollars
($15,000,000).
Notwithstanding the foregoing, in no event shall the aggregate
guaranty liability of Company and its Subsidiaries under (d)
above (determined without duplication) and the aggregate amount
of the indebtedness secured by security interests permitted
pursuant to the provisions of Section 8.6(b) exceed Fifteen
Million Dollars ($15,000,000).
8.3 Allow the Long Term Debt to Worth Ratio to exceed
1.25 to 1.
8.4 Allow Adjusted Total Liabilities to Worth Ratio to
exceed 2.1 to 1.
8.5 Purchase or otherwise acquire or become obligated for
the purchase of, or allow any Subsidiary to purchase or become
obligated to purchase, all or substantially all of the assets or
business interests of any person, firm or corporation or any
shares of stock of any corporation, trusteeship or association or
in any manner effectuate or attempt to effectuate an expansion of
present business by acquisition; unless, after giving effect to
the proposed merger or consolidation:
(a) Company is the surviving corporation and Company is not
merged into any Subsidiary;
(b) if the merger or consolidation involves a Subsidiary of
Company, either the Subsidiary is the surviving
corporation or the surviving corporation is a wholly
owned direct or indirect Subsidiary of Company;
(c) Company or any Subsidiary will be engaged in the same
or related line of business, at the wholesale or retail
level, in which they are engaged as of the date of this
Agreement including being in the business of
remanufacturing, repackaging or marketing its own line
of automotive parts and accessories or related items;
and
(d) No event of default or event which, with notice or
lapse of time or both, would constitute an event of
default, has occurred or exists under Section 10
hereof.
8.6 Affirmatively pledge or mortgage, or allow any
Subsidiary to pledge or mortgage, any of their assets, whether
now owned or hereafter acquired, or create or permit to exist any
lien, security interest in, or encumbrance thereon, except for
the following:
(a) to Bank;
(b) (i) purchase money security interests in inventory and
fixed assets solely to secure purchase money
indebtedness of Company or any Subsidiary in connection
with the acquisition of all or part of the inventory or
fixed assets of any person, firm or corporation in an
acquisition permitted pursuant to the provisions of
Section 8.5, or to which such inventory or fixed assets
so acquired are subject at the time of such
acquisition; provided that such security interest is
granted to the seller of the inventory or fixed assets,
is created substantially contemporaneously with the
acquisition of such inventory or fixed assets and does
not extend to any property other than the inventory or
fixed asset so financed, (ii) capitalized leases for
fixed assets solely to secure purchase money or lease
indebtedness of Company or any Subsidiary; provided
that such security interest or lease is created
substantially contemporaneously with the acquisition of
such fixed assets and does not extend to any property
other than the fixed asset so financed and (iii)
purchase money security interests in inventory and
fixed assets covering assets acquired by Company or any
Subsidiary in connection with an acquisition to the
extent the aggregate indebtedness secured thereby does
not exceed Five Hundred Thousand Dollars ($500,000)
excluding any extension or renewal thereof; provided,
however, that the purchase money security interests
permitted under subsections (i), (ii) and (iii) shall
not exceed Fifteen Million Dollars ($15,000,000) in the
aggregate; and provided, further, however, in no event
shall the aggregate amount of the indebtedness secured
by the security interests permitted under subsections
(i), (ii) and (iii) above and the aggregate guaranty
liability of Company and its Subsidiaries under
Sections 8.2(d) (determined without duplication) exceed
Fifteen Million Dollars ($15,000,000). It is expressly
understood and agreed that Company and the Subsidiaries
shall not be entitled to grant purchase money security
interests to vendors of Company or any Subsidiary for
the purchase of any inventory or fixed assets in the
ordinary course of Company's or any Subsidiary's
business, except as permitted above in the case of
assets acquired in connection with an acquisition or in
subsection (c) below;
(c) purchase money security interests in inventory on
consignment solely to secure inventory on consignment
to Company or any Subsidiary not to exceed in the
aggregate the sum of Five Hundred Thousand Dollars
($500,000.00); provided that such security interest is
created substantially contemporaneously with the
consignment of such inventory and does not extend to
any property other than the consigned inventory so
financed;
(d) liens for taxes, assessments or other governmental
charges incurred in the ordinary course of business and
not yet past due or being contested in good faith by
appropriate proceedings and, if requested by Bank,
bonded in a manner satisfactory to Bank;
(e) liens not delinquent created by statute in connection
with workmen's compensation, unemployment insurance,
social security and similar statutory obligations;
(f) liens of mechanics, materialmen, carriers, warehousemen
or other like statutory or common law liens securing
obligations incurred in good faith in the ordinary
course of business that are not yet due and payable or
are being contested in good faith by appropriate
proceedings and, if requested by Bank, bonded in a
manner satisfactory to Bank;
(g) landlord liens arising under law or by the terms of any
leases of real property securing obligations that are
not yet due and payable or are being contested in good
faith;
(h) encumbrances consisting of zoning restrictions, rights-
of-way, easements or other restrictions on the use of
real property, none of which materially impairs the use
of such property by Company or any Subsidiary in the
operation of the business for which it is used and none
of which is violated in any material respect by any
existing or proposed structure or land use;
(i) pledges and deposits not exceeding at any time in
aggregate amount the sum of $1,000,000 made in the
ordinary course of business to secure the performance
of bids, surety, stay appeal or customs bonds or
pledges or deposits for similar purposes.
8.7 Make or allow to remain outstanding any investment in,
or any loans or advances to, any Subsidiary which has not prior
thereto executed and delivered to Bank a guaranty of all of
Company's indebtedness to Bank, substantially in the form of
Exhibit "C".
8.8 Declare or pay any dividends during any four quarter
period in excess (in the aggregate) of the amount of Company's
net income for such four quarter period, as determined in
accordance with generally accepted accounting principles
consistently applied, less current maturities of Company's Long
Term Debt as of the end of such four quarter period.
9. ENVIRONMENTAL PROVISIONS
9.1 Company shall timely comply, or diligently pursue
compliance, and shall cause the Subsidiaries to comply or
diligently pursue compliance, in all material respects with all
applicable Environmental Laws.
9.2 Company shall provide to Bank, promptly upon receipt,
copies of any correspondence, notice, pleading, citation,
indictment, complaint, order, decree, or other document from any
source asserting or alleging a circumstance or condition which
(i) requires or may require a financial cost to Company or any
Subsidiary, (ii) requires or may require cleanup, removal,
remedial action, or similar response by or on the part of Company
or any Subsidiary under applicable Environmental Laws or (iii)
seeks damages or civil, criminal or punitive penalties from
Company or any Subsidiary for an alleged violation of
Environmental Laws, where the aggregate amount of any such costs,
responses, damages or penalties may exceed $100,000 in the
aggregate.
9.3 Company shall promptly notify Bank in writing as soon
as Company becomes aware of any condition or circumstance which
makes the environmental warranties contained in this Agreement
incomplete or inaccurate in any material respect as of any date
(and not just the date such warranties are made).
9.4 In the event of any condition or circumstance that
makes any environmental warranty, representation and/or agreement
incomplete or inaccurate in any material respect as of any date,
Company shall, at its sole expense, if reasonably requested by
Bank, retain an environmental professional consultant, reasonably
acceptable to Bank, to conduct an environmental audit reasonably
satisfactory to Bank regarding the changed condition and/or
circumstance and any environmental concerns arising from that
changed condition and/or circumstance. A copy of the
environmental consultant's report will be promptly delivered to
both Bank and Company upon completion.
9.5 If Company or any Subsidiary, directly or indirectly
through any professional consultant or other representative,
undertakes an environmental audit, assessment or investigation
and the findings or conclusions of such audit, assessment or
investigation disclose (i) contamination of, or adverse effects
on, any real property owned by Company or any Subsidiary at any
time or (ii) a violation of any Environmental law by Company or
any Subsidiary, either or both of which may require a financial
contribution by Company in excess of $100,000 in the aggregate,
Company will promptly provide to Bank, and will cause
Subsidiaries to promptly provide to Bank, upon receipt, copies of
all final findings and conclusions of any such environmental
investigation. Preliminary findings and conclusions shall also be
provided to Bank if final reports have not been completed and
delivered to Bank within 60 days following completion of the
preliminary findings and conclusions.
9.6 Company hereby indemnifies, saves and holds the Bank
and any of its past, present and future officers, directors,
shareholders, employees, representatives and consultants harmless
from any and all loss, damages, suits, penalties, costs,
liabilities and expenses (including but not limited to reasonable
investigation, environmental audit(s), and legal expenses)
arising out of any claim, loss or damage of any property,
injuries to or death of persons, contamination of or adverse
affects on the environment, or any violation of any applicable
Environmental Laws, caused by or in any way related to Company's
or any Subsidiary's real property, or due to any acts of Company
or any Subsidiary, their officers, directors, shareholders,
employees, consultants and/or representatives. In no event shall
Company be liable hereunder for any loss, damages, suits,
penalties, costs, liabilities or expenses (i) arising from any
act of negligence of Bank, or its agents, employees,
representatives or consultants or (ii) arising from any action
taken by Bank while it is in possession of any such real
property.
It is expressly agreed and understood that the provisions
hereof shall and are intended to be continuing and shall survive
the repayment of any indebtedness from Company to Bank.
9.7 Notwithstanding anything to the contrary set forth in
Section 7.9 the Company shall maintain, and shall cause the
Subsidiaries to maintain, all permits, licenses and approvals
required under applicable Environmental Laws.
10. DEFAULTS
10.1 Upon non-payment of the principal or interest due under
the terms of this Agreement or on the Notes when due in
accordance with the terms thereof and continuance of such default
for a period of ten (10) days, the Revolving Credit Note shall
automatically become immediately due and payable, and Bank's
commitment to make further Advances or issue Letters of Credit
under this Agreement shall automatically terminate.
10.2 Upon occurrence of any of the following events of
default:
(a) default in the observance or performance of any of the
conditions, covenants or agreements of Company set
forth in Sections 7.1 through 7.5, 7.9, 7.13, and 8.1
through 8.8, inclusive, hereof and in the case of
default with respect to Section 7.1, continuance
thereof for three (3) Business Days after notice to
Company by Bank;
(b) default in the observance or performance of any of the
other conditions, covenants or agreements of Company
herein set forth and continuance thereof for thirty
(30) days after notice to Company by Bank;
(c) any representation or warranty made by Company herein
or in any instrument submitted pursuant hereto proves
untrue in any material respect;
(d) default in the payment of any other obligation of
Company or any Subsidiary for borrowed money in excess
of $250,000 in the aggregate other than (e) below, or
in the observance or performance of any conditions,
covenants or agreements related or given with respect
thereto, and such default continues beyond any period
of cure therefore and as a result of such default, the
outstanding indebtedness may be accelerated and become
immediately due and payable in full;
(e) defaults in the aggregate amount of $2,000,000 or more
on note(s) owing from time to time by Company or any
Subsidiary to various sellers for acquisitions
permitted in Section 8.5 hereof, and any of such
seller(s) has taken any remedy, whether demand,
acceleration, or otherwise, against Company or any
Subsidiary;
(f) if there shall be any change for any reason whatsoever
in the management of Company by both Keith M. Thompson,
President and Chief Executive Officer, and Donald B.
Hauk, Executive Vice President and Chief Financial
Officer, which could in the sole judgment of Bank
result in a Material Adverse Change or Effect;
then, or at any time thereafter, unless such default is remedied,
Bank may give notice to Company declaring all outstanding
indebtedness hereunder to be due and payable, whereupon the
Revolving Credit Note and all indebtedness then outstanding
hereunder shall immediately become due and payable without
further notice and demand, as the case may be, and Bank's
commitment to make further Advances or issue Letters of Credit
under this Agreement shall automatically terminate.
10.3 If a creditors' committee shall have been appointed for
the business of Company or any Subsidiary; or if Company or any
Subsidiary shall have made a general assignment for the benefit
of creditors or shall have been adjudicated bankrupt, or shall
have filed a voluntary petition in bankruptcy or for
reorganization or to effect a plan or arrangement with creditors;
or shall file an answer to a creditor's petition or other
petition filed against it, admitting the material allegations
thereof for an adjudication in bankruptcy or for reorganization;
or shall have applied for or permitted the appointment of a
receiver or trustee or custodian for any of its property or
assets; or such receiver, trustee or custodian shall have been
appointed for any of its property or assets (otherwise than upon
application or consent of Company or any Subsidiary) and such
receiver, trustee, or custodian so appointed shall not have been
discharged within sixty (60) days after the date of his
appointment; or if an order shall be entered and shall not be
dismissed or stayed within sixty (60) days from its entry,
approving any petition for reorganization of Company or any
Subsidiary; then the Revolving Credit Note and all indebtedness
then outstanding hereunder shall automatically become immediately
due and payable, and Bank's commitment to make further Advances
or issue Letters of Credit under this Agreement shall
automatically terminate.
10.4 From and after the occurrence of any event of default
under this Agreement or any event which automatically causes the
indebtedness outstanding hereunder or under the Revolving Credit
Note to become immediately due and payable, said indebtedness
shall bear interest at three percent (3%) above the Prime-based
Rate as it may vary from time to time, which interest shall be
payable on demand.
10.5 Upon the occurrence and during the continuance of any
Event of Default, Company shall immediately upon demand by Bank
deposit with Bank cash collateral in the amount equal to the
maximum amount available to be drawn at any time under any Letter
of Credit then outstanding.
11. MISCELLANEOUS
11.1 This Agreement shall be binding upon and shall inure to
the benefit of Company and Bank and their respective successors
and assigns, except:
(a) the credit provided for under this Agreement and no
part thereof and no obligation of Bank hereunder shall
be assignable or otherwise transferable by Company; and
(b) Bank may not assign this Agreement or grant a
participation in this credit to another lender without
the prior written consent of Company.
11.2 Company may at any time permanently cancel in writing
the credit provided for under Section 2 of this Agreement without
penalty, provided that (a) Company shall have fully repaid all
principal, accrued interest, accrued fees, accrued deficiency
values, expenses, applicable prepayment penalties (if any) and
any other accrued charges owing by Company under this Agreement
and (b) if any Letters of Credit are outstanding on the effective
date of such cancellation, Company shall have deposited with Bank
cash collateral in an amount equal to the maximum amount
available to be drawn at any time under such outstanding Letters
of Credit.
11.3 Where the character or amount of any asset or liability
or item of income or expense is required to be determined or any
consolidation or other accounting computation is required to be
made for the purposes of this Agreement, it shall be done in
accordance with generally accepted accounting principles
consistently applied.
11.4 No delay or failure of Bank in exercising any right,
power or privilege hereunder shall affect such right, power or
privilege, nor shall any single or partial exercise thereof
preclude any further exercise thereof, or the exercise of any
other power, right or privilege. The rights of Bank under this
Agreement are cumulative and not exclusive of any right or
remedies which Bank would otherwise have.
11.5 All notices with respect to this Agreement shall be
deemed to be completed upon mailing by certified mail to the
following:
To Company:
500 Wilson Pike Circle, Ste. 115
P.O. Box 2008
Brentwood, Tennessee 37024
Attention: Donald B. Hauk,
Executive Vice President and Chief Financial
Officer
with a copy to:
Thomas R. Berner, Esq.
Berner & Berner P.C.
515 Madison Avenue
20th Floor
New York, New York 10022
To Bank:
One Detroit Center
500 Woodward Avenue
Detroit, Michigan 48226
Attention: National Corporate Banking West
11.6 This Agreement and the Revolving Credit Note have been
delivered at Detroit, Michigan, and shall be governed by and
construed and enforced in accordance with the laws of the State
of Michigan. Whenever possible each provision of this Agreement
shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement
shall be prohibited by or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition
or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
11.7 This Agreement shall become effective upon the
execution hereof by Bank and Company.
11.8 In the event Company's obligation to pay interest on
the principal balance of the Revolving Credit Note is or becomes
in excess of the maximum interest rate which Company is permitted
by law to contract or agree to pay, giving due consideration to
the execution date of this Agreement, then, in that event, the
rate of interest shall be deemed to be immediately reduced to
such maximum rate and all previous payments in excess of the
maximum rate shall be deemed to have been payments in reduction
of principal and not of interest.
11.9 This Agreement, the Revolving Credit Note, any Requests
for Advance hereunder and any agreements, certificates, or other
documents given hereunder, contain the entire agreement of the
parties hereto, and none of the parties shall be bound by
anything not expressed in writing. No amendment or waiver of any
provision of this Agreement, nor consent to any departure by
Company therefrom, shall in any event be effective unless the
same shall be in writing and signed by Company and Bank, and then
such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
11.10 Company shall pay all reasonable closing costs and
expenses, including, by way of description and not limitation,
outside attorney fees incurred by Bank in connection with the
commitment, consummation and closing of this Agreement. All of
said amounts required to be paid by Company may if not paid
within thirty (30) days after request for payment, at Bank's
option, be charged by Bank as an advance against the proceeds of
the Revolving Credit Note. All reasonable costs, including
attorney fees, incurred by Bank in reviewing, revising,
protecting or enforcing any of its rights against Company or
defending Bank from any claims or liabilities by any party or
otherwise incurred by Bank in connection with an event of default
or the enforcement of this Agreement or the related documents,
including by way of description and not limitation, such charges
in any court or bankruptcy proceedings or arising out of any
claim or action by any person against Bank which would not have
been asserted were it not for Bank's relationship with Company
hereunder or otherwise, shall also be paid by Company.
11.11 Bank agrees that it will not disclose without the
prior consent of Company (other than to its employees or to its
auditors or counsel) any information with respect to Company or
the Subsidiaries which is furnished pursuant to this Agreement or
any of the related documents or obtained through an examination
pursuant to the provisions of Section 7.8 above, and which is
specifically designated in writing by Company as confidential
information; provided that Bank may disclose any such information
(a) as has become generally available to the public or has been
lawfully obtained by Bank from any third party under no duty of
confidentiality to Company, (b) as may be required or appropriate
in any report, statement or testimony submitted to, or in respect
to any inquiry, by, any municipal, state or federal regulatory
body having or claiming to have jurisdiction over Bank, including
the Board of Governors of the Federal Reserve System of the
United States, the Office of the Comptroller of the Currency or
the Federal Deposit Insurance Corporation or similar
organizations (whether in the United States or elsewhere) or
their successors, (c) as may be required or appropriate in
respect to any summons or subpoena or in connection with any
litigation, (d) in order to comply with any law, order,
regulation or ruling applicable to Bank, and (e) to any
transferee or assignee or to any participant of, or with respect
to, the Notes.
WITNESS the due execution hereof as of the day and year
first above written.
COMERICA BANK REPUBLIC AUTOMOTIVE PARTS, INC.
By: Bradley A. Terryn By:/s/Donald B. Hauk
----------------------------- -----------------------
Its: Vice President Its:Executive Vice President
---------------------------- ------------------------
EXHIBIT "A"
REVOLVING CREDIT NOTE
$35,000,000.00 Detroit, Michigan
July 5, 1995
On or before April 30, 1999, FOR VALUE RECEIVED, REPUBLIC
AUTOMOTIVE PARTS, INC., a Delaware corporation (herein called
"Company") promises to pay to the order of COMERICA BANK, a
Michigan banking corporation, successor in interest by reason of
merger to MANUFACTURERS BANK, N.A. (herein called "Bank") at its
Main Office at One Detroit Center, 500 Woodward Avenue, Detroit,
Michigan, in lawful money of the United States of America the
indebtedness or so much of the sum of THIRTY FIVE MILLION DOLLARS
($35,000,000.00) as may from time to time have been advanced and
then be outstanding hereunder pursuant to the Fifth Amended and
Restated Revolving Credit Agreement dated July 5, 1995, made by
and between Company and Bank (herein called "Agreement") together
with interest thereon as hereinafter set forth.
Each of the Advances made hereunder shall bear interest at
the Quoted Rate, the Eurodollar-based Rate or the Prime-based
Rate as elected by Company or as otherwise determined under the
Agreement.
Interest on the unpaid balance of all Advances shall be
computed and payable in the manner and at the times provided in
the Agreement.
From and after the occurrence of any event of default under
the Agreement or any event which automatically causes the
indebtedness outstanding hereunder to become immediately due and
payable, the indebtedness outstanding hereunder shall bear
interest at three percent (3%) above the Prime-based Rate as it
may vary from time to time, which interest shall be payable
daily.
This Note is a note under which advances, repayments and
readvances may be made from time to time, subject to the terms
and conditions of the Agreement. This Note evidences borrowing
under, is subject to, and may be matured under, the terms of the
Agreement, to which reference is hereby made. Company grants Bank
a lien on all property and assets including deposits and other
credits of the Company, at any time in possession or control of
or owing by Bank for any purpose.
Company hereby waives presentment for payment, demand,
protest and notice of protest and notice of dishonor and
nonpayment of this Note and agrees that no obligation hereunder
shall be discharged by reason of any extension, indulgence,
release, or forbearance granted by any holder of this Note to any
party now or hereafter liable hereon or any present or subsequent
owner of any property, real or personal, which is now or
hereafter security for this Note. Any transferees of, or
endorser, guarantor or surety paying this Note in full shall
succeed to all rights of Bank, and Bank shall be under no further
responsibility for the exercise thereof or the loan evidenced
hereby. Nothing herein shall limit any right granted Bank by
other instrument or by law.
All capitalized terms used but not defined herein shall have
the meanings ascribed to them in the Agreement.
This Note replaces (by renewal) sums outstanding under that
certain Revolving Credit Note dated May 1, 1994, made in the
maximum principal amount of $20,000,000 by Company payable to
Bank.
REPUBLIC AUTOMOTIVE PARTS,
INC.
By:___________________________
Its:__________________________
By:___________________________
Its:__________________________
EXHIBIT "B"
REQUEST FOR ADVANCE
Pursuant to the Fourth Amended and Restated Revolving Credit
Agreement dated July 5, 1995, (herein called "Agreement"), the
undersigned hereby requests COMERICA BANK to make a(an)
* Advance to the undersigned on
___________________, 19___, in the amount of
DOLLARS ($ ) under the
Revolving Credit Note dated July 5, 1995, issued by the
undersigned to said Bank (herein called "Note"). The Interest
Period for the requested Advance, if applicable, shall be
______________________.** The last day of the Interest Period for
the amounts being converted or refunded hereunder, if applicable,
is __________________, 19___.
The undersigned certifies as follows:
(a) that no event has occurred or condition exists which
constitutes, or with the passage of time and/or giving
of notice would constitute, a default under the
Agreement or the Note, and none will exist upon the
making of the Advance requested hereunder;
(b) that upon advancing the sum requested hereunder, the
aggregate principal amount outstanding under the Note
will not exceed the face amount thereof;
(c) that upon advancing the sum requested hereunder, the
undersigned is in compliance with the formula set forth
in Section 5.2 of the Agreement.
The undersigned hereby authorizes said Bank to disburse the
proceeds of this Request for Advance by crediting the account of
the undersigned with Bank separately designated by the
undersigned or as the undersigned may otherwise direct, unless
this Request for Advance is being submitted for a conversion or
refunding, in which case it shall refund or convert that portion
stated above of the existing outstandings under the Note.
*Insert, as applicable, "Quoted Rate", "Eurodollar-based",
or "Prime-based".
**For a Quoted Rate Advance insert, the applicable number of
days. For a Eurodollar-based Advance insert, as applicable, "one
month", "two months", "three months", or "six months".<PAGE>
Dated this _____ day of _________________, 19___.
REPUBLIC AUTOMOTIVE PARTS,
INC.
By:___________________________
Its:__________________________
By:___________________________
Its:__________________________
EXHIBIT "C"
AMENDED AND RESTATED GUARANTY
(Limited)
This Guaranty is executed and delivered on ______________,
199__, by undersigned ("Guarantor") whose address is
to Comerica Bank, successor in
interest by reason of merger to Manufacturers Bank, N.A.,
formerly known as Manufacturers National Bank of Detroit
("Bank"), a Michigan banking corporation of Detroit, Michigan.
WHEREAS, Republic Automotive Parts, Inc. whose address is
("Borrower") desires
to enter into one or more banking transactions with and thereby
become obligated to Bank, for the payment of one or more
Liabilities, as defined below, from time to time, though it may
not be continuously, and/or to obtain other credit accommodations
from Bank from time to time ("Borrower" wherever used herein
shall include any partnership, firm, corporation, or other
organization or entity succeeding in whole or substantial part
whether immediately or otherwise to the business and/or property
with or without the liabilities of the above named Borrower); and
WHEREAS, Guarantor desire(s) to see the success of, and/or
receive(s) direct and/or indirect benefits from the Borrower as
general or limited partner, shareholder, subsidiary, affiliate or
otherwise.
NOW, THEREFORE, for valuable consideration, the receipt and
adequacy of which is hereby acknowledged, and to induce Bank to
enter into banking transactions with or otherwise make credit
accommodations in favor of the Borrower, but subject to the
limitation that Guarantor shall in no event be required under
this Guaranty to pay more than the principal sum of Thirty Five
Million Dollars ($35,000,000), plus interest and other sums
thereon at the rate(s) and otherwise as set forth in the
documents evidencing the Liabilities and Collection Costs (as
defined below), the GUARANTOR HEREBY UNCONDITIONALLY AND
ABSOLUTELY GUARANTEES TO BANK the prompt payment when due,
whether at maturity or on any accelerated or extended payment
date or otherwise, of any and all Liabilities, until such
Liabilities are fully paid and satisfied as to principal,
interest and other sums due and payable thereunder. "Liabilities"
shall mean all indebtedness for borrowed money and all other
monetary obligations of Borrower to Bank whatsoever, present or
future, direct or indirect, absolute or contingent, joint or
several, now or hereafter existing or arising, due or to become
due, howsoever arising or evidenced, including, but not limited
to, any borrowings of Borrower evidenced by Borrower's promissory
notes, obligations of Borrower under any reimbursement or letter
of credit agreements, and obligations of Borrower on any note,
draft or other instrument, whether or not negotiable in form,
upon which Borrower is primarily or secondarily liable, which may
be paid, accepted, purchased or discounted by Bank, whether or
not such indebtedness or obligation is known to Guarantor now or
at the time such indebtedness or obligation is incurred, and all
amendments, renewals or extensions, in whole or in part, of any
such indebtedness or obligations. Guarantor shall also pay, on
demand, any and all expenses (including without limitation
reasonable attorneys' fees) which may be incurred or paid by Bank
in preserving, protecting or enforcing any of its rights or
remedies in connection with, or collecting against Guarantor
under, this Guaranty ("Collection Costs").
Guarantor further agrees as follows:
1. Absolute and Unconditional Obligation. This Guaranty is
a guaranty of payment and not of collection. The obligation of
the Guarantor under this Guaranty (the "Obligation") shall be
absolute and primary, and complete and binding as to each
Guarantor and subject to no condition whatever, precedent or
otherwise, irrespective of the validity, regularity or
enforceability of any of the Liabilities, the absence of any
action to enforce the same, any waiver or consent with respect
thereto, or any failure or delay in the enforcement thereof.
Notice of acceptance hereof or action in reliance hereon shall
not be required. Bank shall be under no obligation to give
Guarantor notice of Borrower's incurring future Liabilities to
Bank or amendments, renewals or extensions of any Liabilities, or
any other fact or matter pertaining to Borrower. Nor shall the
Obligation be affected by the bankruptcy, insolvency,
incompetence or death, or any change in ownership or control, of
the Borrower, or of any other party. The Obligation shall be
independent of and in addition to any similar obligation or other
liability of the Guarantor to Bank.
2. Waiver. Guarantor waives presentment, demand, protest,
notice of protest or dishonor, diligence in collecting the
Liabilities, any requirement first to proceed against the
Borrower or against any guarantor or other party, or to exhaust
any security for the performance of any of the Liabilities. Any
collateral or other security of Borrower or any other party or
any guaranty or other obligation of any party which Bank now or
subsequently holds may be released or otherwise dealt with by
Bank in all respects as though this Guaranty were not in
existence and the Obligation shall be in no way affected thereby,
Guarantor hereby waiving and foregoing all rights in respect of
any action, or failure to act, by Bank regarding such collateral
or other security.
3. Continuing Obligation. The Obligation shall be
continuing and, irrespective of any statute of limitations
otherwise applicable, shall cover all Liabilities incurred by
Borrower before any revocation of this Guaranty becomes effective
as provided below (and shall also include Liabilities of the
Borrower incurred after such revocation pursuant to any agreement
to lend, whether optional or obligatory, existing at the date of
revocation), and as to any Liabilities so incurred, shall
continue until the same are fully paid and satisfied. The
bankruptcy or insolvency of any Guarantor or revocation by any
Guarantor shall not affect the Obligation of any others, but such
others shall continue to be liable for the Liabilities (including
future Liabilities) as though such bankrupt, insolvent or
revoking party had not been a party hereto. Bank may, if it so
desires (but shall not be obligated to do so), file a claim under
this Guaranty in any such bankruptcy or insolvency proceeding,
provided that the continuance of the Obligation in accordance
with this Guaranty shall not be affected thereby.
4. Revocation. Guarantor (or any of them) may revoke this
Guaranty only as herein provided, and not otherwise. Revocation
shall be in writing signed by the revoking party, or, if
deceased, by the personal representative of such party, and shall
be delivered to the President, Cashier, or any Vice President of
Bank in person at Bank, and shall become effective at the opening
of business on the day next succeeding the delivery thereof. Any
such revocation shall have prospective effect only, from and
after the effective date of revocation, and shall not terminate
or otherwise affect the Obligation of the revoking party existing
prior to the effective date of revocation.
5. Subrogation. Guarantor expressly waives any claim for
reimbursement, contribution, indemnity, or subrogation which the
Guarantor may have against the Borrower by reason of payment by
the Guarantor of any of the Liabilities. In the event of the
liquidation, reorganization or bankruptcy of Borrower (whether
voluntary or involuntary) or in the event that Borrower shall
make an arrangement or composition with its creditors or become
subject to any receivership or other insolvency proceedings, Bank
shall be entitled to receive all dividends or other payments with
respect to the Liabilities until its claims have been paid in
full, and Guarantor shall continue to be liable to Bank to the
extent provided herein for any balance of the Liabilities which
may be owing to Bank. If any amount shall be paid to or received
by Guarantor on account of any subrogation rights arising at any
time when all Liabilities shall not have been paid and discharged
in full, such amount shall be held in trust by Guarantor for the
benefit of Bank and shall forthwith be paid to Bank to be
credited and applied against the Obligation.
6. Continued Effectiveness or Reinstatement.
Notwithstanding any prior revocation, termination or discharge
hereof, the effectiveness of this Guaranty shall continue or be
reinstated, as the case may be, in the event that (a) any payment
received or credit given by Bank in respect of the Liabilities is
returned, disgorged or rescinded as a preference, impermissible
setoff, fraudulent conveyance or otherwise under any applicable
state or federal law, including, without limitation, laws
pertaining to bankruptcy or insolvency, in which case this
Guaranty shall thereafter be enforceable against Guarantor as if
such returned, disgorged or rescinded payment or credit had not
been received or given by Bank, and whether or not Bank relied
upon such payment or credit or changed its position as a
consequence thereof; or (b) any liability is imposed, or sought
to be imposed, against Bank relating to the environmental
condition of, or the presence of hazardous or toxic substances
on, in or about, any property mortgaged to Bank by the Borrower,
Guarantor or any other party as collateral (in whole or in part)
for any of the Liabilities, whether such condition is known or
unknown, now exists or subsequently arises (excluding only
conditions which arise after any acquisition by Bank of any such
property, by foreclosure, in lieu of foreclosure or otherwise,
due to the wrongful act or omission of Bank), in which case this
Guaranty shall thereafter be enforceable against Guarantor to the
extent of all liability, costs and expenses (including reasonable
attorneys' fees) incurred by Bank as the direct or indirect
result of any such environmental condition or hazardous or toxic
substances. For purposes of this Guaranty, "environmental
condition" includes, without limitation, conditions existing with
respect to the surface or ground water, drinking water supply,
land surface or subsurface strata and the ambient air; and
"hazardous or toxic substances" shall include any and all
substances now or subsequently determined by any federal, state
or local authority to be hazardous or toxic, or otherwise
regulated by any such authority.
7. General. This Guaranty amends and restates in its
entirety that certain Guaranty dated , executed
and delivered by Guarantor to Bank with respect to the
liabilities of Borrower and may not be amended except by express
written instrument executed by Guarantor and Bank, and no waiver
by any party shall be effective unless given in writing by such
party. The rights and remedies provided for in this Guaranty are
cumulative, and nothing herein shall limit any right or remedy
granted Bank by other instrument or by law. If any term or
provision of this Guaranty or its application to any circumstance
shall, to any extent, be invalid or unenforceable, the remainder
of this Guaranty, or the application of such term or provision to
circumstances other than those as to which it is held invalid or
unenforceable, shall not be affected thereby, and each term and
provision of this Guaranty shall be valid and enforceable to the
fullest extent permitted by law. Captions have been used in this
Guaranty for convenience of reference only, and shall not be
given substantive effect. This Guaranty shall be governed by and
construed in accordance with the laws of the State of Michigan.
This Guaranty has been duly executed and delivered as of the
date set forth above.
Witnesses: [NAME OF SUBSIDIARY]
[a corporation]
By:
Its:
Accepted by:
Comerica Bank
By:
Its:
SCHEDULE 4.7
Adjusted Total
Long Term Debt Liabilities to Eurodollar Prime-based
to Worth Ratio Worth Ratio Margin Margin
Level 1 Less than or equal Less than or 1% 0%
to 1.0 to 1.0 equal to 2.0
to 1.0
Level 2 Greater than 1.0 Greater than 1 1/2% 1/2%
to 1.0 2.0 to 1.0
Based on quarterly direct financial statements for periods ending
March 31, June 30 and September 30 and on fiscal year end audited
financial statements for periods ending December 31. Rates to be
adjusted on the first day of the first month following the month
in which the applicable financial statements are delivered to the
Bank.
If the covenants fall in different levels, the rate opposite the
lowest applicable level will apply. (Level 1 being the highest
and Level 2 being the lowest.)
Until the financial statements for June 30, 1995 are delivered,
Level 1 pricing shall apply.