<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report: September 9, 1999
(Date of Earliest Event Reported)
MACE SECURITY INTERNATIONAL, INC.
(Exact name of Registrant as Specified in its Charter)
Delaware
(State of Incorporation)
0-22810
(Commission File Number)
03-0311630
(IRS Employer Identification No.)
1000 Crawford Place, Suite 400, Mount Laurel, New Jersey 08054
(Address of Principal Executive Offices)
(856) 778-2300
(Registrant's Telephone Number)
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Item 1. Not Applicable.
Item 2. Acquisition of Quaker Car Wash Inc.
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On September 9, 1999, Mace Security International, Inc., a Delaware
corporation (the "Company" or "Registrant"), acquired all of the car wash
related assets of Quaker Car Wash, Inc. ("Hanna Car Wash") pursuant to the terms
of a Car Wash Asset Purchase/Sale Agreement dated August 26, 1998 (collectively
the "Agreement"). Pursuant to the terms and conditions of the Agreement, the
Registrant purchased all of the assets of Sellers used in the business of
operating one full service car wash in Texas. Sellers are not affiliated with
the Registrant nor with any of the Registrant's subsidiaries. The description of
the acquisition transaction set forth herein is qualified in its entirety by
reference to the Agreement which is filed herewith as Exhibit 2.1.
Pursuant to the Asset Purchase/Sale Agreement, Registrant purchased the
assets for a total consideration of $2,850,000 consisting of $1,750,000 worth of
unregistered shares of the Company's common stock, valued at a strike price of
$7.81 per share, and cash of $1,000,000 paid from working capital. The
Registrant intends to continue to use the acquired assets in the business of
operating a full service car wash in Lubbock, Texas. The acquisition is to be
accounted for using the "purchase" method of accounting.
Items 3-6 Not Applicable.
Item 7 Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired.
It is impracticable to provide the required financial statements
of Hanna Car Wash at the time of the filing of this report. The
required financial statements of Hanna Car Wash will be filed
within the time period required in accordance with applicable
regulations and the Securities and Exchange Act of 1934.
(b) Pro Forma Financial Information.
It is impracticable to provide the required pro forma financial
information of Mace Security International, Inc. at the time of
the filing of this report. The required pro forma financial
information of Mace Security International, Inc. will be filed
within the time period required in accordance with applicable
regulations and the Securities and Exchange Act of 1934.
(c) The following Exhibits are hereby filed as part of this
Current Report on Form 8-K.
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2.1 Car Wash Asset Purchase/Sale Agreement dated as of August
26, 1998, between Quaker Car Wash, Inc. and Millennia Car
Wash, LLC
2.2 Amendment one of the Car Wash Asset Purchase/Sale Agreement
dated as of November 23, 1998.
2.3 Amendment two of the Car Wash Asset Purchase/Sale Agreement
dated as of January 6, 1999.
2.4 Amendment three of the Car Wash Asset Purchase/Sale
Agreement dated as of February 26, 1999.
2.5 Amendment four of the Car Wash Asset Purchase/Sale Agreement
dated as of April 7, 1999.
2.6 Amendment five of the Car Wash Asset Purchase/Sale Agreement
dated as of May 10, 1999.
2.7 Amendment six of the Car Wash Asset Purchase/Sale Agreement
dated as of June 25, 1999.
2.8 Amendment seven of the Car Wash Asset Purchase/Sale
Agreement dated as of August 13, 1999.
2.9 Amendment eight of the Car Wash Asset Purchase/Sale
Agreement dated as of August 27, 1999.
99 Press Release dated September 9, 1999.
Items 8-9. Not applicable.
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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.
Date: September 23, 1999 MACE SECURITY INTERNATIONAL, INC.
By:/s/ Gregory M. Krzemien
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Gregory M. Krzemien
Chief Financial Officer and Treasurer
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EXHIBIT INDEX
Exhibit
No. Description
- --- -----------
2.1 Car Wash Asset Purchase/Sale Agreement dated as of August 26,
1998, between Quaker Car Wash, Inc. and Millennia Car Wash, LLC
2.2 Amendment one of the Car Wash Asset Purchase/Sale Agreement
dated as of November 23, 1998.
2.3 Amendment two of the Car Wash Asset Purchase/Sale Agreement
dated as of January 6, 1999.
2.4 Amendment three of the Car Wash Asset Purchase/Sale Agreement
dated as of February 26, 1999.
2.5 Amendment four of the Car Wash Asset Purchase/Sale Agreement
dated as of April 7, 1999.
2.6 Amendment five of the Car Wash Asset Purchase/Sale Agreement
dated as of May 10, 1999.
2.7 Amendment six of the Car Wash Asset Purchase/Sale Agreement dated
as of June 25, 1999.
2.8 Amendment seven of the Car Wash Asset Purchase/Sale Agreement
dated as of August 13, 1999.
2.9 Amendment eight of the Car Wash Asset Purchase/Sale Agreement
dated as of August 27, 1999.
99 Press Release dated September 9, 1999.
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TABLE OF CONTENTS
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RECITALS.................................................. Page 1 of 25
Purchase And Sale of Assets............................... Page 1 of 25
Amount of Purchase Price.................................. Page 3 of 25
Payment of Purchase Price & Commissions................... Page 4 of 25
Documents and Physical Inspection......................... Page 5 of 25
Escrow.................................................... Page 6 of 25
Conditions Precedent to Closing........................... Page 8 of 25
Seller's Representations and Warranties................... Page 10 of 25
Buyer's Representations and Warranties.................... Page 15 of 25
Risk of Loss.............................................. Page 15 of 25
Employees of Sellers...................................... Page 16 of 25
Closing................................................... Page 16 of 25
Environmental Reports..................................... Page 19 of 25
Taxes..................................................... Page 19 of 25
Confidentiality of Agreement/Publicity.................... Page 20 of 25
Non-Competition Agreements................................ Page 20 of 25
Indemnity/Guaranty Agreements............................. Page 20 of 25
Introduction to and Retention of Customers................ Page 21 of 25
Ownership of Equipment.................................... Page 21 of 25
Amendments/Waivers........................................ Page 21 of 25
Attorneys' Fees........................................... Page 21 of 25
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<TABLE>
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Notices................................................... Page 22 of 25
Time of Essence........................................... Page 22 of 25
Severability.............................................. Page 22 of 25
Exhibits.................................................. Page 22 of 25
Diligence, Good Faith and Further Documents............... Page 22 of 25
Survivability............................................. Page 23 of 25
Entire Agreement.......................................... Page 23 of 25
Assignment Prohibited..................................... Page 23 of 25
Successors................................................ Page 23 of 25
Governing State Law....................................... Page 23 of 25
Counterparts.............................................. Page 23 of 25
Remedies.................................................. Page 24 of 25
Interpretation............................................ Page 24 of 25
Benefit of Agreement...................................... Page 24 of 25
Miscellaneous............................................. Page 24 of 25
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EXHIBIT 2.1
CAR WASH
ASSET PURCHASE/SALE AGREEMENT
This CAR WASH ASSET PURCHASE/SALE AGREEMENT ("Agreement") is made to be
effective as of the Effective Date of Agreement set forth in Item 1 of Basic
Purchase Information ("BPI") by and between the "Buyer" shown in BPI Item 2 and
the Seller or Sellers (collectively "Seller") shown in BPI Item 3.
RECITALS
A. Seller owns one or more car wash operations ("operations") on leased or fee
simple property as set forth in BPI Item 4.
B. Seller desires to sell, and Buyer desires to buy, those operations and the
items pertaining thereto which are set forth in BPI Item 5, "Elements to be
Purchased."
THEREFORE, in consideration of the mutual covenants herein contained and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, and incorporating the above RECITALS in full, Buyer and
Seller agree as follows:
Purchase And Sale of Assets
I A. Seller agrees to sell to Buyer, and Buyer agrees to purchase from
Seller, on the terms and conditions and in the manner set forth in this
Agreement, the following assets of the operations ("assets") :
(1) All of the furniture, fixtures, equipment, leasehold
improvements, and specified tangible assets shown on Exhibit "A."
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(2) Inventory. The most recent inventory taken by Seller is shown on
Exhibit "B." Seller will provide an updated inventory immediately
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prior to Close of escrow.
B. Seller represents that Exhibits "A" and "B" include each and every
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asset of Seller's entities and operations, other than cash on hand, life
insurance policies owned by Seller, excluded accounts receivable and inter-
company receivables, if any. These assets include, but are not limited to:
(1) Personal Property. All of Seller's right, title and interest in
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and to all Inventory, as defined and shown on Exhibit "B," equipment,
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machinery, tools, appliances, furnishings, furniture, goods held for
resale, receivables, customer lists, supplies, telephone and computer
equipment, and any other items used in connection with the business of
owning, operating, and managing the operations in BPI Item 4
(collectively, "Personal Property"), free and clear of any and all
liens, liabilities and encumbrances, and regardless of the location of
such Personal Property, whether on or off the premises of any
operation.
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(2) Permits. All of Sellers' right, title and interest in, to and
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under all transferable permits, licenses, approvals or authorizations
obtained from any governmental authority relating to the business of
owning, operating and managing the operations ("Permits"), attached as
Exhibit "C."
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(3) Intangibles. All of Sellers' right, title and interest in, to and
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under all intangible personal property not otherwise described in this
Section and relating to the business of owning, operating and managing
the operations, including without limitation (a) all warranties in
favor of Sellers; (b) all liens and security interests in favor of
Sellers, together with any instruments or documents evidencing same;
(c) all telephone numbers associated with the operations; and (d) all
goodwill relating to the business of owning, operating, and managing
the operations (collectively, "Intangibles"). Attached hereto as
Exhibit "D" is a list of all Intangibles.
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(4) Trade Names and Trademarks. Buyer shall have the exclusive use of
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Sellers' trade names and trademarks, and other business names owned
and used by Seller, relating to the business of owning, operating, and
managing car wash operations, for an indefinite period, which period
shall terminate if, and only if, Buyer advises Seller in writing of
Buyer's relinquishment of this right. Buyer's rights include the use
of any and all derivatives and forms together with all trademarks,
service marks, and logos of the foregoing names, whether or not
registered and whether now owned or hereafter acquired, together with
all trademark registrations of and trademark registration applications
for the foregoing names, and all good will associated with any of the
foregoing (collectively, "Trade Names & Trademarks"). Trade Names and
DBAs are set forth in "Trade Names & Trademarks," BPI Item 6.
Exhibit "E," attached, contains all of the documents relating to the
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use and entitlement of such Trade Names, Trademarks, DBAs and logos.
(5) Entitlement. Entitlement to any and all advertising campaigns and
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marketing or promotional materials; and any and all guarantees and
warranties relating to the Inventory purchased hereunder
(collectively, "Entitlements"). Notwithstanding the foregoing, to the
extent Buyer redeems outstanding coupons issued by Seller, Seller will
be charged back for the costs of such redemptions.
(6) Books and Records. Copies of all Books and Records relating to
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the business of owning, operating, and managing the operations,
including without limitation all accounting, financial, employment,
sales and other records (collectively, "Books and Records"). Seller
shall be permitted to deliver originals of the Books and Records, in
which event, Buyer agrees to provide Seller reasonable access to the
Books and Records, including the copying thereof, and Buyer agrees to
maintain said Books and Records for a minimum of seven (7) years
following the Closing. Books and Records shall be promptly opened for
Buyer's inspection upon execution of this Agreement. Transfer of
Books and Records shall occur at Closing.
(7) Seller and Principals. "Seller" as used throughout this Agreement
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means an individual seller or, if there is more than one seller, all
of the Sellers taken collectively or any one or more of the Sellers
individually. "Seller" as used herein also means each and every
principal
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of Seller, whether or not separately referenced. "Principal" as used
herein means a shareholder owning 10% or more of a corporation or one
who owns or has the beneficial interest in 10% or more of any entity,
including family or other trusts, or one who is an officer, director,
partner, member, or trustee of any entity. If there is more than one
Seller, any provision which requires consent of Seller shall be
construed so as to require only the consent of that Seller, or those
Sellers, with an interest in the subject matter requiring consent.
Such provision is not intended to confer any additional benefit or
power on any Seller which does not have an interest in the subject
matter or which is not the owner of the property/operation/stock for
which consent is required. If there is more than one Seller, Principal
or Guarantor, the liability of each, at all times, shall be joint and
several.
C. If leasehold interests are owned by Seller as lessee, for the premises
on which certain operations are conducted, Seller shall transfer such
leasehold interests pursuant to a valid assignment of lease and consent of
lessor. Documents evidencing these leasehold interests are attached as
Exhibit "F-1-Operating Leases." Documents evidencing the leases owned by
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Seller as lessor, if any, are attached as Exhibit "F-2-Seller's Leases."
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This Agreement is conditioned upon Buyer's review and approval of all
leases attached as Exhibits "F-1" & "F-2." Buyer and Seller shall
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cooperate in obtaining each lessor's consent to transfer leased premises to
Buyer.
D. Fee Simple Interests in Real Property, if any, shall be transferred
free and clear of all title defects and objections, security interests,
liens, claims, charges and encumbrances of any nature whatsoever. All Fee
Simple Interests in Real Property are set forth on the attached Exhibit "G"
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which includes:
(1) the real property and related operations ("Seller's Land");
(2) all buildings, together with all other improvements owned by
Seller, situated on Seller's Property as defined in Section IV,
including all fixtures and other property owned by Seller permanently
affixed thereto (the "Seller's Improvements");
(3) all Seller's Leases covering all or any portion of the Seller's
Property and Seller's Improvements; and
(4) all other rights and appurtenances of Seller pertaining to the
Seller's Property and Seller's Improvements, including, without
limitation, any right, title and interest of Seller in and to adjacent
streets, alleys or rights-of-way.
Amount of Purchase Price
II A. The total "Purchase Price" set forth in BPI Item 7 is based on the
earnings before interest taxes, depreciation and amortization ("EBITDA").
The EBITDA shown in BPI Item 8 and the "Effective Capitalization (`Cap')
Rate" in BPI Item 9, represents the sum of the purchase prices for all the
operations to be purchased, all personal, real and intangible assets (other
than Inventory), personal and corporate covenants not to compete, and the
guaranties contemplated herein. "Allocations" of the purchase price for
each operation and for the Covenants Not to Compete are shown on BPI Item
10. Inventory (which includes Seller's stock of gasoline, oil, lubricants,
filters, detergents, parts,
<PAGE>
accessories and supplies) will be purchased at Seller's actual cost to
third parties (excluding Sellers' overhead and operating expenses).
Notwithstanding the foregoing, Buyer shall have no obligation to purchase
slow-moving or obsolete items carried by Seller as inventory.
B. The purchase price includes the physical assets in their condition at
the time of sale, without further adjustment. Buyer and Seller acknowledge
that the amount allocated to each asset represents its fair market value
determined pursuant to an arm's-length negotiation. They further
acknowledge that a tax attorney, accountant, or other qualified advisor has
explained the tax consequences of the allocations to them. Buyer and Seller
each agree to report the sale of the operations for federal income tax
purposes in accordance with the allocations set forth in this Agreement.
Payment of Purchase Price & Commissions
III A. The purchase price for each Covenant Not to Compete is included in the
Purchase Price and shall be disbursed at close of escrow.
B. The purchase price for each of the operations purchased is payable in
cash at close of escrow, less a "Hold-Back Percentage" specified in BPI
Item 11 of the total purchase price (operations and Covenants). The hold-
back shall be in effect for the Hold-Back Period specified in BPI Item 12.
To the extent that the hold-back is depleted during the hold-back period by
the "Hold-Back Depletion Amount" specified in BPI Item 13, or more, Seller
shall immediately deposit sufficient funds to bring the amount held-back to
its original level. Although the hold-back will terminate at the end of
the Hold-Back Period, the guarantees, warranties and representations for
which the hold-back was security, remain in effect for the "Guaranty
Period" specified in BPI Item 14, further extended by the time during which
a lawsuit could be brought relating to these items or, if a lawsuit or
other legal proceeding has been commenced, until the final decision in such
suit or proceeding. If a lawsuit or other legal proceeding is instituted
during the Hold-Back Period, the funds shall not be released but shall be
held until the final decision in such suit or proceeding. During the Hold-
Back Period, the funds held back shall be in an escrowed deposit, in an
interest-bearing account in one or more financial institutions approved by
both Buyer and Seller. Risk of loss of funds while on deposit shall be
with Seller and Seller shall receive all of the interest paid by each such
institution while on deposit. Loss of funds shall in no way relieve Seller
of its obligations hereunder and Seller represents and warrants that it has
sufficient funds to meet its obligations.
C. Buyer shall notify Seller and the manager of the escrowed account
promptly upon receipt of notice that a claim has been made with respect to
an item for which the hold-back is security. Seller shall have five (5)
days to object to disbursement of hold-back funds to pay the claim.
Objection must be in writing and state Seller's reasons for objecting. If
no reason has been stated or if Seller has not objected, disbursement in
accordance with Buyer's instructions shall be made immediately without any
need for instructions from Seller with respect thereto. If Seller has
objected, on a reasonable basis, and has brought suit, within 30 days of
notice to Seller of the claim, to challenge the claim, Seller shall
deposit the amount in dispute with the court, pending the final disposition
of the lawsuit. Seller shall be liable to Buyer for all detriment suffered
by Buyer during the pendency of the lawsuit.
D. Buyer and Seller have utilized the respective services, if any, of
those brokers, agents or finders listed in "Buyer's Broker" BPI Item 15 and
"Seller's Broker" BPI Item 16 in connection with the
<PAGE>
sale of the assets relating to this Agreement. Each party agrees to pay its
Agent's fee, at close of escrow, pursuant to their separate agreements with
their Agents. Each party shall indemnify and hold the other party harmless
from any and all claims, expenses, demands, actions and costs thereof
arising in connection with this transaction to an Agent other than that
Agent specified in the BPI as that party's agent. Each party represents and
warrants that it has not employed any brokers or other representatives with
respect to this transaction and that if any brokers or finders make such a
claim, the employing party shall be solely responsible for any fees,
commissions, claims, expenses, demands, actions and costs thereof, with
respect thereto.
Documents and Physical Inspection
IV Seller shall immediately, or as soon as reasonably possible after the
effective date hereof, deliver to Buyer the following "Inspection Items":
A. Preliminary Owner's Title Policy binder for each of Sellers' Lands
issued by the "Title Company" specified in BPI Item 17, dated not earlier
than the Effective Date of this Agreement, showing the title to Seller's
Lands with two (2) copies of all items referred to as exceptions therein.
B. Two copies of all contracts, Operating Leases, Sellers' Leases,
subleases, tenant and landlord assignments, rent rolls, Fuel Station
Agreements (attached as Exhibit "H"), and documents which affect the
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ownership or operation of each Seller's Property (which as used herein
includes Seller Lands and/or operations).
C. Architectural drawings, plans and specifications as are available to
Seller for the improvements on each Seller's Property.
D. Two (2) copies of a current ALTA survey for each of the Seller's Lands
prepared by a competent person or entity to be selected by Buyer. The
survey shall be prepared according to the standards of Buyer, including
certification of zoning status.
E. Current financial statements for all tenants, if any, on each Seller's
Property, to the extent that the tenants are obligated to provide any such
information pursuant to the terms of Seller's Leases.
F. Tax returns, operating and other financial statements, prepared in-
house, or otherwise, for each Seller's Property for the three (3) most
recent fiscal years. Seller agrees to allow Buyer or Buyer's agent to have
access at Seller's applicable places of business and operations at
reasonable times and hours to inspect, copy as needed at Buyer's expense,
and audit Seller's files and records relating to the operations and to
Seller's Property.
G. Certificates of Occupancy for each Seller's Property.
H. A current Zoning Certificate for each Seller Property, which Seller
agrees shall be completed by the applicable governing municipalities to
include the same terms and be in the same form and content as the Zoning
Certificate attached hereto as Exhibit "I". Buyer will take steps to obtain
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this item, or otherwise confirm the zoning, and Seller will cooperate as
necessary.
<PAGE>
I. Current tax receipts and insurance certificates for each Seller's
Property.
J. UCC searches of each Seller and Principal, in the county and state
where each Seller's Property is located, relating to Seller's Personal
Property and equipment being conveyed to Buyer, if applicable.
K. MAI appraisals of each Seller's Property, if available.
L. Other documents or reports reasonably required by Buyer in order to
allow Buyer to complete its due diligence review and inspection of Seller's
Property, including existing Phase I and Phase II reports.
Escrow
V A. Escrow ("escrow") shall be opened with the "Escrow Company" specified
in BPI Item 18, upon execution of this Agreement. If this Agreement has
not been fully executed and escrow has not opened by the "Escrow Opening
Date" specified in BPI Item 19, this Agreement shall terminate and neither
party shall have any further obligation to the other. This Agreement shall
operate as the basis for escrow instructions, with the understanding that
additional form instructions as required by escrow, which do not conflict
with this Agreement, shall be executed by the parties. In the event of any
differences between this Agreement and the escrow instructions, this
Agreement shall prevail. The deposit of this fully executed Agreement, by
either party, with escrow shall be deemed the opening of escrow, regardless
of the date escrow forms are signed by the parties.
B. Escrow shall take appropriate action to comply with bulk sales laws.
Seller shall be solely responsible for all sales, use and transfer taxes.
C. Each party shall pay its own attorney's fees. Escrow fees shall be
split equally by the parties, except for extraordinary costs which are for
the benefit, or at the sole request, of one party. Buyer shall deposit the
sum, specified as the "Initial Deposit" in BPI Item 20, in escrow within 10
days of escrow's opening. Escrow shall immediately deposit said sum in an
escrowed interest-bearing account. Interest from the sum so deposited
shall be credited to Buyer until the last of the following: Buyer withdraws
from the escrow, escrow closes, or the Initial Deposit becomes non-
refundable. The interest so credited shall be used either to reduce the
amount of Buyer's final deposit or shall be returned to Buyer if Buyer is
entitled to a return of the Initial Deposit. After the number of "Days
from Opening" specified in BPI Item 21 and provided that Seller has
provided each and every item required by Buyer from Seller to complete its
due diligence in accordance with the checklist provided by Buyer to Seller
and provided each such item is provided within a time period which will
allow Buyer to complete its due diligence, and provided Seller has not been
notified of disapproval by
Buyer of any element of the sale or that Buyer's contingencies have been
satisfied or removed, the Initial Deposit in escrow will become non-
refundable.
Notwithstanding the preceding, the Initial Deposit again becomes refundable
if, at any time, including after the number of "Days from Opening," any of
the following occur:
<PAGE>
(1) Purchase of land or change in lease terms are a condition of this
Agreement and such purchase or change does not occur;
(2) Buyer disapproves of the state of Title or the ALTA survey;
(3) Buyer disapproves of the Phase I's or Phase II's;
(4) Information, financial and otherwise, supplied by Seller to Buyer
is inaccurate; or
(5) Escrow fails to close and Buyer is not at fault therefor.
At any time prior to the Initial Deposit becoming non-refundable, or upon
written disapproval of the Phase I's or Phase II's, Buyer may withdraw from
the escrow with no penalty or obligation to Seller. Buyer shall be under
no obligation, and it shall not be deemed Buyer's fault if Buyer does not
close escrow because of a failure of any condition in this Agreement.
Further, notwithstanding the lack of obligation to close escrow upon a
failure of a condition, it is specifically acknowledged by the parties that
each and every condition required by Buyer is for Buyer's benefit only and
Buyer has the absolute right to waive one or more or all conditions
precedent, in Buyer's sole discretion, and proceed with close of escrow.
If escrow fails to close due to fault of Buyer, the Initial Deposit is
agreed to be LIQUIDATED DAMAGES and each party shall initial here to show
their acceptance of this provision: ________________________[INITIAL HERE].
If escrow fails to close due to the fault of Seller, or if Seller attempts
to withdraw from escrow at any time after escrow has opened, as defined
herein, Buyer shall have the right to any and all remedies available at law
or in equity, including, but not limited to, an action for specific
performance or a declaratory judgment with respect to this Agreement.
D. All personal property taxes applicable to the assets shall be prorated
on a reasonable basis between Buyer and Seller as of the closing. Buyer
and Seller agree to make payments to each other as of the closing, to the
extent necessary to assure that both parties are reimbursed for the amount
of any personal property taxes that arise with respect to time periods
during which the assets were owned by the other party.
E. The balance of the Purchase Price, adjusted for allocations or credits
as set forth in this Agreement, shall be deposited prior to the scheduled
closing date. The price payable for Inventory shall be added to the
purchase price. Upon Closing, the Initial Deposit, together with all
interest accrued thereon, shall be applied as a credit to the Purchase
Price.
Conditions Precedent to Closing
VI A. Performance of Obligations. Seller shall have performed all of the
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obligations under this Agreement to be performed by Seller prior to the
Closing.
B. Delivery of Items. Seller shall have executed and delivered to Buyer
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all of the items referred to in this Agreement, including, without
limitation, the Guaranties and the Non-Competition Agreements
<PAGE>
required in accordance with this Agreement. Buyer may use all or any
portion of the name by which the operations are known for an unlimited
time. Seller shall provide Buyer with all necessary documents to secure
such rights to Buyer. Seller shall transfer to Buyer all relevant telephone
numbers and telephone book ads, plus art work or copy necessary for same
and shall promptly execute all documents necessary to secure and retain
said items. In the absence of any specified time period for production of
items for Buyer, the applicable time period shall be 3 business days from
opening of escrow.
C. Consents. In connection with the sale of assets in this Agreement,
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Seller shall obtain and deposit into escrow, prior to Closing, all required
consents of third parties to this purchase transaction, including without
limitation, Fuel Companies listed on BPI Item 22; all of Seller's lessors;
and Seller's spouses, whose consents shall be in the form attached hereto
as Exhibit "J".
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D. Inventory. Seller shall maintain the Inventory at its current level.
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E. Creditors. Seller shall have paid or otherwise satisfied in full all
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creditors of Seller, relating to Sellers' prior ownership and operation of
the assets. Additionally, without limiting the foregoing, all Taxes, as
described in this Agreement, shall have been paid in full or otherwise
satisfied by Sellers.
F. Failure of Condition. In the event that any condition set forth in
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this Agreement is not satisfied prior to the Closing, all deposits shall be
fully refundable to Buyer, without the need of any oral or written approval
from Seller, on the Closing Date.
G. Sales & Other Taxes. Seller shall be solely liable and responsible for
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the payment of any sales, use and other transfer-type taxes that may be
payable by reason of the sale of the assets by Seller to Buyer pursuant to
this Agreement. In connection with the foregoing, Seller hereby agrees to
completely and unconditionally indemnify, defend and hold Buyer completely
harmless from and against any liabilities, obligations, claims, damages,
costs and expenses (including attorneys' fees) associated with or arising
out of Seller's obligation to pay all sales, use and other transfer type
taxes. Sellers' obligations under this section shall be part of Sellers'
Retained Liabilities as described below.
H. Sellers' Retained Liabilities. Buyer shall assume all debts and
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obligations shown on Exhibit "K." Except as specifically provided otherwise
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in Exhibit "K", Buyer has not agreed to assume, and shall not have any
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liabilities or obligations with respect to any of Seller's liabilities or
obligations, arising in connection with the use, operation and management
of Seller's operations, whether direct, indirect, absolute, accrued,
contingent or otherwise, and under no circumstances is Buyer assuming any
responsibility or liability to warrant any products sold by Seller or to
perform any warranty work on any products sold by Seller before, on or
after the Effective Date of this Agreement ("Sellers' Retained
Liabilities"). Except as otherwise provided in this Agreement, Seller shall
be solely liable and responsible for all of Seller's Retained Liabilities,
and hereby agrees to completely and unconditionally indemnify, defend and
hold Buyer completely harmless from and against any liabilities,
obligations, claims, damages, costs and expenses (including attorneys'
fees) associated with or arising out of Sellers' Retained Liabilities.
I. Shareholders' and Directors' Consent. The obligations of Seller
------------------------------------
hereunder are conditioned upon the necessary approval by the appropriate
persons or entities, including the Boards of Directors,
<PAGE>
shareholders, partners, members, or other persons who by law or agreement
are entitled to consent or object to the subject transactions, which
condition precedent shall be satisfied on or before the "Consent Date"
specified in BPI Item 23.
J. Seller's Operational Obligations Pending Closing. Seller shall:
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(1) carry on Seller's operations with respect to Seller's Property in
accordance with sound business practice and, without the approval of
Buyer, not introduce any new method of management, operation or
accounting with respect to any Seller's Property;
(2) maintain each Seller's Property in its present condition subject
to normal wear and tear, and, without limiting the foregoing, not
diminish the quality or quantity of maintenance and upkeep services
heretofore provided to Seller's Property;
(3) not commit any default under any lease, mortgage financing,
license, permit, contract, or any other agreement in any way relating
to or connected with Seller's Property;
(4) pay off, in full, any and all existing loans relating to Seller's
Property so that there will be no loan encumbrances or liens from any
lenders relating to Seller's Property at Closing. Seller shall pay all
fees and costs necessary to release all loans and applicable liens,
including, but not limited to, any prepayment penalties;
(5) not grant or permit any new encumbrances on or about Seller's
Property, including, but not limited to, any new service contracts,
title matters or leases or amendments thereto, without the prior
written consent of Buyer. Seller shall not undertake or omit to
undertake any other act which may have a materially adverse impact on
Seller's Property;
(6) have pits/interceptors cleaned no more than sixty (60) days prior
to Close.
(7) promptly provide all documents reasonable or necessary, or
requested by Buyer, to complete Buyer's due diligence;
(8) make full disclosure of all matters, known to Seller, which might
have an effect upon the business or operation being purchased;
(9) facilitate Buyer's, or its representative's, inspection of
Seller's Property and operations throughout the escrow.
K. Inspection and Termination Rights. The Closing of this Agreement shall
---------------------------------
be totally contingent upon the satisfaction of the following conditions:
(1) Review and approval by Buyer's accountant of all financial
information relative to Seller and Seller's Guarantors. Financial
information will include, but is not limited to, the past 3 years' tax
returns, balance sheets, profit and loss statements, and credit
reports;
(2) Buyer's accountants' approval of the books, records, existing
contracts relating to stock, if any, which is part of this Agreement,
the operations, and the schedule of physical assets.
<PAGE>
(3) Seller, or its agent, receiving a letter from Buyer outlining
Buyer's approval or disapproval of all Inspection Items. If such a
letter is not received by Seller, or its agent, on or before the time
specified in Section V. B., Buyer shall be deemed to have rejected one
or more of the Inspection Items, and this Agreement shall terminate in
its entirety and become null and void. If Sellers receive a letter
from Buyer disapproving or objecting to any of the Inspection Items,
Seller shall have the time period specified in Buyer's notice to cure
all of the objections and disapproved Inspection Items to the sole
satisfaction of Buyer or inform Buyer of its unwillingness to cure.
If any of the disapproved Inspection Items are not cured by Seller
within said time period (or if Seller is unwilling to cure), then
Buyer shall have the right to exercise one of the following options:
(a) terminate this Agreement in its entirety by giving Seller
written notice in which event this Agreement shall become null
and void; or
(b) accept the condition of the disapproved Inspection Items "As
Is" by giving written notice to the Seller of the same and close
on Seller's Property subject to all of the other terms and
conditions of this Agreement.
Seller's Representations and Warranties'
VII A. Each Seller, and Principal, jointly and severally, hereby represents
and warrants to Buyer that the statements contained in this Agreement and
its Exhibits and Addenda are true, accurate, complete, and not misleading
in any material respect, as of the Effective Date and further hereby
represents and warrants that each and every one of the following shall be
true and correct as of the Closing Date:
(1) Seller has good, valid and marketable title to stock, if any,
which is included in this transaction, all of the Real Property, all
of the Personal Property that is part of the assets, and the Trade
Names or Trademarks as described herein, free and clear of all title
defects and objections, security interests, liens, pledges, claims,
charges, restrictions and encumbrances (except as shown, and approved
by Buyer, in the preliminary title report) of any nature whatsoever,
including without limitation, leases, mortgages, conditional sales
agreements, collateral security arrangements, and other title or
interest retaining arrangements, whether absolute, accrued, contingent
or otherwise (collectively "Encumbrances"), other than liens for Taxes
currently accrued but not yet due and payable. All of the assets are
in operating order as necessary to conduct the operations currently
being conducted and as conducted on the Closing Date. Except as
otherwise specifically set forth in this Agreement, Seller has
complete and unrestricted authority and the unqualified right to sell,
assign, convey and transfer the assets to Buyer, and upon the
consummation of the transactions contemplated by this Agreement, Buyer
will have acquired good, valid and marketable title to stock, if any,
which is included in this Agreement, and to each of the assets, free
and clear of all Encumbrances.
(2) The Inventories that are part of the assets are usable and
saleable in the ordinary course of business, and are accounted for by
Seller at the lower of cost or market, and in accordance with
generally accepted accounting principles applied on a consistent
basis.
<PAGE>
(3) There is no fact, circumstance or event that could result in
claims, actions, suits, disputes, investigations, arbitrations and
other proceedings of any kind, existing, pending or threatened, that
involve, affect or relate to Seller (or any of its directors, officers
or employees), or Principals, in connection with the operations,
business and affairs of Sellers. There are no agreements, decrees,
orders, or injunctions of or with any court or governmental entity
outstanding against Sellers.
(4) All structures and improvements on Seller's Property have been
constructed and installed in a good and workmanlike manner and in full
compliance with all applicable laws, conditions and restrictions
affecting Seller's Property.
(5) Each Seller Property is properly zoned for the improvements
situated thereon.
(6) There are no threatened, existing or pending litigation,
judicial, administrative, or arbitration hearings, claims,
condemnations, or sales in lieu thereof, contracts of sale, options to
purchase or rights of first refusal with respect to any aspect of
Seller's Property, or stock, nor have any such actions, suits,
proceedings, claims, or other such matters been threatened or
asserted.
(7) Other than as set forth on Exhibit "L", there are no service
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contracts relating to any Seller's Property which cannot be
terminated within thirty (30) days notice by Seller or by Buyer, upon
Buyer becoming the owner of Seller's Property.
(8) Seller has received no notice and has no knowledge of any pending
improvements, liens, or special assessments to be made against any
Seller's Property by any governmental authority.
(9) There are no unpaid bills or claims in connection with the
construction of, or any repairs to, Seller's Property.
(10) Seller's Leases and Operating Leases for each leased premise is
in good standing and Seller is not in default thereon. Seller has
made, or will make, on or before the Effective Date, all payments due
to the lessor of each leased property in connection with the Operating
Leases for the occupancy period up to and including Close of escrow.
(11) Seller remains responsible for repairing any damage caused to
Seller's Property, accruing prior to Closing, for which Seller would
be liable to repair under the terms of any leases, and for any damage
caused to Seller's Property accruing on or after Closing directly
attributable to actions by Seller and Principals prior to Closing.
(12) There has been no hazardous waste dumped or deposited on Seller's
Property and no hazardous waste exists thereon. There are no hazardous
materials, including asbestos, existing on Seller's Property and each
of the items (a) through (i) immediately below are correct. If any
such hazardous waste or material is found to exist thereon, Seller
shall be given the opportunity to accept full responsibility for the
removal of such waste or material, at Seller's sole cost and expense,
and indemnify Buyer relating to any damages or costs
<PAGE>
associated with the presence of such waste or material, or the removal
thereof. In the event Seller rejects such opportunity, Buyer shall
have the choice of eliminating the hazardous waste or hazardous
material site, or the stock which represents ownership of the site,
from the purchase and deducting the allocations of the purchase price
attributable to such site; completing the purchase of all properties,
but deducting the clean-up cost from the purchase price; or
terminating this transaction in its entirety without any liability to
Seller and with re-entitlement to the Initial Deposit.
(a) Seller has not received any notification from a
governmental agency pursuant to the Comprehensive
Environmental Response, Compensation and Liability Act, as
amended (including without limitation, any amendments added
by the Superfund Amendment and Reauthorization Act of 1986),
or pursuant to any other law pertaining to waste materials,
hazardous materials or substances, pollutants or other such
matters affecting the environment, and Seller is not aware
of any facts or circumstances which could give rise to a
violation of any such laws in the future.
(b) If this Agreement includes sites which do not currently
have tanks on them, Seller has not placed any underground
tanks on such sites, and Seller is not aware of any
underground tanks existing on such sites.
(c) There has been no release, emission or discharge into
the environment of waste materials, hazardous substances,
hazardous wastes, air pollutants, or toxic pollutants, as
defined under any applicable legal requirement (including,
without limitation, any leakage from any tank), and that
none has occurred or is occurring in connection with the
business and operations of Seller, except such that have
been remedied and subsequently approved by the appropriate
governmental agency.
(d) No asbestos or asbestos-containing materials are
installed on, used on, or incorporated into Seller's
Property. No polychlorinated biphenyls are used in any
electrical transformers, capacitors, fluorescent light
fixtures or in any other manner whatsoever on any real
property leased or used by Seller.
(e) Seller has at all times complied, and is currently in
compliance, with all requirements of the Safe Drinking Water
and Toxic Enforcement Act of 1986.
(f) Seller has not at any time, now or in the past, engaged
in any environmental cleanup, or any other remediation,
except such that have been approved by the appropriate
governmental agency.
(g) Seller has never violated and is not currently in
violation of any applicable federal, state, county or local
statutes, laws, regulations, rules, ordinances, codes,
licenses, or permits of any governmental authorities
relating to environmental matters, including radiation
safety, in connection with the ownership, use, maintenance,
or operation of any of Seller's assets or the conduct of
Seller's business or operations.
(h) There are no statutes, laws, orders, ordinances, codes,
licenses, permits, rules or regulations relating to
environmental matters, that would require any work, repairs,
<PAGE>
construction or capital expenditures of a material nature
(10% or more of the purchase price allocated to the affected
Seller's Property) with respect to any of the facilities,
equipment or other assets of Sellers.
(i) Seller have not received any notices of any violation
in connection with any of the matters described in this
section.
(13) There are no condemnation or eminent domain proceedings pending
or contemplated against any Seller's Property or any part of a
Seller's Property and Seller has received no notice, oral, written or
constructive, of the desire of any public authority or any other
entity to take or use any Seller's Property or any part of a Seller's
Property.
(14) Each Seller is not a "foreign person" within the meaning of
Section 1445 of the Internal Revenue Code of 1986, as amended.
(15) Each Seller is fully empowered to enter into this transaction
and execute all of the documents related to this transaction as such
pertains to its respective stock and Seller's Property.
(16) Each entity listed on BPI Item 3 as Seller, is organized,
existing and in good standing under the laws of the State in which it
was formed and is in good standing and qualified to conduct business
in the state in which it is doing business. Seller is in good
standing as certified by both the relevant corporation commission and
the duly authorized taxing authority for the State in which Seller is
conducting the operations which are the subject of this Agreement.
(17) The shareholders, owners of beneficial interests, members,
partners, and trustees of each corporate or other entity are listed on
BPI Item 3 They are the sole owners of the stock and operations, and
no other person has any claim, right, title to, or interest in, these
operations.
(18) Seller has no material undischarged obligations affecting the
operations or assets being sold pursuant to this Agreement, other than
obligations arising in the usual and regular course of business and
listed in the attached document marked Exhibit "K."
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(19) Seller has paid, or shall pay, all taxes owed by Seller on
account of the operations.
(20) The books of account for the operations constitute a complete
record of the financial affairs of each operation and accurately set
forth all liabilities, assets, and other matters regarding the
financial condition of the operations.
(21) The purchase and sale will not conflict with or violate any
agreement or law to which Sellers, the stock, if any, which is part of
this transaction, or the operations are subject.
(22) Neither the execution and delivery of this Agreement or the Other
Documents (defined in "23" below), nor the transfer of stock, nor the
consummation of any of the transactions contemplated by this Agreement
or the Other Documents, nor compliance by Seller and/or the Principals
with any of the provisions thereof, will require any consent,
approval,
<PAGE>
authorization or permit from, or any notice, registration or
filing to or with, any governmental or regulatory authority or
any other third party, except as specifically set forth herein in
VI. C. - Consents.
(23) Seller and each signatory have the complete and unrestricted
right, power, authority and capacity to (a) execute and deliver
this Agreement and every other document executed and delivered by
Seller in connection with this Agreement ("Other Documents"); (b)
sell and transfer the assets to Buyer; and (c) carry out and
perform each of Seller's obligations pursuant to this Agreement
and the Other Documents.
(24) All corporate, limited liability company, partnership,
member, partner and shareholder authority, approvals, actions or
proceedings necessary on the part of Seller to authorize this
Agreement or any of the transactions contemplated hereby, will
have been obtained prior to the "Consent Date" in BPI Item 23.
(25) This Agreement and the Other Documents have been or will be
duly and validly executed and delivered by Seller and Principals
(as applicable); and when executed and delivered constitute
legal, valid and binding obligations of Seller, enforceable in
accordance with their terms.
(26) Neither the execution and delivery of this Agreement or the
Other Documents, nor the consummation of any of the transactions
contemplated by this Agreement or the Other Documents, nor
compliance by Seller with any of the provisions thereof, will:
(a) Violate, conflict with, or result in a breach of any of
the provisions of; constitute a default (or an event which,
upon notice or lapse of time or both, would constitute a
default) under; result in the termination or cancellation
of; accelerate the performance required by; or result in the
creation of any lien, security interest, charge or
encumbrance upon any of the assets under any provision of
the Articles, the Bylaws, the Operating Agreement, or any
note, bond, mortgage, indenture, deed of trust, lease,
license or any other agreement or obligation to which Seller
is a party, or by which Seller or any of the assets may be
bound or affected; and
(b) Violate or conflict with any order, writ, injunction,
decree, judgment, permit, license, law, rule, regulation or
ordinance applicable to Seller or any of the assets.
(27) If this Agreement includes a purchase of stock, that stock
is not subject to any restrictions on transfer, governmental or
private, rights of first refusal, voting trusts, proxy
agreements, or any other shareholder rights, member rights, third
party rights, or other governmental restrictions.
Buyer's Representations and Warranties'
VIII A. Buyer is duly organized, validly existing and in good standing under
the laws of the state in which it was incorporated or formed.
B. Buyer has the complete and unrestricted right, power, authority and
capacity to (1) execute and
<PAGE>
deliver this Agreement and every other document executed and delivered by
Buyer in connection with this Agreement ("Additional Documents"); and (2)
carry out and perform each of Buyer's obligations pursuant to this
Agreement and the Additional Documents.
C. Any corporate, limited liability company, shareholder and member
authority, approvals, actions or proceedings necessary on the part of Buyer
to authorize this Agreement or any of the transactions contemplated hereby,
will have been obtained prior to the Closing.
D. This Agreement and the Additional Documents have been or will be duly
and validly executed and delivered by Buyer, and when executed and
delivered will constitute legal, valid and binding obligations of Buyer,
enforceable in accordance with their terms.
Risk of Loss
IX A. Until the Closing, to the extent covered by Insurance, Seller shall
bear all risk of loss, injury, damage, or destruction of the assets of the
operations. If any loss, injury, damage, or destruction substantially
impairs the value of the operations prior to the closing, Buyer must give
written notice to Seller, within 7 days after Buyer has received notice of
the damage or destruction, of Buyer's election to choose one of the
following: (1) terminate this Agreement, in which event this Agreement
shall become null and void; (2) extend the Closing Date to a reasonable
time, which time shall not exceed ninety (90) days, in order to enable
Seller to repair such damage to Seller's Property, and in such an event,
Seller shall promptly repair such damage, and such damage shall be repaired
so that the Seller's Property will conform to the representations and
warranties contained herein; or (3) proceed to closing and receive an
assignment of applicable insurance proceeds. For purposes of this Section,
''substantially impairs'' means that the cost of restoring the assets to
their condition as of the date of execution of this Agreement is ten
percent (10%) or more of the purchase price allocated to the Seller's
affected Property. After the closing, the Buyer shall bear all risk of
loss, injury, damage, or destruction of the assets.
B. The risk of loss until Closing due to condemnation by eminent domain
from an applicable governmental authority shall be borne by Seller. In the
event any portion of Seller's Property is condemned or is planned to be
condemned by an applicable governmental authority prior to Closing, Buyer
shall have the right to exercise one of the following options: (1)
terminate this Agreement in its entirety by giving written notice to Seller
within ten (10) days after Buyer receives notice of said condemnation from
Seller in which event this Agreement shall become null and void; or (2)
Buyer may accept Seller's Property in its condemned state, "As Is," and
proceed to close on Seller's Property according to the remaining terms of
this Agreement. In this event, Buyer shall be entitled to all the proceeds
awarded relating to said condemnation.
Employees of Sellers
X Buyer and Seller agree that Buyer has no obligation to hire employees of
Seller in connection with this Agreement. Should Buyer desire to hire one
or more of Seller's employees, Seller agree to terminate, upon Buyer's
request, such employees, and Seller shall pay all outstanding wages,
benefits, accrued vacation and sick pay, and related employment taxes, upon
termination.
<PAGE>
Closing
XI A. Time and Place. The performance of all matters to be performed upon
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the closing of the purchase and sale of the assets or stock contemplated by
this Agreement ("Closing"), shall take place at the escrow offices on or
before the "Date for Close of Escrow" specified in BPI Item 24, or at such
other time and place as Seller and Buyer agree in writing. For purposes of
this Agreement, the term "Closing Date" or "Closing" means the date upon
which the Closing actually occurs.
B. Delivery of Instruments Within the time periods set forth elsewhere in
-----------------------
this Agreement, or, if none are specified, in sufficient time to meet all
obligations of this Agreement, but, in any event, prior to the date
scheduled for Closing, Seller shall deposit in escrow or deliver to Buyer
the following items which shall be in the form and substance satisfactory
to Buyer:
(1) Special Warranty Deed for each Seller's Land.
(2) ALTA (extended form) Owner's Title Policy for each Seller's
Land (the "Owner's Title Policies") issued by the Title Company,
in the full amount of the Purchase Price allocated to that Land,
containing no exceptions to title other than the standard printed
exceptions (provided that the area and boundaries exceptions
shall be amended, restrictive covenants endorsed "none of
record", taxes endorsed "not yet due and payable", the parties in
possession endorsed "pursuant to written leases," and there shall
be no exception for visible and apparent easements on roads and
highways), and any exceptions which have been approved by Buyer
in writing, which shall include, but not be limited to, the
following five (5) standard title endorsements:
100 Assurance against loss from violations of the
Reciprocal Easement, Covenants and Restrictions
Agreement ("REA") and other matters if such REAs or
other matters encumbering each Seller's Lands.
116.4 Assurance that each of the parcels of land described
in the policy and the REA are contiguous parcels, if
applicable.
103.6 Assurances that the improvements on each of the
Seller's Lands do not encroach onto any easement.
103.7 Assurance that each of the Seller's Lands abuts on
and has access to a physically open street as
identified in the endorsement.
116.1 Assurance that the property described, for each
Seller's Lands, in the policy is the same property as
shown on the survey.
The Owner's Title Policies shall include any other endorsement which
may be required by Buyer to cure a title objection, provided Buyer is
solely responsible for the additional costs, if any, of any such
endorsement.
<PAGE>
(3) Original copies of the Operating Leases and Seller's Leases,
and their respective subleases, if any, and all of the original
amendments and guarantees relating thereto together with valid
assignments of lease/s, executed by Seller and acknowledged
before a notary public, assigning to Buyer all Seller's interests
under the lease/s and valid consents to the assignments executed
and acknowledged by the respective lessors.
(4) Evidence that those acting for Seller, have full authority
to consummate this transaction in accordance with the terms of
this Agreement, as modified through Closing, including, but not
limited to, an opinion of Seller's counsel(s) and certified
copies of the resolutions authorizing this transaction.
(5) An affidavit that all charges related to each Seller's
Property, as of the Closing, have been paid in full, except that
any charges which have not been paid in full relating to services
to any Seller's Property which were performed on or prior to the
Closing shall be credited by the Seller to the Buyer at Closing.
(6) All original warranties and guarantees, which the Seller has
received in connection with any work or services performed or
equipment installed on Seller's Property, together with a duly
executed assignment and assumption thereof to Buyer in a form
acceptable to Buyer.
(7) All keys relating to each Seller's Property.
(8) All other documents or instruments which affect title to, or
possession of, Seller's Property and/or which are necessary to
transfer or assign the same to Buyer or to complete the Closing.
(9) Bill(s) of sale, in the form of Exhibit "M" executed by
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Sellers, conveying to Buyer all the assets described in Section 1
of this Agreement.
(10) Certificates from the appropriate state governmental entity
showing that no amounts are due from Seller, on account of the
operations, for unemployment compensation insurance
contributions, disability compensation insurance contributions,
or state income taxes withheld from employee wages.
(11) A counterpart copy of each of the Guaranty Agreements, duly
executed by Seller and Principals.
(12) A counterpart copy of each of the Non-Competition
Agreements, duly executed by Seller and those Principals
designated by Buyer.
(13) Resolutions of the Boards of Directors of Sellers, approving
Seller's execution and delivery of this Agreement, and Seller's
performance of all of the obligations of Seller pursuant to this
Agreement.
(14) A certificate duly executed by Seller stating that (a) all
of the representations and warranties made by it in this
Agreement or in the Other Documents are true, accurate and not
<PAGE>
misleading in any material respect as of the Closing Date, and
(b) Seller has performed all of its respective obligations
required to be performed prior to the Closing Date.
(15) At the Closing, Seller will place Buyer in complete
possession of all stock (if applicable), assets and all records
of Seller that are part of the assets.
C. Deliveries of Buyer at the Closing. At the Closing, Buyer shall
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deliver the following items to Seller:
(1) A counterpart copy of each of the Non-Competition Agreements
duly executed by Buyer;
(2) The Purchase Price required to be paid pursuant to Section
II.A.
(3) Any other items required to be delivered by Buyer to Seller,
upon the Closing, pursuant to this Agreement.
D. Prorations. Buyer and Seller shall prorate all of the following, on
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the basis of 30-day months, as of 12:01 A.M. Pacific Daylight time on the
date specified in BPI Item 24 for the Closing:
(1) All personal and real property taxes levied or assessed
against any of property subject to this Agreement, for the
current tax year, based on the amount shown on the latest tax
bill.
(2) All premiums on insurance policies insuring the operations
or the assets subject to this Agreement that have been approved
by and are being transferred to Buyer.
(3) The lease payments/rents of the Operational Leases, if any.
(4) The lease payments/rents, security deposits and advance
payments of Seller's Leases, if any.
(5) The charges or prepayments on any assumed contracts.
E. Seller's Closing Costs. At Closing, Seller shall pay (1) the premiums
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for the Owner's Title Policies and shall be reimbursed by Buyer for the
survey costs necessary to procure the same, (2) documentary transfer, deed,
stamp or other similar taxes, (3) one-half of the escrow fees, (4) Broker's
Fees/Commissions, and (5) Seller's attorneys' fees in connection with the
preparation of this Agreement and carrying out the transaction described
herein.
F. Buyer's Closing Costs. At Closing, Buyer shall (1) pay one-half of the
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escrow fees, (2) reimburse seller for ALTA survey costs, (3) Broker's
Fees/Commissions, and (4) pay Buyer's attorneys' fees in connection with
the preparation of this Agreement and carrying out the transaction
described herein.
Environmental Reports
XII Buyer shall obtain, at its expense, current Phase I Environmental Audits
("Phase I's") and/or Phase II Environmental Audits ("Phase II's"), each to
be performed by an individual or company of its choice, for each Seller's
Property. Seller shall obtain any required Lessor's consent for Buyer to
perform the Phase I's or Phase II's with respect to leased property. In
the event Buyer fails to notify
<PAGE>
Seller of Buyer's disapproval of the Phase I's or Phase II's within the
time period set forth in Section V. B., Buyer shall be deemed to have
rejected the Phase I's and/or Phase II's as not satisfactory. If escrow
does not close by reason of Seller's fault, Seller shall reimburse Buyer
for all Phase I and Phase II reports. In the event Buyer notifies Seller
that Buyer is not satisfied with the Phase I's or Phase II's, Buyer shall
have the right to exercise one of the following options:
(1) request Seller to cure (at Seller's option), within a reasonable
time and to Buyer's satisfaction, all objections to Phase I's or Phase
II's. Buyer shall advise Seller, what Buyer determines to be a
reasonable time under the circumstances. If Seller decide not to
cure, then Buyer may choose to
(2) terminate this Agreement in its entirety by giving Seller written
notice in which event this Agreement shall become null and void; or
(3) accept environmental condition "As Is" by giving written notice
to Seller of the same and close on the Seller's Property subject to
all of the other terms and conditions of this Agreement being
satisfied.
Taxes
XIII For purposes of this Agreement "Taxes" means any federal, state, local or
foreign, income, alternative or add-on minimum, business, employment,
franchise, occupancy, payroll, property, sales, transfer, use, withholding
or other tax, levy, impost, fee, imposition, assessment or similar charge,
together with any related additions to tax, interest, penalty or fine
thereon; and (b) "Returns" means all returns, (including without
limitation, information returns and other material information), reports,
and forms relating to Taxes. Seller has duly filed all Returns required to
be filed by Seller with regard to tax periods ending on or before the
Closing Date. All such Returns are accurate and complete and were prepared
in conformity with all applicable laws and regulations. Seller has duly
paid in full all Taxes shown to be due on such Returns or otherwise
assessed against Seller, and has made adequate provision (by the
establishment of reserves or otherwise) for all Taxes relating to or
arising in connection with any tax period ending on or before the Closing
Date. There are no tax liens upon the assets. There are no outstanding
agreements or waivers by Seller for the extension of time for the
assessment of any Taxes. Seller is not a party to any pending action or
proceeding by any governmental authority for the assessment or collection
of any Taxes, and no claim for assessment or collection of any Taxes has
been asserted against Seller that has not been paid. There are no pending
or threatened audits, investigations, or claims for or relating to any
liability regarding Seller's obligations to pay Taxes. Seller shall be
solely liable and responsible for all of Seller's Taxes, and hereby agrees
to completely and unconditionally indemnify, defend and hold Buyer
completely harmless from and against any liabilities, obligations, claims,
damages, costs and expenses (including attorneys' fees) associated with or
arising out of Seller's Taxes.
Confidentiality of Agreement/Publicity
XIV The terms and conditions of this Agreement are and shall at all times
remain confidential, both before and after Closing, and before and after
any termination hereof. No provision of this Agreement shall be disclosed
by any party without the prior written consent of all of the other
parties. All publicity concerning the transactions contemplated by this
Agreement shall be jointly planned and coordinated
<PAGE>
by Buyer and Seller. No party shall permit the dissemination of any
publicity regarding the transactions contemplated by this Agreement
without the prior written consent of the other parties. Any consents
requested or otherwise required pursuant to this Section XV shall not be
unreasonably withheld by any party.
Non-Competition Agreements-
XV In connection with the sale of these operations and sales of stock, and
prior to Closing, Seller and those Principals designated by Buyer, and any
other individuals or companies listed in BPI Item 3 shall execute and
deliver respective non-competition agreements in the form of Exhibits
--------
"N-1- Non-Competition-Corporate" and "N-2-Non-Competition-Individual" to
------------------------------- --------------------------------
this Agreement (collectively "Non-Competition Agreements" and individually
"Non-Competition Agreement-Corporate," and "Non-Competition Agreement-
Individual"). As additional consideration for this Agreement and pursuant
to their respective Non-Competition Agreements, Seller and Principals
agree that they shall not directly or indirectly compete with Buyer or
carry on or engage in the operation of a car wash within the "Non-Compete
Area" for the "Non-Compete Period" each of which is specified in BPI Item
25.
Indemnity/Guaranty Agreements
XVI Except as otherwise expressly provided in this Agreement, Seller and
Principals shall indemnify Buyer and hold Buyer's property, including the
property described in this Agreement, harmless from any and all expenses,
claims, losses, damages, injuries, and liabilities ("Loss") arising from
or on account of Seller's operations or Seller's lease or ownership of any
of the property described in this Agreement. Seller and Principals shall
execute Guaranty Agreements as set forth in Exhibit "O."
-----------
Introduction to and Retention of Customers
XVII Pending the closing, Buyer shall have the right, during normal business
hours, at times, and under conditions agreed upon by Seller, to frequent
the locations where Seller conducts its operations. Seller shall use its
best efforts to introduce Buyer to Seller's customers and others with whom
Seller does business in connection with its operations, as Seller's
successor to the practice. Seller shall, in every manner encourage its
present and former customers and suppliers to frequent Buyer's operations
or otherwise conduct business with Buyer.
Ownership of Equipment
XVIII All of the equipment is owned by the companies listed as Seller. Seller
represents that none of the equipment is leased.
Amendments/Waivers
XIX This Agreement may be amended, supplemented, modified or rescinded only
through an express written instrument signed by all the parties or their
respective successors and assigns. Either party may specifically and
expressly waive in writing any portion of this Agreement or any breach
hereof,
<PAGE>
but no such waiver shall constitute a further or continuing waiver of any
preceding or succeeding breach of the same or any other provision. The
consent by one party to any action for which such consent was required
shall not be deemed to imply consent or waiver of the necessity of
obtaining such consent for the same or similar acts in the future. All
remedies, rights, undertakings, obligations and agreements contained in
this Agreement shall be cumulative, and none of them shall be in limitation
of any other remedy, right, undertaking, obligation or agreement of any
party, except as set forth in the liquidated damages clause. The failure by
any party hereto at any time to enforce any of the provisions of this
Agreement, or to require at any time performance of any of the provisions
hereof, shall in no way be construed to be a waiver of such provisions or
to affect either the validity of this Agreement or the right of any party
to thereafter enforce each and every provision of this Agreement. UNDER NO
CIRCUMSTANCES SHALL A GUARANTOR HAVE THE RIGHT TO APPROVE, NOR SHALL THERE
BE ANY NEED FOR APPROVAL OF, ANY WRITTEN MODIFICATION OF THIS AGREEMENT OR
ANY AMENDMENTS HERETO.
Attorneys' Fees
XX In the event that any party brings a legal action or proceeding to enforce
the obligations of this Agreement or to exercise any of its rights or
remedies, or if any party is required to defend the validity or
enforceability of the obligations of this Agreement in any action or
proceeding, the prevailing party shall be entitled to an award of its
attorneys' fees and costs and expenses incurred in bringing or defending
the action or proceeding, regardless of the forum in which the resolution
is determined and regardless of whether such legal action is prosecuted to
judgment.
<PAGE>
Notices
XXI Notices shall be written and deemed given when personally delivered or 3
days after deposit in the U.S. Mail, registered or certified, return
receipt requested, or on date signed for when sent by expedited mail or
courier service where receipt can be confirmed, and addressed to the
parties or guarantors at their respective addresses specified in BPI Item
26, subject to change by written notice. Notices may also be given and
will be effective as of the first business day following the date of
transmission if (i) sent over electronic transmitting devices, such as
facsimile, Telex, telecopy machines, and computers; (ii) the party to
whom the notice is being sent has such a device in its office and (iii) a
complete copy of any notice so transmitted shall have also been mailed in
the same manner as required for a mailed notice. Avoidance of or refusal
to accept service shall be deemed acceptance.
Time of Essence
XXII Time is of the essence with respect to the performance of each party's
obligations hereunder.
Severability
XXIII In the event that any provision of this Agreement becomes or is declared
by a court of competent jurisdiction to be illegal, unenforceable or
void, then this Agreement shall continue in full force and effect without
said provision. Provided, however, that no such severability shall be
effective if it materially changes the economic benefit of this Agreement
to any party.
Exhibits
XXIV All exhibits and addenda described in this Agreement and the BPI are
incorporated herein by reference as if fully set forth herein, and
constitute a material part of this Agreement. The parties hereby
specifically approve the form and substance of any such exhibits and
addenda. In the event of any conflict between the provisions of this
Agreement and the provisions of any such exhibits and addenda, the
provisions of such exhibits and addenda shall govern.
Diligence, Good Faith and Further Documents
XXV The parties specifically agree to act diligently, in the utmost good
faith and in a timely manner to perform their respective obligations
pursuant hereto, and to carry out the reasonable intent of the provisions
of this Agreement. Each of the parties agrees to cooperate in good faith
with the other, and to execute and deliver such further instruments and
perform such other acts as may be reasonably necessary or appropriate to
consummate and carry into effect the transactions contemplated by this
Agreement.
<PAGE>
Survivability
XXVI All of the representations and warranties of Seller and Principals
pursuant to this Agreement and the Other Documents shall survive the
Closing.
Entire Agreement
XXVII This Agreement constitutes the entire understanding between Buyer and
Seller concerning its subject matter and all representations, agreements,
arrangements and understandings between or among the parties, whether
oral or written, have been fully merged herein and are superseded hereby,
except to the extent fully executed management contracts have been
previously entered into between Seller/Principals and Buyer. Any
agreements, representations, letters, conversations, or proposals
respecting the operations or the sale of assets not expressly set forth
in this Agreement shall have no effect except for a subsequent written
modification signed by the party to be charged.
Assignment Prohibited
XXVIII Neither this Agreement, nor any interest herein, shall be assignable
(voluntarily, involuntarily, by judicial process or otherwise) by any
party hereto to any person or entity without the prior written consent of
the other executing party. Any attempt to assign this Agreement without
such consent shall be void. Notwithstanding the above, Seller may assign
any and all rights to receipt of payments.
Successors
XXIX Subject to the foregoing section, this Agreement shall be binding upon
and inure to the benefit of the parties and their respective heirs,
legatees, legal representatives, successors and permitted assigns.
Governing State Law
XXX This Agreement shall be governed by and interpreted in accordance with
the internal laws of the State shown in BPI Item 27, "Governing State
Law," including all matters of construction, validity, performance and
enforcement, without giving effect to principles of conflict of laws. Any
dispute, action, litigation or other proceeding concerning this Agreement
shall be instituted, maintained, heard and decided in the county shown in
BPI Item 28, "County Jurisdiction."
Counterparts
XXXI This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument and agreement.
<PAGE>
Remedies
XXXII All rights, remedies, undertakings, obligations, options, covenants,
conditions and agreements contained in this Agreement shall be cumulative
and no one of them shall be exclusive of any other. If Seller defaults in
performing any of Seller's obligations under this Agreement for any
reason, or if any of the representations or warranties of Seller herein
are untrue at Closing, Buyer may, at its option, either terminate this
Agreement or seek to enforce specific performance of this Agreement.
Interpretation
XXXIII The language in all parts of this Agreement shall be in all cases
construed simply according to its fair meaning and not strictly for or
against any party. Whenever the context requires, all words used in the
singular will be construed to have been used in the plural, and vice
versa, and each gender will include any other gender. The captions of the
sections of this Agreement are for convenience only and shall not affect
the construction or interpretation of any of the provisions herein. All
cross-references refer to provisions within this Agreement, and shall not
be deemed to be references to the overall transaction or to any other
agreement or document. Each party has been represented by an attorney
throughout this transaction and has had his or its attorney review this
Agreement. "Shall" or "will" as used herein is mandatory. "May" is not
mandatory. Any list or specifications of items herein is deemed to be all
encompassisng and without limitation, unless such limitation is
specifically stated. The foregoing applies whether or not preceded or
followed by the phrase "included, but not limited to" or "included,
without limitation," or similar language.
Benefit of Agreement
XXXIV This Agreement is for the sole and exclusive benefit of the signatories
hereto and nothing in this Agreement shall be construed to give any
person or entity other than the parties hereto any legal or equitable
right, claim, or remedy.
Miscellaneous
XXXV Unless expressly set forth otherwise herein, all references herein to a
"day", "month" or "year" shall be deemed to be a reference to a calendar
day, month or year, as the case may be.
EXECUTED to be effective on the date first set forth herein.
BUYER:
MILLENNIA CAR WASH LLC,
a Delaware limited liability company
By: /s/ Russell B. Geyser
-----------------------------
Russell B. Geyser
Chairman & CEO
SELLER:
QUAKER CAR WASH, INC.,
A Texas corporation
<PAGE>
By: /s/ Patrick C. Simek
----------------------------
Patrick C. Simek, President
PRINCIPAL:
/s/ Patrick C. Simek
- -------------------------------
Patrick C. Simek [100% shareholder]
GUARANTORS:
/s/ Patrick C. Simek
- -------------------------------
Patrick C. Simek
/s/ Dinah L. Simek
- -------------------------------
Dinah L. Simek
ATTACH NOTARIZATIONS HERE:
<PAGE>
CAR WASH ASSET PURCHASE/SALE AGREEMENT
BASIC PURCHASE INFORMATION
1. Effective Date of Agreement August 26, 1998 [Preamble]
---------------
2. Buyer: MILLENNIA CAR WASH LLC
[Preamble] a Delaware Limited Liability Company
3. Seller: Quaker Car Wash, Inc.
----------------------
a Texas corporation
-------------------
[Preamble] & [Seller's Representations and Warranties]
4. Operations:
Name and Location of Car Wash/Operation:
[Recitals]
Hanna Car Wash
-------------------------------
1912 Quaker Avenue
-------------------------------
Lubbock, TX 79407
-------------------------------
5. Elements to be Purchased:
[Recitals]
Assets : A Full Service Car Wash (General Description)
-------------------------------------
And all equipment at the location
--------------------------------------
Real Property: Fee Simple (General Description)
---------------------------------
1912 Quaker Avenue, Lubbock, Texas 79407
------------------------------------------------------
Stock: None (General Description)
------------------------------
___________________________
6. Trade Names & Trademarks
[Purchase and Sale of Assets]
Trade Names: Quaker Car Wash, Inc.
--------------------------------
D/B/A : Hanna Car Wash
--------------------------------
7. Purchase Price: Two Million Eight Hundred Fifty Thousand Dollars
----------------------------------------------------------------
($2,850,000.00)
---------------
[Amount of Purchase Price]
8. EBITDA - (subject to verification): To be supplied
[Amount of Purchase Price]
<PAGE>
9. Effective Capitalization ("Cap") Rate: N/A [Amount of Purchase Price]
----------
10. Allocations: Covenant Not to Compete $ 5,000.00
--------------
Land: $ 645,000.00
--------------
Car Wash Equipment: $ 125,000.00
--------------
Building: $ 2,075,000.00
--------------
Estimated Inventory (not included in Purchase Price): $25,000.00
----------------
11. Hold-Back: $100,000.00
-----------
[Payment of Purchase Price & Commissions]
12. Hold-Back Period: Nine (9) months from the Close of Escrow
---------------------------------------------------
[Payment of Purchase Price & Commissions]
13. Hold-Back Depletion Amount: None
----------------
[Payment of Purchase Price & Commissions]
14. Guaranty Period [minimum period must equal Non-Compete Period]:
[Payment of Purchase Price & Commissions] Two (2) Years
--------------------------
15. Buyer's Broker: Ron Holland (Finder's Fee)
----------------------------------------------------
[Payment of Purchase Price & Commissions]
16. Seller's Broker: None
---------------------------------------------------
[Payment of Purchase Price & Commissions]
17. Title Company: Stewart Title or other Title Company as chosen by Buyer
-------------------------------------------------------
[Documents and Physical Inspection]
18. Escrow Company: Arizona Escrow, attn. Vickie La Ritchie
----------------------------------------------
[Escrow] 3700 North 24th Street, Suite 130
----------------------------------------------
Phoenix, AZ 85016
----------------------------------------------
(602)956-2629; Fax: (602) 224-9393
----------------------------------------------
19. Escrow Opening Date:__________________________________________
[Escrow] (Date by which Escrow must be opened)
20. Initial Deposit:Ten Thousand Dollars ($10,000.00)
-------------------------------------
[Escrow]
21. Days From Opening: Forty Five (45) Days from Opening Escrow
--------------------------------------------
[Escrow] (Earliest Date On Which Buyer's Deposit Becomes Non-Refundable)
<PAGE>
22. Fuel Companies: Texaco
------
[Escrow]
23. Consent Date: Execution of Agreement
------------------------------------
[Conditions Precedent to Closing]
24. Date for Close of Escrow: Seventy Five (75) Days from the Opening of Escrow
[Closing]
25. Non-Compete Area: Lubbock County, Texas
---------------------
Non-Compete Period: Two (2) Years
---------------------
[Non-Competition Agreements]
26. Seller's Address for Notices: Patrick C. Simek
----------------
[Notices] Quaker Car Wash, Inc.
---------------------------
1812 Broadway
--------------------------------
Lubbock, TX 79401
--------------------------------
(806) 763-8911
--------------------------------
Buyer's Address for Notices: Millennia Car Wash LLC
[Notices] 511 Encinitas Blvd., Suite 100
Encinitas, CA 92024
Attn: Catherine L. Bland, General
Counsel
cc: Lynne M. Geyser, Esq.
P.O. Box 4715
San Clemente, CA 92674-4715
Senior General Counsel
Millennia Car Wash, LLC
27. Governing State Law: Texas
-------------------------------------------------
[Governing State Law]
28. County Jurisdiction: Lubbock
-------------------------------------------------
[Governing State Law]
The foregoing Basic Purchase Information ("BPI") forms a part of the standard
form CAR WASH ASSET PURCHASE/SALE AGREEMENT ("Agreement") and is incorporated by
reference into the Agreement pursuant to the operative provisions of the basic
text of the Agreement contained in the attached pages. The BPI shall control
over the text in the event of any conflict.
<PAGE>
EXHIBIT LIST
------------
Exhibit "A" Furniture, Fixtures & Equipment; Leasehold Improvements; &
Specified Tangible Assets
Exhibit "B" Inventory - Definition & List. Definition: Items held for
resale, spare parts and supplies in raw forms (i.e.,
detergents, etc.), fuel.
Exhibit "C" Permits
Exhibit "D" Intangibles
Exhibit "E" Trade Names, Trademarks, DBAs, Logos (Documents)
Exhibit "F-1" Operating Leases (Seller is Lessee)
Exhibit "F-2" Seller's Leases (Seller is Lessor)
Exhibit "G" Seller's Fee Simple Interests in Real Property - Legal
Descriptions
Exhibit "H" Fuel Company Agreements
Exhibit "I" Zoning Certificate
Exhibit "J" Consent and Agreement of Spouse
Exhibit "K" Undischarged and Assumed Obligations
Exhibit "L" Service Contracts Exceeding 30 Days
Exhibit "M" Bill of Sale (Form)
Exhibit "N-1" Non-Competition - Corporate
Exhibit "N-2" Non-Competition - Individual
Exhibit "O" Guaranty Agreement
ADDENDA
-------
The following Addenda are attached to and made a part of this Agreement (if
none, so state):
Additional Conditions of Purchase: None
Exceptions to Non-Competition: None
<PAGE>
Corrections to Agreement:
1. Section I. B. (7), Seller and Principals, Line 1: Insert "entity or"
---------------------
before the word "individual."
2. Section III. B., Line 3: After the parenthetical "(operations and
Covenants)" insert the sentence: "The hold-back amount shall cover any
and all of Seller's liabilities or third party claims, which exist as
of the Close of Escrow, whether known or unknown, or which arise or
become known during the hold-back period specified in BPI Item 12."
3. Section IV. D, Line 1: Insert " , or the equivalent thereof, or a Land
Survey Category IA, as determined by Buyer," after the word "survey."
4. Section V. C. (2): Insert ", in its sole and absolute discretion,"
after "Buyer"
5. Section V. C. (3): Insert ", in its sole and absolute discretion,"
after "Buyer"
6. Section V. C.: Insert at the end thereof,
"At any time prior to Closing, Buyer has the right, in its sole
and absolute discretion, to review, analyze, and approve or
disapprove of Seller's books and records, including, but not
limited to, the accuracy thereof, and take into account the total
economic viability of the transaction as it relates to Buyer's
overall business plans."
7. Section VI. H. Seller's Retained Liabilities, Line 7: Delete
-----------------------------
"Effective Date of this Agreement" and insert "Close of Escrow."
8. Section VI. K. (3), Lines 2 through 5: Delete:
"If such a letter is not received by Seller, or its agent, on or
before the time specified in Section V. B., Buyer shall be deemed
to have rejected one or more of the Inspection Items, and this
Agreement shall terminate in its entirety and become null and
void"
Substitute in lieu thereof:
"If such letter is not received by Seller, or its agent, on or
before the time specified in Section V. C., Seller has the right
to demand such a letter from Buyer. Buyer shall deliver such
letter to Seller within five (5) days of Buyer's receipt of
notice of Seller's demand. If Buyer fails to deliver such an
approval or disapproval letter, Buyer shall be
<PAGE>
deemed to have rejected one or more of the Inspection Items,
and this Agreement shall terminate in its entirety and become
null and void."
9. Section IX. A., Line 1: Delete "to the extent covered by Insurance,".
10. Section XI. B. (2), Line 1: Insert ", or equivalent thereof," after
the parenthetical "(extended form)."
11. Section XI. B. (2), Line 1: Insert "and Seller's Improvements" after
the word "Land."
12. Section XI. B. (2), Line 3: Insert "and the Improvements thereon"
after the word "Land."
13. Section XI. B. (2), Add at the end thereof, "To the extent that the
amendments and endorsements referenced in the first full paragraph
hereof are not available, it shall be within Buyer's sole and absolute
discretion to determine what it will accept in lieu thereof. To the
extent Title Company coverage is not available as specified in the
endorsements shown above, the following shall apply:
100 Buyer must approve any restrictions shown, or otherwise satisfy
itself as to these assurances against loss resulting from
violations of the REA.
116.4 Buyer must be satisfied that each of the parcels of land
described in the policy and the REA are contiguous parcels, if
applicable.
103.6 Buyer shall satisfy itself pursuant to the as-built survey, or
otherwise that the improvements on each of Seller's Lands do
not encroach onto any easement.
103.7 Buyer must be satisfied that Seller's Lands abut on and have
access to a physically open street.
116.1 Buyer must be satisfied that the property described in the
policy is the same property as shown on the survey.
14. Section XI. E. Line 4: Insert "Seller's" before the word "Broker's."
15. Section XII, Lines 4 through 6: Delete:
"In the event Buyer fails to notify Seller of Buyer's
disapproval of the Phase I's or Phase II's within the time
period set forth in Section V. B., Buyer shall be deemed to
have rejected the Phase I's and/or Phase II's as not
satisfactory."
Substitute in lieu thereof:
"If such letter is not received by Seller, or its agent, on or
before the time specified in Section V. C., Seller has the
right to
<PAGE>
demand such a letter from Buyer. Buyer shall deliver such
letter to Seller within five (5) days of Buyer's receipt of
notice of Seller's demand. If Buyer fails to deliver such an
approval or disapproval letter, Buyer shall be deemed to have
rejected one or more of the Inspection Items."
16. Section XXIV, Add at the end thereto: "The parties acknowledge that
the Agreement has been executed prior to the completion of certain
Exhibits which are solely the responsibility of Seller to prepare and
subject to Buyer's sole approval (specifically, Exhibits A-H and K-M).
The parties further agree that said Exhibits shall be attached to the
Agreement as soon as possible, but in all cases, prior to the
Closing."
17. Except as shown above, there are no other corrections to the
Agreement.
<PAGE>
EXHIBIT 2.2
Lynne M. Geyser
Attorney at Law
P.O. Box 4715
San Clemente, Ca 92674-4715
Phone 949-498-8061
24 Hour Phone 1-500-488-Legal
Fax 949-498-7772
November 23, 1998 VIA FAX: (806) 747-0514
Patrick C. Simek, Esq.
1812 Broadway
Lubbock, TX 79401
Re: Millennia Purchase - Quaker Car Wash, Inc.
------------------------------------------
Dear Patrick:
It is my understanding that you and Reed Fisher discussed an extension of
the escrow this morning. As you know, Millennia Car Wash, LLC ("Millennia")
has the absolute right to cancel the Purchase and Sale escrow and receive a
return of the Millennia monies held therein. As you also know, Millennia
prefers not to cancel the escrow. Therefore, Millennia hereby notifies you
that Millennia will refrain from exercising its right to cancel and demand
return of its monies today, specifically conditioned on your agreement to
(i) extend the date in BPI Item 21 - Days From Opening (Earliest Date On
Which Buyer's Deposit Becomes Non-Refundable) to December 29, 1998 and (ii)
extend the date in BPI Item 24 - Date for Close of Escrow - to not later
than March 2, 1999.
In order to accept this offer to refrain from canceling escrow immediately,
Seller must indicate its acceptance by signing below. Further, a copy of
this signed letter must be returned by FAX to me at 949-498-7772 and to
Millennia at 760-635-0578 today, and the original sent via FedEx or other
expedited service for delivery tomorrow, if possible, otherwise the
following day. The FedEx should be sent to the Millennia offices at 511
Encinitas Blvd., Suite 100, Encinitas, CA 92024, Attention: Carrie Tonini.
In the absence of Seller's agreement and receipt of evidence thereof, this
letter shall serve as notification that the escrow is canceled. I will be
out of my office tomorrow, making time extremely short. If any signature
lines have been overlooked, please add a signature sheet as necessary.
Except as stated above, Millennia is not waiving, relinquishing, or
modifying any rights or privileges whatsoever.
As Reed has already told you, if you desire more information concerning the
proposed extension, Stephen Prior is at the Millennia offices (phone
760-635-0492) today and should be able to assist you.
<PAGE>
Patrick Simek, Esq.
November 23, 1998
Page 2
All of us at Millennia have enjoyed working with you and we are very pleased
that your preference as well as ours, is that the escrow be amended as
stated above. Thank you for your consideration in this matter.
Very truly yours,
/s/ Lynne M. Geyser
Lynne M. Geyser
Senior General Counsel
Millennia Car Wash, LLC
APPROVED AND ACCEPTED:
Quaker Car Wash, Inc.
a Texas corporation "Seller"
By: /s/ Patrick C. Simek
-----------------------------
Patrick C. Simek
President
Millennia Car Wash, LLC
a Delaware limited liability company "Buyer"
by: /s/ Russell B. Geyser
-----------------------------
Russell B. Geyser
Chairman and CEO
<PAGE>
Exhibit 2.3
Lynne M. Geyser
Attorney at Law
P.O. Box 4715
San Clemente, Ca 92674-4715
Phone 949-498-8061
24 Hour Phone 1-500-488-Legal
Fax 949-498-7772
January 6, 1999 VIA FAX: (806) 747-0514
Patrick C. Simek, Esq.
1812 Broadway
Lubbock, TX 79401
Re: Millennia Purchase - Quaker Car Wash, Inc.
------------------------------------------
Dear Patrick:
In accordance with Steve Prior's discussion with you earlier this week, I
understand that there is agreement to amend the escrow as follows:
IN CONSIDERATION of the mutual promises of the parties, Buyer and Seller agree
as follows:
1. As between Buyer and Seller, Buyer has the option, but not the obligation,
to assign all or any part of its interest in the Agreement as amended,
and the escrow for the consummation thereof, to American Wash Services,
Incorporated, and/or any successor corporation thereto.
________________
2. Other than as set forth herein, there are no other changes to the terms and
conditions of the escrow.
Thank you for your cooperation throughout this transaction. If you have any
questions please do not hesitate to contact me. Please sign below to indicate
your acceptance of this amendment. Please FedEx three copies with your original
signatures to the Millennia home office and fax one copy to me at (949) 498-7772
and one to Millennia at (760) 635-0578.
Very truly yours,
/s/ Lynne M. Geyser
Lynne M. Geyser
Senior General Counsel
Millennia Car Wash, LLC
APPROVED AND ACCEPTED:
<PAGE>
Patrick Simek, Esq.
January 6, 1999
Page 2
Quaker Car Wash, Inc.
a Texas corporation "Seller"
By: /s/ Patrick C. Simek
-------------------------------------------------
Patrick C. Simek
President
Millennia Car Wash, LLC
a Delaware limited liability company "Buyer"
by: /s/ Russell B. Geyser
-------------------------------------------------
Russell B. Geyser
Chairman and CEO
<PAGE>
Exhibit 2.4
Lynne M. Geyser
Attorney at Law
P.O. Box 4715
San Clemente, Ca 92674-4715
Phone 949-498-8061
24 Hour Phone 1-500-488-Legal
Fax 949-498-7772
February 26, 1999 VIA FAX: (806) 747-0514
Patrick C. Simek, Esq.
1812 Broadway
Lubbock, TX 79401
Re: Millennia Purchase - Quaker Car Wash, Inc.
------------------------------------------
Dear Patrick:
In accordance with Steve Prior's earlier discussions with you, I understand that
there is agreement to amend the escrow as follows:
IN CONSIDERATION of the mutual promises of the parties, Buyer and Seller
agree as follows:
1. BPI Item 24, is hereby deleted in its entirety and the following is
substituted therefor:
"24. Date for Close of Escrow: not later than April 22, 1999
-----------------------------
[Closing]"
2. Other than as set forth herein, there are no other changes to the terms and
conditions of the escrow.
Thank you for your cooperation throughout this transaction. If you have any
questions please do not hesitate to contact me. Please sign below to indicate
your acceptance of this amendment. Please FedEx three copies with your original
signatures to the Millennia home office and fax one copy to me at (949) 498-7772
and one to Millennia at (760) 635-0578.
Very truly yours,
/s/ Lynne M. Geyser
Lynne M. Geyser
Senior General Counsel
<PAGE>
Millennia Car Wash, LLC
APPROVED AND ACCEPTED:
Quaker Car Wash, Inc.
a Texas corporation "Seller"
By: /s/ Patrick C. Simek
-------------------------------------------------
Patrick C. Simek
President
Millennia Car Wash, LLC
a Delaware limited liability company "Buyer"
by: /s/ Russell B. Geyser
-------------------------------------------------
Russell B. Geyser
Chairman and CEO
<PAGE>
EXHIBIT 2.5
Lynne M. Geyser
Attorney at Law
P.O. Box 4715
San Clemente, Ca 92674-4715
Phone 949-498-8061
24 Hour Phone 1-500-488-Legal
Fax 949-498-7772
April 7, 1999 VIA FAX: (806) 747-0514
Patrick C. Simek, Esq.
1812 Broadway
Lubbock, TX 79401
Re: Millennia/AWS Purchase - Quaker Car Wash, Inc.
----------------------------------------------
Dear Patrick:
In accordance with Steve Prior's earlier discussions with you, I understand that
there is agreement to amend the CAR WASH ASSET PURCHASE/SALE AGREEMENT
("Agreement") by this letter agreement.
1. Buyer, Millennia Car Wash LLC (herein also referenced as "Original Buyer-
Assignor"), hereby assigns all its rights, title, and interests in and to
the Agreement to American Wash Services, Inc. ("AWS"), and or any parent,
subsidiary or successor corporation to AWS. Original Buyer-Assignor is
executing this letter amendment for the sole purpose of completing the
assignment of its interests to AWS. All other agreements and amendments
contained herein are for the benefit of AWS, Issuer, and Seller, as their
interests may appear. Original Buyer-Assignee shall not be deemed to have
approved such transactions or to have any interest in such transactions or
in any activities or transactions, which occur with respect to the purchase
and sale of Seller's business, subsequent to March 30, 1999.
2. AWS (herein also referenced as "Buyer" or "Buyer-Assignee") hereby accepts
the assignment from Assignor of its interests in and to the Agreement, and
assumes and accepts all duties and obligations arising thereunder, from and
after March 30, 1999.
3. BPI Item 24, is hereby deleted in its entirety and the following is
substituted therefor:
"24. Date for Close of Escrow: not later than May 15, 1999
---------------------------
[Closing]"
4. BPI Item 10 is hereby deleted in its entirety and the following is
substituted therefor:
"Allocations: Covenant Not to Compete $ 5,000.00
-------------
Land: $2,400,000.00
-------------
<PAGE>
Patrick C. Simek, Esq.
Letter Amendment
April 7, 1999
Page 2 of 6
Car Wash Equipment: $ 50,000.00
-------------
Building: $ 395,000.00
-------------
"Estimated Inventory (not included in Purchase Price): $ 25,000.00
-----------
"The Purchase Price shall be paid in the following manner:
(i) Assumption of Debt of not less than One Million Dollars
($1,000,000.00) nor more than One Million Five Hundred and Fifty-
Five Thousand Dollars ($1,555,000.00) per Exhibit "K."
----------
(ii) Balance of the Purchase Price shall consist of between One
Million Eight Hundred and Fifty Thousand Dollars ($1,850,000.00)
and One Million Two Hundred and Ninety-Five Thousand Dollars
($1,295,000.00) in Mace Securities International, Inc. ("Issuer")
Stock which, for the purpose of this Agreement only, shall be
valued at Seven Dollars and Eighty-One Cents ($7.81) per share.
The exact amount of the balance required to be issued pursuant to
this subparagraph (ii) shall depend upon the exact amount of the
Assumption of Debt as specified in subparagraph (i) immediately
above. Of the total amount of the shares, $100,000 in shares
shall be held back in accordance with BPI Item 11 as amended. The
remaining shares shall be issued at Close of Escrow. At the end
of the Hold-Back Period, so much of the Hold-Back shares as are
then remaining, shall be issued to Seller.
(iii) Cash in Escrow of Ten Thousand Dollars ($10,000.00) to be
returned to Buyer at Close of Escrow
"Each Seller understands and agrees that the following restrictions
and limitations are applicable to its purchase and resale or other
transfer of the Issuer's stock, pursuant to the Securities Act of 1933
(the "Act"). For the purposes of this Agreement, the terms "Issuer's
Stock" includes common stock issuable upon Close of Escrow as well as
the common stock designated as Hold-Back shares which are to be issued
at the end of the Hold-Back Period.
(a) Sellers agree that the Issuer's Stock shall not be sold or
otherwise transferred, unless the Issuer's Stock is registered
under the Act and the state securities laws or is exempt
therefrom.
(b) For a period of one year after the Issuer's Stock or
portion thereof has been issued (unless the Issuer's Stock shall
have been registered under the Act for sale prior thereto),
Sellers shall not sell, distribute or transfer any of such
securities without the prior written consent of the Issuer or its
successor corporation, as applicable. Unless and until the
Issuer's stock is registered under the Act, a legend in
substantially the
<PAGE>
Patrick C. Simek, Esq.
Letter Amendment
April 7, 1999
Page 3 of 6
following form will be placed on the certificates evidencing the
Issuer's stock to be issued to the Sellers:
'The securities represented by this certificate have
not been registered under the Securities Act of 1933 or
any state securities act. These shares have been
acquired for investment and may not be sold,
transferred, pledged or hypothecated unless (i) they
shall have been registered under the Securities Act of
1993 ('the Act') and any applicable state securities
act or (ii) Mace Security International, Inc. shall
have been furnished with an opinion of counsel,
reasonably satisfactory to counsel for Mace Security
International, Inc., that registration is not required
under any such acts.'
(c) Stop transfer instructions will be imposed with respect to
the Issuer's Stock issued to Sellers pursuant to this Agreement
so as to restrict resale or other transfer thereof except in
accordance with the foregoing provisions of this Agreement."
"Each Seller acknowledges that the Issuer's Stock is being delivered
to Seller in a private placement under Section 4.2 of the Act and
under Regulation D promulgated under the Act. To induce Buyer and
Issuer to deliver the Issuer's Stock, each Seller represents and
warrants as follows:
(a) Seller is a Texas corporation and each Seller is an
accredited investor as that term is defined in Regulation D under
the Act.
(b) Each Seller represents and warrants that the Issuer's Stock
is being acquired for its own account without a view to public
distribution or resale and that Sellers have no contract,
undertaking, agreement or arrangement to sell or otherwise
transfer or dispose of the Issuer's Stock, or any portion
thereof, to any other person.
(c) Each Seller represents and warrants that in determining to
acquire the Issuer's Stock, it has relied solely upon its
independent investigation, including the advice of its legal
counsel and accountants or other financial advisors or purchaser
representatives, and has, during the course of
<PAGE>
Patrick C. Simek, Esq.
Letter Amendment
April 7, 1999
Page 4 of 6
discussions concerning its acquisition of the Issuer's Stock,
been offered the opportunity to ask such questions and inspect
such documents concerning Buyer and its business and affairs as
each Seller has requested so as to more fully understand the
nature of the investment and to verify the accuracy of the
information supplied.
(d) THE SELLERS ACKNOWLEDGE THAT THE ACQUISITION OF THE
CONSIDERATION STOCK INVOLVES A HIGH DEGREE OF RISK, and represent
and warrant that they can bear the economic risk of the Seller's
acquisition of the Issuer's Stock, including the total loss of
the investment.
(e) The Sellers represent and warrant that (i) they have
adequate means of providing for their current needs and financial
contingencies, (ii) they have no need for liquidity in this
investment, (iii) they have no debts or other obligations, and
cannot foresee any other circumstances that are likely in the
future to require them to dispose of the Issuer's Stock, and (iv)
all their investments in and commitments to non-liquid
investments are, and after acquisition of the Issuer's Stock will
be reasonable in relation to their net worth and current needs.
(f) The Sellers understand that no federal or state agency has
approved or disapproved the Issuer's Stock or made any finding or
determination as to the fairness of the Issuer's Stock for
investment.
(g) The Sellers understand that the Issuer's Stock is being
offered and sold in reliance on specific exemptions from the
registration requirements of federal and state securities laws
and the Buyer is relying upon the truth and accuracy of the
representations, warranties, agreements, acknowledgments and
understandings set forth herein in order to determine the
applicability of such exemption and the suitability of Sellers to
acquire the Issuer's Stock.
(h) The Sellers represent and warrant that they are familiar
with the business and financial affairs of the Seller corporation
and have had access to all financial statements prepared by the
Seller corporation."
5. BPI Item 11 is hereby deleted in its entirety and the following is
substituted therefor:
"Hold-Back: $100,000.00 in stock.
--------------------
[Payment of Purchase Price & Commissions]"
<PAGE>
Patrick C. Simek, Esq.
Letter Amendment
April 7, 1999
Page 5 of 6
6. BPI Item 26 Add the following notice addresses for buyer:
Buyer: Stephen J. Prior
American Wash Services, Inc.
644 W. Hazelwood Street
Phoenix, AZ 85013
cc: Lynne M. Geyser, Esq.
P.O. Box 4715
San Clemente, CA 92674-4715
7. AGREEMENT Section XIV, Confidentiality of Agreement/Publicity: Delete the
full paragraph appearing beneath the heading in its entirety and
substitute:
"No provision of this Agreement shall be disclosed by Seller
without the prior written consent of Buyer. All publicity
concerning the transactions contemplated by this Agreement
shall be planned and coordinated by Buyer. Seller shall not
permit the dissemination of any publicity regarding the
transactions contemplated by this Agreement without the
prior written consent of Buyer. Any consents requested or
otherwise required pursuant to this Section XIV shall not be
unreasonably withheld."
8. Other than as set forth herein, there are no other changes to the terms and
conditions of the Agreement or the Escrow.
Thank you for your cooperation throughout this transaction. If you have any
questions please do not hesitate to contact me. Please sign below to indicate
your acceptance of this amendment. Please FedEx five (5) copies with your
original signature to the Millennia home office, attention Carrie Tonini and fax
one copy to me at (949) 498-7772 and one to Millennia at (760) 635-0578. Carrie
or I will obtain the additional signatures required and will forward one fully
signed copy to you and one to Escrow.
Very truly yours,
Lynne M. Geyser
APPROVED AND ACCEPTED:
Quaker Car Wash, Inc.
a Texas corporation "SELLER"
<PAGE>
Patrick C. Simek, Esq.
Letter Amendment
April 7, 1999
Page 6 of 6
By: /s/ Patrick C. Simek
--------------------------
Patrick C. Simek
President
Millennia Car Wash, LLC
a Delaware limited liability company "Original Buyer-Assignor"
By: /s/ Patrick C. Simek
--------------------------
Russell B. Geyser
Chairman and CEO
AMERICAN WASH SERVICES, INC.
a Delaware corporation "Buyer" and "Buyer-Assignee"
by: /s/ Robert M. Kramer
--------------------------
Robert M. Kramer
Vice President
APPROVED BY:
ISSUER:
MACE SECURITIES INTERNATIONAL, INC.
a Delaware corporation
By: /s/ John E. Goodrich
--------------------------
John E. Goodrich
President
<PAGE>
EXHIBIT 2.6
Lynne M. Geyser
Attorney at Law
P.O. Box 4715
San Clemente, Ca 92674-4715
Phone 949-498-8061
24 Hour Phone 1-500-488-
Legal
Fax 949-498-7772
May 10, 1999 VIA FAX:(806) 747-0514
Patrick C. Simek, Esq.
1812 Broadway
Lubbock, TX 79401
Re: Millennia/AWS/Mace Purchase - Quaker Car Wash, Inc.
---------------------------------------------------
Dear Patrick:
In accordance with earlier discussions with you, I have prepared this letter
agreement to further amend the CAR WASH ASSET PURCHASE/SALE AGREEMENT
("Agreement") so that the purchase will be stock for stock rather than stock for
assets. The effective or "as of" closing date is midnight May 8, 1999, stock
issue date is anticipated, but not required, to be May 18, 1999. The stock will
be placed in escrow, pending the actual closing date of June 30, 1999, or
sooner.
Having noticed 2 typos in the letter amendment of April 7, 1999, I have restated
the 1/st/ and 2/nd/ provisions from that letter. Please note that in stock for
stock transaction, the inventory is included in the purchase price because it is
one of the assets of the corporation whose stock AWS will acquire. Assumption of
debt is also automatic because of the purchase of the stock, so the purchase
price has been adjusted and a representation as to the amount of debt of the
corporation is included.
1. Buyer, Millennia Car Wash LLC (herein also referenced as "Original Buyer-
Assignor"), hereby assigns all its rights, title, and interests in and to
the Agreement to American Wash Services, Inc. ("AWS"), and or any parent,
subsidiary or successor corporation to AWS. Original Buyer-Assignor is
executing this letter amendment for the sole purpose of completing the
assignment of its interests to AWS. All other agreements and amendments
contained herein are for the benefit of AWS, Mace, any successor in
interest to either of the foregoing, and Seller, as their interests may
appear. Original Buyer-Assignor shall not be deemed to have approved such
transactions or to have any interest in such transactions or in any
activities or transactions, which occur with respect to the purchase and
sale of Seller's business, subsequent to March 30, 1999.
2. AWS (herein also referenced as "Buyer" or "Buyer-Assignee") hereby accepts
the assignment from Original Buyer-Assignor of its interests in and to the
Agreement, and assumes and accepts all duties and obligations arising
thereunder, from and after March 30, 1999.
<PAGE>
Patrick Simek, Esq.
Letterhead Amendment
May 10, 1999
Page 2 of 10
3. It is hereby agreed that American Wash Services, Inc. ("AWS" or "Buyer")
has the right to assign all of its rights, title, and interests in and to
the Agreement to Mace Security International, Inc. ("Mace"), a Delaware
corporation and/or any parent, subsidiary or successor corporation to Mace.
Mace is sometimes further referred to herein as "Issuer."
4. The sole shareholder of the corporate Seller has reviewed and approved the
transactions contemplated by this Agreement. He has decided to amend the
entire Agreement so that the transaction contemplated by the Agreement will
be a sale of stock, in lieu of a sale of assets. To effectuate the intent
of this letter Amendment, the Shareholder agrees that his signature
heretofore affixed to any of the documents constituting this transaction
(including, without limitation, the Agreement, the Exhibits, and all prior
Amendments) shall be deemed to be a signature of such shareholder in the
capacity shown, as well as in his shareholding capacity.
5. BPI Item 3 is hereby deleted in its entirety and the following is
substituted therefor:
"Seller: Shareholder of Quaker Car Wash, Inc., a Texas corporation:
------------------------------------------------------------
Patrick C. Simek - holds 100% of the total shares
-------------------------------------------------
outstanding. [Preamble] & [Seller's Representations and
-----------
Warranties]"
6. BPI Item 5 is hereby deleted in its entirety and the following is
substituted therefor:
"Elements to be Purchased:
[Recitals]
*Assets: A Full Service Car Wash (General Description)
-----------------------
And all equipment at the location
---------------------------------
*Real Property: Fee Simple (General Description)
----------
1912 Quaker Avenue, Lubbock Texas 79407
---------------------------------------
*The foregoing is for descriptive purposes. The
assets are owned by the corporate entity set forth
in BPI, ITEM 3, will remain in that entity and are
not to be separately transferred.
Stock: 100% of all Shares of Stock in the corporate
--------------------------------------------
entity listed in BPI Item 3."
----------------------------
7. BPI Item 7: Delete in its entirety and substitute:
<PAGE>
Patrick Simek, Esq.
Letterhead Amendment
May 10, 1999
Page 3 of 10
"Purchase Price: One Million Eight Hundred Fifty Thousand Dollars
-------------------------------------------------
($1,850,000.00) -subject to adjustment as set forth in BPI Item 10.
--------------------------------------------------------------------
[Amount of Purchase Price]"
8. BPI Item 10: Delete in its entirety and substitute:
"Inventory owned by the corporation owned by Seller is included in the
Purchase Price. Further, the Purchase Price has been determined in the
following manner:
"The debt of the corporation shall be not less
than One Million Dollars $1,000,000.00) nor more
than One Million Five Hundred and Fifty-Five
Thousand Dollars ($1,555,000.00) per Exhibit "K."
----------
The Purchase Price shall be between One Million
Eight Hundred and Fifty Thousand Dollars
($1,850,000.00) and One Million Two Hundred and
Ninety-Five Thousand Dollars ($1,295,000.00)
(adjusted based on the amount of debt described in
Exhibit "K") payable solely by exchange of the
-----------
Stock described in BPI Item 5 for Mace Securities
International, Inc. ("Issuer") Stock which, for
the purpose of this Agreement only, shall be at a
price per share of Seven Dollars and Eighty-One
Cents ($7.81). The exact amount of the balance
required to be issued pursuant to this paragraph
shall depend upon the exact amount of the debt of
the corporation, as set forth immediately above.
Of the total amount of the shares, $100,000.00 in
shares shall be held back in accordance with BPI
Item 11 as amended. The remaining shares shall be
issued at Close of Escrow. At the end of the Hold-
Back Period, so much of the Hold-Back shares as
are then remaining, shall be issued to Seller.
"Seller understands and agrees that the following restrictions and
limitations are applicable to its purchase and resale or other
transfer of the Issuer's stock, pursuant to the Securities Act of 1933
(the "Act"). For the purposes of this Agreement, the terms "Issuer's
Stock" includes common stock issuable upon Close of Escrow as well as
the common stock designated as Hold-Back shares which are to be issued
at the end of the Hold-Back Period.
(a) Seller agrees that the Issuer's Stock shall not be sold or
otherwise transferred, unless the Issuer's Stock is registered
under the Act and the state securities laws or is exempt
therefrom.
<PAGE>
Patrick Simek, Esq.
Letterhead Amendment
May 10, 1999
Page 4 of 10
(b) For a period of one year after the Issuer's Stock or portion
thereof has been issued (unless the Issuer's Stock shall have
been registered under the Act for sale prior thereto), Seller
shall not sell, distribute or transfer any of such securities
without the prior written consent of the Issuer or its successor
corporation, as applicable. Unless and until the Issuer's stock
is registered under the Act, a legend in substantially the
following form will be placed on the certificates evidencing the
Issuer's stock to be issued to the Seller:
`The securities represented by this
certificate have not been registered
under the Securities Act of 1933 or any
state securities act. These shares have
been acquired for investment and may not
be sold, transferred, pledged or
hypothecated unless (i) they shall have
been registered under the Securities Act
of 1993 ('the Act') and any applicable
state securities act or (ii) Mace
Security International, Inc. shall have
been furnished with an opinion of
counsel, reasonably satisfactory to
counsel for Mace Security International,
Inc., that registration is not required
under any such acts.'
(c) Stop transfer instructions will be imposed with respect to
the Issuer's Stock issued to Seller pursuant to this Agreement so
as to restrict resale or other transfer thereof except in
accordance with the foregoing provisions of this Agreement."
"Seller acknowledges that the Issuer's Stock is being delivered to
Seller in a private placement under Section 4.2 of the Act and under
Regulation D promulgated under the Act. To induce Buyer and Issuer to
deliver the Issuer's Stock, Seller represents and warrants as follows:
(a) Seller is the sole shareholder of a Texas corporation and
Seller is an accredited investor as that term is defined in
Regulation D under the Act.
(b) Seller represents and warrants that the Issuer's Stock is
being acquired for its own account without a view to public
distribution or resale and that Seller has no contract,
undertaking, agreement or arrangement to sell or otherwise
transfer or dispose of the Issuer's Stock, or any portion
thereof, to any other person.
<PAGE>
Patrick Simek, Esq.
Letterhead Amendment
May 10, 1999
Page 5 of 10
(c) Seller represents and warrants that in determining to acquire
the Issuer's Stock, it has relied solely upon its independent
investigation, including the advice of its legal counsel and
accountants or other financial advisors or purchaser
representatives, and has, during the course of discussions
concerning its acquisition of the Issuer's Stock, been offered
the opportunity to ask such questions and inspect such documents
concerning Buyer and its business and affairs as Seller has
requested so as to more fully understand the nature of the
investment and to verify the accuracy of the information
supplied.
(d) SELLER ACKNOWLEDGES THAT THE ACQUISITION OF THE CONSIDERATION
STOCK INVOLVES A HIGH DEGREE OF RISK, and represents and warrants
that he can bear the economic risk of Seller's acquisition of the
Issuer's Stock, including the total loss of the investment.
(e) Seller represents and warrants that (i) he has adequate means
of providing for his current needs and financial contingencies,
(ii) he has no need for liquidity in this investment, (iii) he
has no debts or other obligations, and cannot foresee any other
circumstances that are likely in the future to require him to
dispose of the Issuer's Stock, and (iv) all his investments in
and commitments to non-liquid investments are, and after
acquisition of the Issuer's Stock will be, reasonable in relation
to his net worth and current needs.
(f) Seller understands that no federal or state agency has
approved or disapproved the Issuer's Stock or made any finding or
determination as to the fairness of the Issuer's Stock for
investment.
(g) Seller understands that the Issuer's Stock is being offered
and sold in reliance on specific exemptions from the registration
requirements of federal and state securities laws and the Buyer
is relying upon the truth and accuracy of the representations,
warranties, agreements, acknowledgments and understandings set
forth herein in order to determine the applicability of such
exemption and the suitability of Seller to acquire the Issuer's
Stock.
(h) Seller represents and warrants that he is familiar with the
business and financial affairs of the Seller corporation and has
had access to all financial statements prepared by the Seller
corporation."
9. BPI Item 24, is hereby deleted in its entirety and the following is
substituted therefor:
"Date for Close of Escrow: On or before June 30, 1999
-----------------------------
[Closing]
<PAGE>
Patrick Simek, Esq.
Letterhead Amendment
May 10, 1999
Page 6 of 10
"Regardless of the actual date on which the Escrow Closing actually
occurs, for accounting and operational purposes, the effective date
and time of transfer is agreed to be Midnight May 8, 1999. Commencing
with May 9, 1999, the car wash shall be operated by Buyer in and for
its own behalf. Issuer's Shares in the name of Seller shall be
delivered to Escrow to be held until the Closing thereof. A condition
of close of Escrow, if required by lender, is the acceptance by Lender
of the change of control of its debtor. Until Closing, if requested
by lender, Seller will guarantee repayment of the debt."
10. BPI Item 27 is hereby deleted in its entirety and the following is
substituted therefor:
"Governing State Law: Delaware
--------
[Governing State Law]"
11. BPI Item 28 is hereby deleted in its entirety and the following is
substituted therefor:
"County Jurisdiction: Any County in Delaware
-----------------------
[Governing State Law]"
12. Cash in Escrow of Ten Thousand Dollars ($10,000.00) to be returned to
Buyer at Close of Escrow.
13. In the event of any inconsistencies in the documents concerning this
transaction, wherein it may not be clear as to the nature of the
transaction, the transaction shall in all events be treated as an exchange
of stock for stock in compliance with the requisites of Internal Revenue
Code Section 368 (a) (1) (B) and not of stock for assets. As appropriate
to the meaning of the Transaction Documents and each and every
representation and warranty contained therein, "Seller" includes
Shareholder and the corporate entity set forth in BPI Item 3.
14. Buyer shall file Federal Income Tax Reporting Returns for the calendar year
1999. Schedules such as the K-1 shall be prepared for the Seller as if the
books of the corporation had been closed as of effective date, May 8, 1999,
and not the actual date, of Close of Escrow.
15. Seller shareholder, and the corporation whose shares are acquired in this
transaction, each represent and warrant:
A. The corporate entity listed in BPI Item 3 has no subsidiaries and owns
no interest in any corporation, partnership, limited liability company or
other entity. It has previously delivered, or made, or will make
immediately available, to the Buyer complete and correct copies of the
Articles of Incorporation, By-laws and Minute books, each as currently in
effect. The authorized capital stock of the corporation consists entirely
of shares of Common Stock, of which 1000 shares in the corporation are
issued and outstanding. The shareholder listed in
<PAGE>
Patrick Simek, Esq.
Letterhead Amendment
May 10, 1999
Page 7 of 10
BPI Item 3 is the only stockholder of the corporate entity identified in
that Item. There exist no (i) outstanding options, warrants or other rights
to purchase or subscribe for any equity securities or other ownership
interests of the corporation, (ii) indebtedness or securities directly or
indirectly convertible into or exchangeable for any equity securities of or
ownership interest in the corporate entity, or (iii) any outstanding
subscriptions, rights (including any preemptive rights, voting trusts or
agreements, rights of first refusal or offer, co-sale rights, or other
restrictions on transfer), stock appreciation rights, calls or commitments
of any character whatsoever to which the corporate entity is a party or may
be bound requiring the issuance, sale or repurchase of any shares of
capital stock of the corporate entity. All of the issued and outstanding
shares of capital stock of the corporate entity are duly authorized,
validly issued, fully paid and non-assessable and free of any preemptive
rights in respect thereto, and were issued in compliance with all
applicable federal and state laws, rules and regulations.
B. Financial statements (copies of which shall be provided to Buyer), in
all material respects, fairly present the consolidated financial position
of the corporation as of their respective dates, and the other related
statements included in the financial statements, in all material respects,
fairly present the results of their consolidated operations and cash flows
for the years indicated, in each case in accordance with GAAP applied on a
consistent basis, with only such deviations from such accounting principles
and/or their consistent application as are referred to in the notes to the
financial statements and subject, in the case of the unaudited financial
statements, to the absence of related notes. The corporation has no
liabilities (whether accrued, absolute, contingent, unliquidated or
otherwise, whether due or to become due, and whether known or unknown)
except as disclosed in the financial statements or as disclosed in Exhibit
-------
"K" to this Agreement.
--
C. The corporation and the conduct of its business are in compliance with
all applicable laws, statutes, ordinances and regulations, whether federal
or state, local or foreign, except for such violations which, individually
or in the aggregate, would not result in a material adverse effect.
Neither the corporation nor its shareholder has received any written notice
to the effect that, or otherwise been advised that, it is not in compliance
with any such laws, statutes, ordinances and regulations, and neither the
corporation nor its shareholder has any reason to believe that any
presently existing circumstances known to it are likely to result in
violations of any such laws or regulations.
D. No consent, authorization, or approval or other action by, and no
notice to or filing with, any governmental authority or other person is or
will be required to be obtained or made by a shareholder in connection with
the due execution and delivery by that shareholder of this Agreement and
the Transaction Documents to which he is a party and the consummation by
the shareholder of the transactions contemplated by this Agreement and such
Transaction Documents.
<PAGE>
Patrick Simek, Esq.
Letterhead Amendment
May 10, 1999
Page 8 of 10
E. There are no threatened, existing or pending litigation, judicial,
administrative, or arbitration hearings, claims, condemnations, or sales in
lieu thereof, contracts of sale, options to purchase or rights of first
refusal with respect to any aspect of any of the stock, nor have any such
actions, suits, proceedings, claims, or other such matters been threatened
or asserted.
F. The corporation has prepared and filed when due all Tax Returns required
by law to be filed and has paid all Taxes shown to be due by such returns
or on any assessments received by a corporation. No claim or liability is
pending or has been assessed or threatened against any corporation in
connection with any Taxes except as reflected in the Financial Statements.
No United States federal income Tax Returns of the corporation have been
audited or examined by the IRS. There are no outstanding agreements
executed or filed by the corporation extending the statutory period of
limitations applicable to any claim for income Taxes due from the
corporation. The corporation has no knowledge of any unassessed tax
deficiency that has been proposed or threatened against it by any taxing
authority.
G. All Taxes or other assessments and levies which the corporation is or
was required by law to withhold or collect have been duly withheld and
collected, and have been paid over to the proper governmental authorities
or are held by the corporation in separate bank accounts for such payment
and all such withholders and collections and other payments due in
connection therewith are duly set forth on the books of the corporation.
H. The corporation is not a party to any labor agreement with respect to
any of its employees with any labor organization, group or association.
The corporation has not experienced any attempt by organized labor or its
representatives to make the corporation engage in collective bargaining.
The corporation is in compliance with all applicable laws respecting
employment practices, terms and conditions of employment, hiring, and wages
and hours, including, without limitation, laws relating to civil rights,
safety and health, workers' compensation, the collection and payment of
withholding and/or social security taxes, and immigration. The corporation
is not engaged in any unfair labor practice. There is no unfair labor
practices, charge or complaint against the corporation pending before the
National Labor Relations Board or any other governmental agency arising out
of the corporation's activities, and the corporation has no knowledge of
any facts or information which would give rise thereto; there is no labor
strike or labor disturbance pending or, to the knowledge of the
corporation, threatened against the corporation nor is any grievance
currently being asserted; and the corporation has not experienced a work
stoppage or other similar labor difficulty.
I. All material insurance policies (the "Insurance Policies") with respect
to the property, assets, or business of the corporation are in full force
and effect and all premiums due and payable thereon have been paid in full.
Seller will provide a complete list of all Insurance Policies and a summary
of the coverage and policy limits and deductibles applicable to such
<PAGE>
Patrick Simek, Esq.
Letterhead Amendment
May 10, 1999
Page 9 of 10
Insurance Policies. As of the date hereof, there are no pending material
claims under any Insurance Policy as to which the respective insurers have
denied coverage. As of the date hereof, the corporation has not received
either a written notice or, to the knowledge of the Seller, verbal notice
that could reasonably be expected to be followed by a written notice of
cancellation or non-renewal of any Insurance Policy. The Insurance
Policies are sufficient for compliance with all requirements of law and of
all contracts to which the respective corporation is a party and are of a
type and dollar amount as is customary in the car wash/service station
industry. The corporation is not in default under any Insurance Policy and
the corporation has not failed to give any notice or to present any claim
under any such Insurance Policy in a due and timely manner where the effect
of such default or failure would be to render a material claim uninsured.
The corporation has no knowledge of any notice from any insurer advising of
reduced coverage or increased premiums on existing Insurance Policies.
There are no outstanding unpaid claims under any such Insurance Policies.
Such Insurance Policies are in full force and effect on the date hereof and
shall be kept in full force and effect by the corporation through the
Closing Date
J. The shareholder is transferring good, valid and marketable title to the
stock free and clear of all encumbrances. Marketable title means that the
shares are capable of being marketed and not necessarily that there is a
market for such shares.
16. Other than as set forth herein, there are no other changes to the terms and
conditions of the Agreement or the Escrow.
Thank you for your cooperation throughout this transaction. If you have any
questions please do not hesitate to contact me. Please sign below to indicate
your acceptance of this amendment. Please FedEx five (5) copies with your
original signature to the Millennia home office, attention Carrie Tonini and fax
one copy to me at (949) 498-7772 and one to Millennia at (760) 635-0578. Carrie
or I will obtain the additional signatures required and will forward one fully
signed copy to you and one to Escrow.
Very truly yours,
/s/ Lynne M. Geyser
Lynne M. Geyser
APPROVED AND ACCEPTED:
Quaker Car Wash, Inc.
a Texas corporation "Seller"
<PAGE>
Patrick Simek, Esq.
Letterhead Amendment
May 10, 1999
Page 10 of 10
By: /s/ Patrick C. Simek
----------------------
Patrick C. Simek
President
SHAREHOLDER
PATRICK C. SIMEK
/s/ Patrick C. Simek
------------------------
Patrick C. Simek [100%]
Millennia Car Wash, LLC
a Delaware limited liability company "Original Buyer-Assignor"
By: /s/ Russell B. Geyser
-------------------------
Russell B. Geyser
Chairman and CEO
AMERICAN WASH SERVICES, INC.
a Delaware corporation "Buyer" and "Buyer-Assignee"
By:___________________________________
Name:___________________________________
Its:______________________________________
<PAGE>
EXHIBIT 2.7
Lynne M. Geyser
Attorney at Law
P.O. Box 4715
San Clemente, Ca 92674-4715
Phone 949-498-8061
24 Hour Phone 1-500-488-
Legal
Fax 949-498-7772
June 25, 1999 VIA FAX: (806) 747-0514
Patrick C. Simek, Esq.
1812 Broadway
Lubbock, TX 79401
Re: Millennia/AWS/Mace Purchase - Quaker Car Wash, Inc.
---------------------------------------------------
Dear Patrick:
This letter agreement is to replace, in toto, the letter I sent you dated June
22, 1999 and the letter dated June 9, 1999. This letter is to further amend the
CAR WASH ASSET PURCHASE/SALE AGREEMENT ("Agreement") to correct some of the
provisions set forth in the earlier May 10, 1999 letter to you. The changes
hereby agreed to are as follows:
1. Item 8 of the May 10/th/ letter amending BPI Item 10: Subparagraph (b) of
the third full paragraph contains a parenthetical phrase: "(unless the
Issuer's Stock shall have been registered under the Act for sale prior
thereto)". The foregoing parenthetical phrase is hereby deleted.
2. Seller agrees that each person who is to receive Mace stock shall execute
an irrevocable twelve month proxy to Louis D. Paolino, Jr. in the form
attached hereto and designated "IRREVOCABLE PROXY." The proper execution
of such Proxies are a condition to the Close of this Escrow.
3. Other than as set forth herein, there are no other changes to the terms and
conditions of the Agreement or the Escrow.
I believe this now reflects your understanding with Steve Prior. If you have
any questions please do not hesitate to contact me. Please sign below to
indicate your acceptance of this amendment. Please FedEx five (5) copies with
your original signature to the Millennia home office, attention Carrie Tonini
and fax one copy to me at (949) 498-7772 and one to Millennia at (760) 635-0578.
Carrie or I will obtain the additional signatures required and will forward one
fully signed copy to you and one to Escrow.
<PAGE>
Patrick Simek, Esq.
Letter Amendment
June 25, 1999
Page 2 of 3
You already have the proxy form. Please execute the proxy and deposit it
directly with the Escrow, but fax a copy to me and one to Carrie.
Very truly yours,
/s/ Lynne M. Geyser
Lynne M. Geyser
APPROVED AND ACCEPTED:
Quaker Car Wash, Inc.
a Texas corporation "Seller"
By: /s/ Patrick C. Simek
------------------------
Patrick C. Simek
President
SHAREHOLDER
PATRICK C. SIMEK
/s/ Patrick C. Simek
-------------------------
Patrick C. Simek [100%]
Millennia Car Wash, LLC
a Delaware limited liability company "Original Buyer-Assignor"
By: /s/ Russell B. Geyser
------------------------
Russell B. Geyser
Chairman and CEO
AMERICAN WASH SERVICES, INC.
a Delaware corporation "Buyer" And "Buyer-Assignee"
<PAGE>
Patrick Simek, Esq.
Letter Amendment
June 25, 1999
Page 3 of 3
By:____________________________________
Name:___________________________________
Its:______________________________________
<PAGE>
EXHIBIT 2.8
Lynne M. Geyser
Attorney at Law
P.O. Box 4715
San Clemente, Ca 92674-4715
Phone 949-498-8061
24 Hour Phone 1-500-488-
Legal
Fax 949-498-7772
August 13, 1999 VIA FAX:530-583-1355
(Tahoe)
Patrick C. Simek, Esq.
1812 Broadway
Lubbock, TX 79401
Re: Millennia/AWS/Mace Purchase - Quaker Car Wash, Inc.
---------------------------------------------------
Dear Patrick:
This letter agreement between Buyer and Seller is to restructure the above
transaction. As you know, the transaction was originally an asset purchase for
cash, then became an asset purchase for stock, and ultimately a stock purchase
for stock. Now, the parties have agreed to return this transaction to its
status as an asset purchase for stock. To accomplish their goals, the parties
have also agreed to: increase the purchase price by $55,000.00, to be paid in
cash; provide that inventory will not be included in the sales price or be
handled through escrow, but will be addressed by the parties outside of escrow;
and designate the purchasing entity. This letter amends the letters of
11/23/98, 1/6/99, 2/26/99, 4/7/99, 5/10/99, and 6/25/99, but only to the extent
set forth below.
As you requested, rather than setting forth each provision amended, this letter
will state the net changes effected by it.
This letter is to amend the CAR WASH ASSET PURCHASE/SALE AGREEMENT ("Agreement")
in accordance with the foregoing. The changes hereby agreed to are as follows:
1. The Purchase Price is hereby amended to be $2,905,000.00. The Purchase
Price shall be paid in the following manner:
(i) Cash $55,000.00, of which $10,000.00 is in Escrow and shall
be credited to Buyer's account.
<PAGE>
Patrick Simek, Esq.
Letter Amendment
August 13, 1999
Page 2 of 4
(ii)Assumption of Debt of not less than One Million Dollars
($1,000,000.00) nor more than One Million Five Hundred and Fifty-
Five Thousand Dollars ($1,555,000.00) per Exhibit "K."
----------
(ii) Balance of the Purchase Price shall consist of between One
Million Eight Hundred and Fifty Thousand Dollars ($1,850,000.00)
and One Million Two Hundred and Ninety-Five Thousand Dollars
($1,295,000.00) in Mace Securities International, Inc. ("Issuer")
Stock which, for the purpose of this Agreement only, shall be
valued at Seven Dollars and Eighty-One Cents ($7.81) per share.
The exact amount of the balance required to be issued pursuant to
this subparagraph (ii) shall depend upon the exact amount of the
Assumption of Debt as specified in subparagraph (ii) immediately
above. Of the total amount of the Purchase Price, $100,000 in
shares shall be held back in accordance with BPI Item 11 as
amended. The remaining shares shall be issued at Close of Escrow.
At the end of the Hold-Back Period, so much of the Hold-Back
shares as are then remaining, shall be issued to Seller.
2. The allocation of the Purchase Price is:
Land: $2,455,000.00
-------------
Building: $ 395,000.00
-------------
Car Wash Equipment: $ 50,000.00
-------------
Covenant Not to Compete $ 5,000.00
-------------
3. It is the intent of the parties that the transaction be structured as a
non-taxable re-organization of stock for assets and not as an exchange of
stock for stock. Therefore, all references to acquisition of stock for
stock are hereby deleted.
4. Seller is hereby identified as Quaker Car Wash, Inc.
5. American Wash Services, Inc., which as a result of merger and by operation
of law has become Mace Wash, Inc., hereby assigns all of its right, title
and interest in and to the Agreement as amended, to Mace Car Wash, Inc.
Each of the foregoing is a Delaware corporation and each is a wholly owned
subsidiary of Mace Security International, Inc.
6. Inventory is not included in the Purchase Price and Escrow shall not make
any adjustment for Inventory. Inventory reimbursement shall be handled
outside of Escrow, directly between Buyer and Seller.
7. Date for Close of Escrow is hereby extended to "on or before August 18,
1999."
8. Other than as set forth herein, there are no other changes to the terms and
conditions of the Agreement or the Escrow.
<PAGE>
Patrick Simek, Esq.
Letter Amendment
August 13, 1999
Page 3 of 4
If you have any questions please do not hesitate to contact me. Please sign
below to indicate your acceptance of this amendment. Please FedEx five (5)
copies to Vicki at Arizona Escrow with your original signature and fax one copy
to me at (949) 498-7772 and one to Carrie at (760) 635-0578.
Very truly yours,
/s/ Lynne M. Geyser
Lynne M. Geyser
cc: Carrie Tonini - DRI - Distribtion
APPROVED AND ACCEPTED:
Quaker Car Wash, Inc.
a Texas corporation "Seller"
By: /s/ Patrick C. Simek
---------------------
Patrick C. Simek
President
SHAREHOLDER
PATRICK C. SIMEK
/s/ Patrick C. Simek
- ---------------------------
Patrick C. Simek [100%]
<PAGE>
Patrick Simek, Esq.
Letter Amendment
August 13, 1999
Page 4 of 4
AMERICAN WASH SERVICES, INC.
now MACE WASH, INC.
a Delaware corporation "Buyer" and "Buyer-Assignor"
By:_____________________________________
Name:___________________________________
Its:______________________________________
MACE CAR WASH, INC.
a Delaware corporation "Buyer" and "Buyer-Assignee"
By:____________________________________
Name:___________________________________
Its:______________________________________
<PAGE>
EXHIBIT 2.9
August 27, 1999
Patrick C. Simek, Esq.
1812 Broadway
Lubbock, TX 79401
Re: Mace Car Wash, Inc./Quaker Car Wash, Inc.
-----------------------------------------
Dear Patrick:
This letter agreement is to further amend the CAR WASH ASSET PURCHASE/SALE
AGREEMENT ("Agreement") dated August 26, 1998, a letter amendment thereto, dated
November 23, 1998, a letter amendment thereto, dated January 6, 1999, a letter
amendment thereto, dated February 26, 1999, a letter amendment thereto, dated
April 7, 1999, a letter amendment thereto, dated May 10, 1999, a letter
amendment thereto, dated June 25, 1999, and a letter amendment thereto, dated
August 13, 1999 ("Amendments"). The changes hereby agreed to are as follows:
1. The balance of the purchase price payable in common stock of Mace Security
International, Inc. ("Consideration Stock"), shall be issued and delivered to
Seller as of January 3, 2000, except for those shares subject to holdback.
2. Notwithstanding anything to the contrary set forth in the Agreement or the
Amendments, Seller understands and agrees that the following restrictions and
limitations are applicable to the Seller's purchase and resale or other
transfer of the Consideration Stock, pursuant to the Securities Act of 1933 (the
"Act") or otherwise:
(a) Seller agrees that the Consideration Stock shall not be sold or
otherwise transferred, unless the Consideration Stock is registered under the
Act and state securities laws or is exempt therefrom.
(b) A legend in substantially the following form will be placed on the
certificates evidencing the Consideration Stock to be issued to the Seller:
"The securities represented by this certificate have not
been registered under the Securities Act of 1933 or any
state securities act. These shares have been acquired for
investment and may not be sold, transferred, pledged or
hypothecated unless (i) they shall have been registered
under the Securities Act of 1933 and any applicable states
securities act or (ii) Mace Security International, Inc.,
shall have been furnished
<PAGE>
with an opinion of counsel, reasonably satisfactory to
counsel for Mace Security International, Inc., that
registration is not required under any such acts."
(c) For a period of one year after May 8, 1999, Seller shall not sell,
distribute or transfer any of the Consideration Stock without the prior written
consent of the Issuer.
(d) Upon removal of all other trading restrictions as set forth herein,
Seller agrees that no more than one-sixth (1/6th) of the Consideration Stock
received by Seller after Closing shall be sold, distributed or transferred in
any 31-day period, nor shall any more than 4,000 shares of stock be traded in
any one day.
(e) Stop transfer instructions will be imposed with respect to the
Consideration Stock issued to Seller pursuant to this Agreement so as to
restrict resale or other transfer thereof except in accordance with the
foregoing provisions of this Agreement.
3. The following covenants, representations and warranties shall apply to
Purchaser's delivery and Seller's receipt of the Consideration Stock:
(a) The Consideration Stock delivered after Closing on January 3, 2000,
will either be registered under the Act for sale to the public in brokers
transactions at the time of delivery to Seller or shall be registered on the
first registration statement filed by Issuer thereafter to register shares
issued in connection with any other acquisition by Issuer or its subsidiaries,
pursuant to a "shelf registration" on Form S-4 or an other appropriate form, if
Form S-4 is not available under Rule 415 of the Act. At Purchaser's request,
the Seller shall provide Purchaser with any information required for the
completion of the registration statement. Notwithstanding the above,
Purchaser's obligation to file the shelf registration and/or keep the shelf
registration continuously effective shall be suspended during any period that
there exists material, non-public information relating to Purchaser. Purchaser
shall keep such registration statement current and effective, until such time as
the shares may be sold by the Seller at any time pursuant to the provisions of
Rule 144 or otherwise without any restrictions, including restrictions relating
to volume, manner of sale, and notice, or until such earlier date as all of the
shares registered pursuant to such registration statement shall have been sold
or otherwise transferred to a third party. Purchaser shall also prepare and
file with the Securities and Exchange Commission such amendments and supplements
to such registration statement (and the prospectus used in connection therewith)
as may be necessary to update and keep such registration statement current and
effective for such period and to comply with the provisions of the Act with
respect to the sale of all securities covered by such registration statement.
(b) With respect to the Consideration Stock, Purchaser will furnish to the
Seller such number of prospectuses, if required, under the Act, including copies
of preliminary prospectuses, prepared in conformity with the requirements of the
Act, and such other documents as the Seller may reasonably request in order to
facilitate the public sale or other disposition of the securities to be sold by
the Seller.
(c) Purchaser shall indemnify Seller in accordance with the provisions of
Article IX from and against any and all losses, claims, damages and liabilities
(collectively a "Security Liability") to which
<PAGE>
Seller may become subject under the Act, any state securities or "blue sky" law,
any other statute or at common law, insofar as such Security Liability (or
action in respect thereof) arises out of or is based upon (i) any untrue
statement or alleged untrue statement of any material fact contained in any
registration statement under which such securities were registered, any
preliminary prospectus or final prospectus contained therein, or any amendment
or supplement thereto or any filing or other application under the Act or
applicable federal or state securities law or (ii) any omission or alleged
omission to state therein a material fact required to be stated therein (i.e.,
in any registration statement, prospectus, application or filing), or necessary
in order to make the statements therein not misleading or (iii) any violation or
alleged violation by Purchaser to which Seller may become subject under the Act,
or other Federal or state laws or regulations, at common law or otherwise.
Notwithstanding the above, Purchaser shall not be liable to Seller if and to the
extent that any Security Liability arises out of or is based upon any untrue
statement or omission made in such registration statement, preliminary or final
prospectus or amendment or supplement thereto, in reliance upon and in
conformity with information furnished to Purchaser by Seller which is intended
for such use; and provided further, that Purchaser shall not be required to
indemnify Seller against any Security Liability which arises out of the failure
of Seller to deliver a prospectus.
(d) All expenses incurred in effecting the registrations provided for
in this Section shall be paid by Purchaser, including, without limitation, all
registration and filing fees, printing expenses, fees and disbursements of
counsel for Purchaser, underwriting expenses (other than commissions or
discounts which shall be shared by the parties registering shares of Purchaser's
common stock in proportion to the number of shares registered in each
particular offering), expenses of any audits incident to or required by any such
registration and expenses of complying with the securities or "blue sky" laws of
any jurisdictions.
4. Other than as set forth herein, there are no other changes to the terms and
conditions of the Agreement or the Amendments.
Please indicate your acceptance of the terms of this Letter amendment by signing
where indicated below and forwarding to the escrow agent.
MACE SECURITY INTERNATIONAL, INC.
By: /s/ Robert M. Kramer
------------------------------------------
Robert M. Kramer, Executive Vice President
Agreed and Accepted:
QUAKER CAR WASH, INC.
By: /s/ Patrick C. Simek
-------------------------------
Patrick C. Simek, President
<PAGE>
EXHIBIT 99
Mace Security International, Inc.
1000 Crawford Place, Suite 400
Mt. Laurel, NJ 08054
(856) 778-2300
www.mace.com
For Immediate Release
- ---------------------
MACE SECURITY INTERNATIONAL SIGNS DEFINITIVE PURCHASE AGREEMENTS
TO ACQUIRE TWO WASH LOCATIONS IN TEXAS AND NEW JERSEY
Mount Laurel, New Jersey, September 9, 1999 -- Mace Security International, Inc.
(MSI) (Nasdaq: MACE) today announced the completion of the previously announced
acquisitions of Eager Beaver Car Wash and Hanna Car Wash, operators of five car
washes in Florida and one car wash in Texas, respectively. On a combined basis,
these washes add approximately $5,000,000 in annualized revenue to MSI's
existing operation. The Company now owns and operates 58 car washes throughout
the United States and has a present annualized run rate of approximately $57
million.
Eager Beaver Car Wash operates five full service car washes on the West Coast of
Florida. The car washes provide washing and waxing, and contain professional
detail centers and self-service bays. Eager Beaver represents MSI's first car
wash chain in the southeast region of the United States.
Hanna Car Wash is a "tuck-in" acquisition which strengthens the Company's market
presence in Lubbock, Texas. Hanna is a full service car wash that provides
washing, waxing, gasoline and detailing. MSI is the largest operator of car
washes in Lubbock.
"The consummation of these transactions are very important to MSI because of
their geographical location. Eager Beaver is the foundation of our strategy to
aggressively penetrate into the southeast region," said Louis D. Paolino, Jr.,
CEO and Chairman of MSI. "Eager Beaver's previous owner, Ken Bachman, who has
over 20 years experience, is well known and well respected in the car wash
industry. He will join MSI and become a key member of our acquisition team."
Mace Security International, Inc. is a provider of car care services which owns
and operates numerous car washes nationwide. The Company is also a leading
producer of less lethal defense sprays for the consumer market and a marketer of
consumer safety and security products.
This press release includes statements which may constitute forward-looking
statements made pursuant to the safe harbor provision of the Private Securities
Litigation Reform Act of 1995. This information may involve risks and
uncertainties, including but not limitation, risks relating to the financial
outcomes of the planned business and growth strategies, that could cause actual
results to differ materially from the forward-looking statements. Although the
Company believes that the expectations reflected in such forward-looking
statements are based on reasonable assumptions, such statements are subject to
risks and uncertainties that could cause actual results to differ materially
from those projected.
###
