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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: August 24, 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 Shammy Man Car Wash
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On August 24, 1999, Mace Security International, Inc., a Delaware
corporation (the "Company" or "Registrant"), through a wholly owned subsidiary,
acquired all of the car wash related assets of Shammy Man Car Wash (Shammy Man)
pursuant to the terms of a Car Wash Asset Purchase/Sale Agreement dated May 11,
1999 (collectively the "Agreement"), by and between the Registrant, and The
Manus Group, Inc. (the "Sellers"). Pursuant to the terms and conditions of the
Agreement, the Registrant purchased all of the assets of the Sellers used in the
business of operating one full service car wash in Arizona. 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 $1,400,000 plus approximately $15,000 cash
for inventory and $6,000 cash reimbursement for landlord deposits. The
consideration included 62,649 unregistered shares of the Company's common stock
at a strike price of $8.38 per share, the assumption of approximately $400,000
of debt, and payment of cash of approximately $475,000 from working capital. 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 Shammy Man at the time of the filing of this report. The
required financial statements of Shammy Man 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 May 11,
1999, between The Manus Group, Inc. and Mace Car Wash, Inc.
99 Press Release dated August 31, 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 7, 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
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2.1 Car Wash Asset Purchase/Sale Agreement dated as of May 11, 1999,
between The Manus Group, Inc. and Mace Car Wash, Inc.
99 Press Release dated August 31, 1999.
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TABLE OF CONTENTS
RECITALS................................................PAGE 1 OF 18
PURCHASE AND SALE OF ASSETS.............................PAGE 1 OF 18
AMOUNT OF PURCHASE PRICE................................PAGE 3 OF 18
PAYMENT OF PURCHASE PRICE & COMMISSIONS.................PAGE 3 OF 18
DOCUMENTS AND PHYSICAL INSPECTION.......................PAGE 4 OF 18
ESCROW..................................................PAGE 5 OF 18
CONDITIONS PRECEDENT TO CLOSING.........................PAGE 6 OF 18
SELLER'S REPRESENTATIONS AND WARRANTIES.................PAGE 8 OF 18
BUYER'S REPRESENTATIONS AND WARRANTIES.................PAGE 11 OF 18
RISK OF LOSS...........................................PAGE 11 OF 18
EMPLOYEES OF SELLERS...................................PAGE 12 OF 18
CLOSING................................................PAGE 12 OF 18
ENVIRONMENTAL REPORTS..................................PAGE 15 OF 18
TAXES..................................................PAGE 15 OF 18
CONFIDENTIALITY OF AGREEMENT/PUBLICITY.................PAGE 15 OF 18
NON-COMPETITION AGREEMENTS.............................PAGE 15 OF 18
INDEMNITY/GUARANTY AGREEMENTS..........................PAGE 16 OF 18
INTRODUCTION TO AND RETENTION OF CUSTOMERS.............PAGE 16 OF 18
OWNERSHIP OF EQUIPMENT.................................PAGE 16 OF 18
AMENDMENTS/WAIVERS.....................................PAGE 16 OF 18
ATTORNEYS' FEES........................................PAGE 16 OF 18
NOTICES................................................PAGE 16 OF 18
TIME OF ESSENCE........................................PAGE 17 OF 18
SEVERABILITY...........................................PAGE 17 OF 18
EXHIBITS...............................................PAGE 17 OF 18
DILIGENCE, GOOD FAITH AND FURTHER DOCUMENTS............PAGE 17 OF 18
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SURVIVABILITY..........................................PAGE 17 OF 18
ENTIRE AGREEMENT.......................................PAGE 17 OF 18
ASSIGNMENT PROHIBITED..................................PAGE 17 OF 18
SUCCESSORS.............................................PAGE 18 OF 18
GOVERNING STATE LAW....................................PAGE 18 OF 18
COUNTERPARTS...........................................PAGE 18 OF 18
REMEDIES...............................................PAGE 18 OF 18
INTERPRETATION.........................................PAGE 18 OF 18
BENEFIT OF AGREEMENT...................................PAGE 18 OF 18
MISCELLANEOUS..........................................PAGE 18 OF 18
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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.
(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
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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
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of the documents relating to the 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 entity or 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 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.
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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, 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 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. 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 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
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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, or the equivalent thereof, or a
Land Survey Category IA, as determined by Buyer, 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.
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.
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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:
(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, in its sole and absolute discretion, disapproves of the
state of Title or the ALTA survey;
(3) Buyer, in its sole and absolute discretion, disapproves of the
environmental condition on the property;
(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 environmental condition of the property, 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. 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.
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.
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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 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 Close of Escrow ("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
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hereunder are conditioned upon the necessary approval by the appropriate
persons or entities, including the Boards of Directors, 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.
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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
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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.
(3) Seller, or its agent, receiving a letter from Buyer outlining
Buyer's approval or disapproval of all Inspection Items. 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 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:
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(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.
(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.
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(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
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
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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, 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, 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
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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
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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 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, 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
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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.
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
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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), or equivalent thereof, Owner's Title Policy
for each Seller's Land and Seller's Improvements (the "Owner's Title
Policies") issued by the Title Company, in the full amount of the
Purchase Price allocated to that Land, and the Improvements thereon,
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.
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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.
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.
(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 Sellers,
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conveying to Buyer all the assets described in Section 1 of this
Agreement.
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(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 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 the
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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) Seller's
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) Buyer's
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 is relying on Seller's warranties and representations. Nonetheless,
if Seller obtains a current Phase I Environmental Audits ("Phase I's")
and/or Phase II Environmental Audits ("Phase II's"), it shall be strictly
at Seller's
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expense and Seller shall immediately provide Buyer with a copy of said
report. Buyer retains the right to order Phase I's or Phase II's at its own
expense and Seller shall cooperate in such Audits. If Buyer disapproves of
the environmental condition of the property, Buyer shall have the right to
exercise any 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 the environmental
condition of the property. Buyer shall advise Seller, what Buyer
determines to be a reasonable time under the circumstances;
(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 the 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 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.
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
15
<PAGE>
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, 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, if any. 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.
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.
16
<PAGE>
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.
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 and may assign this
entire Agreement or any portions thereof to an affiliate or subsidiary
of, or successor corporation to, Seller. Buyer has the right to assign
all of its rights, title, and interests in and to the Agreement to a
parent, subsidiary or successor corporation.
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
17
<PAGE>
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.
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.
XXXVI The parties have executed this Agreement by affixing their signatures to
Item 1 of the BPI to which this is attached.
18
<PAGE>
EXHIBIT 2.1
CAR WASH ASSET PURCHASE/SALE AGREEMENT
BASIC PURCHASE INFORMATION
("BPI")
1. Effective Date of Agreement May 11, 1999 [Preamble]
------------
2. Buyer: MACE CAR WASH, INC.1
[Preamble] a Delaware Corporation
/1/By operation of law, as a result of a merger, American Wash Services,
Inc. became Mace Wash, Inc., a wholly owned subsidiary of Mace Security
International, Inc. Mace Wash, Inc. hereby assigns all of its rights as
Buyer to Mace Car Wash, Inc., a wholly owned subsidiary of Mace Security
International, Inc. All references to Buyer, herein and in the Agreement
together with its Exhibits and Amendments shall be deemed to be references
to Mace Car Wash, Inc.
3. Seller: THE MANUS GROUP, INC.
---------------------------------
an Arizona corporation
---------------------------------
[Preamble] & [Seller's Representations and Warranties]
4. Operations:
Name and Location of Car Wash/Operation:
[Recitals] Shammy Man Car Wash
----------------------
6001 North 19th Avenue
----------------------
Phoenix, AZ 85015
----------------------
5. Elements to be Purchased:
[Recitals]
Assets: All Full Service Car Wash; Convenience Store ("C-Store"); & Detail
------------------------------------------------------------------
Assets (General Description)
------
Real Property: Leasehold Interest Only. Transaction conditioned on
----------------------------------------------------
approval of Lease terms and conditions by Buyer, in its sole discretion.
-----------------------------------------------------------------------
(General Description)
Stock: None
-------------------------------------- (General Description)
6. Trade Names & Trademarks
[Purchase and Sale of Assets]
Trade Names: None (Seller agrees not to
--------------------------------------------------------------
use name Shammy Man within three (3) mile radius during non-compete
-------------------------------------------------------------------
period per Exhibits N-1 and N-2)
--------------------------------
Page 1 of 10
<PAGE>
D/B/A : None
-------------------------------------------------------------------
7. Purchase Price: ONE MILLION FOUR HUNDRED THOUSAND DOLLARS ($1,400,000.00)
---------------------------------------------------------
plus Approximately $25,000.00 Cash for Inventory and $6,000.00 Cash
-------------------------------------------------------------------
Reimbursement for Landlord Deposits.
--------------------------------------
[Amount of Purchase Price]
Purchase Price - Form of Consideration:
Cash $475,000.00
-----------------------------------------------
Stock** $525,000.00 Total Shares, of which $400,000 is subject to each
--------------------------------------------------------------
restriction shown below, and $125,000.00 of which is not restricted under
-------------------------------------------------------------------------
subsection (c) of the first paragraph of restrictions immediately below,
------------------------------------------------------------------------
but is otherwise subject to all other restrictions shown below. Those
---------------------------------------------------------------------
shares not subject to subsection (c) shall be issued in the name of the
-----------------------------------------------------------------------
Seller corporation only. Remaining shares to be issued in accordance with
--------------------------------------------------------------------------
instructions provided to Escrow by Seller, subject to stock recipients
----------------------------------------------------------------------
executing letter agreements containing similar representations and
------------------------------------------------------------------
warranties to those set forth herein, and accepting the same restrictions
-------------------------------------------------------------------------
as those set forth herein.
--------------------------
Assumption of Debt: Not to exceed $400,000.00 for equipment loan in
-------------------------------------------------
favor of The Dolsen Companies, Columbia Credit Company Division, which
----------------------------------------------------------------------
requires payments at the rate of $8314.00 per month for 72 months
-----------------------------------------------------------------
commencing 5/1/99, subject to Buyer's approval in its sole and absolute
-----------------------------------------------------------------------
discretion. If the principal balance on the equipment loan on the date of
-------------------------------------------------------------------------
closing is less than $400,000.00, the difference between the actual
-------------------------------------------------------------------
principal amount and $400,000.00 shall be paid in cash. Seller to assist
-------------------------------------------------------------------------
Buyer in obtaining consent of equipment lender to Buyer's assumption of
-----------------------------------------------------------------------
equipment loan.
---------------
Other: None
------------------------------------------------------------
**In Mace Securities International, Inc. ("Issuer") Stock which, for the
purpose of this Agreement only, shall be valued at the lower of (i) a price
per share determined by the closing stock price five (5) trading days prior
to the date of Close of Escrow and (ii) $8.38 per share. Ten Percent (10%)
of the Total Purchase Price shall be held back in shares of stock in
accordance with BPI Item 11. 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.
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.
Page 2 of 10
<PAGE>
(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, 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 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) Upon removal of all other trading restrictions as set forth
herein, each Seller agrees that no more than one-twelfth (1/12th) of
the securities shall be sold, distributed or transferred in any 31
day period.
(d) 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 an Arizona corporation and 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
Page 3 of 10
<PAGE>
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 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 both the Seller and Buyer
corporations and have had access to all financial statements prepared
by them.
8. EBITDA - (subject to verification): N/A
----------------------------------
[Amount of Purchase Price]
Page 4 of 10
<PAGE>
EBITDA GUARANTEE PERIOD: N/A YEARS
------------------------------------------
Seller Guarantees EBITDA will continue to meet or exceed the EBITDA shown
above for the period specified.
9. Effective Capitalization ("Cap") Rate: N/A [Amount of Purchase Price]
-----------
10. Allocations: Equipment & Fixtures - $350,000.00; Leasehold Improvements -
------------------------------------------------------------
$980,000.00; Goodwill - $20,000.00; Covenants Not To Compete -
--------------------------------------------------------------
$50,000.00
----------
[Amount of Purchase Price*] (per operation, including Covenant Not to
Compete)
To be supplied (per Covenant)
------------------------------------------------------
*Inventory is NOT included in Purchase Price
11. Hold-Back Percentage: 10% in Issuer Stock. None of the Hold-Back
- -- ---------------------------------------------
Stock shall be comprised of the $125,000.00 in that stock which is not
----------------------------------------------------------------------
subject to subsection (c) of the first paragraph of restrictions of BPI Item
----------------------------------------------------------------------------
7.
--
[Payment of Purchase Price & Commissions]
12. Hold-Back Period: 1 Year
---------------------------------------------------------
[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] 3 Years
---------------
15. Buyer's Broker: None
------------------------------------------------------------
[Payment of Purchase Price & Commissions]
16. Seller's Broker: Arizona Business Investments, 11408 N. Blackheath Road,
-----------------------------------------------------------
Scottsdale,
-----------
[Payment of Purchase Price & Commissions] AZ 85252 - Roger Pencek
-------------------------
17. Title Company: As chosen by Buyer, if Buyer wants leasehold title policy
-------------------------------------------------------------
[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
-----------------------------------------
Page 5 of 10
<PAGE>
19. Escrow Opening Date: June 28, 1999
------------------------------------------------
[Escrow] (Date by which Escrow must be opened)
20. Initial Deposit: NONE
----
[Escrow]
21. Days From Opening: NOT APPLICABLE
--------------
[Escrow] (Earliest Date On Which Buyer's Deposit
Becomes Non-Refundable)
22. Fuel Companies: None
------------------------------------------------------
[Escrow]
23. Consent Date: 8/16/99
--------------------------------------------------------
[Conditions Precedent to Closing]
24. Date for Close of Escrow: 8/18/99
--------------------------------------------
[Closing]
25. Non-Compete Area: 3 Mile Radius
---------------------------------------------------
Non-Compete Period: 3 Years
---------------------------------------------------
[Non-Competition Agreements]
26. Seller's Address for Notices: Joseph N. Gagliano
[Notices] -----------------------------------------
8002 East Thomas Road
-----------------------------------------
Scottsdale, AZ 85251
-----------------------------------------
Buyer's Address for Notices: Attn: Stephen J. Prior
[Notices] Diligence & Research International
511 Encinitas Blvd., Suite 100
Encinitas, CA 92024
Required copy: Lynne M. Geyser, Esq.
P.O. Box 4715
San Clemente, CA 92674-4715
27. Governing State Law: Arizona
------------------------------------------
[Governing State Law]
28. County Jurisdiction: Maricopa
------------------------------------------
[Governing State Law]
<PAGE>
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.
BALANCE OF THIS PAGE DELIBERATELY LEFT BLANK
<PAGE>
EXHIBIT LIST
------------
Exhibits "J," "N-1", "N-2" and "O" are to be executed simultaneously with, and
as part of, the execution of this Agreement. Exhibits "A" through "H" and "K"
through "M" are solely the responsibility of Seller to prepare and are subject
to Buyer's sole approval. Exhibits to be prepared by Seller shall be presented
to Buyer for its review, as soon as practicable, but in any event, within ten
(10) days of the execution of this Agreement.
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
<PAGE>
ADDENDA
-------
The following items are corrected, amended and/or addenda are attached to and
made a part of this Agreement: (If none, so state.)
Additional Conditions of Purchase - None
Exceptions to Non-Competition - BPI Item 4 - Buyer is not purchasing Trade
Names or Trademarks.
The parties hereby execute the attached Car Wash Asset Purchase/Sale Agreement
bearing a footer identification show "ASSET PURCHASE SALE AGREEMENT...American
Wash Services Standard Form...LMG: 4/19/99; 5/24/99," together with the Exhibits
and Addenda shown above, by affixing their signatures to this BPI. EXECUTED to
be effective on the date set forth in Item 1 of this BPI.
BUYER:
MACE WASH, INC. (formerly American Wash Services, Inc.)
a Delaware corporation
Assigning to Mace Car Wash, Inc.
By: /s/ Robert M. Kramer
----------------------------------
Name:________________________________
Its:_________________________________
BUYER:
MACE CAR WASH, INC.
a Delaware corporation
Accepting Assignment from Mace Wash, Inc.
By: /s/ Robert M. Kramer
----------------------------------
Name:________________________________
Its:_________________________________
<PAGE>
SELLER:
THE MANUS GROUP, INC.
an Arizona corporation
By: /s/ Frank Bolester
----------------------------------
Frank Bolester
President
By: /s/ Chrisetta Rush
----------------------------------
Chrisetta Rush
Vice President
PRINCIPALS:
/s/ Joseph Gagliano
----------------------------------
Joseph Gagliano [15% shareholder]
/s/ Chrisetta Rush
----------------------------------
Chrisetta Rush [85% shareholder]
GUARANTORS:
/s/ Joseph Gagliano /s/ Rose Lee Gagliano
---------------------------------- ----------------------------------
Joseph Gagliano Rose Lee Gagliano
[spouse of Joseph N. Gagliano]
/s/ Chrisetta Rush /s/ Arthur Rush
---------------------------------- ----------------------------------
Chrisetta Rush Arthur Rush
[spouse of Chrisetta Rush]
ATTACH SIGNATURE PAGES & NOTARIZATIONS HERE
<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, INC. ACQUIRES TWO
STRATEGIC CAR WASH LOCATIONS IN EXISTING MARKETS
Mount Laurel, New Jersey, August 31, 1999 -- Mace Security International, Inc.
("MSI") (Nasdaq:Mace) today announced that it has acquired Shammy Man Car Wash
of Phoenix, Arizona as well as the completion of the previously announced
acquisition of Classic 50's Car Wash of Lubbock, Texas. Collectively, the
companies represent approximately $2 million in annualized revenue.
Shammy Man, which is a full service car wash containing a convenience store and
detail center, is a "tuck-in" acquisition that will be integrated into MSI's
existing Phoenix, Arizona operations. The Company now owns and operates 14 car
washes in this geographical location. Also, Shammy Man has recently been
reconstructed with new modernized operational equipment which will increase the
efficiency and improve the quality of the car wash.
Additionally, the Company completed the acquisition of Classic 50's. Classic
50's, which is located in Lubbock, Texas, is a full service car wash that also
contains a convenience store and detail center. The completion of this
acquisition, coupled with two car wash businesses under definitive agreement,
makes MSI the operator of 75% of all car washes in the Lubbock, Texas regional
area. This transaction is expected to be accounted for as a "pooling of
interests" business combination.
Louis D. Paolino, Jr., President, CEO and Chairman of MSI, said, "We are very
pleased with the completion of these two acquisitions. Shammy Man immediately
provides us a larger customer base in Phoenix, while Classic 50's gives MSI the
opportunity of becoming the leading operator of car washes in Lubbock, Texas."
He added, "The completion of these acquisitions is exciting because it enables
MSI to implement marketing initiatives to effectively build brand name awareness
in both of these geographical regions."
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.
