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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: October 18, 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 White Glove Chicago Partnership
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On October 18, 1999, Mace Security International, Inc., a Delaware corporation
(the "Company" or "Registrant"), through its wholly owned subsidiary, Mace Wash,
Inc., acquired all of the car wash related assets of White Glove Chicago
Partnership ("White Glove Car Wash") pursuant to the terms of a Car Wash Asset
Purchase/Sale Agreement dated April 20, 1999 (collectively the "Agreement").
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 containing a detail center and convenience store located in
Tempe, 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 $875,000 consisting of $400,000 worth of
unregistered shares of the Company's common stock, valued at a strike price of
$10.50 per share, and cash of $130,000 paid from working capital at closing, and
a $345,000 promissory note to the Sellers bearing an interest rate of 8% due on
January 1, 2000.
The Registrant intends to continue to use the acquired assets in the
business of operating a full service car wash containing a detail center and
convenience store in Tempe, Arizona. 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.
In accordance with the applicable regulations under the Securities
and Exchange Act of 1934 and after review of the financial
statements of the White Glove Car Wash, the Registrant has concluded
that Securities and Exchange Act rules do not require the filing of
financial statements with respect to the acquired company.
Accordingly, the Registrant is not filing financial statements
herewith.
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(c) The following Exhibits are hereby filed as part of this Current
Report on Form 8-K.
2.1 Car Wash Asset Purchase/Sale Agreement dated as of April 20,
1999, between White Glove Chicago Partnership and Mace Wash,
Inc., a wholly owned subsidiary of Mace Security International,
Inc.
2.2 Amendment one of the Car Wash Asset Purchase/Sale Agreement
dated as of April 20, 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 29, 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 Description
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No.
- ---
2.1 Car Wash Asset Purchase/Sale Agreement dated as of April 20,
1999, between White Glove Chicago Partnership and Mace Wash,
Inc., a wholly owned subsidiary of Mace Security International,
Inc.
2.2 Amendment one of the Car Wash Asset Purchase/Sale Agreement dated
as of April 20, 1999.
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TABLE OF CONTENTS
<TABLE>
<S> <C>
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
Survivability................................................. Page 17 of 18
Entire Agreement.............................................. Page 17 of 18
</TABLE>
i
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<TABLE>
<S> <C>
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
</TABLE>
ii
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EXHIBIT 2.1
CAR WASH
ASSET PURCHASE/SALE AGREEMENT
This CAR WASH ASSET PURCHASE/SALE AGREEMENT ("Agreement") is made to be
effective as of the Effective Date of Agreement set forth in Item 1 of Basic
Purchase Information ("BPI") by and between the "Buyer" shown in BPI Item 2 and
the Seller or Sellers (collectively "Seller") shown in BPI Item 3.
RECITALS
A. Seller owns one or more car wash operations ("operations") on leased or fee
simple property as set forth in BPI Item 4.
B. Seller desires to sell, and Buyer desires to buy, those operations and the
items pertaining thereto which are set forth in BPI Item 5, "Elements to be
Purchased."
THEREFORE, in consideration of the mutual covenants herein contained and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, and incorporating the above RECITALS in full, Buyer and
Seller agree as follows:
Purchase And Sale of Assets
I A. Seller agrees to sell to Buyer, and Buyer agrees to purchase from
Seller, on the terms and conditions and in the manner set forth in this
Agreement, the following assets of the operations ("assets") :
(1) All of the furniture, fixtures, equipment, leasehold improvements,
and specified tangible assets shown on Exhibit "A."
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(2) Inventory. The most recent inventory taken by Seller is shown on
Exhibit "B." Seller will provide an updated inventory immediately
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prior to Close of escrow.
B. Seller represents that Exhibits "A" and "B" include each and every
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asset of Seller's entities and operations, other than cash on hand, life
insurance policies owned by Seller, excluded accounts receivable and
inter-company receivables, if any. These assets include, but are not
limited to:
(1) Personal Property. All of Seller's right, title and interest in
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and to all Inventory, as defined and shown on Exhibit "B," equipment,
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machinery, tools, appliances, furnishings, furniture, goods held for
resale, receivables, customer lists, supplies, telephone and computer
equipment, and any other items used in connection with the business of
owning, operating, and managing the operations in BPI Item 4
(collectively, "Personal Property"), free and clear of any and all
liens, liabilities and encumbrances, and regardless of the location of
such Personal Property, whether on or off the premises of any
operation.
(2) Permits. All of Sellers' right, title and interest in, to and
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under all transferable permits, licenses, approvals or authorizations
obtained from any governmental authority relating to the business of
owning, operating and managing the operations ("Permits"), attached as
Exhibit "C."
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(3) Intangibles. All of Sellers' right, title and interest in, to and
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under all intangible personal property not otherwise described in this
Section and relating to the business of owning, operating and managing
the operations, including without limitation (a) all warranties in
favor of Sellers; (b) all liens and security interests in favor of
Sellers, together with any instruments or documents evidencing same;
(c) all telephone numbers associated with the operations; and (d) all
goodwill relating to the business of owning, operating, and managing
the operations (collectively, "Intangibles"). Attached hereto as
Exhibit "D" is a list of all Intangibles.
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(4) Trade Names and Trademarks. Buyer shall have the exclusive use of
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Sellers' trade names and trademarks, and other business names owned
and used by Seller, relating to the business of owning, operating, and
managing car wash operations, for an indefinite period, which period
shall terminate if, and only if, Buyer advises Seller in writing of
Buyer's relinquishment of this right. Buyer's rights include the use
of any and all derivatives and forms together with all trademarks,
service marks, and logos of the foregoing names, whether
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or not registered and whether now owned or hereafter acquired,
together with all trademark registrations of and trademark
registration applications for the foregoing names, and all good will
associated with any of the foregoing (collectively, "Trade Names &
Trademarks"). Trade Names and DBAs are set forth in "Trade Names &
Trademarks," BPI Item 6. Exhibit "E," attached, contains all of the
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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.
Amount of Purchase Price
Page 2 of 18
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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 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.
Page 3 of 18
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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.
Page 4 of 18
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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.
Page 5 of 18
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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
-------------------
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
-----------
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
------------------------------------
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.
Page 6 of 18
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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:
(a) terminate this Agreement in its entirety by giving Seller
written notice in which event this Agreement shall become null
and void; or
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(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.
(9) There are no unpaid bills or claims in connection with the
construction of, or any repairs to, Seller's Property.
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(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 ownership,
use, maintenance, or operation of any of Seller's assets or the
conduct of Seller's business or operations.
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(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 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.
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(25) This Agreement and the Other Documents have been or will be duly
and validly executed and delivered by Seller and Principals (as
applicable); and when executed and delivered constitute legal, valid
and binding obligations of Seller, enforceable in accordance with
their terms.
(26) Neither the execution and delivery of this Agreement or the Other
Documents, nor the consummation of any of the transactions
contemplated by this Agreement or the Other Documents, nor compliance
by Seller with any of the provisions thereof, will:
(a) Violate, conflict with, or result in a breach of any of the
provisions of; constitute a default (or an event which, upon
notice or lapse of time or both, would constitute a default)
under; result in the termination or cancellation of; accelerate
the performance required by; or result in the creation of any
lien, security interest, charge or encumbrance upon any of the
assets under any provision of the Articles, the Bylaws, the
Operating Agreement, or any note, bond, mortgage, indenture, deed
of trust, lease, license or any other agreement or obligation to
which Seller is a party, or by which Seller or any of the assets
may be bound or affected; and
(b) Violate or conflict with any order, writ, injunction, decree,
judgment, permit, license, law, rule, regulation or ordinance
applicable to Seller or any of the assets.
(27) If this Agreement includes a purchase of stock, that stock is not
subject to any restrictions on transfer, governmental or private,
rights of first refusal, voting trusts, proxy agreements, or any other
shareholder rights, member rights, third party rights, or other
governmental restrictions.
Buyer's Representations and Warranties
VIII A. Buyer is duly organized, validly existing and in good standing under
the laws of the state in which it was incorporated or formed.
B. Buyer has the complete and unrestricted right, power, authority and
capacity to (1) execute and 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
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.
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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
-----------------------
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.
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.
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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.
(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.
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(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
----------------------------------
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 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
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(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 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
Page 15 of 18
<PAGE>
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.
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
Page 16 of 18
<PAGE>
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
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
Page 17 of 18
<PAGE>
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 encompassing 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.
Page 18 of 18
<PAGE>
CAR WASH ASSET PURCHASE/SALE AGREEMENT
BASIC PURCHASE INFORMATION
("BPI")
1. Effective Date of Agreement April 20, 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: White Glove Chicago Partnership
-------------------------------
[Preamble] & [Seller's Representations and Warranties]
4. Operations:
Name and Location of Car Wash/Operation:
[Recitals] White Glove Tempe Car Wash
--------------------------
6505 S. McClintock
--------------------------
Tempe AZ 85283
--------------------------
(Seller represents that the names listed are all of the names used by
Seller with respect to the car washes, or by which the car washes are
known.)
5. Elements to be Purchased:
[Recitals]
Assets: All Car Wash Assets, Equipment & Capital Assets, for the Operations
-------------------------------------------------------------------
in BPI Item 4, above - Full Service Car Wash, Detail, &
--------------------------------------------------------
Convenience Store (General Description)
-----------------
Real Property: No Fee Interest - Leasehold Only
---------------------------------------------------
Stock: None
---------------------------------------------------
The real property on which the car wash operation is located is leased by
Seller under its former name of Fleetway Systems, Inc., on a percentage
rental basis, with a minimum monthly rental of $6,000.00 per month. The
real property and the buildings thereon are owned by Landlord, Weingarten
Nostat, Inc. The leased premises are approximately 4500 square feet in
Pueblo Anozira Shopping Center. Seller's security deposit of $5,333.00 on
deposit with Landlord, shall remain on deposit with Landlord for the
benefit of Buyer and
Page 1 of 11
<PAGE>
Buyer will credit $5,333.00 to Seller at Close of Escrow. The current term
ends June 30, 2003. There are three (3) sixty (60) month options to extend
the Lease term. Consent of Landlord, Landlord's execution of a Memorandum
of Lease in recordable form and Buyer's approval of the Lease are each a
condition precedent to Close of Escrow. Buyer's approval of the lease is
within Buyer's sole discretion.
6. Trade Names & Trademarks
[Purchase and Sale of Assets]
Trade Names: White Glove Tempe*
------------------------------
D/B/A : White Glove Tempe*
-------------------------------
*Buyer shall have the right to use this name for a period of ninety (90)
days from Close of Escrow. Seller shall not use this name for a period
of three (3) years from Close of Escrow.
Agreement Section I A (2) is amended by deleting the last sentence and
substituting: "If Buyer requires an updated inventory immediately prior to
Close of Escrow, Buyer shall undertake the responsibility of bringing the
inventory up to date."
Agreement Section I B (1) Personal Property: At the end of Line 2, delete
-----------------
"receivables,".
Agreement Section I B (3) Intangibles, (a): Insert "transferable" before
-----------
"warranties."
Agreement Section I B (5) Entitlement: The last two sentences thereof are
-----------
hereby deleted and in lieu thereof, the following is inserted:
"Prior to Close of Escrow, Seller shall
provide, for Buyer's approval, a Schedule I B
(5) showing the number and monetary value of
the coupons outstanding. To the extent Buyer
redeems outstanding coupons, issued by
Seller, in excess of the amounts shown on the
Schedule, Seller will be charged back for the
costs of s uch redemptions."
7. Purchase Price: Eight Hundred and Seventy-Five Thousand Dollars
------------------------------------------------
($875,000.00) [Amount of Purchase Price]
-------------
Purchase Price - Form of Consideration:
Cash Four Hundred and Seventy-Five Thousand Dollars $475,000.00
-----------------------------------------------------------------
Stock $125,000.00** to Seller, $275,000.00** for 15 year Non-Compete
---------------------------------------------------------------------
Agreement with Anthony Baker, Matthew Baker, and Andrew Baker
---------------------------------------------------------------
(collectively "the Bakers").
----------------------------
**In Mace Securities International, Inc. ("Issuer") Stock to be issued
on January 1, 2000. For the purpose of this Agreement only, the stock
shall be valued at $10.50 per share. Of the shares due Seller, $87,500.00
in shares shall be held back in accordance with BPI Item 11. At the end of
the Hold-Back Period, so much of the Hold-Back shares as are then
remaining, shall be issued to Seller. Prior to Close of Escrow, the Bakers
shall advise Escrow, of the number of shares to be issued to each of them
under the Non-Compete Agreement. All references to Seller in the
representations and warranties in this BPI Item 7, shall be deemed to
include the Bakers.
Page 2 of 11
<PAGE>
Each Seller, understands and agrees that the following restrictions and
limitations are applicable to its purchase and resale or other transfer of
the Issuer's stock, pursuant to the Securities Act of 1933 (the "Act").
For the purposes of this Agreement, the terms "Issuer's Stock" includes
common stock issuable upon Close of Escrow as well as the common stock
designated as Hold-Back shares which are to be issued at the end of the
Hold-Back Period.
(a) Sellers agree that the Issuer's Stock shall not be
sold or otherwise transferred, unless the Issuer's Stock
is registered under the Act and the state securities
laws or is exempt therefrom.
(b) Until January 1, 2001, 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) 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 Illinois general partnership and the Bakers are three
individuals, two of whom reside in Texas and one of whom resides in
Arizona. Each Seller is an accredited investor as that term is defined
in Regulation D under the Act.
(b) Each Seller represents and warrants that the Issuer's Stock is
being acquired for
Page 3 of 11
<PAGE>
its own account without a view to public distribution or resale and
that Sellers have no contract, undertaking, agreement or arrangement
to sell or otherwise transfer or dispose of the Issuer's Stock, or any
portion thereof, to any other person.
(c) Each Seller represents and warrants that in determining to acquire
the Issuer's Stock, it has relied solely upon its independent
investigation, including the advice of its legal counsel and
accountants or other financial advisors or purchaser representatives,
and has, during the course of discussions concerning its acquisition
of the Issuer's Stock, been offered the opportunity to ask such
questions and inspect such documents concerning Buyer and its business
and affairs as each Seller has requested so as to more fully
understand the nature of the investment and to verify the accuracy of
the information supplied.
(d) THE SELLERS ACKNOWLEDGE THAT THE ACQUISITION OF THE CONSIDERATION
STOCK INVOLVES A HIGH DEGREE OF RISK, and represent and warrant that
they can bear the economic risk of the Seller's acquisition of the
Issuer's Stock, including the total loss of the investment.
(e) The Sellers represent and warrant that (i) they have adequate
means of providing for their current needs and financial
contingencies, (ii) they have no need for liquidity in this
investment, (iii) they have no debts or other obligations, and cannot
foresee any other circumstances that are likely in the future to
require them to dispose of the Issuer's Stock, and (iv) all their
investments in and commitments to non-liquid investments are, and
after acquisition of the Issuer's Stock will be, reasonable in
relation to their net worth and current needs.
(f) The Sellers understand that no federal or state agency has
approved or disapproved the Issuer's Stock or made any finding or
determination as to the fairness of the Issuer's Stock for investment.
(g) The Sellers understand that the Issuer's Stock is being offered
and sold in reliance on specific exemptions from the registration
requirements of federal and state securities laws and the Buyer is
relying upon the truth and accuracy of the representations,
warranties, agreements, acknowledgments and understandings set forth
herein in order to determine the applicability of such exemption and
the suitability of Sellers to acquire the Issuer's Stock.
(h) The Sellers represent and warrant that they are familiar with the
business and financial affairs of the Seller partnership and Buyer's
corporation and/or parent company and have had access to all financial
statements prepared by them.
8. EBITDA- (subject to verification): $155,000.00
[Amount of Purchase Price]
EBITDA GUARANTEE PERIOD: N/A YEARS
-----------------------
Page 4 of 11
<PAGE>
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: Leasehold Improvements = $500,000.00 Equipment = $90,000.00;
-------------------------------------------------------------
The Bakers' Covenant Not To Compete = $275,000;
-----------------------------------------------
[Amount of Purchase Price*] $10,000.00 (Corporate Covenant)
-----------------------------------
*Inventory is included in Purchase Price.
11. Hold-Back Percentage: $87,500.00 in stock
---------------------------------------
[Payment of Purchase Price & Commissions]
12. Hold-Back Period: One Year [Payment
---------------------------------------
of Purchase Price & Commissions]
Section III B of the Agreement, Lines 9 and 10: The phrase "by the time
during which a lawsuit could be brought relating to these items or, if a
lawsuit or other" is hereby replaced with the following two words: "if a."
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] Three (3) Years
-------------------------
15. Buyer's Broker: None
---------------------------------------------------
[Payment of Purchase Price & Commissions]
16. Seller's Broker: Arizona Business Investments, 11408 N. Blackheath Road,
------------------------------------------------------------------------
Scottsdale, AZ 85252 - Roger Pencek
-----------------------------------
[Payment of Purchase Price & Commissions]
17. Title Company: Fidelity National Title Insurance or as selected by Buyer
----------------------------------------------------------
[Documents and Physical Inspection]
18. Escrow Company: Arizona Escrow, attn. Vickie La Ritchie
----------------------------------------------
[Escrow] 3700 North 24/th/ Street, Suite 130
----------------------------------------------
Phoenix, AZ 85016
----------------------------------------------
(602) 956-2629; Fax: (602) 224-9393
----------------------------------------------
19. Escrow Opening Date: June 4, 1999
-----------------------------------------
[Escrow] (Date by which Escrow must be opened)
20. Initial Deposit: NONE
----
[Escrow]
Page 5 of 11
<PAGE>
21. Days From Opening: NOT APPLICABLE
--------------
[Escrow] (Earliest Date On Which Buyer's Deposit Becomes Non-Refundable)
22. Fuel Companies: N/A
-------------------------------------------------
[Escrow]
23. Consent Date: April 30, 1999
---------------------------------------------------
[Conditions Precedent to Closing]
24. Date for Close of Escrow: On or before 8/20/99
--------------------------------------
[Closing]
25. Non-Compete Area: Phoenix-Tempe
-------------------------------
Non-Compete Period: Fifteen (15) Years
-------------------------------
[Non-Competition Agreements]
26. Seller's Address for Notices: White Glove Chicago Partnership
[Notices] c/o White Glove Tempe Car Wash
6505 S. McClintock
Tempe AZ 85283
Copy to: Robert Cohen, Esq.
1909 Rte. 70 E.
IBS Bldg., Suite 100
Cherry Hill, NJ 08003
Buyer's Address for Notices:
[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 6 of 11
<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 7 of 11
<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 - Buyer's Standard Form Replaced
with Letter from Seller's Attorney, Robert T. Cohen, addressed to
Buyer's Attorney, Lynne M..Geyser dated May 28, 1999.
Exhibit "K" Undischarged and Assumed Obligations
Exhibit "L" Service Contracts Exceeding 30 Days
Exhibit "M" Bill of Sale
Exhibit "N-1" Non-Competition - Corporate
Exhibit "N-2" Non-Competition - Individual
Exhibit "O" Guaranty Agreement
Page 8 of 11
<PAGE>
ADDENDA
-------
The following items are corrected, amended and/or addenda are attached to and
made a part of this Agreement:
Additional Conditions of Purchase:
1. Seller shall require that each person who is to receive Mace stock
execute an irrevocable six month proxy to Louis D. Paolino, Jr. in the
form attached hereto and designated "IRREVOCABLE PROXY." The proper
execution of such Proxies are a condition to the Close of this Escrow.
2. If Buyer requires a leasehold title policy and a survey of the
Property, Buyer will order and pay for same.
3. Buyer agrees to notify Seller if the Books and Records which Seller
had maintained prior to this Purchase and Sale are moved to a location
other than that shown in BPI Item 4.
4. Buyer agrees to pay the cost of UCC searches.
5. Agreement Section VI: All obligations required to be performed by
Seller prior to Closing shall be performed not later than Closing.
6. Agreement Section VI J (3): Insert ", not cured by Close of Escrow,"
after "default."
7. Agreement Section VI J (5): At the end of the second line insert
"unless the same do not survive closing," after "Buyer,".
8. Seller represents and warrants that Seller is a partnership which is
not required to be certified by the corporation commission.
Exceptions to Non-Competition - Sellers may continue to own and operate
other existing White Glove Car Wash Operations. Existing means owned and
operated under the White Glove name as of April 20, 1999. Existing
operations may only be operated at those locations at which the operations
were located on April 20, 1999.
The parties hereby execute the attached Car Wash Asset Purchase/Sale Agreement
bearing a footer identification shown as "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.
Page 9 of 11
<PAGE>
SELLER:
WHITE GLOVE CHICAGO PARTNERSHIP
an Illinois general partnership
By: /s/ Matthew Baker
---------------------------------------
Matthew Baker, Managing General Partner
SOLE SHAREHOLDER OF WHITE GLOVE, INC.,
A General Partner
By: /s/ Robert T. Cohen, as attorney in fact for Anthony D. Baker
--------------------------------------------------------------
pursuant to a power of attorney executed September 1999
- -------------------------------------------------------
Anthony D. Baker
THE BAKERS
By: /s/ Matthew Baker
---------------------------------------
Matthew Baker
By: /s/ Robert T. Cohen, as attorney in fact for Anthony D. Baker
--------------------------------------------------------------
pursuant to a power of attorney executed September 1999
- -------------------------------------------------------
Anthony D. Baker
By: /s/ Andrew Baker
---------------------------------------
Andrew Baker
Page 10 of 11
<PAGE>
GUARANTORS:
By: /s/ Robert T. Cohen, as attorney in fact for Anthony D. Baker
--------------------------------------------------------------
pursuant to a power of attorney executed September 1999
- -------------------------------------------------------
Anthony D. Baker
BUYER:
MACE WASH, INC. (formerly American Wash Services, Inc.)
a Delaware corporation
Assigning to Mace Car Wash, Inc.
By: /s/ Robert M. Kramer
------------------------------
Name: Robert M. Kramer
----------------------------
Its: Executive Vice President
----------------------------
BUYER:
MACE CAR WASH, INC.
a Delaware corporation
Accepting Assignment from Mace Wash, Inc.
By: /s/ Robert M. Kramer
------------------------------
Name: Robert M. Kramer
----------------------------
Its: Executive Vice President
----------------------------
Page 11 of 11
<PAGE>
EXHIBIT 2.2
FIRST AMENDMENTFIRST AMENDMENT
TO
CAR WASH ASSET PURCHASE/SALE AGREEMENT
This FIRST AMENDMENT hereby amends that certain CAR WASH ASSET PURCHASE/SALE
AGREEMENT ("Agreement") effective April 20, 1999 by and between WHITE GLOVE
CHICAGO PARTNERSHIP, an Illinois General Partnership ("Seller") and MACE CAR
WASH, INC. a Delaware Corporation ("Buyer").
IN CONSIDERATION of the mutual promises of the parties, Buyer and Seller agree
as follows:
1. BPI Item 7, that portion which reads:
"Cash Four Hundred and Seventy-Five Thousand Dollars $475,000.00"
-------------------------------------------------------------
Is hereby amended to read:
"Cash Four Hundred and Seventy-Five Thousand Dollars ($475,000.00),
--------------------------------------------------------------
payable $130,000.00 at Close of Escrow; the remainder of the cash portion
--------------------------------------------------------------------------
of the Purchase Price to be represented by an unsecured Promissory Note
------------------------------------------------------------------------
("Note") in the amount of $345,000.00, in the form attached hereto. The
------------------------------------------------------------------------
Note shall be at the rate of eight percent (8%)interest per annum, due and
--------------------------------------------------------------------------
payable in full on January 1, 2000."
-----------------------------------
2. Percentage rent for the premises on which the car wash operation is located
shall be prorated between Buyer and Seller, through Escrow, as of September
30, 1999. Seller shall be solely responsible for all percentage rent for
the period ending at close of business on September 30, 1999. Buyer shall
be responsible for percentage rent for the period commencing October 1,
1999.
3. BPI Item 24, is hereby amended by the addition of the following:
"Regardless of the actual date on which the Escrow Closing
occurs, for accounting and operational purposes, the effective
date and time of transfer is agreed to be Midnight September 30,
1999. Commencing with October 1, 1999, the car wash shall be
operated by Buyer in and for its own behalf."
4. Except as set forth herein, all other terms of the Agreement remain
unchanged.
Page 1 of 3
<PAGE>
SELLER:
WHITE GLOVE CHICAGO PARTNERSHIP
an Illinois general partnership
By: /s/ Matthew Baker
----------------------------------------
Matthew Baker, Managing General Partner
SOLE SHAREHOLDER OF WHITE GLOVE, INC.,
A General Partner
By: /s/ Robert T. Cohen, as attorney in fact for Anthony D. Baker
--------------------------------------------------------------
pursuant to a power of attorney executed September 1999
- -------------------------------------------------------
Anthony D. Baker
THE BAKERS
By: /s/ Matthew Baker
-----------------------------------
Matthew Baker
By: /s/ Robert T. Cohen, as attorney in fact for Anthony D. Baker
--------------------------------------------------------------
pursuant to a power of attorney executed September 1999
- -------------------------------------------------------
Anthony D. Baker
By: /s/ Andrew Baker
------------------------------------
Andrew Baker
Page 2 of 3
<PAGE>
GUARANTORS:
By: /s/ Robert T. Cohen, as attorney in fact for Anthony D. Baker
--------------------------------------------------------------
pursuant to a power of attorney executed September 1999
- -------------------------------------------------------
Anthony D. Baker
BUYER:
MACE CAR WASH, INC.
a Delaware corporation
By: /s/ Robert M. Kramer
----------------------------
Name: Robert M. Kramer
---------------------------
Its: Executive Vice President
---------------------------
Page 3 of 3
