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: May 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.)
160 Benmont Avenue, Bennington, Vermont 05201
(Address of Principal Executive Offices)
(802) 447-1503
(Registrant's Telephone Number)
<PAGE>
Item 1 Not Applicable.
Item 2 Acquisition of the Assets of Genie Car Washes.
On May 18, 1999, Mace Security International, Inc., a Delaware
corporation (the "Company" or "Registrant"), through its wholly owned
subsidiary Mace Car Wash - Arizona, Inc., acquired substantially all of the
assets (the "Genie Purchased Assets") of Genie Car Wash Inc. of Austin; Genie
Car Care Center, Inc.; and Genie Car Service Center, Inc. (collectively,
"Genie") from Genie and Cornett Limited Partnership (collectively with Genie,
the "Sellers"). Pursuant to the terms and conditions of the Car Wash Asset
Purchase/Sale Agreement executed by Millennia Car Wash, LLC with the Sellers
(the "Genie Purchase Agreement"), as assigned to the Company, the Company
purchased the real estate, inventory, fixed assets, trade names and
trademarks, and intangibles of the car wash operations of Sellers. The
Company intends to continue such use of the Genie Purchased Assets.
Seller is 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 Genie Purchase Agreement and
subsequent amendments, which are filed herewith as Exhibits 2.1, 2.2, 2.3, 2.4
and 2.5 respectively.
At Closing under the Genie Purchase Agreement, the Company paid to Sellers an
aggregate purchase price, subject to adjustments, of $11,750,000 (the "Genie
Purchase Price"), $1,000,000 of which was paid in cash at the closing of the
transaction from working capital, $4,750,000 of which was evidenced by the
delivery of a promissory note bearing interest at 8% per annum, payable in 90
days of the Closing, and $5,550,000 of which was paid by the delivery of
493,333 unregistered shares of the Registrant's Common Stock, par value $.01,
valued in accordance with and subject to restrictions set forth in the terms
of the Genie Purchase Agreement. Upon the expiration of a "hold-back" period,
assuming that the Company has no claims against the Sellers for breaches of
representations and other indemnified claims, the remaining $450,000 will be
paid by the issuance to the Sellers of 40,000 additional unregistered shares
of the Registrant's Common Stock. The acquisition is accounted for using the
"purchase" method of accounting.
In addition, the Sellers and certain principals designated by the
Company executed non-competition agreements preventing each from competing,
directly or indirectly, with the Company or carrying on the operations of a
car wash within certain geographic areas and for certain predetermined
periods.
Items 3-6 Not Applicable.
Item 7 Financial Statements and Exhibits.
(a) Financial Statements of business acquired.
It is impracticable to provide the required financial
statements of Genie at the time of the filing of this report.
The required financial statements of Genie will be filed
within the time period required in accordance with
applicable regulations and the Securities and Exchange
Act of 1934.
(b) Pro Forma Financial information.
It is impracticable to provide the required pro forma financial
information of Mace Security International, Inc. at the time of the
filing of this report. The pro forma financial information will be
filed within the time period required in accordance with
applicable regulations and the Securities and Exchange
Act of 1934.
<PAGE>
(c) Exhibits. 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 July 8,
1998 between Genie Car Wash Inc. of Austin; Genie Car
Care Center, Inc.; Genie Car Service Center, Inc.; and
Cornett Limited Partnership and Millennia Car Wash LLC.
2.2 First Amendment to Car Wash Asset Purchase/Sale
Agreement effective July 8, 1998 between Genie Car Wash
Inc. of Austin; Genie Car Care Center, Inc.; Genie Car
Service Center, Inc.; and Cornett Limited Partnership and
Millennia Car Wash Group LLC.
2.3 Second Amendment to Car Wash Asset Purchase/Sale
Agreement effective April 29, 1999 between Genie Car Wash
Inc. of Austin; Genie Car Care Center, Inc.; Genie Car
Service Center, Inc.; and Cornett Limited Partnership and
Millennia Car Wash Group LLC.
2.4 Third Amendment to Car Wash Asset Purchase/Sale
Agreement effective May 17, 1999 between Genie Car Wash
Inc. of Austin; Genie Car Care Center, Inc.; Genie Car
Service Center, Inc.; and Cornett Limited Partnership and
Millennia Car Wash Group LLC.
2.5 Fourth Amendment to Car Wash Asset Purchase/Sale
Agreement effective May 18, 1999 between Genie Car Wash
Inc. of Austin; Genie Car Care Center, Inc.; Genie Car
Service Center, Inc.; and Cornett Limited Partnership and
Millennia Car Wash Group LLC.
2.6 Promissory Note in the amount of $4,750,000 by Mace Car
Wash-Arizona, Inc., dated May 18, 1999, payable to Mike W. Cornett
as collecting agent for Genie Car Wash Inc. of Austin; Genie Car
Care Center, Inc.; Genie Car Service Center, Inc.; and Cornett
Limited Partnership.
2.7 Security Agreement dated May 18, 1999 between
Mace Car Wash-Arizona, Inc. and Genie Car Wash
Inc. of Austin; Genie Car Care Center, Inc.; Genie Car
Service Center, Inc.; and Cornett Limited Partnership.
99 Press Release dated May 25, 1999.
Items 8-9. Not applicable.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: June 1, 1999 MACE SECURITY INTERNATIONAL, INC.
By:/s/ Gregory M. Krzemien
Gregory M. Krzemien
Chief Financial Officer and Treasurer
<PAGE>
CAR WASH ASSET PURCHASE/SALE AGREEMENT
BASIC PURCHASE INFORMATION
1. Effective Date of Agreement July 8, 1998 [Preamble]
2. Buyer: MILLENNIA CAR WASH LLC
[Preamble] a Delaware Limited Liability Company
3. Seller: [Preamble] & [Seller's Representations and Warranties]
Genie Car Wash Inc. of Austin
Genie Car Care Center, Inc.
Genie Car Service Center, Inc.
Cornett Limited Partnership
4. Operations:
Name and Location of
Car Wash/Operation: [Recitals]
(A) Genie Car Wash Inc.
of Austin 1311 South Lamar Blvd, Austin, TX 78704
(B) Genie Car Care
Center, Inc. 1021 West William Cannon Dr., Austin, TX 78745
(C) Genie Car Service
Center, Inc. 7320 Burnet Road, Austin, TX 78757
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: Location A: 1311 S. Lamar, Austin, Texas 78704
(Downtown - 90,188 Sq. Ft.)
(opened 11/1982) (General Description)
Full Service Car Wash with 4 Vacuum Lanes,
Gasoline Canopy, 4 Coin-Operated Self-Service Car
Wash Bays with 4 Drying Bays, 6 Bay Detail Shop
with Customer Waiting Room and a Wash Bay, Conoco
Fuel, 6 Dual Electronic Gasoline and 2 Single
Diesel Fuel Dispensers.
Location B: 1021 West William Cannon Dr., Austin, Texas 78745
(South Austin - 76,230 Sq. Ft.)
(opened 3/1987) (General Description)
Full Service Car Wash with 4 Vacuum Lanes,
Gasoline Canopy, 6 Coin-Operated Self-Service Car
Wash Bays with 3 Drying Bays, 4 Bay Detail Shop
with Customer Waiting Room, Conoco Fuel, 6 Dual
Electronic Gasoline and 2 Single Diesel Fuel
Dispensers.
<PAGE>
Location C: 7320 Burnet Road, Austin, Texas 78757
(North Austin - 62,600 Sq. Ft.)
(opened 1968; purchased 1978) (General Description)
Full Service Car Wash with 4 Vacuum Lanes,
Gasoline Canopy, 6 Coin-Operated Self-Service Car
Wash Bays, 6 Bay Detail Shop and a Wash Bay (For
Engine Cleaning, etc.), Conoco Fuel, 6 Dual
Electronic Gasoline and 2 Single Diesel Fuel
Dispensers.
Real Property: Fee Simple at all Locations
in Item 4, above. (General Description)
Location A: 2.07 Acres See Legal Description - Exhibit "G"
Location B: 1.75 Acres See Legal Description - Exhibit "G"
Location C: 1.44 Acres See Legal Description - Exhibit "G"
Stock: NONE (General Description)
6. Trade Names & Trademarks
[Purchase and Sale of Assets]
Trade Names/DBAs: Each entity in Item 4 above
and Genie Car Washes of Texas, or other
combinations of the "Genie" name, as
applicable.
7. Purchase Price: ELEVEN MILLION SEVEN HUNDRED FIFTY THOUSAND
DOLLARS ($11,750,000.00): [$11,250,000.00 Based on EBITDA
and Cap Rate PLUS $500,000.00 Additional]
[Amount of Purchase Price]
8. EBITDA - (subject to verification): $1,985,734.00
[Amount of Purchase Price]
9. Effective Capitalization ("Cap") Rate: 17.65% [Amount of Purchase Price]
10. Allocations: See Attachment: "LETTER OF INTENT, ITEM 10 ALLOCATIONS"
[Amount of Purchase Price]
(per operation, including Covenant Not to Compete)
Estimated Inventory
(not included in Purchase Price): (Each Location) $60,000.00
11. Hold-Back Percentage: No Percentage. Total = $450,000.00.
[Payment of Purchase Price & Commissions]
12. Hold-Back Period: Twelve (12) Months from Close of Escrow -
SUBJECT TO RETURN OF $225,000.00, 6 MONTHS FROM CLOSE OF ESCROW,
IF NO CLAIMS MADE OR THREATENED. [Payment of Purchase Price & Commissions]
<PAGE>
13. Hold-Back Depletion Amount: FIFTY THOUSAND DOLLARS ($50,000.00)
[Payment of Purchase Price & Commissions]
14. Guaranty Period [minimum period must equal Non-Compete Period]:
[Payment of Purchase Price & Commissions] WAIVED
15. Buyer's Broker/Consultant Arizona Business Investments,
11408 N. Blackheath Road, Scottsdale, AZ 85252 - Roger Pencek
[Payment of Purchase Price & Commissions]
16. Seller's Broker: NONE
[Payment of Purchase Price & Commissions]
17. Title Company: Lawyer's Title or other company of Buyer's choice
[Documents and Physical Inspection]
18. Escrow Company: Arizona Escrow, attn: Vickie LaRitchie
[Escrow] 3700 North 24th Street, Suite 130
Phoenix, AZ 85016
Phone: (602) 956-2629; Fax: (602) 224-9393
19. Escrow Opening Date: July 30, 1998
[Escrow] (Date by which Escrow must be opened)
20. Initial Deposit: $50,000.00
[Escrow]
21. Days From Opening: Forty-Five (45)
[Escrow] (Earliest Date On Which Buyer's Deposit
Becomes Non-Refundable)
22. Fuel Companies: Conoco
[Escrow]
23. Consent Date: Execution of Agreement
[Conditions Precedent to Closing]
24. Date for Close of Escrow: 90 days from opening of Escrow
[Closing]
25. Non-Compete Area: Travis & Williamson Counties
Non-Compete Period: Five (5) Years
[Non-Competition Agreements]
<PAGE>
26. Seller's Address for Notices: Genie Car Wash Inc. of Austin,
[Notices] Genie Car Care Center, Inc.,
Genie Car Service Center, Inc., and
Cornett Limited Partnership
5471 Thomas Arnold Road, Salado, TX 76571
Buyer's Address for Notices: Millennia Car Wash LLC
[Notices] 511 Encinitas Blvd., Suite 100
Encinitas, CA 92024
Attn: Catherine L. Bland
General Counsel
cc: Lynne M. Geyser, Esq.
P.O. Box 4715
San Clemente, CA 92674-4715
Senior General Counsel
Millennia Car Wash LLC
27. Governing State Law: Texas
[Governing State Law]
28. County Jurisdiction: Travis
[Governing State Law]
The foregoing Basic Purchase Information ("BPI") forms a part of the standard
form CAR WASH ASSET PURCHASE/SALE AGREEMENT ("Agreement") and is incorporated
by reference into the Agreement pursuant to the operative provisions of the
basic text of the Agreement contained in the attached pages. The BPI shall
control over the text in the event of any conflict.
EXHIBIT LIST
Exhibit "A" Furniture, Fixtures & Equipment; Leasehold
Improvements; & Specified Tangible Assets
Exhibit "B" Inventory - Definition & List.
Definition: Items held for resale, spare parts and
supplies in raw forms (i.e., detergents, etc.), fuel.
Exhibit "C" Permits
Exhibit "D" Intangibles
Exhibit "E" Trade Names, Trademarks, DBAs, Logos (Documents)
<PAGE>
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
[Omitted - Spouses are Principals]
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 [Deliberately Omitted]
ADDENDA
The following items are amended and/or addenda are attached to and made a
part of the Agreement:
Additional Conditions of Purchase: [NONE]
Exceptions to Non-Competition: Any Seller or its principal may own and
operate Self Service Car Washes, provided such operations do not use
the name "Genie" in any form or combination.
Corrections to Agreement:
1. Section I. B. (7), Seller and Principals,
Line 1: Insert "entity or" before the word "individual."
2. Section III. B., Line 3: After "(operations and Covenants),"
insert the sentence "The hold-back covers any and all liabilities
in existence at Close of Escrow, whether known or unknown,
provided an action, claim, demand, or notice with respect thereto
arises no later than the end of the hold-back period specified in
BPI Item 12."
<PAGE>
3. Section V. C. (2): Insert ", in its sole and absolute discretion,"
after "Buyer"
4. Section V. C. (3): Insert ", in its sole and absolute discretion,"
after "Buyer".
5. Section V. C.: Insert at the end thereof:
"At any time prior to Closing, Buyer has the right,
in its sole and absolute discretion, to review,
analyze, and approve or disapprove 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."
6. Section VI. H. Sellers' Retained Liabilities, Line 7: Delete
"Effective Date of this Agreement" and insert "Close of Escrow."
7. Section VI. K. (3), Lines 2 through 5: Delete:
"If such a letter is not received by Seller, or its agent, on or
before the time specified in Section V. B., Buyer shall be deemed
to have rejected one or more of the Inspection Items, and this
Agreement shall terminate in its entirety and become null and
void"
Substitute in lieu thereof:
"If such a 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 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."
8. Section IX. A., Line 1: Delete "to the extent covered
by Insurance,".
9. Section XII, Lines 4 through 6: Delete:
"In the event Buyer fails to notify Seller of Buyer's disapproval
of the Phase I's or Phase II's within the time period set forth
in Section V. B., Buyer shall be deemed to have rejected the
Phase I's and/or Phase II's as not satisfactory."
Substitute in lieu thereof:
<PAGE>
"If such a 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 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."
10. Except as shown above, there are no other corrections to
the Agreement.
<PAGE>
ATTACHMENT
LETTER OF INTENT, ITEM 10 ALLOCATIONS
Location A: 1311 S. Lamar, Austin, Texas
Assets Owner Allocation
Land Cornett Limited Partnership $ 500,000
Building Cornett Limited Partnership 2,000,000
Equipment Genie Car Wash, Inc. of Austin 200,000
Lease Improvements Genie Car Wash, Inc. of Austin 100,000
Covenant Genie Car Wash, Inc. of Austin 100,000
Goodwill Genie Car Wash, Inc. of Austin 1,250,000
Location B: 1021 W. William Cannon Dr., Austin, Texas
Land Cornett Limited Partnership 500,000
Building Cornett Limited Partnership 2,000,000
Equipment Genie Car Care Center, Inc. 200,000
Covenant Genie Car Care Center, Inc. 100,000
Goodwill Genie Car Care Center, Inc. 1,000,000
Location C: 7320 Burnet Road, Austin, Texas
Land Genie Car Service Center, Inc. 500,000
Building Genie Car Service Center, Inc. 2,000,000
Equipment Genie Car Service Center, Inc. 200,000
Covenant Genie Car Service Center, Inc. 100,000
Goodwill Genie Car Service Center, Inc. 1,000,000
Total $11,750,000
<PAGE>
TABLE OF CONTENTS
RECITALS ......................................................Page 1 of 26
PURCHASE AND SALE OF ASSETS ...................................Page 1 of 26
AMOUNT OF PURCHASE PRICE ......................................Page 3 of 26
PAYMENT OF PURCHASE PRICE & COMMISSIONS .......................Page 4 of 26
DOCUMENTS AND PHYSICAL INSPECTION .............................Page 5 of 26
ESCROW ........................................................Page 6 of 26
CONDITIONS PRECEDENT TO CLOSING ...............................Page 8 of 26
SELLER'S REPRESENTATIONS AND WARRANTIES ......................Page 10 of 26
BUYER'S REPRESENTATIONS AND WARRANTIES .......................Page 15 of 26
RISK OF LOSS .................................................Page 15 of 26
EMPLOYEES OF SELLERS .........................................Page 16 of 26
CLOSING ......................................................Page 16 of 26
ENVIRONMENTAL REPORTS ........................................Page 19 of 26
TAXES ........................................................Page 19 of 26
CONFIDENTIALITY OF AGREEMENT/PUBLICITY .......................Page 20 of 26
NON-COMPETITION AGREEMENTS ...................................Page 20 of 26
INDEMNITY/GUARANTY AGREEMENTS ................................Page 20 of 26
INTRODUCTION TO AND RETENTION OF CUSTOMERS ...................Page 21 of 26
OWNERSHIP OF EQUIPMENT .......................................Page 21 of 26
AMENDMENTS/WAIVERS ...........................................Page 21 of 26
ATTORNEYS' FEES ..............................................Page 21 of 26
<PAGE>
NOTICES ......................................................Page 22 of 26
TIME OF ESSENCE ..............................................Page 22 of 26
SEVERABILITY .................................................Page 22 of 26
EXHIBITS .....................................................Page 22 of 26
DILIGENCE, GOOD FAITH AND FURTHER DOCUMENTS ..................Page 22 of 26
SURVIVABILITY ................................................Page 23 of 26
ENTIRE AGREEMENT .............................................Page 23 of 26
ASSIGNMENT PROHIBITED ........................................Page 23 of 26
SUCCESSORS ...................................................Page 23 of 26
GOVERNING STATE LAW ..........................................Page 23 of 26
COUNTERPARTS .................................................Page 23 of 26
REMEDIES .....................................................Page 24 of 26
INTERPRETATION ...............................................Page 24 of 26
BENEFIT OF AGREEMENT .........................................Page 24 of 26
MISCELLANEOUS ................................................Page 24 of 26
<PAGE>
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."
(2) Inventory. The most recent inventory taken by Seller is
shown on Exhibit "B." Seller will provide an updated
inventory immediately prior to Close of escrow.
B. Seller represents that Exhibits "A" and "B" include each and
every 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 and to all Inventory, as defined and shown on
Exhibit "B," equipment, 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.
<PAGE>
(2) Permits. All of Sellers' right, title and interest in,
to and 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."
(3) Intangibles. All of Sellers' right, title and interest
in, to and 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.
(4) Trade Names and Trademarks. Buyer shall have the
exclusive use of Sellers' trade names and trademarks, and
other business names owned and used by Seller, relating to
the business of owning, operating, and managing car wash
operations, for an indefinite period, which period shall
terminate if, and only if, Buyer advises Seller in writing
of Buyer's relinquishment of this right. Buyer's rights
include the use of any and all derivatives and forms
together with all trademarks, service marks, and logos of
the foregoing names, whether or not registered and whether
now owned or hereafter acquired, together with all
trademark registrations of and trademark registration
applications for the foregoing names, and all good will
associated with any of the foregoing (collectively, "Trade
Names & Trademarks"). Trade Names and DBAs are set forth in
"Trade Names & Trademarks," BPI Item 6. Exhibit "E,"
attached, contains all of the documents relating to the use
and entitlement of such Trade Names, Trademarks, DBAs and
logos.
(5) Entitlement. Entitlement to any and all advertising
campaigns and 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 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 means an individual seller or, if there is more
than one seller, all of the Sellers taken collectively or
any one or
<PAGE>
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 Seller as lessor, if any, are
attached as Exhibit "F-2-Seller's Leases." This Agreement is
conditioned upon Buyer's review and approval of all leases attached
as Exhibits "F-1" & "F-2." Buyer and Seller shall 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" which includes:
(1) the real property and related operations
("Seller's Land");
(2) all buildings, together with all other improvements
owned by Seller, situated on Seller's Property as defined
in Section IV, including all fixtures and other property
owned by Seller permanently affixed thereto (the "Seller's
Improvements");
(3) all Seller's Leases covering all or any portion of the
Seller's Property and Seller's Improvements; and
(4) all other rights and appurtenances of Seller pertaining
to the Seller's Property and Seller's Improvements,
including, without limitation, any right, title and
interest of Seller in and to adjacent streets, alleys or
rights-of-way.
AMOUNT OF PURCHASE PRICE
II A. The total "Purchase Price" set forth in BPI Item 7 is based on
the earnings before interest taxes, depreciation and amortization
("EBITDA"). The EBITDA shown in BPI Item 8 and the "Effective
Capitalization ('Cap') Rate" in BPI Item 9, represents the sum of
the purchase prices for all the operations to be purchased, all
personal, real and intangible assets (other than Inventory),
personal and corporate covenants not to compete, and the guaranties
contemplated herein. "Allocations" of
<PAGE>
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 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.
<PAGE>
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.
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
ownership or operation of each Seller's Property (which as used
herein includes Seller Lands and/or operations).
C. Architectural drawings, plans and specifications as are available
to Seller for the improvements on each Seller's Property.
D. Two (2) copies of a current ALTA survey for each of the Seller's
Lands prepared by a competent person or entity to be selected by
Buyer. The survey shall be prepared according to the standards of
Buyer, including certification of zoning status.
E. Current financial statements for all tenants, if any, on each
Seller's Property, to the extent that the tenants are obligated to
provide any such information pursuant to the terms of Seller's
Leases.
F. Tax returns, operating and other financial statements, prepared
in-house, or otherwise, for each Seller's Property for the three (3)
most recent fiscal years. Seller agrees to allow Buyer or Buyer's
agent to have access at Seller's applicable places of business and
operations at reasonable times and hours to inspect, copy as needed
at Buyer's expense, and audit Seller's files and records relating to
the operations and to Seller's Property.
G. Certificates of Occupancy for each Seller's Property.
<PAGE>
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 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.
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
<PAGE>
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 disapproves of the state of Title or the ALTA
survey;
(3) Buyer disapproves of the Phase I's or Phase II's;
(4) Information, financial and otherwise, supplied by
Seller to Buyer is inaccurate; or
(5) Escrow fails to close and Buyer is not at fault
therefor.
At any time prior to the Initial Deposit becoming non-refundable, or
upon written disapproval of the Phase I's or Phase II's, Buyer may
withdraw from the escrow with no penalty or obligation to Seller.
Buyer shall be under no obligation, and it shall not be deemed
Buyer's fault if Buyer does not close escrow because of a failure of
any condition in this Agreement. Further, notwithstanding the lack
of obligation to close escrow upon a failure of a condition, it is
specifically acknowledged by the parties that each and every
condition required by Buyer is for Buyer's benefit only and Buyer
has the absolute right to waive one or more or all conditions
precedent, in Buyer's sole discretion, and proceed with close of
escrow.
If escrow fails to close due to fault of Buyer, the Initial Deposit
is agreed to be LIQUIDATED DAMAGES and each party shall initial here
to show their acceptance of this provision:
________________________________________________________[INITIAL
HERE]. If escrow fails to close due to the fault of Seller, or if
Seller attempts to withdraw from escrow at any time after escrow has
opened, as defined herein, Buyer shall have the right to any and all
remedies available at law or in equity, including, but not limited
to, an action for specific performance or a declaratory judgment
with respect to this Agreement.
D. All personal property taxes applicable to the assets shall be
prorated on a reasonable basis between Buyer and Seller as of the
closing. Buyer and Seller agree to make payments to each other as of
the closing, to the extent necessary to assure that both parties are
reimbursed for the amount of any personal property taxes that arise
with respect to time periods during which the assets were owned by
the other party.
E. The balance of the Purchase Price, adjusted for allocations or
credits as set forth in this Agreement, shall be deposited prior to
the scheduled closing date. The price payable for Inventory shall be
added to the purchase price. Upon Closing, the Initial Deposit,
together with all interest accrued thereon, shall be applied as a
credit to the Purchase Price.
<PAGE>
CONDITIONS PRECEDENT TO CLOSING
VI A. Performance of Obligations. Seller shall have performed all of
the 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 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, 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".
D. Inventory. Seller shall maintain the Inventory at its current
level.
E. Creditors. Seller shall have paid or otherwise satisfied in full
all 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 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
obligations shown on Exhibit "K." Except as specifically provided
otherwise 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
Effective Date of this Agreement ("Sellers'
<PAGE>
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.
J. Seller's Operational Obligations Pending Closing. Seller shall:
(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.
<PAGE>
K. Inspection and Termination Rights. The Closing of this Agreement
shall be totally contingent upon the satisfaction of the following
conditions:
(1) Review and approval by Buyer's accountant of all
financial information relative to Seller and Seller's
Guarantors. Financial information will include, but is not
limited to, the past 3 years' tax returns, balance sheets,
profit and loss statements, and credit reports;
(2) Buyer's accountants' approval of the books, records,
existing contracts relating to stock, if any, which is part
of this Agreement, the operations, and the schedule of
physical assets.
(3) Seller, or its agent, receiving a letter from Buyer
outlining Buyer's approval or disapproval of all Inspection
Items. If such a letter is not received by Seller, or its
agent, on or before the time specified in Section V. B.,
Buyer shall be deemed to have rejected one or more of the
Inspection Items, and this Agreement shall terminate in its
entirety and become null and void. If Sellers receive a
letter from Buyer disapproving or objecting to any of the
Inspection Items, Seller shall have the time period
specified in Buyer's notice to cure all of the objections
and disapproved Inspection Items to the sole satisfaction
of Buyer or inform Buyer of its unwillingness to cure. If
any of the disapproved Inspection Items are not cured by
Seller within said time period (or if Seller is unwilling
to cure), then Buyer shall have the right to exercise one
of the following options:
(a) terminate this Agreement in its entirety by
giving Seller written notice in which event this
Agreement shall become null and void; or
(b) accept the condition of the disapproved
Inspection Items "As Is" by giving written notice
to the Seller of the same and close on Seller's
Property subject to all of the other terms and
conditions of this Agreement.
SELLER'S REPRESENTATIONS AND WARRANTIES
VII A. Each Seller, and Principal, jointly and severally, hereby
represents and warrants to Buyer that the statements contained in
this Agreement and its Exhibits and Addenda are true, accurate,
complete, and not misleading in any material respect, as of the
Effective Date and further hereby represents and warrants that each
and every one of the following shall be true and correct as of the
Closing Date:
(1) Seller has good, valid and marketable title to stock,
if any, which is included in this transaction, all of the
Real Property, all of the Personal Property that is part of
the assets, and the Trade Names or Trademarks as described
herein, free and clear of all title defects and objections,
security interests, liens, pledges, claims, charges,
restrictions and encumbrances (except as shown, and
approved by Buyer, in the preliminary title report) of any
nature whatsoever, including without limitation, leases,
mortgages, conditional sales agreements, collateral
security arrangements, and other title or interest
retaining arrangements, whether absolute, accrued,
contingent or otherwise (collectively "Encumbrances"),
other than liens for Taxes currently accrued but not yet
due and payable. All of the assets are in operating order
as necessary to conduct the operations currently being
conducted and as conducted on the
<PAGE>
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 contracts relating to any Seller's Property which
cannot be terminated within thirty (30) days notice by
Seller or by Buyer, upon Buyer becoming the owner of
Seller's Property.
(8) Seller has received no notice and has no knowledge of
any pending improvements, liens, or special assessments to
be made against any Seller's Property by any governmental
authority.
(9) There are no unpaid bills or claims in connection with
the construction of, or any repairs to, Seller's Property.
(10) Seller's Leases and Operating Leases for each leased
premise is in good standing and Seller is not in default
thereon. Seller has made, or will make, on or before the
Effective Date, all payments due to the lessor of each
leased property in connection with the Operating Leases for
the occupancy period up to and including Close of escrow.
<PAGE>
(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.
<PAGE>
(f) Seller has not at any time, now or in the
past, engaged in any environmental cleanup, or any
other remediation, except such that have been
approved by the appropriate governmental agency.
(g) Seller has never violated and is not currently
in violation of any applicable federal, state,
county or local statutes, laws, regulations,
rules, ordinances, codes, licenses, or permits of
any governmental authorities relating to
environmental matters, including radiation safety,
in connection with the ownership, use,
maintenance, or operation of any of Seller's
assets or the conduct of Seller's business or
operations.
(h) There are no statutes, laws, orders,
ordinances, codes, licenses, permits, rules or
regulations relating to environmental matters,
that would require any work, repairs, 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."
<PAGE>
(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.
(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
<PAGE>
(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, to the extent covered by Insurance, Seller
shall bear all risk of loss, injury, damage, or destruction of the
assets of the operations. If any loss, injury, damage, or destruction
substantially impairs the value of the operations prior to the
closing, Buyer must give written notice to Seller, within 7 days
after Buyer has received notice of the damage or destruction, of
Buyer's election to choose one of the following: (1) terminate this
Agreement, in which event this Agreement shall become null and void;
(2) extend the Closing Date to a reasonable time, which time shall
not exceed ninety (90) days, in order to enable Seller to repair such
damage to Seller's Property, and in such an event, Seller shall
promptly repair such damage, and such damage shall be repaired so
that the Seller's Property will conform to the representations and
warranties contained herein; or (3) proceed to closing and receive
an assignment of applicable insurance proceeds. For purposes of this
Section, "substantially impairs" means that the cost of restoring the
assets to their condition as of the date of execution of this
Agreement is ten percent (10%) or more of the purchase price
allocated to the Seller's affected Property. After the closing, the
Buyer shall bear all risk of loss, injury, damage, or destruction of
the assets.
B. The risk of loss until Closing due to condemnation by eminent
domain from an applicable governmental authority shall be borne by
Seller. In the event any portion of Seller's Property is
<PAGE>
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 the closing of the purchase and sale of the assets or stock
contemplated by this Agreement ("Closing"), shall take place at the
escrow offices on or before the "Date for Close of Escrow" specified
in BPI Item 24, or at such other time and place as Seller and Buyer
agree in writing. For purposes of this Agreement, the term "Closing
Date" or "Closing" means the date upon which the Closing actually
occurs.
B. Delivery of Instruments. Within the time periods set forth
elsewhere in this Agreement, or, if none are specified, in
sufficient time to meet all obligations of this Agreement, but, in
any event, prior to the date scheduled for Closing, Seller shall
deposit in escrow or deliver to Buyer the following items which
shall be in the form and substance satisfactory to Buyer:
(1) Special Warranty Deed for each Seller's Land.
(2) ALTA (extended form) Owner's Title Policy for each
Seller's Land (the "Owner's Title Policies") issued by the
Title Company, in the full amount of the Purchase Price
allocated to that Land, containing no exceptions to title
other than the standard printed exceptions (provided that
the area and boundaries exceptions shall be amended,
restrictive covenants endorsed "none of record", taxes
endorsed "not yet due and payable", the parties in
possession endorsed "pursuant to written leases," and there
shall be no exception for visible and apparent easements on
roads and highways), and any exceptions which have been
approved by Buyer in writing, which shall include, but not
be limited to, the following five (5) standard title
endorsements:
100 Assurance against loss from
violations of the Reciprocal Easement,
Covenants and Restrictions Agreement
("REA") and other matters if such REAs or
other matters encumbering each Seller's
Lands.
<PAGE>
116.4 Assurance that each of the parcels
of land described in the policy and the
REA are contiguous parcels, if
applicable.
103.6 Assurances that the improvements on
each of the Seller's Lands do not
encroach onto any easement.
103.7 Assurance that each of the Seller's
Lands abuts on and has access to a
physically open street as identified in
the endorsement.
116.1 Assurance that the property
described, for each Seller's Lands, in
the policy is the same property as shown
on the survey.
The Owner's Title Policies shall include any other
endorsement which may be required by Buyer to cure a title
objection, provided Buyer is solely responsible for the
additional costs, if any, of any such endorsement.
(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, conveying to Buyer all the assets described in
Section 1 of this Agreement.
<PAGE>
(10) Certificates from the appropriate state governmental
entity showing that no amounts are due from Seller, on
account of the operations, for unemployment compensation
insurance contributions, disability compensation insurance
contributions, or state income taxes withheld from employee
wages.
(11) A counterpart copy of each of the Guaranty Agreements,
duly executed by Seller and Principals.
(12) A counterpart copy of each of the Non-Competition
Agreements, duly executed by Seller and those Principals
designated by Buyer.
(13) Resolutions of the Boards of Directors of Sellers,
approving Seller's execution and delivery of this
Agreement, and Seller's performance of all of the
obligations of Seller pursuant to this Agreement.
(14) A certificate duly executed by Seller stating that (a)
all of the representations and warranties made by it in
this Agreement or in the Other Documents are true, accurate
and not misleading in any material respect as of the
Closing Date, and (b) Seller has performed all of its
respective obligations required to be performed prior to
the Closing Date.
(15) At the Closing, Seller will place Buyer in complete
possession of all stock (if applicable), assets and all
records of Seller that are part of the assets.
C. Deliveries of Buyer at the Closing. At the Closing, Buyer shall
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 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.
<PAGE>
(5) The charges or prepayments on any assumed contracts.
E. Seller's Closing Costs. At Closing, Seller shall pay (1) the
premiums for the Owner's Title Policies and shall be reimbursed by
Buyer for the survey costs necessary to procure the same, (2)
documentary transfer, deed, stamp or other similar taxes, (3)
one-half of the escrow fees, (4) Broker's Fees/Commissions, and (5)
Seller's attorneys' fees in connection with the preparation of this
Agreement and carrying out the transaction described herein.
F. Buyer's Closing Costs. At Closing, Buyer shall (1) pay one-half
of the escrow fees, (2) reimburse seller for ALTA survey costs, (3)
Broker's Fees/Commissions, and (4) pay Buyer's attorneys' fees in
connection with the preparation of this Agreement and carrying out
the transaction described herein.
ENVIRONMENTAL REPORTS
XII Buyer shall obtain, at its expense, current Phase I Environmental
Audits ("Phase I's") and/or Phase II Environmental Audits
("Phase II's"), each to be performed by an individual or company of
its choice, for each Seller's Property. Seller shall obtain any
required Lessor's consent for Buyer to perform the Phase I's or
Phase II's with respect to leased property. In the event Buyer fails
to notify Seller of Buyer's disapproval of the Phase I's or Phase
II's within the time period set forth in Section V. B., Buyer shall
be deemed to have rejected the Phase I's and/or Phase II's as not
satisfactory. If escrow does not close by reason of Seller's fault,
Seller shall reimburse Buyer for all Phase I and Phase II reports.
In the event Buyer notifies Seller that Buyer is not satisfied with
the Phase I's or Phase II's, Buyer shall have the right to exercise
one of the following options:
(1) request Seller to cure (at Seller's option), within a
reasonable time and to Buyer's satisfaction, all objections
to Phase I's or Phase II's. Buyer shall advise Seller, what
Buyer determines to be a reasonable time under the
circumstances. If Seller decide not to cure, then Buyer may
choose to
(2) terminate this Agreement in its entirety by giving
Seller written notice in which event this Agreement shall
become null and void; or
(3) accept environmental condition "As Is" by giving
written notice to Seller of the same and close on the
Seller's Property subject to all of the other terms and
conditions of this Agreement being satisfied.
TAXES
XIII For purposes of this Agreement "Taxes" means any federal, state,
local or foreign, income, alternative or add-on minimum, business,
employment, franchise, occupancy, payroll, property, sales, transfer,
use, withholding or other tax, levy, impost, fee, imposition,
assessment or similar charge, together with any related additions to
tax, interest, penalty or fine thereon; and (b) "Returns" means all
returns, (including without limitation, information returns and other
material information), reports, and forms relating to Taxes. Seller
has duly filed all Returns required to be filed by Seller with regard
to tax periods ending on or before the Closing Date. All such Returns
are accurate and complete and were prepared in conformity with all
applicable laws and regulations. Seller has duly paid in full all
<PAGE>
Taxes shown to be due on such Returns or otherwise assessed against
Seller, and has made adequate provision (by the establishment of
reserves or otherwise) for all Taxes relating to or arising in
connection with any tax period ending on or before the Closing Date.
There are no tax liens upon the assets. There are no outstanding
agreements or waivers by Seller for the extension of time for the
assessment of any Taxes. Seller is not a party to any pending action
or proceeding by any governmental authority for the assessment or
collection of any Taxes, and no claim for assessment or collection
of any Taxes has been asserted against Seller that has not been
paid. There are no pending or threatened audits, investigations, or
claims for or relating to any liability regarding Seller's
obligations to pay Taxes. Seller shall be solely liable and
responsible for all of Seller's Taxes, and hereby agrees to
completely and unconditionally indemnify, defend and hold Buyer
completely harmless from and against any liabilities, obligations,
claims, damages, costs and expenses (including attorneys' fees)
associated with or arising out of Seller's Taxes.
CONFIDENTIALITY OF AGREEMENT/PUBLICITY
XIV The terms and conditions of this Agreement are and shall at all
times remain confidential, both before and after Closing, and before
and after any termination hereof. No provision of this Agreement
shall be disclosed by any party without the prior written consent of
all of the other parties. All publicity concerning the transactions
contemplated by this Agreement shall be jointly planned and
coordinated by Buyer and Seller. No party shall permit the
dissemination of any publicity regarding the transactions
contemplated by this Agreement without the prior written consent
of the other parties. Any consents requested or otherwise required
pursuant to this Section XV shall not be unreasonably withheld by
any party.
NON-COMPETITION AGREEMENTS
XV In connection with the sale of these operations and sales of stock,
and prior to Closing, Seller and those Principals designated by
Buyer, and any other individuals or companies listed in BPI Item 3
shall execute and deliver respective non-competition agreements
in the form of Exhibits "N-1-Non-Competition-Corporate" and
"N-2-Non-Competition-Individual" to this Agreement (collectively
"Non-Competition Agreements" and individually "Non-Competition
Agreement-Corporate," and "Non-Competition Agreement-Individual").
As additional consideration for this Agreement and pursuant to their
respective Non-Competition Agreements, Seller and Principals agree
that they shall not directly or indirectly compete with Buyer or
carry on or engage in the operation of a car wash within the
"Non-Compete Area" for the "Non-Compete Period" each of which is
specified in BPI Item 25.
INDEMNITY/GUARANTY AGREEMENTS
XVI Except as otherwise expressly provided in this Agreement, Seller and
Principals shall indemnify Buyer and hold Buyer's property,
including the property described in this Agreement, harmless from
any and all expenses, claims, losses, damages, injuries, and
liabilities ("Loss") arising from or on account of Seller's
operations or Seller's lease or ownership of any of the property
described in this Agreement. Seller and Principals shall execute
Guaranty Agreements as set forth in Exhibit "O."
<PAGE>
INTRODUCTION TO AND RETENTION OF CUSTOMERS
XVII Pending the closing, Buyer shall have the right, during normal
business hours, at times, and under conditions agreed upon by
Seller, to frequent the locations where Seller conducts its
operations. Seller shall use its best efforts to introduce Buyer to
Seller's customers and others with whom Seller does business in
connection with its operations, as Seller's successor to the
practice. Seller shall, in every manner encourage its present and
former customers and suppliers to frequent Buyer's operations or
otherwise conduct business with Buyer.
OWNERSHIP OF EQUIPMENT
XVIII All of the equipment is owned by the companies listed as Seller.
Seller represents that none of the equipment is leased.
AMENDMENTS/WAIVERS
XIX This Agreement may be amended, supplemented, modified or rescinded
only through an express written instrument signed by all the parties
or their respective successors and assigns. Either party may
specifically and expressly waive in writing any portion of this
Agreement or any breach hereof, but no such waiver shall constitute
a further or continuing waiver of any preceding or succeeding breach
of the same or any other provision. The consent by one party to any
action for which such consent was required shall not be deemed to
imply consent or waiver of the necessity of obtaining such consent
for the same or similar acts in the future. All remedies, rights,
undertakings, obligations and agreements contained in this Agreement
shall be cumulative, and none of them shall be in limitation of any
other remedy, right, undertaking, obligation or agreement of any
party, except as set forth in the liquidated damages clause. The
failure by any party hereto at any time to enforce any of the
provisions of this Agreement, or to require at any time performance
of any of the provisions hereof, shall in no way be construed to
be a waiver of such provisions or to affect either the validity of
this Agreement or the right of any party to thereafter enforce each
and every provision of this Agreement. UNDER NO CIRCUMSTANCES SHALL
A GUARANTOR HAVE THE RIGHT TO APPROVE, NOR SHALL THERE BE ANY NEED
FOR APPROVAL OF, ANY WRITTEN MODIFICATION OF THIS AGREEMENT OR ANY
AMENDMENTS HERETO.
ATTORNEYS' FEES
XX In the event that any party brings a legal action or proceeding to
enforce the obligations of this Agreement or to exercise any of its
rights or remedies, or if any party is required to defend the
validity or enforceability of the obligations of this Agreement in
any action or proceeding, the prevailing party shall be entitled to
an award of its attorneys' fees and costs and expenses incurred in
bringing or defending the action or proceeding, regardless of the
forum in which the resolution is determined and regardless of
whether such legal action is prosecuted to judgment.
<PAGE>
NOTICES
XXI Notices shall be written and deemed given when personally delivered
or 3 days after deposit in the U.S. Mail, registered or certified,
return receipt requested, or on date signed for when sent by
expedited mail or courier service where receipt can be confirmed,
and addressed to the parties or guarantors at their respective
addresses specified in BPI Item 26, subject to change by written
notice. Notices may also be given and will be effective as of the
first business day following the date of transmission if (i) sent
over electronic transmitting devices, such as facsimile, Telex,
telecopy machines, and computers; (ii) the party to whom the notice
is being sent has such a device in its office and (iii) a complete
copy of any notice so transmitted shall have also been mailed in the
same manner as required for a mailed notice. Avoidance of or refusal
to accept service shall be deemed acceptance.
TIME OF ESSENCE
XXII Time is of the essence with respect to the performance of each
party's obligations hereunder.
SEVERABILITY
XXIII In the event that any provision of this Agreement becomes or is
declared by a court of competent jurisdiction to be illegal,
unenforceable or void, then this Agreement shall continue in full
force and effect without said provision. Provided, however, that no
such severability shall be effective if it materially changes the
economic benefit of this Agreement to any party.
EXHIBITS
XXIV All exhibits and addenda described in this Agreement and the BPI are
incorporated herein by reference as if fully set forth herein, and
constitute a material part of this Agreement. The parties hereby
specifically approve the form and substance of any such exhibits and
addenda. In the event of any conflict between the provisions of this
Agreement and the provisions of any such exhibits and addenda, the
provisions of such exhibits and addenda shall govern.
DILIGENCE, GOOD FAITH AND FURTHER DOCUMENTS
XXV The parties specifically agree to act diligently, in the utmost good
faith and in a timely manner to perform their respective obligations
pursuant hereto, and to carry out the reasonable intent of the
provisions of this Agreement. Each of the parties agrees to
cooperate in good faith with the other, and to execute and deliver
such further instruments and perform such other acts as may be
reasonably necessary or appropriate to consummate and carry into
effect the transactions contemplated by this Agreement.
<PAGE>
SURVIVABILITY
XXVI All of the representations and warranties of Seller and Principals
pursuant to this Agreement and the Other Documents shall survive the
Closing.
ENTIRE AGREEMENT
XXVII This Agreement constitutes the entire understanding between Buyer
and Seller concerning its subject matter and all representations,
agreements, arrangements and understandings between or among the
parties, whether oral or written, have been fully merged herein and
are superseded hereby, except to the extent fully executed management
contracts have been previously entered into between Seller/Principals
and Buyer. Any agreements, representations, letters, conversations,
or proposals respecting the operations or the sale of assets not
expressly set forth in this Agreement shall have no effect except for
a subsequent written modification signed by the party to be charged.
ASSIGNMENT PROHIBITED
XXVIII Neither this Agreement, nor any interest herein, shall be
assignable (voluntarily, involuntarily, by judicial process
or otherwise) by any party hereto to any person or entity
without the prior written consent of the other executing
party. Any attempt to assign this Agreement without such
consent shall be void. Notwithstanding the above, Seller
may assign any and all rights to receipt of payments.
SUCCESSORS
XXIX Subject to the foregoing section, this Agreement shall be binding
upon and inure to the benefit of the parties and their respective
heirs, legatees, legal representatives, successors and permitted
assigns.
GOVERNING STATE LAW
XXX This Agreement shall be governed by and interpreted in accordance
with the internal laws of the State shown in BPI Item 27, "Governing
State Law," including all matters of construction, validity,
performance and enforcement, without giving effect to principles of
conflict of laws. Any dispute, action, litigation or other
proceeding concerning this Agreement shall be instituted,
maintained, heard and decided in the county shown in BPI Item 28,
"County Jurisdiction."
COUNTERPARTS
XXXI This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument and agreement.
<PAGE>
REMEDIES
XXXII All rights, remedies, undertakings, obligations, options, covenants,
conditions and agreements contained in this Agreement shall be
cumulative and no one of them shall be exclusive of any other. If
Seller defaults in performing any of Seller's obligations under this
Agreement for any reason, or if any of the representations or
warranties of Seller herein are untrue at Closing, Buyer may, at its
option, either terminate this Agreement or seek to enforce specific
performance of this Agreement.
INTERPRETATION
XXXIII The language in all parts of this Agreement shall be in all cases
construed simply according to its fair meaning and not strictly for
or against any party. Whenever the context requires, all words used
in the singular will be construed to have been used in the plural,
and vice versa, and each gender will include any other gender. The
captions of the sections of this Agreement are for convenience only
and shall not affect the construction or interpretation of any of
the provisions herein. All cross-references refer to provisions
within this Agreement, and shall not be deemed to be references to
the overall transaction or to any other agreement or document. Each
party has been represented by an attorney throughout this
transaction and has had his or its attorney review this Agreement.
"Shall" or "will" as used herein is mandatory. "May" is not
mandatory. Any list or specifications of items herein is deemed to
be all encompassisng and without limitation, unless such limitation
is specifically stated. The foregoing applies whether or not
preceded or followed by the phrase "included, but not limited to" or
"included, without limitation," or similar language.
BENEFIT OF AGREEMENT
XXXIV This Agreement is for the sole and exclusive benefit of the
signatories hereto and nothing in this Agreement shall be construed
to give any person or entity other than the parties hereto any legal
or equitable right, claim, or remedy.
MISCELLANEOUS
XXXV Unless expressly set forth otherwise herein, all references herein
to a "day", "month" or "year" shall be deemed to be a reference to a
calendar day, month or year, as the case may be.
EXECUTED to be effective on the date first set forth herein.
BUYER:
MILLENNIA CAR WASH LLC,
a Delaware limited liability company
By: /s/ Russell B. Geyser
Russell B. Geyser
Chairman & CEO
<PAGE>
SELLER:
LOCATION A: 1311 SOUTH LAMAR BLVD., AUSTIN, TEXAS 78704 - PERSONAL PROPERTY
GENIE CAR WASH INC. OF AUSTIN
a Texas corporation
By: /s/ Mike W. Cornett
Mike W. Cornett, President
By: /s/ Shirley A. Cornett
Shirley A. Cornett, Secretary
LOCATION B: 1021 W. WILLIAM CANNON DR., AUSTIN, TEXAS 78745 - PERSONAL PROPERTY
GENIE CAR CARE CENTER, INC.
a Texas corporation
By: /s/ Mike W. Cornett
Mike W. Cornett, President
By: /s/ Shirley A. Cornett
Shirley A. Cornett, Secretary
LOCATION C: 7320 BURNETT ROAD, AUSTIN, TEXAS78757- REAL AND PERSONAL PROPERTY
GENIE CAR SERVICE CENTER, INC.
a Texas corporation
By: /s/ Mike W. Cornett
Mike W. Cornett, President
By: /s/ Shirley A. Cornett
Shirley A. Cornett, Secretary
<PAGE>
LOCATIONS A & B: REAL PROPERTY
CORNETT LIMITED PARTNERSHIP
a Texas limited partnership
By: /s/ Mike W. Cornett
Mike W. Cornett, General Partner
By: /s/ Shirley A. Cornett
Shirley A. Cornett, General Partner
PRINCIPALS:
/s/ Mike W. Cornett
Mike W. Cornett
/s/ Shirley A. Cornett
Shirley A. Cornett
ATTACH NOTARIZATIONS HERE
<PAGE>
FIRST AMENDMENT
TO
CAR WASH ASSET PURCHASE/SALE AGREEMENT
This FIRST AMENDMENT hereby amends that certain CAR WASH ASSET PURCHASE/SALE
AGREEMENT ("Agreement") effective July 8, 1998 by and between GENIE CAR WASH
INC. OF AUSTIN, GENIE CAR CARE CENTER, INC., GENIE CAR SERVICE CENTER, INC.,
all Texas corporations and CORNETT LIMITED PARTNERSHIP, a Texas limited
partnership ("Seller") and MILLENNIA CAR WASH GROUP LLC, a Delaware Limited
Liability Company ("Buyer").
IN CONSIDERATION of the mutual promises of the parties, Buyer and Seller
agree as follows:
1. BPI Item 19, Delete in its entirety and substitute :
"19. Escrow Opening Date: August 12, 1998
[Escrow] (Date by which Escrow must be opened)"
2. BPI section titled "Corrections to Agreement:"
Items 3, 4, and 5 are hereby deleted in their
entirety.
3. Section I. B. (1), Line 3: Delete "receivables."
4. Section I. B. (3) Intangibles, Lines 4 and 5, subsection (b):
Following "(b) all liens and security interests in favor of Sellers,
together with any instruments or documents evidencing same" insert:
", except for that certain Deed of Trust dated August 15, 1994 from
K-Wash, Inc. for the benefit of Genie Car Wash, Inc. (who
subsequently merged with and into Genie Car Service Center, Inc.)
recorded at Volume 1697, Page 13 of the McLennan County Deed of
Trust Records, to secure a $300,000.00 Promissory Note of same
date executed by K-Wash, Inc. and payable to Genie Car Wash, Inc."
5. Section I. B. (4) Trade Names and Trademarks.: Add at the end thereof:
"Notwithstanding anything to the contrary contained in this
section, Buyer is aware that there are 2 full-service and 1
self-service operations in Waco, Texas that have previously
had the name "Genie" licensed to them and Buyer is taking
subject to those pre-existing rights. Buyer is also aware
that there are several
<PAGE>
lube operations in Austin, know as "Genie-Lube;" that these
operations have been acquired by a Pennzoil franchisee and
that the name "Genie-Lube" is expected to be changed. Buyer
has also agreed to limit its rights to Seller's names to
Williamson and Travis counties. Except for pre-existing
rights and the lube operations noted immediately above,
Buyer shall have the sole and exclusive right to use
Seller's Trade Names and Trademarks in Williamson and
Travis counties. Buyer shall retain these rights in
perpetuity whether Buyer actually uses or refrains from
using such Trade Names and Trademarks."
6. Section III. C., Lines 6-8: Delete:
"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."
Substitute:
"If Seller has objected, on a reasonable basis, and has
brought suit, within 45 days of notice to Seller of the
claim, to challenge the claim, Seller shall not be required
to deposit the amount in dispute with the court, provided
the hold-back remains in escrow pending the final
disposition of the lawsuit, and provided further, that if
the hold-back in escrow is less than the amount in dispute,
Seller shall immediately deposit sufficient funds to
increase the hold-back to the amount in dispute."
7. Section IV. D.: Add at the end thereof: "If escrow fails to close
for any reason other than Seller's default, the cost of the surveys
shall be divided equally between Buyer and Seller."
8. Section VI. B. Delivery of Items., Line 8: Delete "3 business days"
and substitute "a reasonable time."
9. Section VI. J. Seller's Operational Obligations Pending Closing,
subsection (4): Add at the end thereof:
"Seller has an SBA loan which contains a substantial
prepayment penalty. For purposes of identification, the SBA
loan is evidenced by a $194,000.00 Promissory Note dated
May 12, 1983 and by a Deed
<PAGE>
of Trust dated May 12, 1983, securing said Note. The Note
and Deed of Trust were executed by Mike W. Cornett and
Shirley Cornett and the Deed of Trust is further executed
by Mike W. Cornett, as alter ego of Genie Car Wash, Inc. of
Austin. Beneficiary thereon is Texas Certified Development
Company Inc. Buyer agrees to allow Seller to deposit
sufficient funds with the title company chosen by Buyer so
as to enable the title company to remove the lien from the
Title Policy for the real property located at 1311 So.
Lamar Blvd., Austin, TX 78704, described in the Deed of
Trust as 'Lot (3), Commercial Square, an addition to the
City of Austin, Travis County, Texas, according to the map
or plat thereof recorded in Book 29, Page 26, Plat Records
of Travis County, Texas.'"
10. Section VII. A. (4), Line 1: Delete "All" and substitute "To the
best of Seller's knowledge, all."
11. Section VII. A. (12), Line 1: Delete "There" and substitute "To the
best of Seller's knowledge, there."
12. Section VII. A. (17): Delete:
"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."
Substitute:
"The shareholders, owners of beneficial interests,
members, partners, and trustees of each corporate or other
entity are listed on BPI Item 3. With the exception of
three sons of Mike W. Cornett and Shirley A. Cornett, which
sons each own less than 10% of Seller, the persons and
entities listed on BPI Item 3 are the sole owners of the
stock and operations, and no other person has any claim,
right, title to, or interest in, these operations."
13. Section VII: Add at the end thereof:
"If during the time period between the Effective Date of
the Agreement and Close of Escrow, Buyer discovers, or any
Seller or Principal discloses to Buyer, that any
representation or warranty of Seller or Principal is or was
false and/or misleading, Buyer shall object
<PAGE>
to same in writing to Seller as soon as reasonably
possible, but in any event prior to the Close of Escrow. It
is agreed that if Buyer fails to make such objection, then
Buyer shall be deemed to have waived any claim or action
against Seller, any Principal, and the Hold-Back with
respect thereto. For the purposes of this subparagraph
only, discovery or disclosure must be made by or to Stephen
J. Prior."
14. Section XII, Line 7: After "Seller shall reimburse Buyer for" insert
"50% of."
15. Section XVI: Delete the last sentence thereof and substitute:
"Notwithstanding anything else contained in this Agreement
or the exhibits hereto, it is specifically agreed that the
liability of Mike W. Cornett and Shirley A. Cornett is
limited strictly to the following situations: (i) liability
as general partners of Cornett Limited Partnership which
owns the real property at sites (A) and (B); (ii)
malfeasance or nonfeasance in their capacity as officers
and directors of the corporate sellers; or (iii) personal
commission of fraud or material misrepresentation."
16. Section XVIII: Delete in its entirety and substitute:
"XVIII. Except as shown on Exhibit 'K,' 'Undischarged and
Assumed Obligations,' all of the equipment is owned
by the companies listed as Seller. Seller represents
that none of the equipment is leased except for
photocopier machines, a list of which, together with
agreements relating thereto will be supplied to Buyer
for Buyer's approval."
17. Section XXIV., Lines 2 and 3: Delete: "The parties hereby
specifically approve the form and substance of any such exhibits and
addenda." and substitute:
"The parties hereby specifically approve the form of any
such exhibits and addenda and the substance of Exhibits
"I," "N-1," "N-2," and the addenda Exceptions to
Non-Competition and Corrections to Agreement forming a part
of the BPI, as further amended by this First Amendment."
18. Buyer represents and warrants that it has qualified to do business in
Texas.
<PAGE>
19. Except as set forth herein, all other terms of the Agreement remain
unchanged.
BUYER:
MILLENNIA CAR WASH LLC,
a Delaware limited liability company
By: /s/ Russell B. Geyser
Russell B. Geyser
Chairman & CEO
SELLER:
LOCATION A: 1311 SOUTH LAMAR BLVD., AUSTIN, TEXAS 78704 - PERSONAL PROPERTY
GENIE CAR WASH INC. OF AUSTIN
a Texas corporation
By: /s/ Mike W. Cornett
Mike W. Cornett, President
By: /s/ Shirley A. Cornett
Shirley A. Cornett, Secretary
LOCATION B: 1021 W. WILLIAM CANNON DR., AUSTIN, TEXAS 78745 - PERSONAL PROPERTY
GENIE CAR CARE CENTER, INC.
a Texas corporation
By: /s/ Mike W. Cornett
Mike W. Cornett, President
By: /s/ Shirley A. Cornett
Shirley A. Cornett, Secretary
<PAGE>
LOCATION C: 7320 BURNETT ROAD, AUSTIN, TEXAS 78757- REAL AND PERSONAL PROPERTY
GENIE CAR SERVICE CENTER, INC.
a Texas corporation
By: /s/ Mike W. Cornett
Mike W. Cornett, President
By: /s/ Shirley A. Cornett
Shirley A. Cornett, Secretary
LOCATIONS A & B: REAL PROPERTY
CORNETT LIMITED PARTNERSHIP
a Texas limited partnership
By: /s/ Mike W. Cornett
Mike W. Cornett, General Partner
By: /s/ Shirley A. Cornett
Shirley A. Cornett, General Partner
PRINCIPALS:
/s/ Mike W. Cornett
Mike W. Cornett
/s/ Shirley A. Cornett
Shirley A. Cornett
<PAGE>
SECOND AMENDMENT
CAR WASH ASSET PURCHASE/SALE AGREEMENT
This SECOND AMENDMENT, effective April 29, 1999 hereby revives and amends
that certain CAR WASH ASSET PURCHASE/SALE AGREEMENT ("Agreement") effective
July 8, 1998 together with the FIRST AMENDMENT thereto by and between GENIE
CAR WASH INC. OF AUSTIN, GENIE CAR CARE CENTER, INC., GENIE CAR SERVICE
CENTER, INC., all Texas corporations and CORNETT LIMITED PARTNERSHIP, a Texas
limited partnership ("Seller") and MILLENNIA CAR WASH GROUP LLC, a Delaware
Limited Liability Company ("Buyer").
IN CONSIDERATION of the mutual promises of the parties, Buyer and Seller
agree as follows:
1. The parties previously entered into certain letter amendments which
imposed restrictions and conditions concerning the continuation of
Escrow and which subsequently canceled the Escrow defined in the
Agreement. By this Second Amendment, all letter amendments prior to the
date of this Second Amendment are nullified in their entirety. The
parties are hereby reviving only the Agreement, its Exhibits, and the
First Amendment. All monies previously deposited with Escrow, released
from Escrow, or paid or returned directly to a party shall be retained
by the party to whom such amounts were paid or returned. With respect to
the funds and the disposition thereof delineated in the immediately
preceding sentence, the conditions contained in the Agreement and/or the
Escrow shall not be revived.
2. The parties agree to reinstate the previously canceled escrow with
Escrow, by redepositing all documents relating to this transaction,
previously returned by Escrow to the respective parties. If Escrow
is unable to reinstate the original escrow, a new escrow shall be
opened in its place, subject to all the same terms and conditions as
if escrow had never been canceled.
3. All due diligence materials have been received Buyer and Buyer is
satisfied with the due diligence materials. All due diligence
requirements are now satisfied and Buyer acknowledges that Seller
has satisfied all of its obligations and that all contingencies or
conditions to Buyer's obligations to purchase have been satisfied or
waived.
4. Buyer, Millennia Car Wash LLC (herein also referenced as "Original
Buyer-Assignor"), hereby assigns all its rights, title, and
interests in and to the Agreement to American Wash Services, Inc.
("AWS"), and or any parent, subsidiary or successor corporation to
AWS. Original Buyer-Assignor is executing this letter amendment for
the sole purpose of completing the assignment of its interests to
AWS. All other agreements and amendments contained herein are for
the benefit of AWS, Issuer, and Seller, as their interests may
appear. Original Buyer-Assignor shall not be deemed to have approved
such transactions or to have
<PAGE>
any interest in such transactions or in any activities or
transactions, which occur with respect to the purchase and sale of
Seller's business, subsequent to March 30, 1999.
5. AWS, a (herein also referenced as "Buyer" or "Buyer-Assignee")
hereby accepts the assignment from Original Buyer-Assignor of its
interests in and to the Agreement, and assumes and accepts all
duties and obligations arising thereunder, from and after March 30,
1999. AWS is a wholly owned subsidiary of Mace Security
International, Inc. ("Issuer").
6. BPI Item 7: Add at the end thereof:
"The Purchase Price shall be paid in the following manner:
(i) A minimum of Fifty Percent (50%) of the
Purchase Price shall be paid in Issuer Stock
which, for the purpose of this Agreement only,
shall be at the price at which it traded on the
close of business on the day prior to Seller's
signing this Amendment. Of the total amount of the
shares, $450,000.00 in shares shall be held back
in accordance with BPI Item 11 as amended. The
remaining shares shall be issued at Close of
Escrow. At the end of the first Hold-Back Period,
one-half of the Hold-Back shares shall be issued
to Seller. At the end of the second Hold-Back
Period, so much of the Hold-Back shares as are
then remaining, shall be issued to Seller. (ii)
The Balance of the Purchase Price shall, at the
option of each Seller, be paid in Cash or
Certified Check, or in additional stock at the
price set forth in subparagraph (i) immediately
above. (iii) It shall be the obligation of Seller
to advise Buyer of the allocations of stock and
cash among the Seller entities.
"Each Seller understands and agrees that the following
restrictions and limitations are applicable to its purchase
and resale or other transfer of the Issuer's stock,
pursuant to the Securities Act of 1933 (the "Act"). For the
purposes of this Agreement, the terms "Issuer's Stock"
includes common stock issuable upon Close of Escrow as well
as the common stock designated as Hold-Back shares which
are to be issued at the end of the Hold-Back Period.
(a) Sellers agree that the Issuer's Stock shall
not be sold or otherwise transferred, unless the
Issuer's Stock is registered under the Act and the
state securities laws or is exempt therefrom.
(b) For a period of one year after the Issuer's
Stock or portion thereof has been issued (unless
the Issuer's Stock shall have been registered
under the Act for sale prior thereto), Sellers
shall not sell, distribute or transfer any of such
securities without the prior written consent of
the Issuer or its successor corporation, as
applicable. Unless and
<PAGE>
until the Issuer's stock is registered under the
Act, a legend in substantially the following form
will be placed on the certificates evidencing the
Issuer's stock to be issued to the Sellers:
'The securities represented by
this certificate have not been
registered under the Securities
Act of 1933 or any state
securities act. These shares have
been acquired for investment and
may not be sold, transferred,
pledged or hypothecated unless
(i) they shall have been
registered under the Securities
Act of 1993 ('the Act') and any
applicable state securities act
or (ii) Mace Security
International, Inc. shall have
been furnished with an opinion of
counsel, reasonably satisfactory
to counsel for Mace Security
International, Inc., that
registration is not required
under any such acts.'
(c) Upon removal of all other trading restrictions
as set forth herein, each Seller agrees that no
more than one-twelfth (1/12th) of the securities
shall be sold, distributed or transferred in any
31 day period.
(d) Stop transfer instructions will be imposed
with respect to the Issuer's Stock issued to
Sellers pursuant to this Agreement so as to
restrict resale or other transfer thereof except
in accordance with the foregoing provisions of
this Agreement."
"Each Seller acknowledges that the Issuer's Stock is being
delivered to Seller in a private placement under Section
4.2 of the Act and under Regulation D promulgated under the
Act. To induce Buyer and Issuer to deliver the Issuer's
Stock, each Seller represents and warrants as follows:
(a) Sellers consist of three Texas corporations
and one Texas limited partnership and each Seller
is an accredited investor as that term is defined
in Regulation D under the Act.
(b) Each Seller represents and warrants that the
Issuer's Stock is being acquired for its own
account without a view to public distribution or
resale and that Sellers have no contract,
undertaking, agreement or arrangement to sell or
otherwise transfer or dispose of the Issuer's
Stock, or any portion thereof, to any other
person.
<PAGE>
(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) Each of the Sellers and their Principals
represent and warrant that they are familiar with
the business and financial affairs of each Seller
corporation and limited partnership and have had
access to all financial statements prepared by the
Seller corporations and the limited partnership."
7. BPI Item 11 is hereby deleted in its entirety and the following is
substituted therefor:
<PAGE>
"Hold-Back: $450,000.00 in stock.
[Payment of Purchase Price & Commissions]"
8. BPI Item 15 is hereby deleted in its entirety and the following is
substituted therefor.
Buyer's Broker/Consultant: None
[Payment of Purchase Price & Commissions]"
9. BPI Item 20 is hereby deleted in its entirety and the following is
substituted therefor:
"Initial Deposit: None [Escrow]"
10. BPI Item 21 is hereby deleted in its entirety and the following is
substituted therefor:
"Days From Opening: N/A
[Escrow] (Earliest Date On Which Buyer's Deposit
Becomes Non-Refundable)"
11. BPI Item 24, Delete in its entirety and substitute:
"Date for Close of Escrow: not later than May 18, 1999"
12. BPI Item 26 Add the following notice addresses for Buyer:
Buyer: American Wash Services, Inc.
Attn. Stephen J. Prior
644 W. Hazelwood Street
Phoenix, AZ 85013
cc: Lynne M. Geyser, Esq.
P.O. Box 4715
San Clemente, CA 92674-4715
13. AGREEMENT Section XIV, CONFIDENTIALITY OF AGREEMENT/PUBLICITY:
Delete the full paragraph appearing beneath the heading in its
entirety and substitute:
"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."
<PAGE>
14. Issuer represents and warrants that, except for the Hold-Back
shares, it will register the Issuer Shares which are the subject
matter of this Agreement, within six (6) months from Close of
Escrow. With respect to the Hold-Back shares, as shares are released
from the Hold-Back requirement, Issuer will register those shares as
soon as practicable, not to exceed six (6) months from the release
date.
15. Except as set forth herein, all other terms of the Agreement remain
unchanged.
MILLENNIA CAR WASH, LLC
a Delaware limited liability company "Original Buyer-Assignor"
By: /s/ Russell B. Geyser
Russell B. Geyser, Chairman and CEO
AMERICAN WASH SERVICES, INC.
a Delaware corporation "Buyer" and "Buyer-Assignee"
By: /s/ Louis D. Paolino, Jr.
Louis D. Paolino, Jr.
President and CEO
APPROVED BY:
ISSUER:
MACE SECURITIES INTERNATIONAL, INC.
a Delaware corporation
By: /s/ John E. Goodrich
John E. Goodrich
President
<PAGE>
SELLER: DATE SIGNED BY SELLER April 30,1999
LOCATION A: 1311 SOUTH LAMAR BLVD., AUSTIN, TEXAS 78704 - PERSONAL PROPERTY
GENIE CAR WASH INC. OF AUSTIN
a Texas corporation
By: /s/ Mike W. Cornett
Mike W. Cornett, President
By: /s/ Shirley A. Cornett
Shirley A. Cornett, Secretary
LOCATION B: 1021 W. WILLIAM CANNON DR., AUSTIN, TEXAS 78745 - PERSONAL PROPERTY
GENIE CAR CARE CENTER, INC.
a Texas corporation
By: /s/ Mike W. Cornett
Mike W. Cornett, President
By: /s/ Shirley A. Cornett
Shirley A. Cornett, Secretary
LOCATION C: 7320 BURNETT ROAD, AUSTIN, TEXAS 78757 - REAL AND PERSONAL PROPERTY
GENIE CAR SERVICE CENTER, INC.
a Texas corporation
By: /s/ Mike W. Cornett
Mike W. Cornett, President
By: /s/ Shirley A. Cornett
Shirley A. Cornett, Secretary
<PAGE>
LOCATIONS A & B: REAL PROPERTY
CORNETT LIMITED PARTNERSHIP
a Texas limited partnership
By: /s/ Mike W. Cornett
Mike W. Cornett, General Partner
By: /s/ Shirley A. Cornett
Shirley A. Cornett, General Partner
PRINCIPALS:
/s/ Mike W. Cornett
Mike W. Cornett
/s/ Shirley A. Cornett
Shirley A. Cornett
<PAGE>
THIRD AMENDMENT
CAR WASH ASSET PURCHASE/SALE AGREEMENT
This THIRD AMENDMENT, effective May 17, 1999 hereby amends that certain CAR
WASH ASSET PURCHASE/SALE AGREEMENT ("Agreement") effective July 8, 1998
together with the FIRST AMENDMENT thereto and the SECOND AMENDMENT, effective
April 29, 1999, by and between GENIE CAR WASH INC. OF AUSTIN, GENIE CAR CARE
CENTER, INC., GENIE CAR SERVICE CENTER, INC., all Texas corporations and
CORNETT LIMITED PARTNERSHIP, a Texas limited partnership ("Seller") and
MILLENNIA CAR WASH GROUP LLC, a Delaware Limited Liability Company ("Buyer").
IN CONSIDERATION of the mutual promises of the parties, Buyer and Seller
agree as follows:
1. Buyer, Millennia Car Wash, LLC, has previously assigned all of its
rights, title, and interests in and to the Agreement to American
Wash Services, Inc. ("AWS"), and or any parent, subsidiary or
successor corporation to AWS. AWS hereby assigns all its rights,
title, and interests in and to the Agreement to Mace Car Wash -
Arizona, Inc.
2. A notice address for Mace Car Wash - Arizona, Inc. will be provided
through Escrow.
3. BPI, Item 10, Allocations: is amended to substitute a new
Attachment: "LETTER OF INTENT, ITEM 10 ALLOCATIONS" bearing a typed
footer notation "Genie Car Wash, Inc.
Allocations" and a handwritten notation "5/17/99."
4. BPI Item 10: The Inventory, not to exceed Two Hundred and Fifty
Thousand Dollars ($250,000), which is not included in the Purchase
Price shall be paid by Promissory Note in the principal amount of
the Inventory, limited as stated above, with interest from Close of
Escrow at Eight Percent (8%) per annum, principal and interest due
and payable in full Ninety (90) days from Close of Escrow.
5. Purchase Price of Eleven Million Seven Hundred and Fifty Thousand
Dollars ($11,750,000) shall be payable as follows: Stock - Six
Million Dollars ($6,000,000); Cash - One Million Dollars
($1,000,000) represented by a Cashier's, Certified Check or Escrow
Check; Promissory Note in the principal amount of Four Million Seven
Hundred and Fifty Thousand Dollars ($4,750,000) with interest from
Close of Escrow at Eight Percent (8%) per annum, principal and
interest due and payable in full Ninety (90) days from Close of
Escrow.
6. Buyer has agreed to accept a standard title policy in lieu of the
ALTA (extended coverage) title policy called for in the Agreement.
The following sections are hereby amended to reflect that change:
Sections IV. D.; V. C. (2); XI. B. (2); and XI. F.
<PAGE>
7. Except as set forth herein, all other terms of the Agreement remain
unchanged.
AMERICAN WASH SERVICES, INC.
a Delaware corporation
By: /s/ Robert M. Kramer
Robert M. Kramer
Vice President
MACE CAR WASH - ARIZONA, INC.
an Arizona corporation
By: /s/ Jon E. Goodrich
Jon E. Goodrich
President
SELLER:
LOCATION A: 1311 SOUTH LAMAR BLVD., AUSTIN, TEXAS 78704 - PERSONAL PROPERTY
GENIE CAR WASH INC. OF AUSTIN
a Texas corporation
By: /s/ Mike W. Cornett
Mike W. Cornett, President
By: /s/ Shirley A. Cornett
Shirley A. Cornett, Secretary
LOCATION B: 1021 W. WILLIAM CANNON DR., AUSTIN, TEXAS 78745 - PERSONAL PROPERTY
GENIE CAR CARE CENTER, INC.
a Texas corporation
<PAGE>
By: /s/ Mike W. Cornett
Mike W. Cornett, President
By: /s/ Shirley A. Cornett
Shirley A. Cornett, Secretary
LOCATION C: 7320 BURNETT ROAD, AUSTIN, TEXAS 78757 - REAL AND PERSONAL PROPERTY
GENIE CAR SERVICE CENTER, INC.
a Texas corporation
By: /s/ Mike W. Cornett
Mike W. Cornett, President
By: /s/ Shirley A. Cornett
Shirley A. Cornett, Secretary
LOCATIONS A & B: REAL PROPERTY
CORNETT LIMITED PARTNERSHIP
a Texas limited partnership
By: /s/ Mike W. Cornett
Mike W. Cornett, General Partner
By: /s/ Shirley A. Cornett
Shirley A. Cornett, General Partner
PRINCIPALS:
/s/ Mike W. Cornett
Mike W. Cornett
/s/ Shirley A. Cornett
Shirley A. Cornett
<PAGE>
FOURTH AMENDMENT
CAR WASH ASSET PURCHASE/SALE AGREEMENT
This FOURTH AMENDMENT, effective May 18, 1999 hereby amends that certain CAR
WASH ASSET PURCHASE/SALE agreement ("Agreement") effective July 8, 1998
together with the FIRST AMENDMENT thereto, the SECOND AMENDMENT, effective
April 29, 1999 and the THIRD AMENDMENT thereto, effective May 17, 1999 by and
between GENIE CAR WASH INC. OF AUSTIN, GENIE CAR CARE CENTER, INC., GENIE CAR
SERVICE CENTER, INC., all Texas corporations and CORNETT LIMITED PARTNERSHIP,
a Texas limited partnership, ("Sellers"), and MACE CAR WASH- ARIZONA,
INC.("Buyer"), an Arizona corporation.
IN CONSIDERATION of the mutual promises of the parties, Buyer and Sellers
agree as follows:
1. Amend thee first sentence of provision (b) of the language added to BPI
Item 7 in the SECOND AMENDMENT by deleting the parenthetical phrase so
the first sentence of provision (b) as amended shall read as follows:
"For a period of one year after the Issuer's Stock or portion thereof
has been issued, Sellers shall not sell, distribute or transfer any
of such securities without the prior written consent of the Issuer or
its successor corporation, as applicable."
2. Amend Item of the SECOND AMENDMENT by deleting in its entirety and
inserting the following in lieu thereof:
Issuer represents and warrants that it will file a registration
statement with the Securities and Exchange Commission with respect
to the sale of the Issuer's Stock transferred to Sellers as part of
the Purchase Price within six (6) months of the date the Issuer's
Stock has been issued (or in the case of Hold-Back shares, the date
such shares are released from the Hold-Back requirement) and will
use best efforts to cause such registration statement to be declared
effective; provided that if the Company notifies Sellers that it has
determined in good faith that the registration statement would
require disclosure of non-public information not otherwise required
to be disclosed under applicable law ("Non-Public Information"), the
Issuer may postpone the filing or effectiveness of any registration
statement by the length of time that the Non-Public Information is
not disclosed (as measured by the notice date to Sellers to the date
of disclosure) and, if such registration statement has become
effective the Issuer shall not be required to maintain the
effectiveness of such registration statement and Sellers shall be
required to suspend sales of common stock pursuant to the
registration statement, in each case, until such time as Issuer has
disclosed to the public such Non-Public Information. Notwithstanding
the foregoing, the Issuer's Stock shall be registered by the one
year anniversary of the issuance date thereof (or in the case of
Hold-Back shares, the date such shares are released from the
Hold-Back requirement).
In the event that the registration statement covering the Issuer
Stock is not declared effective within the one (1) year time period
specified herein, Seller shall agrees that, prior to seeking any
remedies for a default in the Agreement, Sellers will from time to
time as determined by Sellers until such registration statement is
declared effectives, provide Issuer with written notice that Sellers
desire to sell all or part of the Issuer Stock and Issuer will have
twenty (20) days after receipt of such notice in which to arrange
for and complete the sale of, or to purchase directly (in (in each
case at the then current market price as quoted on NASDAQ) up to
1/12 of the Issuer Stock in any thirty-one (31) day period. Seller
shall continue to have the right to sell all or a part of the Issuer
Stock as herein provided until such time as the registration
statement is declared effective. For as long as Issuer actually
causes the completion of the arranged for purchase, or completes the
purchase directly, as herein above provided, Sellers shall have no
other remedy with respect to the failure to comply with this Section
14 with regard to the registration; but if at any time Issuer fails
to so cause the purchase, or purchase directly, Issuer Stock, such
<PAGE>
shall be an event of default and shall entitle Sellers to pursue any
and all remedies therefor, including, without limitation, the
foreclosure of any and all liens securing this obligation.
3. Except as set forth herein, all other terms of the Agreement shall
remain unchanged.
IN WITNESS WHEREOF, the parties have executed this Amendment with the intent
of being legally bound by the terms hereof:
BUYER:
Mace Car Wash- Arizona, Inc., an Arizona corporation
By: /s/ Jon E. Goodrich
Jon E. Goodrich, President
SELLERS:
Genie Car Wash of Austin, Inc., a Texas corporation
By: /s/ Mike Cornett By: /s/ Shirley A. Cornett
Mike Cornett, President Shirley A. Cornett, Secretary
Genie Car Care Service Center, Inc., a Texas corporation
By: /s/ Mike Cornett By: /s/ Shirley A. Cornett
Mike Cornett, President Shirley A. Cornett, Secretary
Genie Car Service Center, Inc., a Texas corporation
By: /s/ Mike Cornett By: /s/ Shirley A. Cornett
Mike Cornett, President Shirley A. Cornett, Secretary
Cornett Limited Partnership, a Texas limited partnership
By: /s/ Mike Cornett By: /s/ Shirley A. Cornett
Mike Cornett, President Shirley A. Cornett, Secretary
APPROVED WITH RESPECT TO ITEM 2 ONLY:
Mace Security International, Inc., a Delaware corporation
By: /s/ Jon E. Goodrich
Jon E. Goodrich, President
<PAGE>
PROMISSORY NOTE
$4,750,000.00 May 18, 1999
FOR VALUE RECEIVED, the undersigned MACE CAR WASH - ARIZONA, INC., a
corporation ("Maker") promises to pay to the order of Mike W. Cornett, as
collecting agent for CORNETT LIMITED PARTNERSHIP, a Texas limited
partnership, GENIE CAR WASH, INC. OF AUSTIN, a Texas corporation, GENIE CAR
SERVICE CENTER, INC., a Texas corporation, GENIE CAR CARE CENTER, INC., a
Texas corporation (herein together with all subsequent holders hereof called
"Holder") the principal sum of FOUR MILLION SEVEN HUNDRED FIFTY THOUSAND AND
NO/100 ($4,750,000.00) DOLLARS, in lawful money of the United States of
America, with interest thereon from date at the rate hereafter provided, both
principal and interest payable at 5471 Thomas Arnold Road, Salado, Bell
County, Texas 76571.
Interest on the principal balance hereof from time to time remaining
unpaid prior to maturity shall accrue at a rate per annum equal to eight (8%)
percent, calculated based on a year of 360 days divided by 12 equal periods
of 30 days each, unless such calculation would result in a rate in excess of
the Maximum Rate, as hereinafter defined, in which case interest shall be
calculated on a per annum basis of 365 or 366 days, as the case may be.
The principal and all accrued interest on this Note shall be due and
payable on or before August 18, 1999.
All past due principal, and, to the extent permitted by law, past due
interest, shall bear interest from maturity at the rate of fourteen (14%)
percent per annum, calculated, notwithstanding any other provision hereof, on
a 365 or 366 day year, as applicable.
Maker shall have the right to prepay all or any part of the principal
balance of this Note at any time without penalty, whereupon interest on the
amount prepaid shall cease to accrue. Any and all prepayments of the
principal balance of this Note shall be credited against the last principal
installment payments to become due under the terms of this Note and its
schedule of payments.
This Note is secured by a Deed of Trust, of even date herewith, covering
the property located in Austin, Travis County, Texas, described as follows,
to-wit:
1311 South Lamar, Austin, Texas
TRACT ONE:
BEING Lot Three (3), Commercial Square, a subdivision in Travis County,
Texas, according to the map or plat thereof recorded in Book 29, Page 26,
Plat Records, Travis County, Texas.
<PAGE>
TRACT TWO:
BEING a tract of land containing 0.606 acre being a portion of Lot 1, The
Maufrais Subdivision, a subdivision in the City of Austin, Travis County,
Texas, recorded in Plat Book 90, Pages 90-91, Plat Records, Travis County,
Texas. Said 0.606 acre tract. being more particularly described by metes and
bounds as follows:
BEGINNING at the Northeast corner of said Lot 1, same being in the West line
of the International & Great Northern Rail Road right-of way for the
Northeast corner and Point of Beginning hereof;
THENCE with the East line of said Lot 1, same being the West line of said
International & Great Northern Rail Road tract the following two (2) courses
and distances:
1) S 27(Degree)06'01" W for a distance of 24.35 feet;
2) 146.56 feet along the arc of a curve to the right whose radius is
2814.79 feet and whose chord bears, S 28(Degree)35'31" W for a distance
of 146.55 feet to a point for the Southeast corner hereof
THENCE through and across said Lot 1 with the South line hereof, N
55(Degree)56'25" W for a distance of 205.97 feet to an existing corner in the
North line of said Lot 1, same being the South line of Lot 3, Commercial
Square, a subdivision in the City of Austin, Travis County, Texas, recorded
in Plat Book 29, Page 26, Plat Records, Travis County, Texas, for the
Southwest corner hereof
THENCE with the West line of the herein described tract being the North
line of said Lot 1, same being the South line of said Lot 3, the following
three (3) courses and distances:
1) N 52(Degree)06'35" E for a distance of 145.30 feet to a point for the
Northwest corner hereof;
2) S 62(Degree)12'12" E for a distance of 60.10 feet;
3) S 72(Degree)40'25" E for a distance of 88.02 feet to the Point of
Beginning and containing 0 606 acre of land, more or less.
<PAGE>
1021 W. Wm. Cannon, Austin, Texas
BEING Lot 1C of the Southwest Mediplex Resubdivision of Lot 1, an addition in
Travis County, Texas, according to the map or plat thereof recorded in Volume
72, Page 62, Plat Records of Travis County, Texas.
7320 Burnett Road, Austin, Texas
BEING Lot 2A, Waco Subdivision, an addition in Travis County, Texas,
according to the map or plat thereof recorded in Volume 31, Page 8, Plat
Records of Travis County, Texas.
This Note is also secured by a Security Agreement executed
contemporaneously herewith by the parties covering the rights, properties and
interests described therein, and said Security Agreement and all its terms
are incorporated herein by this reference for all purposes as if they were
fully set out at length herein.
In the event Maker shall default in the payment of this Note, or in the
event Maker shall be in default, violate or fail to perform any other
provisions or obligations as contained in this Note or in the
above-referenced Deed of Trust or Security Agreement or any other documents
executed as a part hereof or in connection herewith, and shall continue in
default of any such non-payment default after thirty (30) days' written
notice thereof has been sent to the Maker by the Holder hereof, the same
shall, at the election of the Holder of this Note, mature the entire
principal and then accrued interest balance of this Note, and it shall at
once become due and payable, and the Deed of Trust lien herein mentioned, and
the security interest granted and evidenced by the aforesaid Security
Agreement shall become subject to foreclosure proceedings, as the Holder may
elect. Except for the express notice provision provided above, each maker,
surety, endorser, guarantor and/or other party liable hereon, and all parties
assuming any payment hereof, severally waives grace, demand, presentment,
protest, notice of every type, including, without limitation, notice of
default, notice of intention to accelerate, notice of acceleration, and
notice of protest, and consents that time of payment may be extended without
notice. Each maker, surety, endorser, guarantor and/or other party liable
hereon agrees that their liability on this Note shall be joint and several
with that of any other party obligated hereon, shall not be affected by any
renewal or extension of this Note, by any indulgences, or by any release or
change in any security for this Note, and hereby consents to any and all
renewals, extensions, indulgences, releases or changes, regardless of the
number. It is agreed that the waiving by Holder of any default of Maker shall
be limited to the particular incident, and shall not be deemed to waive any
other default of the same or other covenants hereunder. It is hereby
specially agreed that if this Note is placed in the hands of an attorney for
collection, or if collected by suit or through probate or bankruptcy
proceedings, Maker agrees to pay reasonable attorney's fees in addition to
the principal and interest then due hereon, and together with all costs of
collection.
As used herein, the term "Maximum Rate" means the greatest of the
rates of interest from time to time permitted under applicable Federal and
Texas law. To the extent of the applicability of Article 5069-1.04, as
<PAGE>
amended, Texas Revised Civil Statutes, the Maximum Rate shall be the highest
permitted rate based upon the "indicated rate ceiling," but to the extent now
or hereafter permitted by Texas law, Holder may from time to time implement,
withdraw and reinstate any ceiling as an alternative to the indicated rate
ceiling, including the right to reinstate the indicated rate ceiling.
Regardless of any provision contained in this Note, the Holder hereof
shall never be entitled to receive, collect or apply, as interest on this
Note, any amount in excess of the Maximum Rate. In determining whether or not
the interest paid or payable under any specific contingency exceeds the
Maximum Rate, Maker and the Holder hereof shall, to the maximum extent
permitted under applicable laws, (i) characterize any nonprincipal payment as
an expense, fee or premium rather than as interest, (ii) exclude voluntary
prepayments and the effects thereof, and (iii) amortize, prorate, allocate
and spread, in proportionate parts, the total amount of interest paid or
payable throughout the entire contemplated term of this obligation so that
the effective interest rate is uniform throughout the entire term of this
Note. If the Holder hereof ever receives, collects or applies as interest any
amount in excess of the Maximum Rate, then any such amount which would be
excessive interest shall be deemed a partial prepayment of principal, and
treated hereunder as such; and if the principal balance of the indebtedness
evidenced hereby has been paid in full, then the Holder hereof shall refund
to Maker the amount of such excessive interest.
In the event the property covered by the aforementioned Deed of Trust
and/or Security Agreement securing this Note, or any portion thereof, without
first obtaining written approval of the Holder hereof, is sold, transferred,
alienated, devised, conveyed or otherwise made the subject of any transaction
which has the effect of changing possession or ownership thereof, at any time
before this Note is fully paid, the same shall be considered an event of
default hereunder, and the Holder shall thereupon have the option to declare
the entire principal and accrued interest balance of this Note immediately
due and payable, and the Holder hereof may thereupon further request the
trustee in the aforesaid Deed of Trust securing this Note to commence
foreclosure proceedings as therein provided, or commence any other action
authorized by the said Deed of Trust, and/or Holder may commence foreclosure
proceedings as provided in the Security Agreement.
THIS NOTE IS PAYABLE IN FULL ON AUGUST 18, 1999. AT MATURITY YOU MUST
PAY THE ENTIRE PRINCIPAL BALANCE OF THE NOTE AND UNPAID INTEREST THEN DUE.
THE HOLDER IS UNDER NO OBLIGATION TO REFINANCE THE NOTE AT THAT TIME. YOU
WILL THEREFORE BE REQUIRED TO MAKE PAYMENT OUT OF OTHER ASSETS YOU MAY OWN,
OR YOU WILL HAVE TO FIND A LENDER WILLING TO LEND YOU THE MONEY AT THEN
PREVAILING MARKET RATES, WHICH MAY BE CONSIDERABLY HIGHER THAN THE INTEREST
RATE ON THIS NOTE. IF YOU REFINANCE THIS LOAN AT MATURITY, YOU MAY HAVE TO
PAY SOME OR ALL OF THE CLOSING COSTS NORMALLY ASSOCIATED WITH A NEW LOAN EVEN
IF YOU OBTAIN FINANCING FROM THE SAME LENDER.
<PAGE>
THIS NOTE, AND ITS VALIDITY, ENFORCEMENT AND INTERPRETATION, SHALL BE
GOVERNED BY TEXAS LAW (WITHOUT REGARD TO ANY CONFLICT OF LAWS PRINCIPLES) AND
APPLICABLE UNITED STATES FEDERAL LAW.
THE LOAN DOCUMENTS (being this document and any other document referred
to herein or executed in connection herewith) REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, OR
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
If any of the terms of this Note conflict in any respect with those of
any other document or instrument referred to herein or executed in connection
herewith, the terms of this Note shall control.
EXECUTED this 18th day of May, 1999.
MACE CAR WASH - ARIZONA, INC.
BY: /s/ Jon E. Goodrich
Jon E. Goodrich, President
<PAGE>
SECURITY AGREEMENT
Date: May 18, 1999
Debtor: MACE CAR WASH - ARIZONA, INC., a corporation
Debtor's Mailing Address (including county): 160 Benmont Avenue, Bennington,
Vermont 05201
Secured Party: CORNETT LIMITED PARTNERSHIP, a Texas limited partnership,
GENIE CAR WASH, INC. OF AUSTIN, a Texas corporation, GENIE CAR
SERVICE CENTER, INC., a Texas corporation, and GENIE CAR CARE
CENTER, INC., a Texas corporation
Secured Party's Mailing Address (including county): 5471 Thomas Arnold Road,
Salado, Bell County, Texas
76571
Classification of Collateral: Furniture, fixtures and equipment
Collateral (including all accessions): All of Debtor's property and assets,
tangible and intangible of whatever type or nature sold on or about this date
by one or more of the Secured Party and located at or used in connection with
the operation of the car wash businesses located at 1311 South Lamar, 1021 W.
William Cannon Drive and 7320 Burnett Road, all in Austin, Texas, including
but not limited to all of Debtor's furniture, fixtures, equipment, supplies,
and all attachments and accessories thereto and all products thereof and all
proceeds thereof including insurance payable by reason of loss or damage
thereto, and all substitutions therefor and all replacements thereof and all
other fixtures of Debtor hereafter placed on the above described locations.
Obligation
Notes
Date: May 18, 1999
Amount: (i) FOUR MILLION SEVEN HUNDRED FIFTY THOUSAND AND NO/100
($4,750,000.00) DOLLARS
(ii) ONE HUNDRED EIGHTY THOUSAND AND NO/100
($180,000.00) DOLLARS
Maker: Mace Car Wash - Arizona, Inc.
Payee: Cornett Limited Partnership, Genie Car Wash, Inc. of Austin, Genie Car
Service Center, Inc., and Genie Car Care Center, Inc.
Final Maturity Date: As therein provided.
Terms of Payment (optional):
<PAGE>
Other Obligation: All obligations of Debtor, American Wash Services, Inc. and
Mace Securities International, Inc. to register the "Issuer Shares" in
accordance with that certain Second Amendment Car Wash Asset Purchase/Sale
Agreement effective as of April 29, 1999, executed by and between Secured
Party, American Wash Services, Inc., Millennia Car Wash Group, LLC and Mace
Securities International, Inc.
Debtor's Representation Concerning Location of Collateral (optional):
Subject to the terms of this agreement, Debtor grants to Secured Party a
security interest in the collateral and all its proceeds to secure payment
and performance of Debtor's obligation in this security agreement and all
renewals and extensions of any of the obligation.
Debtor's Warranties
1. Financing Statement. Except for that in favor of Secured Party, no
financing statement covering the collateral is filed in any public office.
2. Ownership. Debtor owns the collateral and has the authority to grant
this security interest. Ownership is free from any setoff, claim,
restriction, lien, security interest, or encumbrance except this security
interest and liens for taxes not yet due.
3. Fixtures and Accessions. None of the collateral is affixed to real
estate, is an accession to any goods, is commingled with other goods, or will
become a fixture, accession, or part of a product or mass with other goods
except as expressly provided in this agreement.
Debtor's Covenants
1. Protection of Collateral. Debtor will defend the collateral against
all claims and demands adverse to Secured Party's interest in it and will
keep it free from all liens except those for taxes not yet due and from all
security interests except this one. The collateral will remain in Debtor's
possession or control at all times, except as otherwise provided in this
agreement. Debtor will maintain the collateral in good condition and protect
it against misuse, abuse, waste, and deterioration except for ordinary wear
and tear resulting from its intended use.
2. Insurance. Debtor will insure the collateral in accord with Secured
Party's reasonable requirements regarding choice of carrier, casualties
insured against, and amount of coverage. Policies will be written in favor of
Debtor and Secured Party according to their respective interests or according
to Secured Party's other requirements. All policies will provide that Secured
Party will receive at least ten days' notice before cancellation, and the
policies or certificates evidencing them will be provided to Secured Party
when issued. Debtor assumes all risk of loss and damage to the collateral to
the extent of any deficiency in insurance coverage. Debtor irrevocably
appoints Secured Party as attorney-in-fact to collect any return, unearned
premiums, and proceeds of any insurance on the collateral and to endorse any
draft or check deriving from the policies and made payable to Debtor.
<PAGE>
3. Secured Party's Costs. Debtor will pay all expenses incurred by
Secured Party in obtaining. preserving, perfecting, defending, and enforcing
this security interest or the collateral and in collecting or enforcing the
note. Expenses for which Debtor is liable include, but are not limited to,
taxes, assessments, reasonable attorney's fees, and other legal expenses.
These expenses will bear interest from the dates of payments at the highest
rate stated in notes that are part of the obligation, and Debtor will pay
Secured Party this interest on demand at a time and place reasonably
specified by Secured Party. These expenses and interest will be part of the
obligation and will be recoverable as such in all respects.
4. Additional Documents. Debtor will sign any papers that Secured Party
considers necessary to obtain, maintain, and perfect this security interest
or to comply with any relevant law.
5. Notice of Changes. Debtor will immediately notify Secured Party of
any material change in the collateral; change in Debtor's name, address, or
location; change in any matter warranted or represented in this agreement;
change that may affect this security interest; and any event of default.
6. Use and Removal of Collateral. Debtor will use the collateral
primarily according to the stated classification unless Secured Party
consents otherwise in writing. Debtor will not permit the collateral to be
affixed to any real estate, to become an accession to any goods, to be
commingled with other goods, or to become a fixture, accession, or part of a
product or mass with other goods except as expressly provided in this
agreement.
7. Sale. Debtor will not sell, transfer, or encumber any of the
collateral without the prior written consent of Secured Party.
Rights and Remedies of Secured Party
1. Generally. Secured Party may exercise the following rights and
remedies after default, and if the default continues after Secured Party
gives Debtor any applicable notice of the default and the time, if any,
within which it must be cured as provided in the note:
a. take control of any proceeds of the collateral;
b. release any collateral in Secured Party's possession to any debtor,
temporarily or otherwise;
c. take control of any funds generated by the collateral, such as
refunds from and proceeds of insurance, and reduce any part of the
obligation accordingly or permit Debtor to use such funds to repair
or replace damaged or destroyed collateral covered by insurance; and
d. demand, collect, convene, redeem, settle, compromise, receipt for,
realize on, adjust, sue for, and foreclose on the collateral either
in Secured Party's or Debtor's name, as Secured Party desires.
2. Insurance. If Debtor fails to maintain insurance as required by this
agreement or otherwise by Secured Party, then Secured Party may purchase
single-interest insurance coverage that will protect only Secured Party. If
Secured Party purchases this insurance, its premiums will become part of the
obligation.
Events of Default
Each of the following conditions is an event of default:
<PAGE>
1. if Debtor defaults in timely payment or performance of any
obligation, covenant, or liability in any written agreement between Debtor
and Secured Party or in any other transaction secured by this agreement;
2. if any warranty, covenant, or representation made to Secured Party by
or on behalf of Debtor proves to have been false in any material respect when
made;
3. if a receiver is appointed for Debtor or any of the collateral;
4. if the collateral is assigned for the benefit of creditors or, to the
extent permitted by law, if bankruptcy or insolvency proceedings commence
against or by any of these parties: Debtor; any partnership of which Debtor
is a general partner; and any maker, drawer, acceptor, endorser, guarantor,
surety, accommodation party, or other person liable on or for any part of the
obligation;
5. if any financing statement regarding the collateral but not related
to this security interest and not favoring Secured Party is filed;
6. if any lien attaches to any of the collateral;
7. if any of the collateral is lost, stolen, damaged, or destroyed,
unless it is promptly replaced with collateral of like quality or restored to
its former condition.
Remedies of Secured Party on Default
During the existence of any event of default, Secured Party may declare
the unpaid principal and earned interest of the obligation immediately due in
whole or part, enforce the obligation, and exercise any rights and remedies
granted by the Texas Uniform Commercial Code or by this agreement, including
the following:
1. require Debtor to deliver to Secured Party all books and records
relating to the collateral;
2. require Debtor to assemble the collateral and make it available to
Secured Party at a place reasonably convenient to both parties;
3. take possession of any of the collateral and for this purpose enter
any premises where it is located if this can be done without breach of the
peace;
4. sell, lease, or otherwise dispose of any of the collateral in accord
with the rights, remedies, and duties of a secured party under chapters 2 and
9 of the Texas Uniform Commercial Code after giving notice as required by
those chapters; unless the collateral threatens to decline speedily in value,
is perishable, or would typically be sold on a recognized market, Secured
Party will give Debtor reasonable notice of any public sale of the collateral
or of a time after which it may be otherwise disposed of without further
notice to Debtor; in this event, notice will be deemed reasonable if it is
mailed, postage prepaid, to Debtor at the address specified in this agreement
at least ten days before any public sale or ten days before the time when the
collateral may be otherwise disposed of without further notice to Debtor;
5. surrender any insurance policies covering the collateral and receive
the unearned premium;
6. apply any proceeds from disposition of the collateral after default
in the manner specified in chapter 9 of the Texas Uniform Commercial Code,
including payment of Secured Party's reasonable attorney's fees and court
expenses; and
7. if disposition of the collateral leaves the obligation unsatisfied,
collect the deficiency from Debtor.
<PAGE>
General Provisions
1. Parties Bound. Secured Party's rights under this agreement shall
inure to the benefit of its successors and assigns. Assignment of any part of
the obligation and delivery by Secured Party of any part of the collateral
will fully discharge Secured Party from responsibility for that part of the
collateral. If Debtor is more than one, all their representations,
warranties, and agreements are joint and several. Debtor's obligations under
this agreement shall bind Debtor's personal representatives, successors, and
assigns.
2. Waiver. Neither delay in exercise nor partial exercise of any of
Secured Party's remedies or rights shall waive further exercise of those
remedies or rights. Secured Party's failure to exercise remedies or rights
does not waive subsequent exercise of those remedies or rights. Secured
Party's waiver of any default does not waive further default. Secured Party's
waiver of any right in this agreement or of any default is binding only if it
is in writing. Secured Party may remedy any default without waiving it.
3. Reimbursement. If Debtor fails to perform any of Debtor's
obligations, Secured Party may perform those obligations and be reimbursed by
Debtor on demand at the place where the note is payable for any sums so paid,
including reasonable attorney's fees and other legal expenses, plus interest
on those sums from the dates of payment at the rate stated in the note for
matured, unpaid amounts. The sum to be reimbursed shall be secured by this
security agreement.
4. Interest Rate. Interest included in the obligation shall not exceed
the maximum amount of nonusurious interest that may be contracted for, taken,
reserved, charged, or received under law; any interest in excess of that
maximum amount shall be credited to the principal of the obligation or, if
the principal amount has been paid, refunded. On any acceleration or required
or permitted prepayment of the obligation, any such excess shall be canceled
automatically as of the acceleration or prepayment or, if already paid,
credited on the principal amount of the obligation or, if the principal
amount has been paid, refunded. This provision overrides other provisions in
this and all other instruments concerning the obligation.
5. Modification. No provisions of this agreement shall be modified or
limited except by written agreement.
6. Severability. The unenforceability of any provision of this agreement
will not affect the enforceability or validity of any other provision.
7. Applicable Law. This agreement will be construed according to Texas
laws.
8. Place of Performance. This agreement is to be performed in the county
of Secured Party's mailing address.
9. Financing Statement. A carbon, photographic, or other reproduction of
this agreement or any financing statement covering the collateral is
sufficient as a financing statement.
10. Presumption of Truth and Validity. If the collateral is sold after
default, recitals in the bill of sale or transfer will be prima facie
evidence of their truth, and all prerequisites to the sale specified by this
agreement and by the Texas Uniform Commercial Code will be presumed
satisfied.
11. Singular and Plural. When the context requires, singular nouns and
pronouns include the plural.
12. Priority of Security Interest. This security interest shall neither
affect nor be affected by any other security for any of the obligation.
Neither extensions of any of the obligation nor releases of any of the
collateral will affect the priority or validity of this security interest
with reference to any third person.
<PAGE>
13. Cumulative Remedies. Foreclosure of this security interest by suit
does not limit Secured Party 's remedies, including the right to sell the
collateral under the terms of this agreement. All remedies of Secured Party
may be exercised at the same or different times, and no remedy shall be a
defense to any other. Secured Party's rights and remedies include all those
granted by law or otherwise, in addition to those specified in this
agreement.
14. Agency. Debtor's appointment of Secured Party as Debtor's agent is
coupled with an interest and will survive any disability of Debtor.
Cornett Limited Partnership Mace Car Wash - Arizona, Inc.
BY: /s/ Mike W. Cornett BY: /s/ Jon E. Goodrich
Mike W. Cornett, General Partner Jon E. Goodrich, President
"Debtor"
BY: /s/ Shirley A. Cornett
Shirley A. Cornett, General Partner
Genie Car Wash, Inc. of Austin
BY: /s/ Mike W. Cornett
Mike W. Cornett, President
Genie Car Service Center, Inc.
BY: /s/ Mike W. Cornett
Mike W. Cornett, President
Genie Car Care Center, Inc.
BY: /s/ Mike W. Cornett
Mike W. Cornett, President
"Secured Party"
<PAGE>
Contact: Mace Security International, Inc.
160 Benmont Avenue
Bennington, Vermont 05201
(800) 255-2634
Jon E. Goodrich, President & Chief Executive Officer
Eduardo Nieves, Jr., Corporate Communications Manager
FOR IMMEDIATE RELEASE
MACE SECURITY INTERNATIONAL ACQUIRES TWO CAR WASH CHAINS
BECOMING THE COUNTRY'S FIRST PUBLICLY OWNED CAR WASH CONSOLIDATOR
Bennington, Vermont, May 25, 1999 -- Mace Security International, Inc.
(MSI) (NASDAQ:MACE) today announced that it has acquired Colonial Full
Service Car Wash, Inc. and Genie Car Wash, Inc. and certain of its affiliated
entities, two major Texas-based car wash chains. The closing of these
transactions immediately places MSI in the forefront of the car wash
industry, making it the country's first publicly owned consolidator of car
washes. The addition of Colonial and Genie, which together operate 13 car
washes and generate approximately $16 million in sales annually, plays a
strategic role in MSI's aggressive growth strategy of acquiring car wash
businesses. MSI recently announced it will acquire American Wash Services,
Inc., a company founded by Louis D. Paolino, Jr., which owns and has under
agreement to close on numerous car wash locations.
Jon E. Goodrich, current President and CEO of MSI, said, "We are very
pleased to have quickly established a leadership position among the car wash
consolidators in the United States. These acquisitions give MSI a strong
foothold in the southwestern market for further acquisitions in this
important region." He added, "We are hiring Steve Sims, formerly Chief
Operating Officer of Colonial Full Service Car Wash, Inc., to become Vice
President of the Texas operation and oversee our Texas-based car wash
businesses. Mr. Sims brings market and industry expertise that will be
invaluable to our vision of consolidating full and self-service car wash
chains."
Colonial Full Service Car Wash, Inc. and the Genie Car Washes, which are
located in the Dallas and Fort Worth, Texas and Austin, Texas areas,
respectively, operate car wash and lubrication centers that provide a full
line of car care services including washing, waxing, detailing, gasoline and
lubrication services.
Mace Security International, Inc. is the first publicly-traded company
to focus on the consolidation of the car wash industry. The Company is also a
leading producer of less lethal defense sprays for the consumer market and a
marketer and retailer of consumer safety and security products.
This press release includes statements which may constitute
forward-looking statements made pursuant to the safe harbor provision of the
Private Securities Litigation Reform Act of 1995. This information may
involve risks and uncertainties, including without limitation, risks relating
to the financial outcomes of the planned business and growth strategies, that
could cause actual results to differ materially from the forward-looking
statements. Although the Company believes that the expectations reflected in
such forward-looking statements are based on reasonable assumptions, such
statements are subject to risks and uncertainties that could cause actual
results to differ materially from those projected.
###
