Asset Purchase Agreement (04781704)

ASSET PURCHASE AGREEMENT

This Asset Purchase Agreement (this “Agreement”) is made and entered into as of November __, 2014, by and among AUTO AFTER CARE, INC., an Ohio corporation (the “Buyer”) and ______(the “Company”), ______. The Company and the Individual Sellers are collectively referred to herein as the “Sellers”.

RECITALS

A. The Company is engaged in the business of (the “Business”). owns all of the equity of the Company and __is the president and chief executive officer of the Company.

B. The Company operates the Business from (collectively, the “Facilities”). The Facilities are owned solely by (“__”). The Facilities are leased to the Company pursuant to the Lease (as herein defined).

C. Buyer desires to (i) purchase (a) the Business and the Assets (as herein defined) from the Company pursuant to the terms of this Agreement and (b) fee title and interest in and to the Facilities pursuant to the terms of a facilities purchase agreement (the “Facilities Purchase Agreement”) attached hereto as Exhibit A and (ii) enter into an employment agreement with ______.

D. Buyer and Sellers have entered into a Letter of Intent dated ______2014 which sets forth certain terms and provisions with regard to transactions contemplated therein and herein (the “Letter of Intent”).

AGREEMENT

In consideration of the above Recitals and the representations, warranties and covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

DEFINITIONS

1.1 Defined Terms. As used herein, the terms below shall have the following meanings:

“Affiliate” shall mean, with respect to any Person, any other Person directly or indirectly controlling, controlled by or under common control with such Person and any member, general partner, director, officer or employee of such Person. For purposes of this definition of Affiliate, “control” shall mean the power of one or more Persons to direct the affairs of the Person controlled by reason of ownership of voting stock, contract or otherwise.

“Ancillary Agreements” shall mean the Assignment and Assumption Agreement, the Bill of Sale, the Employment Letter, the Escrow Agreement, the Goodwill Agreement, the Assignment of Trade Names, the Domain Name Assignment, the Facilities Purchase Agreement and such other agreements entered into by the parties and such other documents and instruments as are necessary to consummate the transactions contemplated in this Agreement.

“Assets” shall mean (other than the Excluded Assets and the Facilities) the Business, together with all of the properties and assets of the Company and the Individual Sellers of every kind and description, whether real, personal or mixed or tangible or intangible, located at the Facilities or off-site (including but not limited to packaging materials, supplies and machine spare parts) as shall exist on the Closing Date that are related to or used in the conduct of the Business. Without limiting the generality of the foregoing, the Assets shall include the Contract Rights, the Inventory, the Personal Property, the Intellectual Property, the Domain Name(s), the Books and Records, all improvements and fixtures, all tooling and spare parts, and all goodwill associated with the Business owned by the Company and/or Suleiman and, to the extent transferable, all Permits and all of Sellers’ collective or individual right(s), title and interest(s) in and to computer software used at the Facilities or in the Business.

“Assignment and Assumption Agreement” shall mean the Assignment and Assumption Agreement between Buyer and the Company substantially in the form of Exhibit B attached hereto.

“Assignment of Trade Names” shall mean the Assignment of Trade Name between Buyer and the Company substantially in the form of Exhibit C attached hereto.

“Assumed Contracts” shall mean all Contracts which relate to the operation of the Business to which the Company is a party and for which Buyer shall be responsible after the Effective Time. Schedule 1.1 lists all Assumed Contracts.

“Assumed Liabilities” shall mean:

(a) any liability or obligation of the Company under the Assumed Contracts; and

(b) any liability or obligation under purchase orders or sales orders in process.

“Bill of Sale” shall mean any bill of sale from the Company in favor of Buyer substantially in the form attached hereto as Exhibit D or as otherwise approved by Buyer.

“Books and Records” shall mean all records of the Company pertaining to the Business, the Assets and the Facilities including all tangible or computerized (a) customer and supplier lists and files, (b) pricing information and related documents, (c) product and production cost files and related documents, (d) advertising and promotion materials, product description materials and related documents, (e) sales records and files and related documents, and (f) all employee work performance, job assignment, disciplinary and attendance records (other than medical records) (the “Employment Records”); provided, however, that the Excluded Assets shall not be included among the Books and Records.

“Buyer’s Knowledge” shall mean the actual knowledge of Buyer or GLC.

“Closing Date” shall mean ______2014 or as soon thereafter as Buyer and Sellers shall mutually agree provided, however, that the parties shall endeavor to consummate and close the transactions contemplated herein on or before ______2014 (the “Outside Closing Date”).

“Code” shall mean the [tax code of the Republic of Zambia], as amended, and the rules and regulations thereunder.

“Confidential Information” shall mean all non-public or proprietary information furnished by one party to another about the former’s business, operations, customers, products, or pricing that has been designated by that party as confidential or proprietary. The term Confidential Information shall also include the terms of this Agreement, including the Purchase Price as well as disclosures made by the parties as required herein. Notwithstanding anything herein to the contrary, the term “Confidential Information” shall not include or apply to information that (a) that is generally available to the trade or to the public through no fault or breach on the part of the party possessing it; (b) subsequently becomes available to the trade or to the public through no fault or breach of this Agreement by the party possessing it and then only after said later date; (c) the party possessing it can demonstrate, by written or other tangible evidence, it rightfully possessed the same prior to disclosure of the same by the party presenting it as Confidential Information; (d) is independently developed by the party possessing it without the use of any Confidential Information; or (e) the party possessing it obtained the information in good faith from a third party who has the independent right to transfer or disclose such information.

“Contract Rights” shall mean all of the Company’s rights under sales or purchase orders in process entered into by the Company in the ordinary course of business prior to the Effective Time and which are permitted under Section 5.2(b), utility and lease deposits, prepaid items and expenses and rights under Assumed Contracts.

[“COBRA” shall mean Section 4980B of the Code (as well as its predecessor provision, Section 162(k) of the Code) and Sections 601 through 608, inclusive, of ERISA.]

“Contracts” shall mean any and all contracts, agreements, arrangements, leases and other instruments and obligations, whether or not in writing, entered into by the Company and relating to the Business and operation of the Facilities.

“Lease” shall mean the lease relating to the Facilities dated ______by and between ______and the Company.

“Damages” shall mean any and all costs, losses, damages, liabilities or expenses, including interest, penalties, fines, remedial action requirements, enforcement actions of any kind and all costs and expenses including reasonable attorneys’ fees and expenses incident thereto, incurred in connection with any Claim, as herein defined.

“Domain Name” shall mean all of the Company’s right, title and interest in all Internet domain names used, directly or indirectly, now or in the past by the Company, ______, ______(or any of them) including but not limited to www.bobbycoolwheels.com, in connection with the Business anywhere in the world, and the registration thereof, together with the goodwill of the Business connected with and symbolized by the Domain Name.

“Domain Name Assignment” shall mean the Domain Name Assignment between Buyer and the Company substantially in the form of Exhibit E attached hereto.

“Employee Plan” shall mean any “employee benefit plan” within the meaning of [Section 3(3) of ERISA,] which is sponsored or maintained by the Company for its Employees.

“Environment” shall mean soil, land surface or subsurface strata, surface waters (including navigable waters and ocean waters), groundwater, drinking water supply, stream sediments, ambient air (including indoor air), plant and animal life, and any other environmental medium or natural resource.

“Environmental Laws” shall mean all applicable past or present statutes, regulations, rules, ordinances, codes, licenses, permits, orders, approvals, authorizations and similar items, of all governmental entities, and all principles of common law pertaining to the regulation and protection of the Environment or human health or safety, including, without limitation, Releases and threatened Releases or otherwise relating to the operation, manufacture, processing, distribution, use, treatment, storage, disposal, transport, or handling of [Hazardous Materials. Environmental Laws] include, but are not limited to, the [Comprehensive Environmental Response, Compensation, and Liability Act of 1980]; the [Federal Insecticide, Fungicide and Rodenticide Act]; the [Resource Conservation and Recovery Act]; the [Toxic Substances Control Act; the Clean Air Act; the Federal Water Pollution Control Act; OSHA; and the Safe Drinking Water Act] or the regulations promulgated thereunder, as the statute and/or regulations have been interpreted as of the date hereof; and their state and local counterparts or equivalents, if any, all as amended from time to time.

“[ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended, and all regulations and rulings promulgated thereunder].

“Escrow Agent” shall mean ______.

“Escrow Agreement” shall mean the escrow agreement to be entered into by and among Sellers, Buyer, _____ and the Escrow Agent with respect to the handling and disposition of the Purchase Price, the payment of liens and other costs and expenses and the transfer of the title of Assets and the Facilities.

“Excluded Assets” shall mean

(a) the Company’s cash existing as of the Effective Time less the Reserved Funds;

(b) all accounts receivable of the Company created in the ordinary and regular course of business that are outstanding and unpaid as of the Effective Time (the “Accounts Receivable”);

(d) all of the Company’s rights relating to claims for refunds, including refunds of taxes and other governmental charges of whatever nature;

(e) all personnel records and other records the Company is required by law to retain in its possession;

(f) all rights of the Company and the Individual Sellers under this Agreement and the Ancillary Agreements.

(g) Obsolete Inventory;

(h) pending claims and insurance claims of the Company against ______and its insurance carriers; and

(i) the specific items set forth on Exhibit F attached hereto.

“Excluded Liabilities” shall mean any liability or obligation of the Company or the Individual Sellers relating to the Assets, the Business, the Facilities or any other business of the Company or the Individual Sellers, absolute or contingent, known or unknown, not expressly assumed by Buyer as an Assumed Liability. The Excluded Liabilities shall include:

(a) any liability or obligation of the Company or the Individual Sellers that results from or which would constitute any breach or default by the Company or the Individual Sellers under this Agreement or any Ancillary Agreement;

(b) any liability or obligation of the Company or the Individual Sellers relating to income, franchise, payroll, unemployment or withholding taxes of Sellers, including any interest or penalties related thereto;

(c) any liability or obligation of the Company the Individual Sellers relating to indebtedness for borrowed money for use by or in connection with the Company, the Assets, the Facilities or otherwise;

(d) any liability or obligation of the Company or the Individual Sellers relating to Excluded Assets;

(e) any liability or obligation of the Company or the Individual Sellers relating to the ownership, use or operation of the Assets, the Business, the Facilities or any products sold or any services performed by the Company or the Individual Sellers prior to the Effective Time;

(f) any liability or obligation relating to any violation of any law, statute, rule or regulation by the Company or the Individual Sellers or any Representative or Affiliate of the Company or the Individual Sellers that relates to the Business, the Assets or the Facilities (including but not limited to claims based on Environment Laws) and arises out of or results from any act, omission, occurrence or state of facts prior to the Effective Time;

(g) any liability or obligation of the Company or the Individual Sellers with respect to Employees incurred prior to the Effective Time except to the extent such liability or obligation is a liability or obligation with respect to COBRA which is imposed upon Buyer under Legal Requirements as a result of Buyer’s acquisition of the Business; provided, however, that Buyer shall not be responsible for any COBRA liability or obligation with respect to either Brennenstuhl or Suleiman , each agreeing to waive any right they may have respecting the same;

(h) any liability or obligation under the Lease; and/or

(i) any liability or obligation or claim of loss from a vendor, customer or supplier of the Company based upon a shortage in or damage to Third Party Property arising or related to any time prior to the Effective Date.

“Hazardous Substances” shall mean (a) any chemicals, materials, substances or wastes which are now or hereafter defined as or included in the definition of “hazardous substances,” “hazardous materials,” “toxic substances,” “extremely hazardous substances,” “toxic pollutants,” or words of similar import, under any applicable Environmental Laws; (b) any petroleum, petroleum products (including, without limitation, crude oil or any fraction thereof), natural gas, natural gas liquids, liquefied natural gas or synthetic gas useable for fuel (or mixtures of natural gas and such synthetic gas) or oil and gas exploration or production waste, polychlorinated biphenyls (“PCBs”), asbestos-containing materials, mercury and lead-based paints; (c) any other chemical, material, substances, or waste, exposure to which is prohibited, limited, or regulated by any governmental entity and (d) any “hazardous substance” or “hazardous waste” as defined in Section 144.01 et seq., of the Wisconsin Statutes or other applicable state or local law.

A. The Company is engaged in the business of ______(the “Business”). ______owns all of the equity of the Company and ______is the president and chief executive officer of the Company.

B. The Company operates the Business from ______(collectively, the “Facilities”). The Facilities are owned solely by ______(“______”). The Facilities are leased to the Company pursuant to the Lease (as herein defined).