PURCHASE AGREEMENT
This PURCHASE AGREEMENT (this "Agreement") is made and entered into as of
June ___, 2012 by and among P&F Industries Inc., a Delaware corporation (the
"Company"), and Xxxxxxx X. Xxxxxxx, an individual (the "Seller").
WHEREAS, Seller directly owns shares of the issued and outstanding common
stock, par value $1.00 per share, of the Company ("Company Shares"); and
WHEREAS, Seller desires to sell, and the Company desires to purchase, free
and clear of any and all Liens (as defined herein) an aggregate number of
Company Shares having an aggregate purchase price of $_____________ (the
"Purchase Price") as set forth herein.
NOW, THEREFORE, in consideration of the foregoing premises and the covenants,
agreements and representations and warranties contained herein, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
PURCHASE AND SALE; ClOSINGS
Section 1.1 Purchase and Sale. Upon the terms and subject to the
conditions of this Agreement, Seller agrees to sell, convey, assign,
transfer and deliver to the Company, and the Company agrees to purchase from
Seller, [257,451] Company Shares (the "Purchased Shares"), free and clear of
any and all mortgages, pledges, encumbrances, liens, security interests,
options, charges, claims, deeds of trust, deeds to secure debt, title
retention agreements, rights of first refusal or offer, limitations on voting
rights, proxies, voting agreements, limitations on transfer or other
agreements or claims of any kind or nature whatsoever (collectively,
"Liens").
Section 1.2 Purchase Price. Upon the terms and subject to the conditions
of this Agreement, in consideration of the aforesaid sale, conveyance,
assignment, transfer and delivery to the Company of the Purchased Shares, the
Company shall pay to Seller a price per Purchased Share of [$5.00] (the
"Purchase Price"), for an aggregate price of $______________ in cash.
Section 1.3 Expenses. Except as expressly set forth in this Agreement,
all fees and expenses incurred by a party hereto in connection with the
matters contemplated by this Agreement shall be borne by the party incurring
such fee or expense, including without limitation the fees and expenses of
any investment banks, attorneys, accountants or other experts or advisors
retained by such party.
Section 1.4 Closing. The consummation of the transactions contemplated
by this Agreement (the "Closing") shall take place at 10:00 a.m., local
time, on June _____, 2012 at the offices of the Company or at such other
place, date or time as the parties may agree in writing (the " Closing
Date"); provided that the Company's obligations to consummate the
transactions contemplated by this Agreement shall be conditioned on (a) no
condition existing on the Closing Date which would prevent the Company from
drawing funds under the Loan and Security Agreement, dated as of October 25,
2010, among the Company, certain of the Company's subsidiaries, Capital One
Leverage Finance Corporation, as agent, and the financial institutions party
thereto, as amended or otherwise modified through the date hereof, and (b)
no injunction or other order, judgment, law, regulation, decree or ruling or
other legal restraint or prohibition having been issued, enacted or
promulgated by a court or other governmental authority of competent
jurisdiction that would have the effect of prohibiting or preventing the
consummation of the transactions contemplated hereunder.
Section 1.5 Closing Deliveries.
(a) At the Closing, in accordance with Section 1.2, the Company shall
deliver or cause to be delivered to Seller the following:
(i) The Purchase Price by wire transfer of immediately available funds to
such account as Seller has specified in writing prior to the Closing Date;
and
(b) At the Closing, Seller shall deliver or cause to be delivered to the
Company the following:
(i) certificates representing [5,000] of the Purchased Shares duly and
validly endorsed or accompanied by stock powers duly and validly executed in
blank and sufficient to convey to the Company good, valid and marketable
title in and to the Purchased Shares, free and clear of any and all Liens;
and
(ii) delivery of [250,451] of the Purchased Shares by transfer via the
Depository Trust Company Deposit Withdrawal Agent Commission System ("DWAC")
in accordance with the instructions included on the signature page hereto.
ARTICLE II
COVENANTS
Section 2.1 Standstill.
(a) During the period beginning on the date hereof and ending on the date
that is the third anniversary of the Closing Date (the "Standstill Period"),
except as specifically permitted by the terms of this Agreement, Seller shall
not, and shall cause his Affiliates (as defined in Section 5.3) not to,
acquire, offer or propose to acquire, or agree to acquire, directly or
indirectly, by purchase or otherwise, any (i) Voting Securities (as defined
in Section 5.3), or (ii) direct or indirect rights or options to acquire
(through purchase, exchange, conversion or otherwise) any Voting Securities.
(b) During the Standstill Period, except upon the express prior written
invitation of the Company, Seller shall not, and shall cause his Affiliates
not to, directly or indirectly, singly or as part of a partnership, limited
partnership, syndicate or other group (as those terms are used within the
meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), which meanings shall apply for all purposes of
this Agreement): (i) make, or in any way participate in, any "solicitation"
of "proxies" (as such terms are defined or used in Regulation 14A under the
Exchange Act) or exempt solicitation under Rule 14a-2(b)(1) or otherwise
with respect to any Voting Securities (including by the execution of actions
by written consent), become a "participant" or a "participant in a
solicitation" (as such terms are defined or used in Regulation 14A under the
Exchange Act) with respect to the Company or otherwise communicate with any
stockholder of the Company pursuant to Rule 14a-1(l)(2)(iv) under the
Exchange Act; (ii) initiate, propose or otherwise solicit, or participate in
the solicitation of, stockholders for the approval of one or more
stockholder proposals with respect to the Company, including any proposal
made pursuant to Rule 14a-8 under the Exchange Act, or encourage or induce
any other individual or entity to initiate any stockholder proposal relating
to the Company, or make any demand or request for any list of the holders of
Voting Securities; (iii) form, encourage the formation, join or in any way
participate in a "group" which owns or seeks or offers to acquire beneficial
ownership of Voting Securities or rights to acquire such securities or which
seeks or offers to acquire control of the Company or influence its policies;
(iv) solicit, seek or offer to effect, negotiate with or provide any
information to any party with respect to, make any statement or proposal,
whether written or oral, either alone or in concert with others, to the board
of directors of the Company, to any director or officer of the Company or to
any other stockholder of the Company with respect to, or otherwise formulate
any plan or proposal or make any public announcement, proposal, offer or
filing under the Exchange Act, any similar or successor statute or
otherwise, or take action to cause the Company to make any such filing, with
respect to: (A) any form of business combination, restructuring,
recapitalization, dissolution or similar transaction involving the Company or
any Affiliate thereof, including, without limitation, a merger, tender or
exchange offer, share repurchase or liquidation of the Company's assets, (B)
any acquisition or disposition of assets material to the Company, (C) any
request to amend, waive or terminate the provisions of this Agreement or (D)
any proposal or other statement inconsistent with the terms of this
Agreement; (v) otherwise act, alone or in concert with others (including by
providing financing for another party), to seek or offer to acquire control
of the Company or influence, in any manner, its management, board of
directors or policies; or (vi) assist or encourage any third party, whether
or not a "group" with such third party, to take any of the actions
enumerated in this Section 2.1(b).
Section 2.2 Non-disparagement.
(a) The Company (on its own behalf and on behalf of its directors,
officers, subsidiaries and Affiliates and each of their respective
successors and assigns (collectively, the "Company Parties")) agrees that,
during the Standstill Period, it shall not (whether directly or indirectly,
individually or in concert with others, publicly or privately, orally or in
writing) engage in any conduct or make, or cause to be made, any statement,
observation or opinion, or communicate any information that is calculated to
or is reasonably likely to have the effect of (i) undermining, impugning,
disparaging, injuring the reputation of or otherwise in any way reflecting
adversely or detrimentally upon any of the Seller or his Affiliates,
successors or assigns (collectively, the "Seller Parties") or (ii) accusing
or implying that any Seller Party engaged in any wrongful, unlawful or
improper conduct. The foregoing shall not apply to any compelled testimony,
either by legal process, subpoena or otherwise or to any response to any
request for information from any governmental authority having jurisdiction
over the Company; provided, however, that in the event that any Company
Party is requested pursuant to, or required by, applicable law, regulation or
legal process to testify or otherwise respond to a request for information
from any governmental authority, the Company shall notify Seller promptly so
that the Seller may seek a protective order or other appropriate remedy. In
the event that no such protective order or other remedy is obtained, or any
Seller waives compliance with the terms of this Section 2.2(a), such Company
Party shall furnish only such information which it has been advised by
counsel is legally required and will exercise reasonable efforts to obtain
reliable assurance that such information will be accorded confidential
treatment.
(b) The Seller agrees that, during the Standstill Period, he shall not
(whether directly or indirectly, individually or in concert with others,
publicly or privately, orally or in writing) engage in any conduct or make,
or cause to be made, any statement, observation or opinion, or communicate
any information, including, without limitation, to any member of the press,
analyst, governmental or regulatory agency, that is calculated to or is
reasonably likely to have the effect of (i) undermining, impugning,
disparaging, injuring the reputation of or otherwise in any way reflecting
adversely or detrimentally upon any Company Party or (ii) accusing or
implying that any Company Party engaged in any wrongful, unlawful or improper
conduct; provided, however, that in the event that Seller is requested
pursuant to, or required by, applicable law, regulation or legal process to
testify or otherwise respond to a request from any governmental authority,
Seller shall notify the Company promptly so that the Company may seek a
protective order or other appropriate remedy. In the event that no such
protective order or other remedy is obtained, or any Company Party waives
compliance with the terms of this Section 2.2(b), the Seller shall furnish
only such information which it is advised by counsel is legally required and
will exercise reasonable efforts to obtain reliable assurance that such
information will be accorded confidential treatment.
Section 2.3 Public Announcement; Public Filings.
(a) Upon execution of this Agreement, the Company shall issue a press
release (in substantially the form attached hereto as Exhibit A). No party
hereto nor any of its respective Affiliates shall issue any press release or
make any public statement relating to the transactions contemplated hereby
(including, without limitation, any statement to any governmental or
regulatory agency or accrediting body) that is inconsistent with, or are
otherwise contrary to, the statements in the press release.
(b) Promptly following the date hereof, Seller will cause to be filed
with the Securities and Exchange Commission an amendment to its Schedule 13D
filed on _________________ and prior to filing will provide the Company and
its counsel a reasonably opportunity to review and comment upon such
amendment.
Section 2.4 Confidentiality. Seller shall not disclose and shall
maintain the confidentiality of (and shall cause his Affiliates and
employees to not disclose and to maintain the confidentiality of) any
non-public information which relates to the business, legal or financial
affairs of the Company (the "Confidential Information"). Seller shall use at
least the same degree of care to safeguard and to prevent the disclosure,
publication or dissemination of the Confidential Information as they
respectively employ to avoid unauthorized disclosure, publication or
dissemination of their own information of a similar nature, but in no case
less than reasonable care. In the event that Seller (or any Affiliate or
employee) is requested or required (by oral question, interrogatory, request
for information or documents, subpoena, civil investigative demand or similar
process) to disclose any Confidential Information, Seller shall (a) notify
the Company promptly so that the Company may seek a protective order or other
appropriate remedy and (b) cooperate with the Company in any effort the
Company undertakes to obtain a protective order or other remedy. In the
event that no such protective order or other remedy is obtained, the
applicable party shall disclose to the person compelling disclosure only
that portion of the Confidential Information which such party is advised by
counsel is legally required and shall exercise reasonable efforts to obtain
reliable assurance that confidential treatment is accorded the Confidential
Information so disclosed.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF Seller
Seller hereby makes the following representations and warranties to the
Company:
Section 3.1 Existence; Authority. Seller has all requisite competence,
power and authority to execute and deliver this Agreement, to perform his
obligations hereunder and thereunder and to consummate the transactions
contemplated hereby.
Section 3.2 Enforceability. This Agreement has been duly and validly
executed and delivered by Seller and, assuming due and valid authorization,
execution and delivery by the Company, this Agreement constitutes a legal,
valid and binding obligation of the Seller enforceable against him in
accordance with its terms, except as such enforceability may be affected by
bankruptcy, insolvency, moratorium and other similar laws relating to or
affecting creditors' rights generally and general equitable principles.
Section 3.3 Ownership. Seller is the sole record and beneficial owner of
the Purchased Shares, free and clear of any and all Liens. Seller has full
power and authority to transfer full legal ownership of its respective
Purchased Shares to the Company, and Seller is not required to obtain the
approval of any person or governmental agency or organization to effect the
sale of the Purchased Shares. The entire direct or indirect beneficial
ownership of Seller or any of his Affiliates in the Company is [257,451]
Company Shares.
Section 3.4 Good Title Conveyed. Any stock certificates and stock powers
executed and delivered by Seller at the Closing will be valid and binding
obligations of Seller, enforceable in accordance with their respective terms,
and, together with the delivery of Purchased Shares through DWAC, will
effectively vest in the Company good, valid and marketable title to all
Purchased Shares, free and clear of any and all Liens.
Section 3.5 Absence of Litigation. There is no suit, action,
investigation or proceeding pending or, to the knowledge of Seller
threatened against such party that could impair the ability of Seller to
perform its obligations hereunder or to consummate the transactions
contemplated hereby.
Section 3.6 Other Acknowledgments.
(a) Seller hereby represents and acknowledges that he is a sophisticated
investor and he knows the Company may have material Confidential Information
concerning the Company and its condition (financial and otherwise), results
of operations, businesses, properties, plans and prospects and that such
information could be material to Seller's' decision to sell the Purchased
Shares or otherwise materially adverse to Seller's interests. Seller
acknowledges and agrees that the Company shall have no obligation to
disclose to it or him any such information and hereby waives and releases, to
the fullest extent permitted by law, any and all claims and causes of action
it has or may have against the Company and their respective Affiliates,
officers, directors, employees, agents and representatives based upon,
relating to or arising out of nondisclosure of such information or the sale
of the Purchased Shares hereunder.
(b) Seller further represents that it or he has adequate information
concerning the business and financial condition of the Company to make an
informed decision regarding the sale of the Purchased Shares and has,
independently and without reliance upon the Company, made his own analysis
and decision to sell the Purchased Shares. With respect to legal, tax,
accounting, financial and other considerations involved in the transactions
contemplated by this Agreement, including the sale of the Purchased Shares,
Seller is not relying on the Company (or any agent or representative
thereof). Seller carefully considered and, to the extent he believes such
discussion necessary, discussed with professional legal, tax, accounting,
financial and other advisors the suitability of the transactions
contemplated by this Agreement, including the sale of the Purchased Shares.
Seller acknowledges that the Company or any of their respective directors,
officers, subsidiaries or Affiliates has not made or makes any
representations or warranties, whether express or implied, of any kind
except as expressly set forth in this Agreement.
(c) Seller is an "accredited investor" as defined in Rule 501 promulgated
under the Securities Act. The sale of the Purchased Shares by Seller (i)
was privately negotiated in an independent transaction and (ii) does not
violate any rules or regulations applicable to Seller.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company makes the following representations and warranties to Seller:
Section 4.1 Existence; Authority. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State
of Delaware. The Company has all requisite corporate power and authority to
execute and deliver this Agreement, to perform its obligations hereunder and
to consummate the transactions contemplated hereby and has taken all
necessary corporate action to authorize the execution, delivery and
performance of this Agreement.
Section 4.2 Enforceability. This Agreement has been duly and validly
executed and delivered by the Company and, assuming due and valid
authorization, execution and delivery by Seller, this Agreement constitutes a
legal, valid and binding obligation of the Company, enforceable against it
in accordance with its terms, except as such enforceability may be affected
by bankruptcy, insolvency, moratorium and other similar laws relating to or
affecting creditors' rights generally and general equitable principles.
Section 4.3 Absence of Litigation. There is no suit, action,
investigation or proceeding pending or, to the knowledge of the Company,
threatened against such party that could impair the ability of the Company to
perform its obligations hereunder or to consummate the transactions
contemplated hereby.
ARTICLE V
miscellaneous
Section 5.1 Survival. Each of the representations, warranties,
covenants, and agreements in this Agreement or pursuant hereto shall survive
the Closing. Notwithstanding any knowledge of facts determined or
determinable by any party by investigation, each party shall have the right
to fully rely on the representations, warranties, covenants and agreements of
the other parties contained in this Agreement or in any other documents or
papers delivered in connection herewith. Each representation, warranty,
covenant and agreement of the parties contained in this Agreement is
independent of each other representation, warranty, covenant and agreement.
Except as expressly set forth in this Agreement, no party has made any
representation warranty, covenant or agreement.
Section 5.2 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall
be deemed to have been duly given if so given) by hand delivery, cable,
telecopy or mail (registered or certified, postage prepaid, return receipt
requested) to the respective parties hereto addressed as follows:
If to the Company:
000 Xxxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx
Telecopy #: (000) 000-0000
If to Seller:
0000 Xxxxxx Xxxxxx
XxXxxxx, Xxxxxxx 00000
Telecopy #:
Section 5.3 Certain Definitions. As used in this Agreement, (a) the term
"Affiliate" shall have the meaning set forth in Rule 12b-2 under the
Exchange Act and shall include persons who become Affiliates of any person
subsequent to the date hereof; (b) the term "Voting Securities" shall mean
the Company Shares and any other securities of the Company entitled to vote
in the election of directors, or securities convertible into, or exercisable
or exchangeable for, securities of the Company entitled to vote in the
election of directors, whether or not subject to the passage of time or other
contingencies; and (c) the Company and Seller will be referred to herein
individually as a "party" and collectively as "parties."
Section 5.4 Specific Performance. The Company, on the one hand, and
Seller, on the other hand, acknowledge and agree that the other would be
irreparably injured by a breach of this Agreement and that money damages are
an inadequate remedy for an actual or threatened breach of this Agreement.
Accordingly, the parties agree to the granting of specific performance of
this Agreement and injunctive or other equitable relief as a remedy for any
such breach or threatened breach, without proof of actual damages, and
further agree to waive any requirement for the securing or posting of any
bond in connection with any such remedy. Such remedy shall not be deemed to
be the exclusive remedy for a breach of this Agreement, but shall be in
addition to all other remedies available at law or equity.
Section 5.5 No Waiver. Any waiver by any party hereto of a breach of any
provision of this Agreement shall not operate as or be construed to be a
waiver of any other breach of such provision or of any breach of any other
provision of this Agreement. The failure of a party hereto to insist upon
strict adherence to any term of this Agreement on one or more occasions shall
not be considered a waiver or deprive that party of the right thereafter to
insist upon strict adherence to that term or any other term of this
Agreement.
Section 5.6 Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction
or other authority to be invalid or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated by such holding. The parties agree that the court making any
such determination of invalidity or unenforceability shall have the power to
reduce the scope, duration or area of, delete specific words or phrases in,
or replace any such invalid or unenforceable provision with one that is
valid and enforceable and that comes closest to expressing the intention of
such invalid or unenforceable provision, and this Agreement shall be
enforceable as so modified after the expiration of the time within which the
judgment may be appealed.
Section 5.7 Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective
successors and assigns; provided that this Agreement (and any of the rights,
interests or obligations of any party hereunder) may not be assigned by any
party without the prior written consent of the other parties hereto, such
consent not to be unreasonably withheld. Any purported assignment of a
party's rights under this Agreement in violation of the preceding sentence
shall be null and void.
Section 5.8 Entire Agreement; Amendments. This Agreement constitutes the
entire agreement between the parties with respect to the subject matter
hereof and supersedes all other prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter
hereof and, except as expressly set forth herein, is not intended to confer
upon any person other than the parties hereto any rights or remedies
hereunder. This Agreement may be amended only by a written instrument duly
executed by the parties hereto or their respective permitted successors or
assigns.
Section 5.9 Headings. The section headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning
or interpretation of this Agreement.
Section 5.10 Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Delaware,
without giving effect to choice of law principles thereof that would cause
the application of the laws of any other jurisdiction.
Section 5.11 Submission to Jurisdiction. Each of the parties irrevocably
submits to the exclusive jurisdiction and service and venue in any federal
or state court sitting in the State of Delaware for the purposes of any
action, suit or proceeding arising out of or with respect to this Agreement.
Each of the parties irrevocably and unconditionally waives any objections to
the laying of venue of any action, suit or proceeding relating to this
Agreement in any federal or state court sitting in the State of Delaware,
and hereby further irrevocably and unconditionally waives and agrees not to
plead or claim in any such court that any such action, suit or proceeding
brought in any such court has been brought in an inconvenient forum. Each of
the parties hereto hereby irrevocably waives the right to A trial by jury.
Section 5.12 Counterparts; Facsimile. This Agreement may be executed in
counterparts, including by facsimile or PDF electronic transmission, each of
which shall be deemed an original, but all of which together shall constitute
one and the same Agreement.
Section 5.13 Further Assurances. Upon the terms and subject to the
conditions of this Agreement, each of the parties hereto agrees to execute
such additional documents, to use commercially reasonable efforts to take, or
cause to be taken, all actions, and to do, or cause to be done, and to
assist and cooperate with the other parties in doing, all things necessary,
proper or advisable to consummate or make effective, in the most expeditious
manner practicable, the transactions contemplated by this Agreement.
Section 5.14 Interpretation. The parties acknowledge and agree that this
Agreement has been negotiated at arm's length and among parties equally
sophisticated and knowledgeable in the matters covered hereby. Accordingly,
any rule of law or legal decision that would require interpretation of any
ambiguities in this Agreement against the party that has drafted it is not
applicable and is hereby waived.
[SIGNATURE PAGES FOLLOW]IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed as of the day and year first written
above.
P&F INDUSTRIES INC.
By:__________________________
Name:
DWAC Instructions:
Broker
Name:
DTC Number:
Account
Number:
XXXXXXX X. XXXXXXX
EXHIBIT A
Form of Press Release P&F Industries Inc. Announces Stock Repurchase
Agreement
P&F Industries Inc. (Nasdaq: PFIN, the "Company") today announced it has
entered into an agreement whereby the Company will repurchase [257,451] of
its common shares from Xxxxxxx X Xxxxxxx in a privately negotiated
transaction at [$5] per share for a total purchase price of $___________.
Xxxxxxx Xxxxxxxx, Chairman and Chief Executive Officer of the Company,
commented, "This transaction enables us to make attractive use of our
capital to acquire a meaningful block of Company shares at a favorable price.
The repurchase should be immediately accretive to earnings per share."
The repurchase is expected to close in the next several days. Pursuant to
the purchase agreement, Xx. Xxxxxxx will be bound by a three-year standstill
provision.
[P&F tag]
Except for historical information contained herein, statements in the release
are forward-looking statements that are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements involve known and unknown risks and
uncertainties, which may cause the Company's actual results in future periods
to differ materially from forecasted results. Those risks include, but are
not limited to, risks associated with pricing, volume, cash flow guidance,
fluctuations in exchange rates and conditions of markets. Those and other
risks are described in the Company's filings with the Securities and
Exchange Commission (the "SEC") over the last 12 months, copies of which are
available from the SEC or may be obtained from the Company.
