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PURCHASE AND SALE AGREEMENT
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THIS AGREEMENT, Made as of the 27th day of September, 1996,
by and between WELDCO, INC., an Ohio corporation ("SELLER"), and
X.X. XXXXXXX ("RHK"), R. XXXXX XXXXXXX ("RBK"), XXXXXXX XXXX
("WB"), and XXXXX XXXX ("LB") (RHK, RBK, WB and LB are jointly
and severally referred to hereinafter as the "SHAREHOLDERS"),
KRABO, LTD., an Ohio limited liability company the members of
which are certain of the Shareholders ("KRABO") and VALLEY
NATIONAL GASES, INC., a West Virginia corporation ("PURCHASER"),
and WEST RENTALS, INC., a West Virginia corporation ("WEST").
W I T N E S S E T H:
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WHEREAS, Seller is in the business of the sale and
distribution of welding products, industrial gas and liquid
propane ("BUSINESS"); and
WHEREAS, Seller conducts the Business operations primarily
from two (2) sale and distribution sites located at 0000 Xxxxxxx
Xxxxxx, Xxxxxxxxxx, Xxxx ("CINCINNATI LOCATION"), as well located
at 0000 Xxxxxxxx Xxxx, Xxxxxx, Xxxx ("DAYTON LOCATION"); and
WHEREAS, Seller desires to terminate the Business; and
WHEREAS, Krabo is the owner of the real property upon which
the Cincinnati Location and the Dayton Location are situated, and
RBK, WB and LB are the owners of certain gas cylinders used by
Seller in the Business;
WHEREAS, Seller and the Shareholders desire to sell certain
of the Business assets of Seller and certain of the Shareholders
("PURCHASE ASSETS" as specifically set forth in Section 1
hereinafter) to Purchaser and Purchaser wishes to acquire such
Purchase Assets, all in accordance with the provisions hereunder;
and
WHEREAS, Shareholders are all of the shareholders of Seller
and as consideration and inducement for Purchaser to undertake
the agreements and obligations and to execute and deliver this
Agreement, Shareholders hereby execute and deliver this Agreement
to cause Seller's performance hereunder, to convey certain
assets, and also to enter into certain other agreements
individually and/or collectively with Purchaser, as set forth
hereinafter and otherwise part hereof; and
WHEREAS, West is a real estate holding corporation which
enters into and executes this Agreement to purchase from Krabo
the Cincinnati Location real estate and to lease from Krabo the
Dayton Location real estate as provided for hereinafter.
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants and agreements hereinafter set forth, the
parties hereto mutually covenant and agree as follows:
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SECTION 1. SALE OF PURCHASE ASSETS.
Seller, together with RBK, WB and LB with respect to certain
of the Cylinders and Tanks, shall, subject to the terms and
conditions hereof, convey, sell, grant, assign, transfer,
deliver, and set over unto Purchaser at the Purchase Asset
Closing, effective as of the commencement of Weldco's Business on
the Purchase Asset Closing date [See "Section 2 CLOSING"], all
operating assets of Seller's Business ("PURCHASE ASSETS"), except
for those assets expressly excluded by scheduling on Exhibit "A"
attached hereto and incorporated herein by reference ("EXCLUDED
ASSETS"), including, but not limited to, the following described
Purchase Assets:
(a) All high and low pressure gas cylinders and tanks as
well as all propane cylinders and tanks as well as bulk
tanks (collectively "CYLINDERS AND TANKS"), including
at least the number and types listed in Exhibit "B"
attached hereto and by reference made part hereof.
(b) The trucks, vehicles and automotive equipment
(collectively "VEHICLES"') described and identified in
Exhibit "C" attached hereto and by this reference made
a part hereof.
(c) All saleable hardgoods and equipment inventory, gas
resale inventory and resale cylinder inventory
(collectively "INVENTORY").
(d) All Business, office and warehouse equipment, furniture
and fixtures together with all other tangible property
and assets of Seller or the Business (collectively
"EQUIPMENT AND FIXTURES").
(e) All Seller's Business accounts receivable ("ACCOUNTS
RECEIVABLE").
(f) All of Seller's right, title and interest in the
agreements, leases, contracts, other commitments,
licenses and warranties relating to the Business, and
all Business files, records and customer lists as well
as all intangible rights, privileges, general and
special intangible property and goodwill of Seller
relating to the Business, including, but not limited
to, the name WELDCO, Inc. and the Business telephone
and/or telefax numbers ("CONTRACT RIGHTS AND
INTANGIBLES"), excluding, however, the leases for the
Cincinnati and Dayton Locations between Seller and
Krabo and Seller's corporate and stock records, tax
returns and supporting information, Business cash and
bank deposit accounts, all of which are not being
purchased by Purchaser hereunder.
SECTION 2. CLOSING.
The Closing of the sale and purchase of the Purchase Assets,
provided for herein shall take place at the offices of Xxxxxxxx
Xxxx & Xxxxx P.L.L., 000 Xxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxxxxx,
Xxxx 00000-0000, on October 11, 1996, at 10:00 A.M. local time or
at such other
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time and date as agreed upon in writing by the parties hereto (the "PURCHASE
ASSET CLOSING").
SECTION 3. PURCHASE PRICE.
(a) Purchaser shall pay to Seller, together with RBK, WB
and LB in respect to certain of the Cylinders and Tanks, as the
purchase price ("PURCHASE PRICE") for the Purchase Assets
described in Section 1, a sum estimated as of the date of this
Agreement to be Eleven Million Eight Hundred Five Thousand
Dollars ($11,805,000.00) as delineated by component price and
scheduled on Exhibit "D" attached hereto and made part hereof
subject, however, to the following Closing Adjustments and Post
Closing Adjustments, as applicable:
(i) Closing Adjustments. At Purchase Asset
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Closing, in the event Seller is unable to deliver any of the said
Vehicles at closing, free and clear of valid liens and
encumbrances, then the Purchase Price shall be reduced by the
corresponding unit value for such Vehicles as itemized on Exhibit "C".
(ii) Post Closing Adjustment. Within one hundred
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twenty (120) days after the Purchase Asset Closing, the Purchase
Price shall be further adjusted, affixed and determined as
follows:
(A) Prior to Closing, Seller and Purchaser shall
jointly conduct a physical inventory of the
Inventory to determine the amount and value
of Saleable Inventory. The term "Saleable
Inventory" shall be defined for the purposes
of this provision as (1) non shopworn, non
obsolete, non defective inventory items, and
(2) listed for sale in the manufacturer's
current catalog which have been sold by
Seller in the ordinary course of business
within the twelve (12) month period prior to
Purchase Asset Closing date or which have
been sold by Purchaser in the ordinary course
of business within the twelve (12) month
period prior to Purchase Asset Closing date.
The value of all Saleable Inventory shall be
calculated at Seller's average cost, or in
the absence thereof at the manufacturer's
current catalog pricing. In the event, the
value of the Inventory, after the Saleable
Inventory is determined hereunder, is less
than Nine Hundred Ninety-three Thousand
Eighty-six Dollars ($993,086.00), the
Purchase Price shall be reduced as follows:
(I) The dollar amount of any such deficiency up to
Fifty Thousand Dollars ($50,000.00);
(II) The dollar amount of any such deficiency in excess
of Fifty Thousand Dollars ($50,000.00) shall be
offset dollar for dollar by the amount the
Accounts Receivable, at Purchase Asset Closing
date exceeds $1,462,970.00; and,
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(III) The dollar amount of any such deficiency to the
extent the dollar amount of such deficiency
exceeds the sum of Fifty Thousand Dollars
($50,000.00) plus any applicable dollar for dollar
offset with respect to the Accounts Receivable as
provided for next above in Section 3(a)(ii)(A)(II).
Purchaser, in its discretion, may elect to acquire
Inventory which is not Saleable Inventory as
defined hereunder if it has a use for such Inventory
within its systemwide sales and distribution
system; all Inventory that is determined not to be
Saleable Inventory shall be valued as agreed
between Seller and Purchaser; provided that all such
Inventory which is not determined to be Saleable
Inventory and not otherwise purchased hereunder
shall be kept by Seller as its sole property, and
thereafter Seller shall be freely able to
liquidate such non-purchased non-Saleable Inventory
at its discretion without restriction or
limitation.
(B) At Closing, Seller, together with RBK, WB and
LB, hereby agree to transfer to Purchaser at
least Twelve Thousand Seven Hundred Twenty-
five (12,725) Cylinders and Sixteen (16) Bulk
Tanks, with an agreed upon aggregate value of
One Million Eight Hundred Two Thousand Four
Hundred Thirty Dollars ($1,802,430.00).
Within one hundred twenty (120) days after
Purchase Asset Closing and after completion
of the Cylinders and Tanks audit and/or
inventory required by Section 6(b)
hereinafter, the Purchase Price shall be
subject to Post Closing Adjustment to reflect
any deficiency in the number of Cylinders and
Tanks transferred to Purchaser by Seller,
RBK, WB and LB at Purchase Asset Closing
date. In the event that the number of
Cylinders and Tanks is less than Twelve
Thousand Seven Hundred Twenty-five (12,725)
Cylinders and Sixteen (16) Bulk Tanks of the
number and types set forth on Exhibit "B",
then the Purchase Price shall be reduced by
the dollar amount that the value of Cylinders
and Tanks is less than One Million Eight
Hundred Two Thousand Four Hundred Thirty
Dollars ($1,802,430.00); calculated utilizing
the "Negotiated Adjustment Value" set forth
for each respective type of Cylinder and Tank
upon said Exhibit "B".
(C) Seller shall furnish Purchaser a Schedule of
Seller's Accounts Receivable as of Purchase
Asset Closing date, fully itemized as to
customer, amount and account aging history.
After Closing, Purchaser shall first apply
all payments received from each pre-closing
account debtor to the oldest outstanding and
unpaid account invoice for such pre-closing
account debtor. Purchaser shall exert
commercially reasonable efforts to collect
Seller's Accounts Receivable (not to include
the institution of litigation). As of one
hundred twenty (120) days after Purchase
Asset Closing date ("RECEIVABLE ADJUSTMENT
DATE"), Purchaser expects to
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have collected all of the Accounts Receivable purchased
at Closing. In the event that upon the
Receivable Adjustment Date Purchaser has not
collected Seller's accounts receivables in an
amount equal to the aggregate value of the
Closing Date Accounts Receivable, the
Purchase Price shall be reduced by the dollar
amount by which the Accounts Receivable
actually collected by Purchaser is less than
the aggregate value reflected upon Seller's
Schedule of Closing Date Accounts Receivable.
All such Accounts Receivable not collected by
Purchaser, shall, after repayment by Seller
to Purchaser, be assigned and transferred to
Seller; and all such Accounts Receivable
assigned to Seller shall then be and remain
Seller's sole property.
(D) In the event the aggregate amount of Seller's
liabilities assumed by Purchaser pursuant to
Section 11(a) and (b), as of Purchase Asset
Closing date, exceeds One Million Five
Hundred Twenty-one Thousand Dollars
($1,521,000.00), the Purchase Price shall be
reduced by the dollar amount of such excess,
up to a maximum reduction of Two Hundred
Ninety-five Thousand Nine Hundred Eighty-
three Dollars ($295,983.00).
(b) At the Purchase Asset Closing, Purchaser shall pay
Seller the Purchase Asset Purchase Price as follows:
(i) Note I. Purchaser shall deliver to Seller a
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Promissory Note in the principal amount of Four Million Seven
Hundred Eighty-one Thousand Five Hundred Twenty one Dollars
($4,781,521.00), with principal payable in seven (7) annual
installments of Six Hundred Eighty-three Thousand Seventy-four
Dollars and Forty-three Cents ($683,074.43) each, and with
interest accruing on the outstanding principal balance at a fixed
per annum rate of six and six one hundredths percent (6.6%)
("INTEREST RATE"), payable in seven (7) annual installments, both
principal and interest payments to commence one (1) year after
Closing, and shall be thereafter payable on each subsequent
anniversary of the Purchase Asset Closing date for a total of
seven (7) consecutive annual payments ("NOTE I"). Note I shall
be in the form and upon all terms and conditions reflected upon
Exhibit "E" attached hereto and incorporated herein by reference.
Note I shall be secured by Purchaser's grant to Seller of
security interests in certain cryogenic storage vessels and
cylinders owned by Purchaser as part of and reflected in a
Security Agreement in the form attached hereto and incorporated
herein by reference as Exhibit "F"; and,
(ii) Note II. Purchaser shall deliver to Seller a
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Promissory Note in the principal amount of Three Million One
Hundred Five Thousand Two Hundred Dollars ($3,105,200.00), with
principal payable in seven (7) annual installments of Four
Hundred Fortythree Thousand Six Hundred Dollars ($443,600.00)
each, and with interest accruing on the outstanding principal
balance at the Interest Rate, payable in seven (7) annual
installments, both principal and interest payments to commence
one (1) year after Closing, and shall be thereafter
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payable on each subsequent anniversary of the Purchase Asset Closing date
for a total of seven (7) consecutive annual payments ("NOTE II").
Note II shall be in the form and upon all terms and conditions
reflected upon Exhibit "G" attached hereto and incorporated
herein by reference. Note II shall be secured by an irrevocable,
reducing balance Letter of Credit issued by Bank One, N.A.,
substantially in the form attached hereto and incorporated herein
by reference as Exhibit "H"; and,
(iii) Closing Cash Payment. Cash funds or cash
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equivalents in an amount equal to the Closing Date Purchase
Price, as adjusted and determined pursuant to Section 3(a) and
all subsections thereof, less Seven Million Eight Hundred Eighty-
six Thousand Seven Hundred Twenty-one Dollars ($7,886,721.00)
which is the aggregate combined Purchase Price value of Note I
and Note II to be delivered by Purchaser to Seller as provided
for in subsections (i) and (ii) of this Section 3(b).
(c) One Hundred Twenty (120) days after Purchase Asset
Closing date, Seller shall pay Purchaser by Seller's check an
amount equal to any applicable Post Closing Adjustment to the
Purchase Price pursuant to Section 3(a)(ii)(A), Section
3(a)(ii)(B), Section 3(a)(ii)C) and/or Section 3(a)(ii)(D);
provided that any disputes between Purchaser and Seller, if not
mutually resolved, shall be resolved pursuant to Section 13
hereof.
SECTION 4. EXPENSES AND TAXES. Each party hereto shall pay
its, his or her own expenses incident to this Agreement and the
transactions contemplated hereby. All applicable excise, sales,
transfer, documentary and similar taxes, if any, that may be
imposed upon or payable or collectible by Purchaser or Seller in
connection with the Purchase Assets described in Section 1(a) or
otherwise imposed upon, arising out of, or payable on account of
the sales, assignments, transfers, and deliveries of the Purchase
Assets to be made by Purchaser and/or Seller hereunder shall be
paid by Seller or Purchaser as customary in similar asset
purchase and sale transactions in the State of Ohio. Regardless
of the relevant lien date, real and personal property taxes for
the current tax year applicable to the Purchase Assets being
purchased hereunder shall be apportioned between Seller and the
Purchaser as of the Purchase Asset Closing date; Seller bearing
such portion as is allocable to that part of the current tax year
ending on the Purchase Asset Closing date and the Purchaser
bearing the remaining portion of such year. Purchaser and Seller
shall promptly reimburse the other party upon receipt of proof of
payment of personal property taxes by such other party for which
the reimbursing party was liable in accordance with the
immediately preceding sentence.
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SECTION 5. INSTRUMENTS OF CONVEYANCE.
Pursuant to the terms and conditions hereof, Seller,
together with RBK, WB and LB in respect of certain of the
Cylinders and Tanks, shall at the Purchase Asset Closing convey,
sell, transfer, and assign to Purchaser by means of a Xxxx of
Sale and Assignment executed and delivered to Purchaser or its
designee, the Purchase Assets described in Section 1 and all
subsections thereof. Said Xxxx of Sale and Assignment, with
warranty of title, shall be in the form of Exhibit "I", attached
hereto and by this reference made a part hereof.
SECTION 6. INVENTORY OF PURCHASE ASSETS.
(a) As of the Purchase Asset Closing date, Seller and
Purchaser shall have jointly, conducted physical inventories of
(i) Vehicles and (ii) Inventory. The Vehicle inventory shall be
concluded and agreed upon by Seller and Purchaser prior to
Closing and utilized for any necessary adjustment to Purchase
Price pursuant to Section 3(a)(i) hereinabove. The Inventory
inventory shall be conducted prior to closing and within ninety
(90) days thereafter, agreed upon by Seller and Purchaser, and,
when agreed upon, shall be utilized for any necessary adjustment
to the Purchase price pursuant to Section 3(a)(ii)(A)
hereinabove.
(b) Within ninety (90) days after the Purchase Asset
Closing date, Seller and Purchaser shall have jointly conducted
(i) a book examination of the Cylinder and Tank records and/or
(ii) a physical inventory of the Cylinders and Tanks, as required
by Purchaser in its sole discretion, to determine that Seller has
at least the number and types of Cylinders and Tanks set forth in
Section 1(a)(i) and Section 3(a)(ii)(B) hereinabove; which
examination and/or inventory shall be agreed upon by Purchaser
and Seller and utilized for any necessary reduction and
adjustment to Purchase Price pursuant to Section 3(a)(ii)(A)
hereinabove.
SECTION 7. BULK SALES LAW, WAIVER AND INDEMNITY. Purchaser
hereby waives compliance by Seller with any Bulk Transfer
provisions of the Uniform Commercial Code of any applicable
state. Seller agrees to indemnify Purchaser against as well as
hold Purchaser harmless from any costs, expenses (including all
legal expenses and attorney's fees), losses, claims, damages, and
liabilities arising out of the failure of Seller to comply with
any such bulk sales law with respect to any of the Purchase
Assets.
SECTION 8. WARRANTIES AND REPRESENTATIONS OF SELLER AND
SHAREHOLDERS. Seller and Shareholders represent and warrant to
Purchaser as of the date hereof and as of the Purchase Asset
Closing date as follows:
(a) Organization, Standing and Qualification.
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Seller is a duly organized, validly existing corporation which is
in good standing under the laws of the State of Ohio; is duly
licensed, qualified to do business, and in good standing in each
jurisdiction in which the ownership and operation of its business
requires such licensing or qualification except where the failure
to be so licensed or qualified would not have a material adverse
effect on Seller, the Purchase Assets or the Business; and has
full corporate power and authority, and, to its
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knowledge, has all permits, consents and authorizations, necessary to own and
lease its properties and to carry on its business as now conducted.
(b) No Breach. The execution and delivery of this
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Agreement by Seller and the consummation by Seller of the
transactions contemplated hereby will not (i) violate any
provision of, or result in the breach or termination of, or
accelerate or permit the acceleration of the performance required
by, the terms of: (A) the Articles of Incorporation or Bylaws of
Seller; (B) any agreement to which Seller is a party or by which
it is bound, other than as set forth on Exhibit "J" attached
hereto and incorporated herein by reference and the breach of
which shall not, in any event, materially affect the purchase and
sale transactions hereunder; or (C) any order, judgment, or
decree applicable to Seller; (ii) result in the creation of any
claim, lien, charge or encumbrance upon the Purchase Assets or
(iii) in any way affect or violate the terms or conditions of, or
result in the cancellation, modification, revocation, or
suspension of, any of the licenses, franchises, approvals,
certificates, permits, or authorizations held by Seller.
(c) Title to Assets. Seller has or as of the
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Purchase Asset Closing date shall have good and marketable title
to the Purchase Assets, free and clear of restrictions on, or
conditions to, transfer or assignment, and of mortgages, liens,
pledges, charges, encumbrances, security interests, equities,
claims, limiting covenants or conditions.
(d) Financial Statements. True and correct copies
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of balance sheets as well as copies of operating and revenue
statements for Seller with all notes and supplementary
information as of December 31, 1993, December 31, 1994, and
December 31, 1995; and as well for the seven (7) month period
ended July 31, 1996 (provided, however, that the Financial
Statements for the seven (7) month period ended July 31, 1996
does not include notes and supplementary information otherwise
required hereunder) shall, individually and collectively,
constitute the "FINANCIAL STATEMENTS"; all of which Financial
Statements are attached hereto and incorporated herein by
reference as Exhibit "K". The Financial Statements including the
notes thereto: are and will be (1) prepared in accordance with
the books and records of Seller; and (2) are and will be in all
material respects correct and present fairly the financial
condition of Seller at the dates of such Financial Statements and
its results of operations for the respective period then ending;
and (3) all Financial Statements shall have been prepared in
accordance with Generally Accepted Accounting Principles
("GAAP"), consistently applied with prior period (provided,
however, that the Financial Statements for the seven (7) month
period ended July 31, 1996 indicates a negative cash balance of
Two Hundred Ninety-five Thousand Nine Hundred Eighty-three
Dollars ($295,983.00) and does not include notes and
supplementary information otherwise required hereunder).
(e) Taxes, Tax Returns, and Audits. Seller has
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filed all returns with respect to all taxes arising out of or
related to Seller and the Business whether on income, sales, use,
goods and services, payroll, real or personal property or with
respect to any other taxes, Federal, State or local, which are
required by law to be filed on or before the Closing Date ("TAX
RETURNS") and all Tax Returns are correct and complete in all
material respects insofar as they relate to the operations of
Seller. Seller has paid all taxes and duties as shown in the Tax
Returns to the extent such taxes are payable or have become due
on or before the Closing Date,
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and has paid all assessments which it is obligated to pay. There are no
currently outstanding assessments or reassessments for any taxes, interest or
relating to the Tax Returns. Seller is not liable for any taxes,
levies, duties, assessments, charges, penalties, interest, fines
or other taxes of any nature due and unpaid at the date hereof in
respect of the Business or for the payment of any tax installment
due in respect of its current taxation year, except as reflected
in or reserved upon the July 31, 1996 Financial Statements.
Seller shall have full responsibility and liability with respect
to the payment of any claims against Seller for taxes payable
with respect to all periods prior to the Closing Date by Seller
and all interest penalties in respect thereof (whether or not now
asserted or determined). True and correct copies of all Seller's
federal and state tax returns for its 1993, 1994 and 1995 fiscal
and tax years shall have been furnished Purchaser prior to
Purchase Asset Closing date.
(f) No Third Party Rights or Options. As of
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Purchase Asset Closing date, there will be no outstanding rights
or options in any third party to acquire any of the Purchase
Assets or any interest therein.
(g) Litigation. There are no actions, suits,
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proceedings or investigations ("LITIGATION"), pending or, to
Seller's knowledge, threatened, in any court or before any
governmental agency or instrumentality against the Business or
any of the Purchase Assets, or which would prevent Seller and/or
Shareholders from carrying out the transactions contemplated
hereby or would declare the same unlawful or cause the recision
thereof.
(h) Absence of Adverse Changes or Other Events.
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Except as expressly contemplated by and stated in this
Agreement, after the date of this Agreement and up to Purchase
Asset Closing date, Seller will operate the Business in the
ordinary course, except as provided for herein; specifically,
Seller will not without the prior consent of Purchaser:
(A) Create or incur any liability (absolute or
contingent), except for unsecured current
liabilities under oral or written contracts
entered into in the ordinary course of business;
(B) Loan any money or otherwise pledge the credit of
Seller or mortgage, pledge or subject its assets
to any tangible or intangible lien or encumbrance;
(C) Except as otherwise expressly contemplated by this
Agreement, sell or otherwise dispose of, or
contract to sell or dispose of, any of the
Purchase Assets; or cancel any debts owed it or
claims held by it against any third party, except,
in each case, in the ordinary course of business;
(D) Except in the ordinary course of its business make
or become a party to any contract or commitment,
or renew, extend, amend or modify any contract or
commitment, to be assumed or purchased by
Purchaser which in any one case involves an amount
in excess of One Thousand Dollars ($1,000.00) or a
term in excess of thirty (30) days;
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(E) Pay or agree to pay, conditionally or otherwise,
any bonus, extra compensation, or severance pay to
any director, officer, or employee, not required
under this Agreement or any existing agreement
disclosed to Purchaser prior to the date of this
Agreement, or increase the compensation, including
salaries, fees, commissions, bonuses, profit
sharing, incentive, pension, retirement, or other
similar payments paid to any of its directors,
officers, or employees;
(F) Become bound by or enter into any contract,
commitment, or transaction, other than in the
ordinary course of business or except as
contemplated by this Agreement;
(G) Make or become a party to any contract or
otherwise enter into any transaction with
Shareholders or any other related party other than
in the ordinary course of business except as
contemplated by this Agreement;
(H) Purchase any fixed asset or multiple fixed assets
from a single vendor or supplier with an aggregate
cost exceeding Five Thousand Dollars ($5,000.00);
or,
(I) Enter into any contract or agreement to do or
perform any of the foregoing actions.
(i) No Employees to Leave Employment with Seller.
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As of the date of this Agreement, no employee of Seller has
furnished written notice to Seller that he or she intends to
leave employment of Seller, and Seller has no knowledge or
information, directly or indirectly, that any such employee
intends to leave the employment of Seller. After the date of
this Agreement and prior to the Purchase Asset Closing date,
Seller shall promptly furnish Purchaser notice of any employee
who indicates to Seller that he or she intends to leave the
employment of Seller.
(j) No Union, Employee Collective Bargaining Unit or
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Organizing Activity. Seller is not signatory to any collective
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agreement or member of any bargaining unit; and Seller is not, to
its knowledge, currently subject to any present labor collective
process or organizing efforts by any union or other collective
bargaining representative. Seller has no knowledge that any
union or collective bargaining unit is threatening to organize
Seller's employees to form a union or collective bargaining unit.
(k) Accuracy of Information. Copies of all
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documents furnished by, or on behalf of, Seller to Purchaser
pursuant to the terms of this Agreement are complete and accurate
in all material respects. To Seller's knowledge and belief, no
statement or certificate furnished to Purchaser by Seller
pursuant to the terms of this Agreement contains or will contain
any untrue statement of a material fact.
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(l) No Brokerage Fees. No broker or finder has
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acted for Seller in connection with this Agreement or the
transactions contemplated hereby, and no broker or finder is
entitled to any brokerage or finder's fee or other commission in
respect of such transactions based in any way on agreements,
arrangements or understandings made by or on behalf of Seller.
SECTION 9. WARRANTIES AND REPRESENTATIONS OF PURCHASER AND
WEST. Purchaser and West represent and warrant to Seller as of
the date hereof and as of the Purchase Asset Closing date as
follows:
(a) Organization, Standing and Qualification.
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Purchaser and West each is a duly organized, validly existing
corporation which is in good standing under the laws of the State
of West Virginia; is duly licensed, qualified to do business, and
in good standing in each jurisdiction in which the ownership and
operation of its business requires such licensing or
qualification, except where the failure to be so licensed or
qualified would not have a material adverse effect on the
property or assets, or the business of, Purchaser or West; and
has full corporate power and authority, and, to its knowledge,
has all permits, consents and authorizations, necessary to own
and lease its properties and to carry on its business as now
conducted.
(b) No Breach. The execution and delivery of this
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Agreement by Purchaser and West, and the consummation by
Purchaser and West of the transactions contemplated hereby will
not (i) violate any provisions of, or result in the breach or
termination of, or accelerate or permit the acceleration of the
performance required by, the terms of: (A) the Articles of
Incorporation, or By-Laws of Purchaser or West; (B) any agreement
to which Purchaser or West is a party or by which either is
bound; or (C) any order, judgment, or decree applicable to
Purchaser or West; (ii) result in the creation of any claim,
lien, charge or encumbrance upon any property or assets of
Purchaser or West; or (iii) in any way affect or violate the
terms or conditions of, or result in the cancellation,
modification, revocation, or suspension of, any of the licenses,
franchises, approvals, certificates, permits, or authorizations
held by Purchaser or West.
(c) Authority: Enforceability. Each of Purchaser
-------------------------
and West has all requisite corporate power and authority to enter
into this Agreement and to consummate the transactions
contemplated hereby. This Agreement and each other agreement
herein contemplated to be executed in connection herewith by
Purchaser or West have been duly executed and delivered by
Purchaser or West, as the case may be, and constitute legal,
valid and binding obligations of Purchaser or West, as the case
may be, enforceable against Purchaser or West, as the case may
be, in accordance with their respective terms.
(d) Litigation. There are no actions, suits,
----------
proceedings or investigations pending or, to Purchaser's
knowledge, threatened, in any court or before any governmental
agency or instrumentality against any of the property or assets
of Purchaser or West, or which would prevent Purchaser or West
from carrying out the transactions contemplated hereby or would
declare the same unlawful or cause the recision thereof.
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(e) Accuracy of Information. Copies of all
-----------------------
documents furnished by, or on behalf of, Purchaser or West to
Seller pursuant to the terms of this Agreement are complete and
accurate in all material respects. To Purchaser's knowledge and
belief, no statement or certificate furnished to Seller by
Purchaser or West pursuant to the terms of this Agreement
contains or will contain any untrue statement of a material fact.
(f) No Brokerage Fees. Except for ADE Vantage,
-----------------
Inc. and/or Xxxxxxx X. Indelicito, consultant to Purchaser, no
broker or finder has acted for Purchaser or West in connection
with this Agreement or the transactions contemplated hereby, and
no broker or finder is entitled to any brokerage or finder's fee
or other commission in respect of such transactions based in any
way on agreements, arrangements or understandings made by or on
behalf of Purchaser or West. Purchaser shall pay all fees and
expenses of ADE Vantage, Inc. and Mr. Indelicito.
SECTION 10. INDEMNIFICATION.
(a) Indemnification by Seller and the Shareholders.
----------------------------------------------
Seller and the Shareholders, jointly and severally, agree to defend, indemnify
and hold Purchaser, its successors and assigns, harmless from and against any
claim, liability, expense, loss or other damage ("CLAIMS") (including,
without limitation, attorneys' fees md expenses) in respect of:
(i) Any and all Claims resulting from or arising out
of Seller's possession, control and/or utilization of the
Purchase Assets prior to Purchase Asset Closing date.
(ii) Any and all Claims resulting from any
misrepresentation or breach of warranty or violation of any
covenant made by Seller hereunder, or in any Schedule or other
instrument or document furnished or to be furnished by Seller
hereunder, including, without limitation, any documents furnished
at the Closing.
(iii) Any and all Claims in respect of any liabilities
of Seller as of the Purchase Asset Closing date (except those liabilities
provided for or otherwise disclosed in Seller's July 31, 1996 Financial
Statements or incurred by Seller in the ordinary course of the
Business from July 31, 1996 through the Purchase Asset Closing
date, all of which liabilities are affirmatively assumed by
Purchaser pursuant to Section 11).
(iv) Any and all Claims in respect of Seller's federal,
state or local taxes, incurred in the Business prior to Purchase
Asset Closing date, including but not limited to income taxes
based upon or measured by income or any gain or sales or transfer
taxes, or which may be asserted against Purchaser or the Purchase
Assets as a result of any operations of Seller or the Business
whether such taxes be trust fund or employment taxes or taxes
based on property, income, gain or otherwise.
(v) Any and all Claims with respect to any and all
plans, policies, labor contracts or arrangements relating to
commissions, bonuses, group insurance, severance pay, pensions,
profit sharing, any deferred compensation arrangements or health
and welfare or other benefit plans for employees of Seller or
otherwise arising out of or related to Seller's operation
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of the Business prior to the Purchase Asset Closing date, including, but
not limited to, any liability imposed under the provisions of the
Employee Retirement Income Security Act of l974, Multiemployer
Pension Plan Amendment Acts of 1980, the Consolidated Omnibus
Budget Reconciliation Act of 1985 or the Omnibus Budget
Reconciliation Act of 1987 as well as any other federal or state
law or regulation.
(vi) Any and all Claims arising out of a violation of
any federal or state law or regulation, including, but not
limited to, outstanding grievance, arbitration award, NLRB unfair
labor practice charge, OSHA citation, EEOC charge, Fair Labor
Standards Act charge, Americans with Disabilities Act charge,
Family and Medical Leave Act charge, Immigration Reform and
Control Act charge, or Civil Rights Restoration Act charge,
compliance review, consent decree, conciliation agreement,
benefit claim, wage and hour complaint, and any litigation
involving any personnel practices or policies of Seller with
respect to any employment relationship, attributable to Seller's
operations of the Business prior to the Purchase Asset Closing
date.
(vii) Any and all Claims which are asserted by any
governmental or regulatory authority for any penalties or other
obligations attributable to the Purchase Assets or the Business,
provided that the basis for such Claims existed prior to the
Closing. Said "other obligations" shall include, but are not
limited to, any violation by Seller prior to the Closing in
connection with the Business of any applicable federal, state or
local environmental or health and safety statute, regulation,
ordinance, or code or other governmental requirement, including,
but not limited to, regulations establishing environmental or
health and safety quality criteria or standards for air, water or
land.
(viii) Any and all Claims asserted by third parties,
including Claims arising from Purchaser's affirmative legal duty
to furnish notice to third parties, including governmental
entities, and/or of remediation, arising from or out of any
Hazardous Materials, as hereinafter defined, spilled, released,
discharged or disposed of by Seller, or arising out of Seller's
operation of the Business prior to the Closing, including without
limitation: (A) cost of investigation, removal, restoration or
any other remedial work done in connection with any Hazardous
Materials spilled, released, discharged or disposed of by Seller
or arising out of Seller's operation of the Business prior to the
Closing; (B) costs incurred to correct a violation of any
applicable Environmental Law as hereinafter defined, arising out
of or resulting from Seller's operation of the Business prior to
the Closing; and (C) costs incurred as a result of being named a
responsible party under the Comprehensive Environmental Response,
Compensations and Liability Act of 1980 ("CERCLA") as amended by
the Superfund Amendment and Reauthorization Act of 1986 ("XXXX").
The term "Hazardous Materials" ("HAZARDOUS MATERIALS") shall mean
any hazardous or toxic material, waste or substances now
identified as hazardous or toxic by CERCLA, XXXX, the Resource
Conservation and Recovery ACT ("RCRA"), the Toxic Substances
Control Act ("TSCA") or any other now existing Environmental Law
promulgated by the Federal government or any state, local, or
other governmental authority (collectively or individually
"ENVIRONMENTAL LAW") with jurisdiction over Seller's operation
of the Business.
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(ix) Any and all Claims for defective products or
unsatisfactory services furnished to Seller's customers in the
Business prior to the Purchase Asset Closing date.
(x) Any and all actions, suits, proceedings, claims,
demands, assessments, judgments, costs and expenses incident to any item to
which the foregoing indemnify relates.
(b) Indemnification by Purchaser. Purchaser
----------------------------
agrees to defend, indemnify and hold Seller and Shareholders and their
respective successors and assigns, harmless from and against
any claim, liability, expenses, loss or damage ("CLAIMS")
(including, without limitation, reasonable attorneys' fees and
expenses) in respect of:
(i) Any and all Claims resulting from or arising out
of Purchaser's possession, control and/or utilization of the
Purchase Assets after Purchase Asset Closing date.
(ii) Any and all Claims resulting from any misrepresentation or
breach of warranty or violation of any covenant made by Purchaser
hereunder, or in any document furnished or to be furnished by Purchaser
hereunder, including, without limitation, any documents or instruments
furnished at the Closing.
(iii) Any and all Claims in respect of any liabilities,
obligations, contracts, commitments and other undertakings of
Seller assumed by Purchaser pursuant to Section 11 hereof or
otherwise herein.
(iv) Any and all Claims resulting from or arising out
of: (A) costs to remediate contamination caused or exacerbated by
Purchaser's performance of Phase I, Phase II or any other
environmental investigations relating to the Dayton and
Cincinnati Locations; (B) costs to return the Cincinnati or
Dayton Locations to the conditions existing prior to the
investigations by Purchaser's performance of Xxxxx 0, Xxxxx II or
any other environmental investigations relating to the Dayton and
Cincinnati Locations; or (C) any property damage or personal
injury resulting from Purchaser's performance of Phase I, Phase
II or any other environmental investigations relating to the
Dayton and Cincinnati Locations.
(v) Any and all actions, suits, proceedings, claims,
demands, assessments judgments, costs and expenses incident to
any item to which the foregoing indemnity relates.
(c) Determination of Loss. Indemnification
----------------------
pursuant to this Section 10 shall be payable with respect to
Claims described herein as subject to indemnification upon the
happening of the earlier of the following:
(i) Resolution of Claims by mutual agreement between
Seller and Purchaser; or,
(ii) The issuance of a final award, order or other
ruling by an arbitrator, pursuant to Section 13 hereof.
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(d) Indemnification Payments. All amounts payable
------------------------
to one party to the other pursuant to the provisions of this
Section 10 shall be payable within ten (10) days after final
determination thereof in accordance with the provisions hereof.
(e) Limitations on Indemnification.
-------------------------------
(i) Any amounts which any party hereto may be
obligated to pay another party hereto pursuant to Section 10(d)
will be reduced by an amount equal to: (a) the tax benefit, if
any, realized as a result of such losses (for purposes of
determining the "tax benefit", if any, the reasonable joint
determination by Purchaser's and Seller's outside accountants
will be binding and conclusive as to all parties hereto); and (b)
any insurance recovery with respect to such losses received by
the indemnified party.
(ii) Neither Purchaser nor Seller and Shareholders
shall assert any Claims for indemnification pursuant to this
Section 10 unless and until the aggregate amount of all Claims
for indemnification asserted by such party exceeds Fifty Thousand
Dollars ($50,000.00) in the aggregate, and upon such event and at
such time the applicable indemnifying party or parties shall be
responsible for and obligated to pay one hundred percent (100%)
of all Claims in excess of Twenty-five Thousand Dollars
($25,000.00) in the aggregate.
(iii) Purchaser shall not assert Claims against Seller
or the Shareholders which aggregate more than the Purchase Price,
as specified and adjusted pursuant to Section 3(a) hereof.
(iv) Except for Claims pursuant to Section 10(a)(ii)
hereof for breach of Seller and Shareholder's Warranties and
Representations under Section 8(c) which shall not be limited as
to time, the right of indemnification afforded to Purchaser,
Seller and the Shareholders pursuant to this Section 10 shall be
available for the following periods of time:
(A) With respect to any Claim asserted under Section
10(a)(ii), (except for Section 8(c)
Representations and Warranties aforesaid),
and/or under Section 10(b)(ii), a period of
eighteen (18) months from and after the Asset
Purchase Closing date.
(B) With respect to any and all other Claims asserted
under Section 10(a) or Section 10(b), for a period
of three (3) years from and after the Purchase
Asset Closing date.
(C) Notwithstanding anything herein to the contrary,
any specific Claim or action of which specific
written notice is given to the party which has the
indemnification obligation prior to the date on
which such right of indemnification otherwise
terminates as provided in this Section 10(e)(iv)
may continue to be asserted and shall be
indemnified against pursuant to this Section 10.
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(f) Notification and Duty of Indemnifying Parties.
---------------------------------------------
Purchaser or Seller and the Shareholders, as the case may be,
will promptly notify the other of the existence or occurrence of
any facts or events which give rise to the assertion of any Claim
under the provisions of this Section 10. If such Claims are due
to the claims of third parties, the indemnifying parties shall
promptly and diligently take such actions as may be reasonably
required to defend or settle such claims and shall keep the indemnified
parties advised of the current status thereof. The indemnified parties shall,
at the indemnifying parties' expense, reasonably cooperate with the
indemnifying parties' defense and the indemnifying parties shall
reasonably consider the indemnified parties' advice.
SECTION 11. PURCHASER TO ASSUME AND SUCCEED TO CERTAIN OF
SELLER'S LIABILITIES. As of the Purchase Asset Closing date,
Purchaser shall assume or discharge at Purchaser's sole cost and
expense, and succeed to Seller's liabilities (a) as disclosed and
reflected upon Seller's July 31, 1996 Financial Statement
disclosed to Purchaser to be One Million Five Hundred Twenty-one
Thousand Dollars ($1,521,000.00) to the extent not discharged or
otherwise extinguished prior to the Purchase Asset Closing date,
(b) incurred in Seller's operation of the Business in its
ordinary course after July 31, 1996 up to the Purchase Asset
Closing date, and (c) as identified on Exhibit "L" attached
hereto and incorporated herein by reference ("ASSUMED
LIABILITIES").
SECTION 12. ADDITIONAL MATERIAL CONSIDERATION.
(a) X.X. Xxxxxxx and Purchaser will execute and
deliver to the other the Consultation, Agreement in form and upon
all terms and conditions as set forth on Exhibit "M" attached
hereto and incorporated herein by reference ("R.H. CONSULTATION
AGREEMENT").
(b) R. Xxxxx Xxxxxxx and Purchaser will execute and
deliver to the other the Consultation Agreement in form and upon
all terms and conditions as set forth on Exhibit "N" attached
hereto and incorporated herein by reference ("R.B. CONSULTATION
AGREEMENT").
(c) Xxxxxxx Xxxx and Purchaser will execute and
deliver to the other the Consultation Agreement in form and upon
all terms and conditions as set forth on Exhibit "O" attached
hereto, and incorporated herein by reference ("W.B. CONSULTATION
AGREEMENT").
(d) At Purchase Asset Closing, West shall enter into a
lease with Krabo for the real estate and improvement comprising the Dayton
Location, in the form and upon all terms and conditions as set forth on
Exhibit "P" attached hereto and incorporated herein by reference.
(e) At the Purchase asset Closing, West shall lease
from Krabo the real estate and improvements comprising the
Cincinnati location ("REAL ESTATE") until October 31 upon all
terms and conditions which Weldco currently leases the Cincinnati
Location from Krabo. On the 31st day of October, 1996, or such later date in
the event the real estate closing and transfer is postponed as provided
hereinafter, Krabo shall sell to West and West shall purchase
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from Krabo the real estate and improvements comprising the
Cincinnati Location in accordance with all terms and conditions
set forth in the Real Estate Purchase Agreement ("REAL ESTATE
PURCHASE AGREEMENT") attached hereto and incorporated herein by
reference as Exhibit "Q"; provided, however, that such date of
transfer may be postponed for up to ninety (90) days; in the
event that Seller has not, as of October 31, 1996, completed any
action it has agreed to undertake in respect of remediation of an
Impairment (as hereinafter defined). Prior to Purchase Asset
Closing date, West shall have the right and privilege to conduct,
at its sole cost and expense, such environmental investigation,
as it deems necessary with respect to the Real Estate; and in the
event the findings, results and reports arising out of such
environmental investigations disclose environmental contamination
and/or impairment ("IMPAIRMENT"), Krabo and West shall have the
following rights and obligations as to the Real Estate:
(i) In the event the estimated cost to remediate such
Impairment, as determined by bonafide third party estimates and
bids, is Fifty Thousand Dollars ($50,000.00) or less, Krabo shall
remediate same, at its sole cost and expense.
(ii) In the event the estimated costs to remediate such
Impairment exceeds Fifty Thousand Dollars ($50,000.00) and West
decides not to purchase the Real Estate in accordance with all of
the terms and conditions set forth in the Real Estate Purchase
Agreement, Krabo may elect either (A) to terminate the Real Estate
purchase and sale transaction subject hereof and not proceed under
the Real Estate Purchase Agreement, or alternatively (B) to remedy
the Impairment at its sole cost and expense and conclude the Real
Estate purchase and sale transaction in accordance with the Real
Estate Purchase Agreement. In the event Krabo elects to
terminate the Real Estate purchase and sale transaction, Krabo
and West shall enter into a five (5) year Lease for fair market
rental value for the Real Estate and substantially upon the terms
and conditions as the Lease attached hereto is Exhibit "P", with
such modifications as are requested by Krabo based on the fact
that such Lease is for a facility occupied by multiple tenants
and the Real Estate will be occupied by a single tenant.
(f) (i) Seller and Purchaser acknowledge that
Purchaser intends, in the near future, to sell approximately
thirty-five percent (35%) to forty-five percent (45%) of its
common stock through an initial public offering ("IPO") as newly
issued shares ("NEW STOCK"); and in that regard Seller or the
Shareholders, as successors to the assets and interests of Seller
after Closing in the event of dissolution or liquidation of
Seller, shall for a period of three (3) years after Purchase
Asset Closing date have the right and option to acquire,
immediately prior to any such IPO occurring during the three (3)
year period, New Stock with an aggregate value of up to twenty
percent (20%) of the sum of (A) One Million Dollars
($1,000,000.00), plus (B) the final aggregate Purchase Price as
determined and affixed, after all required adjustments pursuant
to Section 3(a) hereinbefore, plus (C) the value of the Assumed
Liabilities as defined in Section 11(a) and (b). Purchaser shall
furnish Seller or the Shareholders as successors in interest to
Seller, as the case may be, written notice of the impending IPO
as soon as reasonably possible after the formalization of the
IPO; and Seller or the Shareholders, as applicable at that time,
shall furnish Purchaser written notice of the election to
exercise, the IPO/New Stock purchase option rights hereunder
within fourteen (14) days after receipt of such notice. Such
notice from Purchaser shall advise Seller or the Shareholders, as
applicable, how much of the New Stock
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shall be publicly tradeable upon receipt without restriction and/or how much
of the New Stock shall be restricted and limited as to free and unrestricted
marketability. Purchaser shall exert its best efforts with the
underwriter of the IPO to assure, to the maximum extent possible
within underwriter's discretion and control, that the New Stock
issued is publicly tradeable without restriction or limitation.
Purchaser and Seller agree that as soon as reasonably possible,
but no later than fourteen (14) days after the IPO becomes
effective in the public markets, that the number of shares of New
Stock issued to Seller or the Shareholders, as applicable
hereunder, shall be increased or decreased, as and if necessary,
so that New Stock issued and acquired hereunder equals the value
of the New Stock calculated at the IPO New Stock offering price.
Payment for New Stock acquired hereunder shall be made to
Purchaser at date of issuance of New Stock to Seller or the
Shareholders, as applicable as follows:
(A) By reduction (and extinguishment, if necessary) of
the outstanding principal balance and accrued interest due Seller from
Purchaser as of the New Stock acquisition date under Note II issued pursuant
to Section 3(b)(ii) hereinabove in an amount equal to the value of the New
Stock acquired; and, if necessary,
(B) By reduction of the outstanding principal balance
and accrued interest due Seller from Purchaser as of the New
Stock acquisition date under Note I issued pursuant to
Section 3(b)(i) hereinabove in an amount equal to the value of
the New Stock acquired less the value of the Note II principal
and accrued interest as of the New Stock acquisition date.
(ii) For and during a period of three (3) years
following the New Stock acquisition date, if Seller or the
Shareholders so desires, Purchaser will repurchase from Seller or
the Shareholders, all New Stock acquired hereunder, at a price
equal to the aggregate price paid for the New Stock acquired
hereunder, together with interest for the three (3) year period
at the Interest Rate; Purchaser's obligation hereunder shall be
secured by an irrevocable letter of credit issued by Bank One,
N.A., as addressed in the form of a Letter of Assurance in the
form attached hereto and incorporated herein by reference as
Exhibit "R". Purchaser shall cause the Letter of Assurance to be
delivered by Bank One, N.A. to Seller prior to Purchase Asset
Closing. For the purposes of this Section 12(f) and the option
rights granted hereunder, the term "Shareholders" shall be deemed
to include not only RHK, RBK, WB and LB, but also their spouses,
lineal decedents and any trust with respect to which the
beneficial interest is solely held by or inures to the benefit of
RHK, RBK, WB and LB and/or their spouses or lineal decedents.
(iii) Upon the issuance, of New Stock and reduction (and
extinguishment, if necessary) of Note II as provided for
hereinabove, the original Letter of Credit, Exhibit "H" to this
Agreement, the parties shall cause the Letter of Credit to be
amended or surrendered as necessary to reflect such reduction or
extinguishment thereof so that the security provided therefore is
reduced by a dollar amount equal to such reduction or
extinguishment.
(iv) During the period in which Seller or the
Shareholders shall continue to have the right and option to
acquire New Stock, Seller shall maintain availability under its
Letter of Credit Facility with Bank One, Indianapolis, National
Association, in an amount not less than Seller's maximum
repurchase obligation specified in Section 12(f)(ii) of this
Agreement.
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(v) In the event that Seller or the Shareholders
exercise its or their option to acquire New Stock and thereafter Purchaser's
IPO is terminated or otherwise abandoned, Purchaser shall repurchase all of
the New Stock owned by Seller or the Shareholders and shall pay for such
stock by reissuing Note II according to its original terms and
reinstating the Letter of Credit which originally represented the
security therefor.
(g) Seller and the Shareholders covenant, warrant and
agree that Purchaser shall have the right of setoff against any
and all sums owing Seller and the Shareholders, or any of them,
under the terms of the Consultation Agreements to satisfy amounts
due and owing Purchaser for payment of post-closing Purchase
Price adjustments due and not timely paid under Section
hereinabove, and/or for any and all Claims of Purchaser pursuant
to Section 10 hereof as long as each such Claim has been
determined pursuant to Section 10(c) and not timely paid to
Purchaser pursuant to Section 10(d) hereof.
(h) At Purchase Asset Closing, Seller shall make its
best, good faith effort to assure that all current Business
customers, customer accounts and other customer commitments and
arrangements shall be transferred to Purchaser without
termination or modification by customers.
(i) West, by its execution and delivery of this
Agreement, agrees to be fully bound by all terms, covenants, and
agreements imposed upon it as lessee of the Demised Premises and
purchaser of the Purchase Real Estate pursuant to Section 12(d)
and Section 12(e) hereinabove.
(j) Between the date of this Agreement and prior to
the Purchase Asset Closing date, Seller shall promptly furnish
Purchaser notice of any current customer or customers which
individually or in the aggregate comprise a material volume of
Seller's business which terminate transacting business with
Seller or indicate to Seller the intention to terminate
transacting business with Seller. For the purposes of this
Agreement, a material volume of Seller's business shall be
defined as more than two percent (2%), in the aggregate, of
Seller's annualized sales of volume.
(k) From and after the Purchase Asset Closing date,
each employee who was formerly an employee of Seller and who
becomes an employee of Purchaser shall become eligible to
participate in Purchaser's employee benefit plans, including its
health, pension and profit sharing plans.
SECTION 13. ARBITRATION.
(a) Any controversy, dispute or claim arising out of,
in connection with, or in relation to the interpretation,
performance or breach of this Agreement, including, without
limitation, any claim based on contract, tort or statute and any
claim pursuant to the provisions of Sections 3 and 10 hereof,
shall be settled by arbitration. Any arbitration pursuant to
this Agreement shall be conducted in Cincinnati, Ohio before and
in accordance with the then existing Rules for Commercial
Arbitration of the American Arbitration Association, provided
that only one
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arbitrator as selected by the American Arbitration Association shall conduct
any arbitration proceeding. Any arbitration shall be final and binding. Any
judgment upon any interim or final award or order rendered by the arbitrator
entered by any federal or state court having jurisdiction thereof.
(b) The parties intend that any agreement pursuant
hereto to arbitrate be valid, enforceable and irrevocable. Each
party in any arbitration proceeding commenced hereunder shall
bear such party's own costs and expenses (including
expert,witness and attorneys' fees) of investigating, preparing
and pursuing such arbitration claim. The parties to any
arbitration shall have the right to discover the relevant books
and records of the other side that are not confidential or
privileged.
SECTION 14. CONTINUOUS OPERATION AND RISK OF LOSS. Seller
shall be operated in the ordinary course up to and including the
Purchase Asset Closing date. Further, Seller shall keep the Purchase Assets
fully insured and shall bear all risk of loss to the Purchase Assets prior to
the Closing. In the event of such loss, Purchaser shall not be
required to purchase damaged or destroyed Purchase Assets; and
the applicable purchase price shall be reduced correspondingly.
In the event of total loss of or damage to the Purchase Assets,
Purchaser shall have the sole and unilateral right to terminate
this Agreement without obligation or liability to Seller.
SECTION 15. CONDITIONS PRECEDENT. The obligations of Seller
and Purchaser pursuant to this Agreement are subject to the
following express conditions being fulfilled on or prior to the
Purchase Asset Closing date:
(a) Purchaser, West, Seller and the Shareholders shall
have performed and complied with all terms and conditions
required by this Agreement to be performed and complied with.
(b) The execution, delivery and performance of this
Agreement and the transactions contemplated hereby shall have been duly
authorized and approved by any and all requisite corporate or limited
liability company action of Purchaser, West, Seller and Krabo, and they
shall deliver to the others at or before Closing a proper corporate or limited
liability company certificate to this effect.
(c) Seller shall have procured all necessary consents
of third parties, in proper form, to effectuate assignment,
transfer or conveyance of any assets subject of Section 1,
subsections (a) through (f), inclusive, together with any and all
other rights, agreements, contracts, leases, releases,
instruments or other commitment incidental to such assets or as
otherwise required by this Agreement.
(d) Seller shall be able to assign, transfer, grant
and/or convey good and marketable title to the Purchase Assets subject of
Section 1, subsections (a) through (f), inclusive, free and clear of all
claims, liens and encumbrances or any interest of my party, as required by
this Agreement.
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(d) All necessary parties thereto shall have executed
and delivered the R.H. Consultation Agreement, the R.B.
Consultation Agreement, the W.B. Consultation Agreement, the
Lease and the Real Estate Purchase Agreement.
(e) In the event that prior to Purchase Asset Closing
date, Seller has received notice of termination or actual
termination of a material volume of the Business as defined in
Section 12(j), Purchaser shall have the unilateral right, in its
sole discretion, to terminate this Agreement and all transactions
contemplated hereunder without liability to any party.
SECTION 16. MISCELLANEOUS.
(a) This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors
and permitted assigns.
(b) Any notice, request, instruction, consent,
approval or other communication provided for herein shall be
sufficiently given in writing and delivered personally or sent by
first class mail, certified, return receipt requested, postage
prepaid as follows: If to Purchaser or West, addressed to VALLEY
NATIONAL GASES, INC., Attention of Xxxxxxxx X. Xxxxx, 00 - 00xx
Xxxxxx, Xxxxxxxx, Xxxx Xxxxxxxx, 00000, with a copy to Xxxxx X.
XxXxxxx, Esquire, GOMPERS, MCCARTHY, HILL & XXXXXXX, 000 Xxxxx xx
Xxxxx Xxxxxxxx, Xxxxxxxx, Xxxx Xxxxxxxx, 00000; if to Seller or
the Shareholders, addressed to WELDCO, INC., 0000 Xxxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxx 00000-0000, Attention: R. Xxxxx Xxxxxxx,
President, with a copy to Xxxxxxx X. Xxxxxx, Esquire, XXXXXXXX
XXXX & XXXXX, P.L.L., 000 Xxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxxxxx,
Xxxx 00000-0000.
(c) This Agreement shall constitute the entire agreement
between Seller, Purchaser, Guarantors and West with respect to
the transactions contemplated herein. There are no
representations, warranties, covenants or conditions except for
those specified in the Agreement. No waiver, change, amendment or discharge of
any term or condition hereof on the part of any party hereto shall be of any
force or effect unless made in writing and signed by the party to be bound
thereby.
(d) Seller, the Shareholders, Krabo, Purchaser or West
may, by written notice to the others waive any inaccuracies in the
representation or warranties of any of the other parties contained in this
Agreement or (ii) waive compliance with any of the covenants of any of the
other parties contained in this Agreement and waive performance of any
of the obligations of any other party.
(e) If any term or provision of this Agreement or any
application thereof shall be invalid or unenforceable, the
remainder of this Agreement and any other application of such
term or provision shall not be affected thereby.
(f) This Agreement shall not be assigned by any party
without the prior written consent of the other parties hereto.
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(g) This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which
together shall constitute one and the same instrument.
(h) All representations, warranties and agreements
made by Seller, West, Shareholders or Purchaser in this Agreement
shall survive the Closing hereunder and the transfer of assets
described herein to the extent expressly stated herein.
SECTION 17. GOVERNING LAWS. This Agreement shall be
construed and enforced in accordance with the laws of the State
of Ohio.
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IN WITNESS WHEREOF, the parties hereto with full authority
therefore have duly caused this Agreement to be executed and
delivered as of the day and year first above written.
WELDCO, INC., AN OHIO CORPORATION
WITNESSES:
-----------------------------
By /s/ R. Xxxxx Xxxxxxx
----------------------------- ---------------------------------
Its President
-----------------------------
/s/ Xxxxxx X. Xxxxxxx
----------------------------- -----------------------------------
X.X. Xxxxxxx
-----------------------------
/s/ R. Xxxxx Xxxxxxx
----------------------------- -----------------------------------
R. Xxxxx Xxxxxxx
-----------------------------
/s/ Xxxxxxx Xxxx
----------------------------- -----------------------------------
Xxxxxxx Xxxx
-----------------------------
/s/ Xxxxx Xxxx
----------------------------- -----------------------------------
Xxxxx Xxxx
-----------------------------
KRABO, LTD., an Ohio limited liability
company
-----------------------------
By /s/ R. Xxxxx Xxxxxxx
----------------------------- -----------------------------------
Its--------------------------------
VALLEY NATIONAL GASES, INC., a
West Virginia corporation
-----------------------------
By /s/ Xxxxxxxx X. Xxxxx
----------------------------- -----------------------------------
Its President
WEST RENTALS, INC., a West Virginia
corporation
-----------------------------
By /s/ Xxxxxxxx X. Xxxxx
----------------------------- -----------------------------------
Its Secretary
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