EXHIBIT 10.1
STOCK PURCHASE AGREEMENT
BETWEEN
ABLE ENERGY, INC.
AND
ALL AMERICAN PLAZAS, INC.
JUNE 16, 2005
ARTICLE I. DEFINITIONS.........................................................1
ARTICLE II. SALE AND TRANSFER OF SHARES; CLOSING...............................1
2.1 Shares............................................................1
2.2 Purchase Price....................................................1
2.3 Closing...........................................................2
2.4 Closing Obligations...............................................2
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF SELLERS.........................3
3.1 Organization and Good Standing....................................3
3.2 Authority; No Conflict; Consents..................................3
3.3 Title; Capitalization.............................................5
3.4 Financial Statements..............................................5
3.5 No Material Adverse Change........................................5
3.6 Absence of Certain Changes and Events.............................5
3.7 Books and Records.................................................6
3.8 No Undisclosed Liabilities........................................7
3.9 Environmental Matters.............................................7
3.10 Taxes.............................................................7
3.11 Employees.........................................................8
3.12 Employee Benefit Plans............................................9
3.13 Labor Relations and Employment Agreements.........................9
3.14 Compliance with Legal Requirements, Governmental Authorizations..10
3.15 Legal Proceedings; Orders........................................11
3.16 Contracts; No Defaults...........................................12
3.17 Insurance........................................................15
3.18 Title to and Condition of Assets.................................16
3.19 Intellectual Property............................................16
3.20 Certain Payments.................................................17
3.21 Related Party Transactions.......................................18
3.22 Brokers or Finder................................................18
3.23 Legal Representation.............................................18
3.24 Disclosure.......................................................18
3.25 Investment Representations.......................................18
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF BUYER...........................20
4.1 Organization and Good Standing...................................20
4.2 Authority; No Conflict; Consents.................................21
4.3 Investment Intent................................................21
4.4 Certain Proceedings..............................................22
4.5 Brokers or Finders...............................................22
4.6 No Undisclosed Liabilities.......................................22
4.7 Taxes............................................................22
4.8 Compliance with Legal Requirements, Governmental Authorizations..22
4.9 No Material Adverse Change.......................................23
4.10 Disclosure.......................................................23
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ARTICLE V. COVENANTS OF SELLERS PRIOR TO CLOSING DATE.........................24
5.1 Access and Investigation.........................................24
5.2 Operation of the Business of the Company.........................24
5.3 Negative Covenant................................................26
5.4 Required Approvals...............................................26
5.5 Notification.....................................................26
5.6 No Solicitation of Other Proposals; Ordinary Course Operations...27
5.7 Best Efforts.....................................................27
ARTICLE VI. COVENANTS OF BUYER................................................27
6.1 Prior to Closing.................................................27
ARTICLE VII. CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE..............28
7.1 Accuracy of Representations; Material Adverse Changes............28
7.2 Sellers' Performance.............................................28
7.3 Consents.........................................................28
7.4 No Proceedings...................................................28
7.5 No Claim Regarding Stock Ownership or Sale Proceeds..............28
7.6 Shareholder Approval.............................................29
ARTICLE VIII. CONDITIONS PRECEDENT TO SELLERS' OBLIGATION TO CLOSE............29
8.1 Accuracy of Representations; Material Adverse Changes............29
8.2 Buyer's Performance..............................................29
8.3 Consents.........................................................29
8.4 No Injunction....................................................29
ARTICLE IX. TERMINATION.......................................................30
9.1 Termination Events...............................................30
9.2 Effect of Termination; Liquidated Damages........................30
ARTICLE X. INDEMNIFICATION; REMEDIES..........................................30
10.1 Survival.........................................................30
10.2 Indemnification and Payment of Damages by Sellers................31
10.3 Indemnification and Payment of Damages by Buyer..................31
10.4 Limitations......................................................31
10.5 Limitations on Amount--Sellers...................................32
10.6 Limitations on Amount--Buyer.....................................32
10.7 Procedure for Indemnification--Third Party Claims................32
10.8 Procedure for Indemnification--Other Claims......................33
10.9 Exclusive Remedy.................................................34
ARTICLE XI. POST-CLOSING COVENANTS............................................34
11.1 Cooperation......................................................34
11.2 Treatment of Confidential Information............................34
11.3 Preparation of Tax Returns.......................................35
11.4 Employment Arrangements..........................................35
11.5 No Section 338 Election..........................................35
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ARTICLE XII. GENERAL PROVISIONS...............................................36
12.1 Expenses.........................................................36
12.2 Public Announcements; Filings....................................36
12.3 Confidentiality..................................................36
12.4 Notices..........................................................36
12.5 Jurisdiction; Service of Process.................................37
12.6 Further Assurances...............................................37
12.7 Waiver...........................................................38
12.8 Entire Agreement and Modification................................38
12.9 Schedules........................................................38
12.10 Assignments, Successors, and No Third-Party Rights...............38
12.11 Severability.....................................................39
12.12 Section Headings, Construction...................................39
12.13 Time of Essence..................................................39
12.14 Governing Law....................................................39
12.15 Counterparts.....................................................39
12.16 Sellers' Representative..........................................39
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STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement ("AGREEMENT") is made as of June 16, 2005,
by Able Energy, Inc., a Delaware corporation ("BUYER") and all of the
shareholders of All American Plazas, Inc., as set forth on Schedule A annexed
hereto (collectively, "SELLERS").
WITNESSETH:
WHEREAS, on this date Sellers collectively own all of the issued and
outstanding shares (the "SHARES") of capital stock of All American Plazas, Inc.
(the "COMPANY");
WHEREAS, Buyer desires to acquire the Company's multi-location truck
stop business which includes travel stores, restaurants, diesel and gas fueling
and lube facilities and motels (the "BUSINESS") through a purchase of the
Shares;
WHEREAS, Sellers desire to sell and transfer, and Buyer desires to
purchase, all of the Shares of the Company on the terms and conditions
hereinafter set forth;
WHEREAS, the Buyer is executing and delivering this Agreement in
reliance upon the exemption from securities registration afforded by Rule 506 of
Regulation D ("REGULATION D") as promulgated by the SEC under the Securities Act
of 1933, as amended (the "1933 ACT").
NOW, THEREFORE, in consideration of the representations, warranties,
promises, covenants, and agreements hereinafter contained and intending to be
legally bound, the parties hereby agree as follows:
ARTICLE I. DEFINITIONS
For purposes of this Agreement, capitalized terms used herein have the
meanings specified or referred to in Appendix A attached hereto.
ARTICLE II. SALE AND TRANSFER OF SHARES; CLOSING
2.1 SHARES. Subject to the terms and conditions of this Agreement, at
the Closing, Sellers will sell, assign and transfer all of the Shares to Buyer,
and Buyer will purchase the Shares from Sellers.
2.2 PURCHASE PRICE.(a) The purchase price (the "PURCHASE PRICE") for the
Shares will be paid as follows:
(1) At the Closing, the Buyer shall deliver to the Sellers that
number of aggregate shares of restricted common stock of the
Buyer (together with the shares in (2) and (3) below, the "Able
Shares") based upon a Purchase Price of Thirty Five Million
($35,000,000) Dollars for all of the Shares of Sellers.
a. The price of the Able Shares for purposes of calculating
the $35,000,000 Purchase Price shall be $3.00 per share,
thus the number
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of Able Shares delivered to the Sellers under Section
2.2(1) shall be 11,666,667.
b. The Purchase Price shall be allocated among the Sellers
in proportion to their respective holding of Company
Shares, as set forth on Schedule A annexed hereto.
(2) In addition, at the Closing, the Buyer shall deliver to certain
of the Sellers a number of shares of Buyer's restricted common
stock equal to the number of shares of Buyer's common stock
owned by the Company as of the Closing Date, such Able Shares to
be allocated among such Sellers as set forth on Schedule B
annexed hereto.
(3) It is hereby acknowledged by the parties, that Sellers have
caused the Company to enter into a term sheet dated June 6, 2005
with a third party institutional lender to refinance the
Company's debt and provide the Company with certain working
capital. Such term sheet provides that the loan will be in the
amount of approximately Thirty Five Million ($35,000,000)
Dollars, at an interest rate of "30-day LIBOR plus spread
(adjustable rate) this is equivalent to Prime + 1.75%.", with a
25-year term and a 25-year amortization schedule. The Company
will secure the loan with a first mortgage on all of its
properties, including improvements thereto (the "Financing"). In
the event that the Company completes the Financing on or before
December 31, 2005, Buyer agrees to increase the Purchase Price
by an additional Ten Million ($10,000,000) Dollars which
Purchase Price shall be paid in restricted common shares on the
same basis as set forth in subparagraphs1(a) and (b) of this
paragraph.
2.3 CLOSING. The purchase and sale of the Shares (the "CLOSING")
provided for in this Agreement will take place at the offices of Buyer's counsel
at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, xx the 1st day following the date the
shareholders of Buyer approve the within transaction based upon the Buyer's
filing of the requisite proxy statement, or at such other time and place as the
parties may agree.
2.4 CLOSING OBLIGATIONS. At the Closing:
(a) Sellers will deliver (or cause to be delivered) to
Buyer:
(i) certificates representing the Shares, duly
endorsed with all taxes paid (or accompanied by duly executed
stock powers);
(ii) the Non-Competition Agreement.
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(iii) a certificate executed by Sellers to the effect
that, except as otherwise stated in such certificate, each of
Sellers' representations and warranties in this Agreement was
accurate in all respects as of the date of this Agreement and is
accurate in all respects as of the Closing Date as if made on
the Closing Date; and
(b) Buyer will deliver (or cause to be delivered) to
Sellers:
(i) The Able Shares
(ii) a certificate executed by Buyer to the effect
that, except as otherwise stated in such certificate, each of
Buyer's representations and warranties in this Agreement was
accurate in all respects as of the date of this Agreement and is
accurate in all respects as of the Closing Date as if made on
the Closing Date.
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF SELLERS
Sellers, severally and not jointly, represent and warrant to Buyer as
follows:
3.1 ORGANIZATION AND GOOD STANDING.
(a) The Company is a corporation duly organized, validly
existing, and in good standing under the laws of Pennsylvania, with full
corporate power and authority to conduct its business as it is now being
conducted, to own or use the properties and assets that it purports to
own or use, and to perform all its obligations under Applicable
Contracts. The Company is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each state or
other jurisdiction in which either the ownership or use of the
properties owned or used by it, or the nature of the activities
conducted by it, requires such qualification and in which the failure to
be so qualified would have a Material Adverse Effect on the Buyer's
ability to conduct the Company's business following the Closing, with
such jurisdictions listed on SCHEDULE 3.1.
(b) Sellers have delivered to Buyer copies of the
Organizational Documents of the Company, as currently in effect.
3.2 AUTHORITY; NO CONFLICT; CONSENTS.
(a) Subject to the Petro Franchise Consents (as such term is
defined in Section 5.4), this Agreement constitutes the legal, valid,
and binding obligation of Sellers, enforceable against Sellers in
accordance with its terms, except as such enforceability may be limited
by laws regarding bankruptcy, insolvency and other creditors' rights,
and by principles of equity. Upon the execution and delivery by the
applicable Sellers of the Sellers' Releases and the Noncompetition
Agreement (collectively, the "SELLERS' CLOSING DOCUMENTS"), the Sellers'
Closing Documents will constitute the legal, valid, and binding
obligations of the applicable Sellers, enforceable against them in
accordance with their respective terms, except as such enforceability
may be limited by laws regarding bankruptcy, insolvency and other
creditors' rights, and by principles of equity. Sellers have the
absolute and unrestricted right, power, authority, and capacity to
execute and
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deliver this Agreement and the Sellers' Closing Documents and to perform
their obligations under this Agreement and the Sellers' Closing
Documents.
(b) Subject to the Petro Franchise Consents (as such term is
defined in Section 5.4), except as set forth in SCHEDULE 3.2, neither
the execution and delivery of this Agreement nor the consummation or
performance of any of the Contemplated Transactions will, directly or
indirectly (with or without notice or lapse of time):
(i) contravene, conflict with, or result in a
violation of (A) any provision of the Organizational Documents
of the Company, or (B) any resolution adopted by the board of
directors or the stockholders of the Company;
(ii) contravene, conflict with, or result in a
violation of, or give any Governmental Body or other Person the
right to challenge any of the Contemplated Transactions or to
exercise any remedy or obtain any relief under, any Legal
Requirement or any Order to which the Company or any Seller, or
any of the assets owned or used by the Company, may be subject;
(iii) contravene, conflict with, or result in a
violation of any of the terms or requirements of, or give any
Governmental Body the right to revoke, withdraw, suspend,
cancel, terminate, or modify, any Governmental Authorization
that is held by the Company or that otherwise relates to the
business of, or any of the assets owned or used by, the Company;
(iv) cause Buyer or the Company to become subject to,
or to become liable for the payment of, any Tax;
(v) cause any of the assets owned by the Company to
be reassessed or revalued by any taxing authority or other
Governmental Body;
(vi) contravene, conflict with, or result in a
violation or breach of any provision of, or give any Person the
right to declare a default or exercise any remedy under, or to
accelerate the maturity or performance of, or to cancel,
terminate, or modify, any Applicable Contract; or
(vii) result in the imposition or creation of any
Encumbrance upon or with respect to any of the assets owned or
used by the Company.
(c) Except as set forth in SCHEDULE 3.2, neither Seller nor
the Company is or will be required to give any notice to or obtain any
Consent from any Person in connection with the execution and delivery of
this Agreement or the consummation or performance of any of the
Contemplated Transactions.
3.3 TITLE; CAPITALIZATION.
(a) On the Closing Date, Sellers will be the record and
beneficial owners and holders of all of the Shares, free and clear of
all Encumbrances, as set forth on SCHEDULE 3.3 (including the identity
of each shareholder and the number of Shares held by each).
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(b) The authorized equity securities of the Company consist
of 100,000 shares of Class A common stock, par value $100.00 per share,
of which 25,485.16 shares are issued and outstanding as of the date
hereof, and 100,000 shares of Class B common stock, par value $100.00,
of which 632 shares are issued and outstanding as of the date hereof.
The Company's subsidiaries are set forth on SCHEDULE 3.3. Except as set
forth in SCHEDULE 3.3, no legend or other reference to any purported
Encumbrance appears upon any certificate representing issued and
outstanding equity securities of the Company and no such Encumbrance
will be in effect as of Closing. All of the outstanding equity
securities of the Company have been duly authorized and validly issued
and are fully paid and nonassessable. Except as set forth in Schedule
3.3, there are no Contracts relating to the issuance, sale, or transfer
of any equity securities or other securities of the Company or options
or rights to acquire securities of the Company, that will remain in
effect at or after Closing. None of the outstanding equity securities or
other securities of the Company was issued in violation of the
Securities Act or any other Legal Requirement. The Company does not own,
nor has any Contract to acquire, any equity securities or other
securities of any Person or any direct or indirect equity or ownership
interest in any other business.
3.4 FINANCIAL STATEMENTS. Sellers have delivered to Buyer: (a) audited
balance sheets of the Company as at September 30 in each of the years 2002, 2003
and 2004, and the related audited statements of income for each of the fiscal
years then ended, (b) an internally prepared balance sheet of the Company as at
March 31, 2005 (the "INTERIM BALANCE SHEET"), and the related internally
prepared statement of income for the fiscal year then ended. To the Sellers'
Knowledge, such financial statements and notes fairly and materially present the
financial condition and the results of operations of the Company as at the
respective dates of and for the periods referred to in such financial
statements.
3.5 NO MATERIAL ADVERSE CHANGE. Since the date of the Interim Balance
Sheet, to the Sellers' Knowledge (a) there has not been any material adverse
change in the business, operations, properties, assets, or condition of the
Company and (b) no event has occurred or circumstance exists that may result in
such a material adverse change other than changes, events and circumstances
existing in or affecting the capital markets, and general economic and industry
conditions.
3.6 ABSENCE OF CERTAIN CHANGES AND EVENTS. Except as set forth in
SCHEDULE 3.6, and except for transactions expected in connection with the
Contemplated Transactions, since the date of the Interim Balance Sheet, the
Company has conducted the Business only in the Ordinary Course of Business and
there has not been any:
(a) change in the Company's authorized or issued capital
stock; grant of any stock option or right to purchase shares of capital
stock of the Company; issuance of any security convertible into such
capital stock; grant of any registration rights; purchase, redemption,
retirement, or other acquisition by the Company of any shares of any
such capital stock; or declaration or payment of any dividend or other
distribution or payment in respect of shares of capital stock;
(b) amendment to the Organizational Documents of the
Company;
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(c) payment or increase by the Company of any bonuses,
salaries, or other compensation to any stockholder, director, officer,
or (except in the Ordinary Course of Business) employee or entry into
any employment, severance, or similar Contract with any director,
officer, or employee;
(d) adoption of, or increase in the payments to or benefits
under, any profit sharing, bonus, deferred compensation, savings,
insurance, pension, retirement, or other employee benefit plan for or
with any employees of the Company;
(e) damage to or destruction or loss of any asset or
property of the Company, whether or not covered by insurance, materially
and adversely affecting the properties, assets, business, financial
condition, or prospects of the Company;
(f) entry into, termination of, or receipt of notice of
termination of (i) any license, joint venture, credit, or similar
agreement, or (ii) any Contract or transaction involving a total
remaining commitment by or to the Company of at least $25,000.00;
(g) cancellation or waiver of any claims or rights with a
value to the Company in excess of $25,000.00;
(h) material change in the accounting methods used by the
Company; or
(i) agreement, whether oral or written, by the Company to do
any of the foregoing.
(j) any notice by a governmental agency or
quasi-governmental agency regarding the conduct of the Company's
business.
3.7 BOOKS AND RECORDS. The books of account, minute books, stock record
books, and other records of the Company, all of which have been made available
to Buyer, are complete and correct in all material respects and have been
maintained in accordance with practices that are customary for similar
businesses. At the Closing, all of those books and records will be in the
possession or control of the Company.
3.8 NO UNDISCLOSED LIABILITIES. Except as set forth in SCHEDULE 3.8, the
Company had no material liabilities or obligations of any nature required to be
reflected or reserved against in the Balance Sheet or the Interim Balance Sheet
as of the respective dates thereof in accordance with GAAP that were not so
reflected, and has since the date of the Balance Sheet incurred no such
liabilities other than current liabilities incurred in the Ordinary Course of
Business.
3.9 ENVIRONMENTAL MATTERS. Except as set forth in SCHEDULE 3.9 :
(a) Seller has not received any notice, report or
information regarding any liabilities (whether accrued, absolute,
contingent, unliquidated or otherwise), or any corrective, investigatory
or remedial obligations, arising under Environmental and Safety
Requirements, with respect to the past or present operations of the
Businesses, the Assets and/or the Assumed Contracts.
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(b) Seller has obtained, and is in compliance with all terms
and conditions of, all permits, licenses and other authorizations
required pursuant to Environmental and Safety Requirements with respect
to past or present operations of the Businesses and the Assets.
(c) None of the following exists at any property owned or
occupied by Seller: asbestos-containing material in any form or
condition; polychlorinated biphenyl-containing materials or equipment;
or
(d) No facts, events or conditions relating to the assets of
the Company, operations of the Business and/or the Applicable Contracts
will (x) prevent, hinder or limit continued compliance by Purchaser with
Environmental and Safety Requirements, (y) give rise to any corrective,
investigatory or remedial obligations on the part of Purchaser pursuant
to Environmental and Safety Requirements, or (z) give rise to any
liabilities on the part of Purchaser (whether accrued, absolute,
contingent, unliquidated or otherwise) pursuant to Environmental and
Safety Requirements, including, without limitation, those liabilities
relating to on-site or off-site hazardous substance releases, personal
injury, property damage or natural resources damage.
(e) Seller has not assumed any liabilities or obligations of
any third party under Environmental and Safety Requirements.
3.10 TAXES.
(a) The Company has filed or caused to be filed all Tax
Returns that are or were required to be filed by or with respect to it,
either separately or as a member of a group of corporations, pursuant to
applicable Legal Requirements. Sellers have delivered or made available
to Buyer copies of, and SCHEDULE 3.10 contains a complete and accurate
list of, all such Tax Returns filed since 2000. The Company has paid, or
made provision for the payment of, all Taxes that have or may have
become due pursuant to those Tax Returns or otherwise, or pursuant to
any assessment received by Sellers or the Company, except such Taxes, if
any, as are listed in SCHEDULE 3.10 and are being contested in good
faith and as to which adequate reserves (determined in accordance with
GAAP) have been provided in the Balance Sheet and the Interim Balance
Sheet.
(b) The United States federal and state income Tax Returns
of the Company have been audited by the IRS or relevant state tax
authorities or are closed by the applicable statute of limitations for
all taxable years through 2000. SCHEDULE 3.10 contains a complete and
accurate list of all audits of all such Tax Returns, including a
reasonably detailed description of the nature and outcome of each audit.
All deficiencies proposed as a result of such audits have been paid,
reserved against, settled, or, as described in SCHEDULE 3.10, are being
contested in good faith by appropriate proceedings. SCHEDULE 3.10
describes all adjustments to the United States federal income Tax
Returns filed by the Company or any group of corporations including the
Company for all taxable years since 1999, and the resulting deficiencies
proposed by the IRS. Except as described in SCHEDULE 3.10, neither any
of the Sellers nor the Company has given or been requested to give
waivers or extensions (or is or would be subject to a waiver or
extension given by
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any other Person) of any statute of limitations relating to the payment
of Taxes of the Company or for which the Company may be liable.
(c) The charges, accruals, and reserves with respect to
Taxes on the respective books of the Company are adequate (determined in
accordance with GAAP) and are at least equal to the Company's liability
for Taxes. There exists no proposed tax assessment against the Company
except as disclosed in the Balance Sheet or in SCHEDULE 3.10. No consent
to the application of Section 341(f)(2) of the IRC has been filed with
respect to any property or assets held, acquired, or to be acquired by
the Company. All Taxes that the Company is or was required by Legal
Requirements to withhold or collect have been duly withheld or collected
and, to the extent required, have been paid to the proper Governmental
Body or other Person.
(d) All Tax Returns filed by (or that include on a
consolidated basis) the Company are true, correct, and complete. There
is no tax sharing agreement that will require any payment by the Company
after the date of this Agreement.
3.11 EMPLOYEES
(a) SCHEDULE 3.11 contains a complete and accurate list of
the following information for each employee or director of the Company,
including each employee on leave of absence or layoff status: name; job
title; current compensation paid or payable; vacation accrued; and
service credited for purposes of vesting and eligibility to participate
under the Company's pension, retirement, profit-sharing, thrift-savings,
deferred compensation, stock bonus, stock option, cash bonus, employee
stock ownership (including investment credit or payroll stock
ownership), severance pay, insurance, medical, welfare, or vacation
plan, other Employee Pension Benefit Plan or Employee Welfare Benefit
Plan, or any other employee benefit plan or any Director Plan.
(b) Except as set forth in SCHEDULE 3.11, no employee or
director of the Company is a party to, or is otherwise bound by, any
agreement or arrangement, including any confidentiality,
non-competition, or proprietary rights agreement, between such employee
or director and any other Person ("PROPRIETARY RIGHTS AGREEMENT") that
in any way adversely affects or will affect (i) the performance of his
duties as an employee or director of the Company, or (ii) the ability of
the Company to conduct its business, including any Proprietary Rights
Agreement with Sellers or the Company by any such employee or director.
(c) SCHEDULE 3.11 also contains a complete and accurate list
of the following information for each retired employee or director of
the Company, or their dependents, receiving benefits or scheduled to
receive benefits in the future: name, pension benefit, pension option
election, retiree medical insurance coverage, retiree life insurance
coverage, and other benefits.
3.12 EMPLOYEE BENEFIT PLANS.
(a) All material employee benefit plans, contracts or
arrangements to which the Company is a party or by which the Company is
bound, including without limitation all
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pension, retirement, deferred compensation, savings, incentive, bonus,
profit sharing, stock purchase, stock option, life insurance, death or
survivor's benefit, health insurance, sickness, disability, medical,
surgical, hospital, severance, layoff or vacation plans, contracts or
arrangements (collectively the "COMPANY BENEFIT PLANS"), but not
including the Employment Agreements, are identified in SCHEDULE 3.12.
Each of the Company Benefit Plans which is an "employee pension benefit
plan" as defined in Section 3(2) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"); each such Plan being herein
called a "COMPANY PENSION PLAN") is intended to be exempt from tax under
Sections 401 and 501 of the IRC, has been maintained and operated (to
the knowledge of the Sellers or Company) in material compliance with all
applicable provisions of the IRC and ERISA. No transaction has occurred
with respect to the Company Pension Plans which would subject the
Company to a tax, penalty, or liability for "prohibited transactions"
(as such term is defined in Section 4975 of the IRC or in ERISA) There
have been no material breaches of fiduciary duty by any fiduciary under
or with respect to the Company Pension Plans or any other Company
Benefit Plan which is an employee welfare benefit plan as defined in
ERISA, and no claim is pending or threatened with respect to any Company
Benefit Plan other than claims for benefits made in the Ordinary Course
of Business. The Company has not incurred any material penalty imposed
by the IRC or by ERISA with respect to the Company Pension Plans or any
other Company Benefit Plan. No Company Benefit Plan is currently under
audit by the Department of Labor or the IRS and, to the Knowledge of the
Sellers or Company, no such action is contemplated or under
consideration.
3.13 LABOR RELATIONS AND EMPLOYMENT AGREEMENTS.
(a) The Company is not a party to or bound by any collective
bargaining agreement. The Company enjoys good working relationships with
its employees, and there are no labor disputes pending, or to the
Knowledge of the Company, Threatened, that might materially and
adversely affect the condition (financial or otherwise), assets,
liabilities, business, operations or prosperity of the Company. Except
as disclosed in Schedule 3.13, the Company has no employment contract,
severance agreement, deferred compensation agreement, consulting
agreement or similar obligation (including the amendments and agreement
referred to below, an "EMPLOYMENT OBLIGATION") with any director,
officer, employee, agent or consultant. Except as disclosed in Schedule
3.13, as of the Closing Date, the Company will have no liability for
employee termination rights arising out of any Employment Obligation.
(b) No payment that is owed or may become due to any
director, officer, employee, or agent of the Company will be
non-deductible to the Company or subject to tax under IRC ss. 280G or
ss. 4999; nor will the Company be required to "gross up" or otherwise
compensate any such person because of the imposition of any excise tax
on a payment to such person.
(c) Except as set forth on SCHEDULE 3.13, the consummation
of the Contemplated Transactions will not result in the payment,
vesting, or acceleration of any benefit.
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3.14 COMPLIANCE WITH LEGAL REQUIREMENTS, GOVERNMENTAL AUTHORIZATIONS
(a) Except as set forth in SCHEDULE 3.14:
(i) the Company is, and at all times since January
1, 2000 has been, in full compliance with each Legal Requirement
that is or was applicable to it or to the conduct or operation
of its business or the ownership or use of any of its assets,
the violation of which would have a Material Adverse Effect on
the Company;
(ii) no event has occurred or circumstance exists
that (with or without notice or lapse of time) (A) may
constitute or result in a material violation by the Company of,
or a material failure on the part of the Company to comply with,
any Legal Requirement, or (B) may give rise to any material
obligation on the part of the Company to undertake, or to bear
all or any portion of the cost of, any remedial action of any
nature; and
(iii) the Company has not received, at any time since
January 1, 2000, any written notice or other communication from
any Governmental Body or any other Person regarding any
material, actual, alleged, possible, or potential violation of,
or failure to comply with, any Legal Requirement which would
have a Material Adverse Effect on the Company.
(b) SCHEDULE 3.14 contains a complete and accurate list of
each Governmental Authorization that is held by the Company or that
otherwise relates to the business of, or to any of the assets owned or
used by, the Company. Each Governmental Authorization listed or required
to be listed in SCHEDULE 3.14 is valid and in full force and effect.
Except as set forth in SCHEDULE 3.14:
(i) the Company is, and at all times since January
1, 2000 has been, in material compliance with all of the terms
and requirements of each Governmental Authorization identified
or required to be identified in SCHEDULE 3.14;
(ii) no event has occurred or circumstance exists
that may (with or without notice or lapse of time) (A)
constitute or result directly or indirectly in a material
violation of or a failure to comply with any term or requirement
of any Governmental Authorization listed or required to be
listed in SCHEDULE 3.14, or (B) result directly or indirectly in
the revocation, withdrawal, suspension, cancellation, or
termination of, or any modification to, any Governmental
Authorization listed or required to be listed in SCHEDULE 3.14;
(iii) the Company has not received, at any time since
January 1, 2000, any notice or other communication (whether oral
or written) from any Governmental Body or any other Person
regarding (A) any material actual, alleged, possible, or
potential violation of or failure to comply with any term or
requirement of any Governmental Authorization, or (B) any
actual, proposed, possible, or potential revocation, withdrawal,
suspension, cancellation,
10
termination of, or modification to any Governmental
Authorization listed on SCHEDULE 3.14; and
(iv) all applications required to have been filed for
the renewal of the Governmental Authorizations listed or
required to be listed in SCHEDULE 3.14 have been duly filed on a
timely basis with the appropriate Governmental Bodies, and all
other filings required to have been made with respect to such
Governmental Authorizations have been duly made on a timely
basis with the appropriate Governmental Bodies.
The Governmental Authorizations listed in SCHEDULE 3.14 collectively
constitute all of the Governmental Authorizations necessary to permit the
Company to lawfully conduct and operate its business in the manner it currently
conducts and operate such business and to permit the Company to own and use its
assets in the manner in which it currently owns and uses such assets.
3.15 LEGAL PROCEEDINGS; ORDERS
(a) Except as set forth in SCHEDULE 3.15, there is no
pending Proceeding:
(i) that has been commenced by or against the
Company or that otherwise relates to or may affect the business
of, or any of the assets owned or used by, the Company that
would, if determined adversely to the Company, have a Material
Adverse Effect on the Company; or
(ii) that challenges, or that may have the effect of
preventing, delaying, making illegal, or otherwise interfering
with, any of the Contemplated Transactions.
To the Knowledge of Sellers and the Company, (1) no such Proceeding has
been Threatened, and (2) no event has occurred or circumstance exists that may
give rise to or serve as a basis for the commencement of any such Proceeding.
Sellers have delivered to Buyer copies of all pleadings, correspondence, and
other documents relating to each Proceeding listed in SCHEDULE 3.15. The
Proceedings listed in SCHEDULE 3.15 will not have a Material Adverse Effect on
the Company.
(b) Except as set forth in SCHEDULE 3.15:
(i) there is no Order to which the Company, or any
of the assets owned or used by the Company, is subject to, the
violation of or compliance with which would have a Material
Adverse Effect on the Company;
(ii) no Seller is subject to any Order that relates
to the business of, or any of the assets owned or used by, the
Company, the violation of or compliance with which would have a
Material Adverse Effect on the Company; and
(iii) no officer, director, agent, or employee of the
Company is subject to any Order that prohibits such officer,
director, agent, or employee from engaging
11
in or continuing any conduct, activity, or practice relating to
the business of the Company.
(c) Except as set forth in SCHEDULE 3.15:
(i) the Company is, and at all times since January
1, 2000 has been, in full compliance with all of the terms and
requirements of each Order to which it, or any of the assets
owned or used by it, is or has been subject;
(ii) no event has occurred or circumstance exists
that may constitute or result in (with or without notice or
lapse of time) a violation of or failure to comply with any term
or requirement of any Order to which the Company, or any of the
assets owned or used by the Company, is subject; and
(iii) the Company has not received, at any time since
January 1, 2000, any notice or other communication (whether oral
or written) from any Governmental Body or any other Person
regarding any actual, alleged, possible, or potential violation
of, or failure to comply with, any term or requirement of any
Order to which the Company, or any of the assets owned or used
by the Company, is or has been subject.
3.16 CONTRACTS; NO DEFAULTS.
(a) SCHEDULE 3.16(A) contains a complete and accurate list,
and Sellers have delivered to Buyer true and complete copies, of:
(i) each Applicable Contract that involves
performance of services or delivery of goods or materials by the
Company of an amount or value in excess of $25,000;
(ii) each Applicable Contract that was not entered
into in the Ordinary Course of Business and that involves
expenditures or receipts of the Company in excess of $15,000;
(iii) each lease, rental or occupancy agreement,
license, installment and conditional sale agreement, and other
Applicable Contract affecting the ownership of, leasing of,
title to, use of, or any leasehold or other interest in, any
real or personal property (except personal property leases and
installment and conditional sales agreements having a value per
item or aggregate payments of less than $30,000 or with terms of
less than one year);
(iv) each licensing agreement or other Applicable
Contract with respect to patents, trademarks, copyrights, or
other intellectual property, including agreements with current
or former employees, consultants, or contractors regarding the
appropriation or the non-disclosure of any of the Intellectual
Property Assets;
12
(v) each collective bargaining agreement and other
Applicable Contract to or with any labor union or other employee
representative of a group of employees;
(vi) each joint venture, partnership, and other
Applicable Contract (however named) involving a sharing of
profits, losses, costs, or liabilities by the Company with any
other Person;
(vii) each Applicable Contract containing covenants
that in any way purport to restrict the business activity of the
Company or any Affiliate of the Company or limit the freedom of
the Company or any Affiliate of the Company to engage in any
line of business or to compete with any Person;
(viii) each Applicable Contract providing for payments
to or by any Person based on sales, purchases, or profits, other
than direct payments for goods;
(ix) each power of attorney that is currently
effective and outstanding;
(x) each Applicable Contract entered into other than
in the Ordinary Course of Business that contains or provides for
an express undertaking by the Company to be responsible for
consequential damages;
(xi) each written warranty, guaranty, and or other
similar undertaking with respect to contractual performance
extended by the Company other than in the Ordinary Course of
Business; and
(xii) each amendment, supplement, and modification
(whether oral or written) in respect of any of the foregoing.
The Applicable Contracts designated by an asterisk on SCHEDULE 3.16(A)
shall be considered "Material Contracts."
(b) Except as set forth in SCHEDULE 3.16(B):
(i) no Seller (and no Affiliate of any Seller other
than the Company) has or may acquire any rights under, and no
Seller has or may become subject to any obligation or liability
under, any Contract that relates to the business of, or any of
the assets owned or used by, the Company; and
(ii) no officer or director of the Company and, to
the Knowledge of Sellers, no agent, employee, consultant, or
contractor of the Company is bound by any Contract that purports
to limit the ability of such officer, director, agent, employee,
consultant, or contractor to (A) engage in or continue any
conduct, activity, or practice relating to the business of the
Company, or (B) assign to the Company or to any other Person any
rights to any invention, improvement, or discovery.
13
(c) Except as set forth in SCHEDULE 3.16(C), to the
Knowledge of Sellers, each Contract identified or required to be
identified in Schedule 3.16(a) is in full force and effect and is valid
and enforceable in accordance with its terms.
(d) Except as set forth in SCHEDULE 3.16(D):
(i) the Company is in material compliance with all
applicable terms and requirements of each material Contract
under which the Company has or had any obligation or liability
or by which the Company or any of the assets owned or used by
the Company is or was bound;
(ii) to the Knowledge of Sellers, each other Person
that has or had any obligation or liability under any Contract
under which the Company has or had any rights is, and at all
times since January 1, 2000 has been, in full compliance with
all applicable terms and requirements of such Contract;
(iii) to the Knowledge of Sellers, no event has
occurred or circumstance exists that (with or without notice or
lapse of time) may contravene, conflict with, or result in a
violation or breach of, or give the Company or other Person the
right to declare a default or exercise any remedy under, or to
accelerate the maturity or performance of, or to cancel,
terminate, or modify, any Applicable Contract; and
(iv) the Company has not given to or received from
any other Person, at any time since January 1, 2000, any written
notice or other communication regarding any actual, alleged,
possible, or potential violation or breach of, or default under,
any Contract.
(e) There are no renegotiations of, attempts to renegotiate,
or outstanding rights to renegotiate any material amounts paid or
payable to the Company under current or completed Contracts with any
Person and no such Person has made written demand for such
renegotiation.
(f) The Contracts relating to the provision of services by
the Company have been entered into in the Ordinary Course of Business
and have been entered into without the commission of any act alone or in
concert with any other Person, or any consideration having been paid or
promised, that is or would be in violation of any Legal Requirement.
3.17 INSURANCE.
(a) Sellers have delivered to Buyer:
(i) true and complete copies of all policies of
insurance to which the Company is a party or under which the
Company, or any director of the Company, is or has been covered
at any time within the year preceding the date of this
Agreement; and
(ii) true and complete copies of all pending
applications for policies of insurance.
14
(b) SCHEDULE 3.17(B) describes:
(i) any self-insurance arrangement by or affecting
the Company, including any reserves established thereunder; and
(ii) all obligations of the Company to provide
insurance for third parties (including such obligations under
leases and service agreements) and identifies the policy under
which such coverage is provided.
(c) Except as set forth on SCHEDULE 3.17(C):
(i) all policies to which the Company is now a party
or that now provide coverage to any Seller, the Company, or any
director or officer of the Company:
A) are valid, outstanding, and enforceable;
B) taken together, provide insurance
coverage for the assets and the operations of the
Company for all risks normally insured against by a
Person carrying on the same business or businesses as
the Company;
C) are sufficient for compliance with all
Legal Requirements and Contracts to which the Company is
a party or by which any of them is bound;
D) will continue in full force and effect
following the consummation of the Contemplated
Transactions; and
E) do not provide for any retrospective
premium adjustment or other experienced-based liability
on the part of the Company.
(ii) no Seller nor the Company has received (A) any
refusal of coverage or any notice that a defense will be
afforded with reservation of rights, or (B) any notice of
cancellation or any other indication that any insurance policy
is no longer in full force or effect or will not be renewed or
that the issuer of any policy is not willing or able to perform
its obligations thereunder; and
(iii) the Company has paid all premiums due, and has
otherwise performed all of its obligations, under each policy to
which the Company is a party or that provides coverage to the
Company or directors thereof.
3.18 TITLE TO AND CONDITION OF ASSETS. Except as disclosed in SCHEDULE
3.18, the Company has good and marketable title to all material personal and
real properties and assets reflected in the Interim Balance Sheet or acquired
subsequent to December 31, 2002 (other than property and assets disposed of in
the Ordinary Course of Business), free and clear of all liens or encumbrances of
any kind whatsoever; provided, however, that the representations and warranties
contained in this sentence do not cover liens or encumbrances that: (i) are
reflected in the Interim Balance Sheet or in SCHEDULE 3.18; (ii) represent liens
of current taxes not yet due or which, if due, may be paid without penalty, or
which are being contested in good faith by appropriate proceedings; and (iii)
represent such imperfections of title, liens, encumbrances,
15
zoning requirements and easements, if any, as are not substantial in character,
amount or extent and do not materially detract from the value, or interfere with
the present use, of the properties and assets subject thereto.
3.19 INTELLECTUAL PROPERTY.
(a) INTELLECTUAL PROPERTY ASSETS. The term "Intellectual
Property Assets" means:
(i) the name "All American Plazas" or any variation
or derivation thereof, all fictional business names, trading
names, registered and unregistered trademarks, service marks,
and applications owned, used or licensed to the Company
(collectively, "MARKS"); and
(ii) all know-how, trade secrets, confidential
information, customer lists, software, technical information,
data, and process technology (collectively, "TRADE SECRETS")
owned, used, or licensed by the Company as licensee or licensor.
(b) AGREEMENTS. SCHEDULE 3.19(B) contains a complete and
accurate list and summary description, including any royalties paid or
received by the Company, of all Contracts relating to the Intellectual
Property Assets to which the Company is a party or by which the Company
is bound, except for any license implied by the sale of a product and
perpetual, paid-up licenses for commonly available software programs
with a value of less than $30,000 under which the Company is the
licensee. There are no outstanding and, to Sellers' Knowledge, no
Threatened disputes or disagreements with respect to any such agreement.
(c) KNOW-HOW NECESSARY FOR THE BUSINESS.
(i) The Company is the owner of all right, title,
and interest in and to each of the Intellectual Property Assets,
free and clear of all Encumbrances, or has the right to use the
Intellectual Property Assets without payment to a third party.
(ii) To the Sellers' Knowledge, except as set forth
in SCHEDULE 3.19(C), no employee of the Company has entered into
any Contract that restricts or limits in any way the scope or
type of work in which the employee may be engaged or requires
the employee to transfer, assign, or disclose information
concerning his work to anyone other than the Company.
(d) TRADEMARKS.
SCHEDULE 3.19(D) contains a complete and accurate list
and summary description of all Marks. The Company is the owner of all
right, title, and interest in and to each of the Marks, free and clear
of all liens, security interests, charges, encumbrances, equities, and
other adverse claims.
16
(e) TRADE SECRETS. The Company has good title and an
absolute (but not necessarily exclusive) right to use the Trade Secrets.
To Sellers' Knowledge, no Trade Secret is subject to any adverse claim
or has been challenged or threatened in any way.
3.20 CERTAIN PAYMENTS. Except as set forth in SCHEDULE 3.20, since
January 1, 2000, neither the Company nor any director, officer, agent, or
employee of the Company, or any other Person associated with or acting for or on
behalf of the Company, has directly or indirectly (a) made any contribution,
gift, bribe, rebate, payoff, influence payment, kickback, or other payment to
any Person, private or public, regardless of form, whether in money, property,
or services (i) to obtain favorable treatment in securing business, (ii) to pay
for favorable treatment for business secured, or (iii) to obtain special
concessions or for special concessions already obtained, for or in respect of
the Company or any Affiliate of the Company, in violation of any Legal
Requirement, or (b) except in the Ordinary Course of Business established or
maintained any fund or asset that has not been recorded in the books and records
of the Company.
3.21 RELATED PARTY TRANSACTIONS. Except as disclosed in SCHEDULE 3.21,
the Company has no contract, extension of credit, business arrangement or other
relationship of any kind with any of the following persons: (i) any executive
officer or director (including any person who has served in such capacity since
January 1, 2000) of the Company; (ii) any shareholder owning five percent (5%)
or more of the outstanding Company Common Stock; and (iii) any "associate" (as
defined in Rule 405 under the Securities Act) of the foregoing persons or any
business in which any of the foregoing persons is an officer, director, employee
or five percent (5%) or greater equity owner. Each such contract or extension of
credit disclosed in SCHEDULE 3.21, except as otherwise specifically described
therein, has been made in the Ordinary Course of Business on substantially the
same terms, including interest rates and collateral, as those prevailing at the
time for comparable arms' length transactions with other persons that do not
involve more than a normal risk of collectibility or present other unfavorable
features.
3.22 BROKERS OR FINDER. INTENTIONALLY LEFT BLANK
3.23 LEGAL REPRESENTATION. Each of Sellers has been represented by legal
counsel in connection with the Contemplated Transactions.
3.24 DISCLOSURE. Neither this Agreement, nor any financial statement,
schedule (including without limitation its Schedules to this Agreement),
certificate, or other statement or document delivered by Sellers to Buyer in
connection herewith contains any statement which, at the time and in light of
the circumstances under which it is made, is false or misleading with respect to
any material fact or omits to state any material fact necessary to make the
statements contained herein or therein not false or misleading.
3.25 INVESTMENT REPRESENTATIONS. Each Seller severally and not jointly
represents and warrants that:
(a) INVESTMENT PURPOSE. Each Seller is acquiring the Able
Shares for its own account for investment only and not with a view
towards, or for resale in connection with, the public sale or
distribution thereof, except pursuant to sales registered or exempted
under the 1933 Act.
17
(b) ACCREDITED INVESTOR STATUS. Each Seller is an
"accredited investor" as that term is defined in Rule 501(a) of
Regulation D.
(c) RELIANCE ON EXEMPTIONS. Each Seller understands that the
Able Shares are being offered and sold to it in reliance on specific
exemptions from the registration requirements of United States federal
and state securities laws and that the Buyer is relying in part upon the
truth and accuracy of, and each Seller's compliance with, the
representations, warranties, agreements, acknowledgments and
understandings of each Seller set forth herein in order to determine the
availability of such exemptions and the eligibility of each Seller to
acquire the Able Shares.
(d) INFORMATION. Each Seller and its advisors, if any, have
been furnished with all materials relating to the business, finances and
operations of the Buyer and materials relating to the offer and sale of
the Able Shares, which have been requested by such Seller. Each Seller
and its advisors, if any, have been afforded the opportunity to ask
questions of the Buyer. Neither such inquiries nor any other due
diligence investigations conducted by such Seller or its advisors, if
any, or its representatives shall modify, amend or affect the Seller's
right to rely on the Buyer's representations and warranties contained
herein. Each Seller understands that its investment in the Able Shares
involves a high degree of risk. Each Seller has sought such accounting,
legal and tax advice as it has considered necessary to make an informed
investment decision with respect to its acquisition of the Able Shares.
(e) NO GOVERNMENTAL REVIEW. Each Seller understands that no
United States federal or state agency or any other government or
governmental agency has passed on or made any recommendation or
endorsement of the Able Shares or the fairness or suitability of the
investment in the Able Shares nor have such authorities passed upon or
endorsed the merits of the offering of the Able Shares.
(f) TRANSFER OR RESALE. Each Seller understands that: (i)
the Able Shares have not been and are not being registered under the
1933 Act or any state securities laws, and may not be offered for sale,
sold, assigned or transferred unless (A) subsequently registered
thereunder, (B) such Seller shall have delivered to the Buyer an opinion
of counsel, in a generally acceptable form, to the effect that such Able
Shares to be sold, assigned or transferred may be sold, assigned or
transferred pursuant to an exemption from such registration, or (C) such
Seller provides the Buyer with reasonable assurance that such Able
Shares can be sold, assigned or transferred pursuant to Rule 144
promulgated under the 1933 Act, as amended, (or a successor rule
thereto) ("Rule 144"); (ii) any sale of the Able Shares made in reliance
on Rule 144 may be made only in accordance with the terms of Rule 144
and further, if Rule 144 is not applicable, any resale of the Able
Shares under circumstances in which the seller (or the person through
whom the sale is made) may be deemed to be an underwriter (as that term
is defined in the 0000 Xxx) may require compliance with some other
exemption under the 1933 Act or the rules and regulations of the SEC
thereunder; and (iii) neither the Buyer nor any other person is under
any obligation to register the Able Shares for resale under the 1933 Act
or any state securities laws or to comply with the terms and conditions
of any resale exemption thereunder.
18
(g) LEGENDS. Each Seller understands that the certificates
or other instruments representing the Able Shares, until such time as
the sale of the Able Shares have been registered under the 1933 Act,
shall bear a restrictive legend in substantially the following form (and
a stop-transfer order may be placed against transfer of such stock
certificates):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD,
TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, OR (B) AN OPINION
OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT
REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS OR (II)
UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT.
The legend set forth above shall be removed and the Buyer shall issue a
certificate without such legend to the holder of the Able Shares upon which it
is stamped, if, unless otherwise required by state securities laws, (i) such
Able Shares are registered for sale under the 1933 Act, (ii) in connection with
a sale, assignment or other transfer, such holder provides the Buyer with an
opinion of counsel, in a generally acceptable form, to the effect that such
sale, assignment or transfer of the Able Shares may be made without registration
under the 1933 Act, or (iii) such holder provides the Buyer with reasonable
assurance that the Able Shares can be sold, assigned or transferred pursuant to
Rule 144 without any restriction as to the number of securities acquired as of a
particular date that can then be immediately sold.
(h) VALIDITY; ENFORCEMENT. This Agreement has been duly and
validly authorized, executed and delivered on behalf of such Seller and
is a valid and binding agreement of such Seller enforceable against such
Seller in accordance with its terms, subject as to enforceability to
general principles of equity and to applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation and other similar laws relating
to, or affecting generally, the enforcement of applicable creditors'
rights and remedies.
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Sellers as follows:
4.1 ORGANIZATION AND GOOD STANDING. Buyer is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
New Jersey, with full corporate power and authority to conduct its business as
it is now being conducted, to own or use the properties and assets that it
purports to own or use, and to perform all of its obligations.
4.2 AUTHORITY; NO CONFLICT; CONSENTS.
(a) This Agreement constitutes the legal, valid, and binding
obligation of Buyer, enforceable against Buyer in accordance with its
terms, except as such enforceability may be limited by laws regarding
bankruptcy, insolvency, and other creditors' rights, and by
19
principles of equity. Upon the execution and delivery by the Company of
the Company Releases and upon execution and delivery by Buyer of the
Able Shares and Buyer's representation herein contained (collectively,
the "BUYER'S CLOSING DOCUMENTS"), the Buyer's Closing Documents will
constitute the legal, valid, and binding obligations of Buyer,
enforceable against Buyer in accordance with their respective terms,
except as such enforceability may be limited by laws regarding
bankruptcy, insolvency, and other creditors' rights, and by principles
of equity. Buyer has the absolute and unrestricted right, power, and
authority to execute and deliver this Agreement and the Buyer's Closing
Documents and to perform its obligations under this Agreement and the
Buyer's Closing Documents. The Buyer has the absolute and unrestricted
right, power, authority and capacity to execute and deliver this
Agreement and to perform its obligations under this Agreement. At the
Closing, the Buyer will have the absolute and unrestrictive right,
power, authority and capacity to execute and deliver the Buyer's Closing
Documents and to perform its obligations thereunder.
(b) Except as set forth in SCHEDULE 4.2, neither the
execution and delivery of this Agreement by Buyer nor the consummation
or performance of any of the Contemplated Transactions by Buyer will
give any Person the right to prevent, delay, or otherwise interfere with
any of the Contemplated Transactions pursuant to:
(i) any provision of Buyer's Organizational
Documents;
(ii) any resolution adopted by the board of directors
or the stockholders of Buyer;
(iii) any Legal Requirement or Order to which Buyer
may be subject;
(iv) any Contract to which Buyer is a party or by
which Buyer may be bound; or
(v) any transaction or contract which the Buyer is
contemplating.
(c) Except as set forth in SCHEDULE 4.2, Buyer is not and
will not be required to obtain any Consent from any Person in connection
with the execution and delivery of this Agreement or the consummation or
performance of any of the Contemplated Transactions.
4.3 INVESTMENT INTENT. Buyer is acquiring the Shares for its own account
and not with a view to their distribution within the meaning of Section 2(11) of
the Securities Act.
4.4 CERTAIN PROCEEDINGS. There is no pending Proceeding that has been
commenced against Buyer and that challenges, or may have the effect of
preventing, delaying, making illegal, or otherwise interfering with, any of the
Contemplated Transactions. To Buyer's knowledge, no such Proceeding has been
Threatened.
4.5 BROKERS OR FINDERS. Buyer and its officers and agents have incurred
no obligation or liability, contingent or otherwise, for brokerage or finders'
fees or agents' commissions or other similar payment in connection with this
Agreement and will indemnify and hold Sellers harmless
20
from any such payment alleged to be due by or through Buyer as a result of the
action of Buyer or its officers or agents.
4.6 NO UNDISCLOSED LIABILITIES. Except as set forth in SCHEDULE 4.7, the
Buyer has no liabilities or obligations of any nature (whether known or unknown
and whether absolute, accrued, contingent, or otherwise) except for liabilities
or obligations reflected or reserved against in the Buyer Financial Statements
and current liabilities incurred in the Ordinary Course of Business since the
respective dates thereof.
4.7 TAXES. The Buyer has filed or caused to be filed all Tax Returns
that are or were required to be filed by or with respect to it, either
separately or as a member of a group of corporations, pursuant to applicable
Legal Requirements. The Buyer has paid, or made provision for the payment of,
all Taxes that have or may have become due pursuant to those Tax Returns or
otherwise, or pursuant to any assessment received by Buyer, except such Taxes,
if any, as are listed in SCHEDULE 4.8 and are being contested in good faith and
as to which adequate reserves (determined in accordance with GAAP) have been
provided in the financial statements available to the public.
4.8 COMPLIANCE WITH LEGAL REQUIREMENTS, GOVERNMENTAL AUTHORIZATIONS.
(a) Except as set forth in SCHEDULE 4.10:
(b) the Buyer is, and at all times since January 1, 2000 has
been, in full compliance with each Legal Requirement that is or was
applicable to it or to the conduct or operation of its business or the
ownership or use of any of its assets;
(c) no event has occurred or circumstance exists that (with
or without notice or lapse of time) (A) may constitute or result in a
violation by the Buyer of, or a failure on the part of the Buyer to
comply with, any Legal Requirement, or (B) may give rise to any
obligation on the part of the Buyer to undertake, or to bear all or any
portion of the cost of, any remedial action of any nature; and
(d) the Buyer has not received, at any time since January 1,
2000, any notice or other communication (whether oral or written) from
any Governmental Body or any other Person regarding (A) any actual,
alleged, possible, or potential violation of, or failure to comply with,
any Legal Requirement, or (B) any actual, alleged, possible, or
potential obligation on the part of the Buyer to undertake, or to bear
all or any portion of the cost of, any remedial action of any nature.
(e) the Buyer is, and at all times since January 1, 2000 has
been, in full compliance with all of the terms and requirements of each
Governmental Authorization identified or required to be identified in
SCHEDULE 4.10;
(f) no event has occurred or circumstance exists that may
(with or without notice or lapse of time) (A) constitute or result
directly or indirectly in a violation of or a failure to comply with any
term or requirement of any Governmental Authorization listed or required
to be listed in SCHEDULE 4.10, or (B) result directly or indirectly in
the revocation,
21
withdrawal, suspension, cancellation, or termination of, or any
modification to, any Governmental Authorization listed or required to be
listed in SCHEDULE 4.10;
(g) the Buyer has not received, at any time since January 1,
2000, any notice or other communication (whether oral or written) from
any Governmental Body or any other Person regarding (A) any actual,
alleged, possible, or potential violation of or failure to comply with
any term or requirement of any Governmental Authorization, or (B) any
actual, proposed, possible, or potential revocation, withdrawal,
suspension, cancellation, termination of, or modification to any
Governmental Authorization; and
(h) all applications required to have been filed for the
renewal of the Governmental Authorizations listed or required to be
listed in SCHEDULE 4.10 have been duly filed on a timely basis with the
appropriate Governmental Bodies, and all other filings required to have
been made with respect to such Governmental Authorizations have been
duly made on a timely basis with the appropriate Governmental Bodies.
The Governmental Authorizations listed in SCHEDULE 4.10 collectively
constitute all of the Governmental Authorizations necessary to permit the Buyer
to lawfully conduct and operate its business in the manner they currently
conduct and operate such businesses and to permit the Buyer to own and use its
assets in the manner in which it currently owns and uses such assets.
4.9 NO MATERIAL ADVERSE CHANGE. Since the date of the Buyer Interim
Balance Sheet, there has not been any Material Adverse Change in the business,
operations, properties, assets, or condition of the Buyer or any Guarantor and
no event has occurred or circumstance exists that may result in such a Material
Adverse Change other than changes, events and circumstances existing in or
affecting the capital markets, and general economic and industry conditions.
4.10 DISCLOSURE. Neither this Agreement, nor any financial statement,
schedule (including without limitation its Schedules to this Agreement),
certificate, or other statement or document delivered by Buyer to Sellers in
connection herewith contains any statement which, at the time and in light of
the circumstances under which it is made, is false or misleading with respect to
any material fact or omits to state any material fact necessary to make the
statements contained herein or therein not false or misleading.
ARTICLE V. COVENANTS OF SELLERS PRIOR TO CLOSING DATE
5.1 ACCESS AND INVESTIGATION. Between the date of this Agreement and the
Closing Date, Sellers will, and will cause the Company and its Representatives
to, (a) afford Buyer and its Representatives and their Representatives
(collectively, "BUYER'S ADVISORS") reasonable access, after appropriate notice,
to the Company's personnel, properties, contracts, books and records, and other
documents and data, (b) furnish Buyer and Buyer's Advisors with copies of all
such contracts, books and records, and other existing documents and data
belonging to the Company as Buyer may reasonably request, and (c) furnish Buyer
and Buyer's Advisors with such additional financial, operating, and other data
and information relating to the Company as Buyer may reasonably request. To the
extent practicable, Buyer will so conduct its interviews with personnel as to
minimize disruption and shall conduct its review off-site.
5.2 OPERATION OF THE BUSINESS OF THE COMPANY.
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(a) Between the date of this Agreement and the Closing Date,
Sellers will, and will cause the Company to conduct the business of the
Company only in the Ordinary Course of Business, except as set forth in
SCHEDULE 5.2.
(b) Without limiting the generality of the provisions of (a)
above, the Sellers shall cause the Company to (absent the prior written
consent of Buyer and except as set forth in SCHEDULE 5.2):
(i) not issue any additional shares of capital stock
of any class or redeem any outstanding shares of capital stock;
(ii) maintain the fixed assets essential to the
Company's operations in good operating repair and condition,
subject to normal wear and tear, and make repairs and
replacements in accordance with prior practices;
(iii) report to Buyer concerning operational matters
of a material nature and otherwise report periodically to Buyer
concerning any material changes to status of the business,
operations, and finances of the Company;
(iv) continue to pay and satisfy the Company's
liabilities in the Ordinary Course of Business, paying such
liabilities in accordance with prior practices;
(v) continue to maintain in full force and effect or
renew or replace all policies of insurance now in effect which
cover the assets or the Company and give all notices and present
all material claims under all policies of insurance in due and
timely fashion;
(vi) not enter into any material leases or contracts
for the purchase or sale of products, utilities, or services,
except (A) those made in the Ordinary Course of Business or (B)
those which may be canceled without liability upon not more than
thirty (30) days' notice; or (C) with approval of Buyer;
(vii) use Best Efforts to preserve the business
organization and properties to be transferred hereunder intact,
including present operations and relationships with lessors,
licensors, customers and employees; use reasonable efforts to
preserve for Buyer the goodwill of the Company's employees,
suppliers, customers, and other persons with whom the Company
has business relations;
(viii) not enter into any contract, agreement, or
understanding with any labor union or other association
representing any employee; not enter into, amend, or terminate,
fully or partially, any benefit plan; and not withdraw any funds
from any benefit plan or trust or other funding arrangement
maintained pursuant thereto;
(ix) except for annual merit increases awarded to
non-officer employees in the Ordinary Course of Business
consistent with past business practices not authorize or grant
any wage or salary increase, otherwise directly or indirectly
23
increase post Closing compensation to or for any employee, or
agree in any manner to any such post Closing increase;
(x) not create or incur any indebtedness for
borrowed money or assume directly or indirectly any debt,
obligation, or liability (whether absolute or contingent,
whether directly or as surety or guarantor, and whether or not
currently due or payable) which will exist after the Closing
Date, except in the Ordinary Course of Business consistent with
past business practices and policies and as required for the
operation of the Company;
(xi) not make any material change in the accounting
methods, practices, policies, principles, or procedures of the
Company, except as necessary to perform this Agreement, without
consulting with Buyer;
(xii) not enter into any lease, sublease, or contract,
regarding the acquisition, leasing, or occupancy of any real
estate, equipment, vehicles, or other items relating to the
Company except in the Ordinary Course of Business or upon
approval of the Buyer;
(xiii) not sell, convey, lease, abandon, or otherwise
dispose of, or grant, suffer, or permit any lien or encumbrance
upon, any of the Company's material assets, except on arm's
length terms or in the Ordinary Course of Business;
(xiv) not enter into or modify in any manner any
material Contract to which it is a party except in the Ordinary
Course of Business, other than as contemplated in clause (viii)
above; and
(xv) accrue and/or pay all withholding and other
Taxes on a timely basis.
(c) Notwithstanding the foregoing, nothing in this Agreement
shall be construed to limit the right of the Sellers to take actions or
engage in transactions (or to cause the Company to take actions or
engage in transactions) which are consistent with the obligations under
this Agreement. The parties contemplate that the Company may refinance
its debt with respect to its Milton, Pennsylvania facility, and the
parties shall cooperate with respect thereto.
5.3 NEGATIVE COVENANT. Except as otherwise expressly permitted by this
Agreement, between the date of this Agreement and the Closing Date, Sellers will
not, and will cause the Company not to, without the prior consent of Buyer, take
any affirmative action, or fail to take any common and reasonable action within
their or its control, as a result of which any of the changes or events listed
in Section 3.6 is likely to occur.
5.4 REQUIRED APPROVALS. As promptly as practicable after the date of
this Agreement, Sellers will, and will cause the Company to, make all filings
required by Legal Requirements to be made by them in order to consummate the
Contemplated Transactions. Between the date of this Agreement and the Closing
Date, Sellers will, and will cause the Company to, (i) cooperate with Buyer with
respect to all filings that Buyer elects to make or is required by Legal
Requirements to make in connection with the Contemplated Transactions, and (ii)
cooperate with
24
Buyer in obtaining all consents identified in SCHEDULE 4.2 or SCHEDULE 3.2. The
approvals required shall include, without limitation, approval of the
Contemplated Transaction by Securities and Exchange Commission and all other
governmental bodies so required pursuant to the Buyer's proxy filing, Buyer
Shareholder approval and approval by Petro (the "Petro Franchise Consents") of
Buyer as a Petro franchisee with respect to the Company's Xxxxxx, Breezewood and
Frystown locations, without the payment of any fees to Petro other than as set
forth in the Company's existing franchise agreements with Petro (the "Petro
Franchise Agreements").
5.5 NOTIFICATION. Between the date of this Agreement and the Closing
Date, any Seller will promptly notify Buyer in writing if such Seller or the
Company becomes aware of any fact or condition that causes or constitutes a
Breach of any of Sellers' representations and warranties as of the date of this
Agreement, or if such Seller or the Company becomes aware of the occurrence
after the date of this Agreement of any fact or condition that would (except as
expressly contemplated by this Agreement) cause or constitute a Breach of any
such representation or warranty had such representation or warranty been made as
of the time of occurrence or discovery of such fact or condition. During the
same period, each Seller will promptly notify Buyer of the occurrence of any
Breach of any covenant of Sellers in this Section 5 or of the occurrence of any
event that is likely to make the satisfaction of the conditions in Section 7
impossible or unlikely.
5.6 NO SOLICITATION OF OTHER PROPOSALS; ORDINARY COURSE OPERATIONS. The
Company and the Sellers hereby agree that they will not directly or indirectly
solicit, entertain or encourage inquiries or proposals, or enter into an
agreement or negotiate with any other party, to sell, or enter into any merger
on consolidation with respect to, the Business, the Company, a substantial
portion of the Company's assets or the Shares.
5.7 BEST EFFORTS. Between the date of this Agreement and the Closing
Date, Sellers will use their Best Efforts to cause the conditions in Sections 7
and 8 to be satisfied.
ARTICLE VI. COVENANTS OF BUYER
6.1 PRIOR TO CLOSING.
(a) APPROVALS OF GOVERNMENTAL BODIES.
As promptly as practicable after the date of this Agreement, Buyer will,
and will cause each of its Related Persons to, make all filings required by
Legal Requirements to be made by them to consummate the Contemplated
Transactions. Between the date of this Agreement and the Closing Date, Buyer
will, and will cause each Related Person to, cooperate with Sellers and the
Company with respect to all filings that Sellers or the Company are required by
Legal Requirements to make in connection with the Contemplated Transactions, and
(ii) cooperate with Sellers and the Company in obtaining all consents identified
in SCHEDULE 3.2; provided that this Agreement will not require Buyer to dispose
of or make any unreasonable change in any portion of its business or to incur
any other unreasonable burden to obtain a Governmental Authorization.
25
(b) BEST EFFORTS.
Except as set forth in the proviso to Section 6.1, between the date of
this Agreement and the Closing Date, Buyer will use its Best Efforts to cause
the conditions in Sections 7 and 8 to be satisfied.
(c) NOTIFICATION.
Buyer will notify Seller in writing promptly of (a) the occurrence of
any Breach by Buyer, (b) any Knowledge Buyer may obtain of any Breach by any
Seller, and (c) the occurrence of any event known to Buyer that is likely to
make the satisfaction of the conditions in Sections 7 or 8 impossible or
unlikely.
ARTICLE VII. CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE
Buyer's obligation to purchase the Shares and to take the other actions
required to be taken by Buyer at the Closing is subject to the satisfaction, at
or prior to the Closing, of each of the following conditions (any of which may
be waived by Buyer, in whole or in part):
7.1 ACCURACY OF REPRESENTATIONS; MATERIAL ADVERSE CHANGES.
(a) All of Sellers' representations and warranties in this
Agreement must be accurate in all material respects as of the Closing Date as if
made on the Closing Date, or, if inaccurate, must not have a Material Adverse
Effect on the Company's business, finances or operations taken as a whole
following Closing.
(b) Between the date hereof and the Closing Date, there
shall not have occurred any change in the assets, liabilities, business,
financial condition, operations, or results of operations of the Company which
would have a Material Adverse Effect on the Company's business, finances or
operations taken as a whole following Closing.
7.2 SELLERS' PERFORMANCE.
(a) All of the covenants and obligations that Sellers are
required to perform or to comply with pursuant to this Agreement at or prior to
the Closing must have been duly performed and complied with in all material
respects.
(b) Each document required to be delivered by Sellers
pursuant to Section 2.4(a) must have been delivered.
7.3 CONSENTS. Each of the Consents identified in SCHEDULE 3.2 or
SCHEDULE 4.2 must have been obtained and must be in full force and effect,
including, but not limited to, the Petro Franchise Consents.
7.4 NO PROCEEDINGS. Since the date of this Agreement, there must not
have been commenced or Threatened against Buyer, or against any Person
affiliated with Buyer, any Proceeding (a) involving any material challenge to,
or seeking damages or other relief in connection with, any of the Contemplated
Transactions, or (b) that would have the effect of
26
preventing, delaying, making illegal, or otherwise interfering with any of the
Contemplated Transactions.
7.5 NO CLAIM REGARDING STOCK OWNERSHIP OR SALE PROCEEDS
There must not have been made or Threatened by any Person any claim
(which is not or cannot be settled or dismissed prior to closing) asserting that
such Person (a) is the holder or the beneficial owner of, or has the right to
acquire or to obtain beneficial ownership of, any stock of, or any other voting,
equity, or ownership interest in, any of the Company, or (b) is entitled to all
or any portion of the Purchase Price payable for the Shares.
7.6 SHAREHOLDER APPROVAL
The shareholders of Buyer shall have approved this Agreement and the
transactions contemplated hereby.
ARTICLE VIII. CONDITIONS PRECEDENT TO SELLERS' OBLIGATION TO CLOSE
Sellers' obligation to sell the Shares and to take the other actions
required to be taken by Sellers at the Closing is subject to the satisfaction,
at or prior to the Closing, of each of the following conditions (any of which
may be waived by Sellers, in whole or in part):
8.1 ACCURACY OF REPRESENTATIONS; MATERIAL ADVERSE CHANGES.
(a) All of Buyer's representations and warranties in this
Agreement must be accurate in all material respects as of the Closing
Date as if made on the Closing Date or, if inaccurate, must not have a
Material Adverse Effect on Sellers.
(b) Between the date hereof and the Closing Date, there
shall not have occurred any change in the assets, liabilities, business,
financial condition, operations, or results of operations of the Buyer
which would have a Material Adverse Effect on the Buyer's business,
finances or operations taken as a whole following Closing.
8.2 BUYER'S PERFORMANCE.
(a) All of the covenants and obligations that Buyer is
required to perform or to comply with pursuant to this Agreement at or
prior to the Closing must have been performed and complied with in all
material respects.
(b) Buyer must have delivered each of the documents required
to be delivered by Buyer pursuant to Section 2.4(b) and must deliver the
Able Shares to the Sellers.
8.3 CONSENTS
Each of the Consents identified in SCHEDULE 3.2 or SCHEDULE 4.2 must
have been obtained and must be in full force and effect, including, but not
limited to, the Petro Franchise Consents.
27
8.4 NO INJUNCTION
There must not be in effect any Legal Requirement or any injunction or
other Order that (a) prohibits the sale of the Shares by Sellers to Buyer, and
(b) has been adopted or issued, or has otherwise become effective, since the
date of this Agreement.
ARTICLE IX. TERMINATION
9.1 TERMINATION EVENTS. This Agreement may by notice be terminated;
(a) by either Buyer or Sellers if a material Breach of any
representation, warranty or obligation contained in this Agreement has
been committed by the other party and such Breach has not been waived
or, to the extent the Breach is of the nature which can be cured, not
cured within thirty (30) days of written notice of such Breach by the
other parties;
(b) (i) by Buyer if any of the conditions in Section 7 has
not been satisfied as of the Closing Date or if satisfaction of such a
condition is or becomes impossible (other than through the failure of
Buyer to comply with its obligations under this Agreement) and Buyer has
not waived such condition on or before the Closing Date; or (ii) by
Sellers, if any of the conditions in Section 8 has not been satisfied as
of the Closing Date or if satisfaction of such a condition is or becomes
impossible (other than through the failure of Sellers to comply with
their obligations under this Agreement) and Sellers have not waived such
condition on or before the Closing Date;
(c) by mutual consent of Buyer and Sellers; or
A party seeking to exercise the rights provided in Subsection 9.1(a) shall so
notify the other party within fifteen (15) days after obtaining Knowledge of the
facts, events or circumstances giving rise to the right to terminate, but no
later than the Closing Date. In any other case provided for in this Section 9.1,
termination may be effected by written notice to the other parties before or at
Closing.
9.2 EFFECT OF TERMINATION; LIQUIDATED DAMAGES. If this Agreement is
terminated pursuant to Section 9.1(a) or 9.1(b) as a result of a Breach (it
being understood that a failure of a condition shall not be considered a Breach
unless it is caused by a party's breach of its representations and warranties,
or other obligations, under this Agreement), this Agreement will terminate,
except that sections 12.1 and 12.3 will survive.
ARTICLE X. INDEMNIFICATION; REMEDIES
10.1 SURVIVAL. All representations, warranties, covenants, and
obligations in this Agreement will survive the Closing, provided that all
representations and warranties of the parties shall expire two (2) years after
the Closing, (with the exception of Section 3.3(a), relating to title to the
Shares, which shall survive indefinitely, Section 3.9, relating to environmental
matters, which shall survive for three (3) years, and Section 3.12, relating to
taxes, which shall survive until expiration of the applicable statute of
limitations), subject to the provisions of Sections 10.4 and 10.5. Neither party
shall have any right to indemnification, payment of Damages or other remedy
after the Closing based on any inaccuracy or breach of such representations,
warranties, covenants, or obligations of which the injured party had any
knowledge before the Closing Date, the injured party's sole remedy in such case
being to terminate this Agreement and to decline to close pursuant to Section
9.1(a) and, if applicable, to receive the compensation as described in Section
9(2). The waiver of any condition based on the accuracy of any representation or
warranty, or on the performance of or compliance with any covenant or
obligation, will bar any right to indemnification, payment of
28
Damages, or other remedy based on such representations, warranties, covenants,
and obligations.
10.2 INDEMNIFICATION AND PAYMENT OF DAMAGES BY SELLERS
Subject to the limitations of Sections 10.1, 10.4 and 10.5, if the
Closing has occurred, Sellers jointly, in proportion to their percentage
ownership in the Company, will indemnify and hold harmless Buyer, the Company,
and their respective consolidated corporate parents and subsidiaries
(collectively, the "INDEMNIFIED PERSONS") for, and will pay to the Indemnified
Persons the amount of, any loss, liability, claim, damage (including incidental
and consequential damages), expense (including costs of investigation and
defense and reasonable, documented attorneys' fees of outside counsel) whether
or not involving a third-party claim (collectively, "DAMAGES"), arising,
directly or indirectly, from or in connection with: (a) any Breach of any
representation, warranty, covenant or obligation of Sellers in this Agreement;
or (b) any claim by any Person for brokerage or finder's fees or commissions or
similar payments based upon any agreement or understanding alleged to have been
made by any such Person with either Seller or the Company (or any Person acting
on their behalf) in connection with any of the Contemplated Transactions.
10.3 INDEMNIFICATION AND PAYMENT OF DAMAGES BY BUYER. Subject to the
limitations of Sections 10.1, 10.4 and 10.5, Buyer will indemnify and hold
harmless Sellers and their respective successors and assigns, and will pay to
Sellers, and their respective successors and assigns, the amount of any Damages
arising, directly or indirectly, from or in connection with (a) any Breach of
any representation, warranty, covenant or obligation of Buyer in this Agreement,
or in any certificate delivered by Buyer pursuant to this Agreement, or (b) any
claim by any Person for brokerage or finder's fees or commissions or similar
payments based upon any agreement or understanding alleged to have been made by
such Person with Buyer (or any Person acting on its behalf) in connection with
any of the Contemplated Transactions.
10.4 LIMITATIONS. If the Closing occurs, Sellers will have no liability
(for indemnification or otherwise) with respect to any representation or
warranty, unless on or before the date which is two years from the Closing Date
(or, in the case of 3.9, three years from the Closing Date), Buyer notifies
Sellers of a claim specifying the factual basis of that claim in reasonable
detail to the extent then known by Buyer. A claim pursuant to 3.3(a) (a "CLAIM")
or a claim with respect to Section 3.10, shall be made no more than six (6)
months after Buyer obtains Knowledge of the same, but in no event after the
expiration of the applicable statute of limitations.
29
10.5 LIMITATIONS ON AMOUNT--SELLERS.
(a) Sellers will have no liability (for indemnification or
otherwise) with respect to the matters described in Section 10.2 until
the total of all Damages with respect to such matters exceeds 1% of the
Purchase Price and then only for the amount by which such Damages exceed
such amount.
(b) Notwithstanding any other provision of this Agreement or
any other document, the maximum aggregate liability of the Sellers under
this Agreement shall be fifty percent (50%) of the amount of the
Purchase Price.
(c) Sellers' liability hereunder shall be further reduced to
the extent (i) the loss, event, liability or matter giving rise thereto
is covered by insurance maintained or required to be maintained by the
Company or the Buyer; (ii) the loss, event, liability or matter giving
rise thereto is reimbursable through government programs, including but
not limited to USTIF; and (iii) the loss, event, liability or matter
giving rise thereto provides the Buyer or the Company with any reduction
in taxes or other operating costs or any other economic benefit.
10.6 LIMITATIONS ON AMOUNT--BUYER.
(a) Buyer will have no liability (for indemnification or
otherwise) with respect to the matters described in clause of Section
10.3 until the total of all Damages with respect to such matters exceeds
1% of the Purchase Price, and then only for the amount by which such
Damages exceed such amount. However, this Section 10.6 will not apply to
any claim against Buyer based on failure to pay the Purchase Price.
(b) The maximum liability of Buyer under this Section 10
shall be fifty percent (50%) of the amount of the Purchase Price paid by
Buyer.
10.7 PROCEDURE FOR INDEMNIFICATION--THIRD PARTY CLAIMS.
(a) Promptly after receipt by a party of notice of the
commencement of any Proceeding against it against which that party is
entitled to indemnity under Sections 10.2 or 10.3, such indemnified
party will, if it intends to make a claim against an indemnifying party
under such Section, give notice to the indemnifying party of the
commencement of such claim within 30 (thirty) days of receipt of notice,
but the failure to notify the indemnifying party will not relieve the
indemnifying party of any liability that it may have to any indemnified
party, except to the extent that the indemnifying party demonstrates
that the defense of such action is prejudiced by the indemnifying
party's failure to give such notice. The indemnified party shall keep
the indemnifying party informed with respect to any significant
developments with respect to such Proceeding, answer any questions the
indemnifying party or its or their representatives may have from time to
time with respect thereto and give all reasonable cooperation to the
indemnifying necessary to investigate and defend such Proceeding.
(b) If any Proceeding referred to in subsection (a) of this
Section is brought against an indemnified party and it gives notice to
the indemnifying party of the commencement of such Proceeding, the
indemnifying party will be entitled to participate in such Proceeding
and, to the extent that it wishes (unless (i) the indemnifying party is
30
also a party to such Proceeding and the indemnified party determines in
good faith that joint representation would be inappropriate, or (ii) the
indemnifying party fails to provide reasonable assurance to the
indemnified party of its financial capacity to defend such Proceeding
and provide indemnification with respect to such Proceeding), to assume
the defense of such Proceeding with counsel reasonably satisfactory to
the indemnified party . After notice from the indemnifying party to the
indemnified party of its election to assume the defense of such
Proceeding, the indemnifying party will not, as long as it diligently
conducts such defense, be liable to the indemnified party for any fees
of other counsel or any other expenses with respect to the defense of
such Proceeding, in each case subsequently incurred by the indemnified
party in connection with the defense of such Proceeding, other than
reasonable costs of investigation. The indemnifying party may, however,
assume the defense of a Proceeding while reserving expressly all rights
to deny that the claims made in that Proceeding are within the scope of
and subject to indemnification in which case (i) the indemnified party
may participate in the defense thereof, at the expense of the
indemnifying party using counsel of the indemnified party's choosing,
(ii) no compromise or settlement of such claims may be effected by the
indemnifying party without the indemnified party's consent unless (A)
there is no finding or admission of any violation of Legal Requirements
or any violation of the rights of any Person and no effect on any other
claims that may be made against the indemnified party, and (B) the sole
relief provided is monetary damages that are paid in full by the
indemnifying party; and (iii) the indemnified party will have no
liability with respect to any compromise or settlement of such claims
effected without its consent. If notice is given to an indemnifying
party of the commencement of any Proceeding and the indemnifying party
does not, within ten days after the indemnified party's notice is given,
give notice to the indemnified party of its election to assume the
defense of such Proceeding, the indemnifying party will be bound by any
determination made in such Proceeding or any compromise or settlement
effected by the indemnified party.
(c) Notwithstanding the foregoing, if an indemnified party
determines in good faith that there is a reasonable probability that a
Proceeding may adversely affect it or its affiliates other than as a
result of monetary damages for which it would be entitled to
indemnification under this Agreement, the indemnified party may, by
notice to the indemnifying party, assume the exclusive right to defend,
compromise, or settle such Proceeding, but the indemnifying party will
not be bound by any determination of a Proceeding so defended or any
compromise or settlement effected without its consent.
(d) Section 12.5 hereof shall govern jurisdiction over
disputes under this Article 10.
10.8 PROCEDURE FOR INDEMNIFICATION--OTHER CLAIMS. A claim for
indemnification for any matter not involving a third-party claim may be asserted
by notice to the party from whom indemnification is sought.
10.9 EXCLUSIVE REMEDY. If Closing occurs, a claim for Indemnifiable
Damages pursuant to this Article shall be the indemnified party's sole and
exclusive remedy with respect to any Breach of representation or warranty, or
covenant in this Agreement, or any other Transaction Document regardless whether
such claim arises in contract, tort, breach of warranty
31
or any other legal or equitable theory; provided that the rights and limitations
of this Article 10 shall not apply to any claim for failure to pay the Purchase
Price or for breach of any affirmative or negative covenant under this or any
other agreement related hereto that occurs after Closing, and the parties shall
retain all rights and remedies available hereunder or under applicable law for
such breach, subject to any express limits on such remedies contained in the
applicable agreement. Buyer shall be entitled to exercise its rights of set-off
set forth in Section 10.7 with respect thereto as provided in that section.
ARTICLE XI. POST-CLOSING COVENANTS
11.1 COOPERATION. The parties will cooperate with and provide such
further assurances to each other as are reasonably necessary or requested to
perfect (of record or otherwise) and effectively vest the Buyer's title to the
Shares, aid in the prosecution, defense, or other action regarding litigation of
any rights arising from or affecting title to the Shares, and assist in making a
smooth transition in ownership of the Shares from the Sellers to the Buyer at
each party's own expense. The Sellers, upon reasonable notice, shall be
permitted to have access to the records transferred to the Buyer as provided in
this Agreement at no charge to the Sellers.
11.2 TREATMENT OF CONFIDENTIAL INFORMATION.
(a) Each of the Sellers acknowledges that he or she has or
may have had in the past, and in the future may have, access to
confidential information of the Company, and Buyer. Each of Sellers
agree that he or she will keep confidential all such confidential
information and, except with the specific prior written consent of the
Buyer, will not disclose such confidential information to any person
except; (i) representatives of the Buyer, or (ii) its own
representatives, provided that such representatives (other than counsel)
agree to the confidentiality provisions of this Section. Confidential
information shall not include (A) such information that becomes known to
the public generally through no fault of the Sellers, (B) information
required to be disclosed by the terms of this Agreement or by law or the
order of any governmental authority under color of law, provided that
prior to disclosing any information pursuant to this clause (B), Sellers
shall, if possible, give prior written notice thereof to the Buyer and
provide the Buyer with the opportunity to contest such disclosure, or
(C) such information that the disclosing party reasonably believes is
required to be disclosed in connection with the defense of a lawsuit
against the disclosing party. Because of the difficulty of measuring the
economic loss that may be incurred as a result of the breach of the
covenants above, and because of the immediate and irreparable damage
that would be caused for which the injured party would have no other
adequate remedy, Sellers agree that Buyer and/or the Company may enforce
the provisions of this section by injunctions and restraining orders
against any of them who breaches any of these provisions. Nothing herein
shall be construed as prohibiting Buyer from pursuing any other remedy
available at law or in equity for such breach or threatened breach,
including the recovery of damages, subject to the limitations of Article
10.
(b) Because of the difficulty of measuring the economic loss
that may be incurred as a result of the breach of the covenant above,
and because of the immediate and irreparable damage that would be caused
for which the injured party would have no
32
other adequate remedy, Buyer agrees that Sellers may enforce the
provisions of this section by specific performance.
(c) The obligations of the parties under this Section 11.2
shall survive the termination of this Agreement.
11.3 PREPARATION OF TAX RETURNS. Sellers agree to prepare and execute
applicable tax returns for the Company for any interim or stub period. Buyer
agrees not to amend or otherwise change any tax return for any period ending
prior to the Closing Date, or otherwise make any election or similar accounting
method change that would have the effect of retroactively increasing any
Seller's tax liability without obtaining prior written consent from Sellers
holding at least 90% of the outstanding stock immediately prior to Closing.
11.4 EMPLOYMENT ARRANGEMENTS.
(a) From and after the Closing Date, Buyer shall use its
Best Efforts to retain a majority of the present full-time employees of
the Company at such employee's current position (or, if offered to, and
accepted by an employee, a position for which the employee is qualified
with Buyer or a Subsidiary of Buyer at a salary commensurate with the
position), and pay compensation to each person who was employed as of
the Closing Date and who continues to be employed by the Company on or
after the Closing Date (other than Sellers), that is at least equal to
the aggregate compensation that such person was receiving from the
Company prior to the Closing Date.
(b) For vesting and eligibility purposes for employee
benefits under each Company Benefit Plan and/or any employee benefit
plan established by Buyer after the Closing Date, employees and/or
directors, former employees and directors, if applicable, of the Company
shall receive credit for years of service with the Company.
11.5 NO SECTION 338 ELECTION. Buyer shall not make an election under
Section 338(h)(10) of the Internal Revenue Code of 1986, as amended, or any
applicable analogous provision of state or local law, in connection with the
Contemplated Transactions.
ARTICLE XII. GENERAL PROVISIONS
12.1 EXPENSES. Except as otherwise expressly provided in this Agreement
each party to this Agreement will bear its respective expenses incurred in
connection with the preparation, execution, and performance of this Agreement
and the Contemplated Transactions, including all fees and expenses of agents,
representatives, counsel, and accountants. For purposes of the foregoing,
Sellers' expenses shall include only those expenses incurred by Sellers after
March 30, 2005. In the event of termination of this Agreement, the obligation of
each party to pay its own expenses will be subject to any rights of such party
expressly provided herein arising from a breach of this Agreement by another
party.
12.2 PUBLIC ANNOUNCEMENTS; FILINGS. Any public announcement or similar
publicity with respect to this Agreement or the Contemplated Transactions will
be issued at such time and in such manner as Buyer determines based upon Buyer's
requirements as a publicly traded Company. Unless consented to by Buyer and
Sellers in advance, Sellers and Buyer shall, and
33
shall cause the Company to, keep this Agreement strictly confidential
and may not make any disclosure of this Agreement to any Person. Sellers
and Buyer will consult with each other concerning the means by which the
Company's employees, customers, and suppliers and others having dealings
with the Company will be informed of the Contemplated Transactions.
12.3 CONFIDENTIALITY.
(a) Except as otherwise contemplated by this Agreement,
between the date of this Agreement and the Closing Date, Buyer and
Sellers will maintain in confidence, and will cause the directors,
officers, employees, agents, and advisors of Buyer and the Company to
maintain in confidence any written, oral, or other information obtained
in confidence from another party or the Company in connection with this
Agreement or the Contemplated Transactions, unless (i) such information
is already known to such party or to others not bound by a duty of
confidentiality or such information becomes publicly available through
no fault of such party, (ii) the use of such information is necessary or
appropriate in making any filing or obtaining any consent or approval
required for the consummation of the Contemplated Transactions, or (iii)
the furnishing or use of such information is required by or necessary or
appropriate in connection with legal proceedings.
(b) If the Contemplated Transactions are not consummated,
each party will return or destroy as much of such written information as
the other party may reasonably request.
12.4 NOTICES. All notices, consents, waivers, and other communications
under this Agreement must be in writing and will be deemed to have been duly
given when (a) delivered by hand (with written confirmation of receipt), (b)
sent by telecopier (with written confirmation of receipt), provided that a copy
is mailed by registered mail, return receipt requested, or (c) when received by
the addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and telecopier
numbers set forth below (or to such other addresses and telecopier numbers as a
party may designate by notice to the other parties):
Sellers: Xxxxxxx Xxxxxxxxx
All American Plazas, Inc.
0000 Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Facsimile No.: 000-000-0000
With a copy to:
Xxxxxxxx Xxxxxxx, Esquire
Austern & Austern LLC
Facsimile No.: (000) 000-0000
34
Buyer: Xxxxx Xxxxxx
Able Energy, Inc.
000 Xxxxx Xxxx Xxxx
Xxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
With a copy to:
Xxxxxx Frost Chan & Xxxxxx, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxx, Esquire
Facsimile No.: 000-000-0000
12.5 JURISDICTION; SERVICE OF PROCESS. Any action or proceeding seeking
to enforce any provision of, or based on any right arising out of, this
Agreement may be brought against any of the parties in any court of the
Commonwealth of Pennsylvania or State of New Jersey, having jurisdiction, and
each of the parties consents to the jurisdiction of such courts (and of the
appropriate appellate courts) in any such action or proceeding and waives any
objection to venue laid therein. Process in any action or proceeding referred to
in the preceding sentence may be served on any party anywhere in the world.
12.6 FURTHER ASSURANCES. The parties agree (a) to furnish upon request
to each other such further information, (b) to execute and deliver to each other
such other documents, and (c) to do such other acts and things, all as the other
party may reasonably request for the purpose of carrying out the intent of this
Agreement and the documents referred to in this Agreement.
12.7 WAIVER. Subject to the limits set forth herein, (a) the rights and
remedies of the parties to this Agreement are cumulative and not alternative,
(b) neither the failure nor any delay by any party in exercising any right,
power, or privilege under this Agreement or the documents referred to in this
Agreement will operate as a waiver of such right, power, or privilege, and no
single or partial exercise of any such right, power, or privilege will preclude
any other or further exercise of such right, power, or privilege or the exercise
of any other right, power, or privilege. To the maximum extent permitted by
applicable law, (x) no claim or right arising out of this Agreement or the
documents referred to in this Agreement can be discharged by one party, in whole
or in part, by a waiver or renunciation of the claim or right unless in writing
signed by the other party; (y) no waiver that may be given by a party will be
applicable except in the specific instance for which it is given; and (z) no
notice to or demand on one party will be deemed to be a waiver of any obligation
of such party or of the right of the party giving such notice or demand to take
further action without notice or demand as provided in this Agreement or the
documents referred to in this Agreement.
12.8 ENTIRE AGREEMENT AND MODIFICATION. This Agreement supersedes all
prior oral and written communications, information, disclosures, bid documents,
and agreements between the parties with respect to its subject matter (including
memoranda, draft term sheets and correspondence relating thereto) and
constitutes (along with the Transaction Documents) a complete and exclusive
statement of the terms of the agreement between the parties with respect to its
subject matter. This Agreement may not be amended except by a written agreement
executed by the party to be charged with the amendment.
35
12.9 SCHEDULES. In the event of any inconsistency between the statements
in the body of this Agreement and those in the Schedules, the statements in the
Schedule will control.
12.10 ASSIGNMENTS, SUCCESSORS, AND NO THIRD-PARTY RIGHTS. Neither party
may assign any of its rights under this Agreement without the prior consent of
the other parties except that Buyer may assign any of its rights under this
Agreement to any Subsidiary of Buyer. Subject to the preceding sentence, this
Agreement will apply to, be binding in all respects upon, and inure to the
benefit of the heirs, personal representatives, successors and permitted assigns
of the parties. Nothing expressed or referred to in this Agreement will be
construed to give any Person other than the parties to this Agreement (or their
heirs, personal representatives, successors and permitted assigns) any legal or
equitable right, remedy, or claim under or with respect to this Agreement or any
provision of this Agreement. This Agreement and all of its provisions and
conditions are for the sole and exclusive benefit of the parties to this
Agreement and their heirs, personal representatives, successors and assigns.
12.11 SEVERABILITY. If any provision of this Agreement is held invalid
or unenforceable by any court of competent jurisdiction, the other provisions of
this Agreement will remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or unenforceable.
12.12 SECTION HEADINGS, CONSTRUCTION. The headings of Sections in this
Agreement are provided for convenience only and will not affect its construction
or interpretation. All references to "Section" or "Sections" refer to the
corresponding Section or Sections of this Agreement. All words used in this
Agreement will be construed to be of such gender or number as the circumstances
require. Unless otherwise expressly provided, the word "including" does not
limit the preceding words or terms.
12.13 TIME OF ESSENCE. With regard to all dates and time periods set
forth or referred to in this Agreement, time is of the essence.
12.14 GOVERNING LAW. This Agreement will be governed by the laws of the
State of New York without regard to conflicts of laws principles.
12.15 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement.
12.16 SELLERS' REPRESENTATIVE. Each Seller hereby appoints the Majority
Shareholder as identified on Schedule A annexed hereto as his or her
representative (the "Sellers' Representative"). The Sellers' Representative
shall have full power and authority to act on behalf of each individual Seller
with respect to all matters pertaining to this Agreement including, but not
limited to, the grant or request of waivers of any requirement of this
Agreement, the giving or acceptance of any notice permitted or required to be
given under this Agreement and the execution of any amendment to this Agreement
excepting only such amendments as would materially reduce the Purchase Price.
For purposes of the foregoing, each Seller hereby constitutes and appoints
Sellers' Representative with full power and authority as
36
Seller's true and lawful attorney-in-fact, with full power and authority in
Seller's name, place and stead to do any or all of the foregoing.
The foregoing grant of authority:
(i) is a special power of attorney coupled with an interest,
and is irrevocable;
(ii) may be exercised by such attorney-in-fact by executing
any agreement, certificate, instrument or document with a single signature as
attorney-in-fact for Seller; and
Each Seller hereby agrees to be bound by all the representations of
Seller's attorney-in fact and waives any and all defenses which may be available
to Seller to contest, negate or disaffirm the actions of such attorney-in-fact
under this power of attorney, and hereby ratifies and confirms all acts which
said attorney-in-fact may take as attorney-in-fact hereunder in all respects as
though performed by Seller.
[Signature Page Follows]
37
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first written above.
Attest All American Plazas, Inc.
By:_______________________________ By:________________________________
Name: ______________________ Name: XXXXXXX XXXXXXXXX
Title: Secretary Title: PRESIDENT
The "Sellers":
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
Able Energy, Inc.
By:________________________________
Name: XXXXX XXXXXX
Title: PRESIDENT
TABLE OF APPENDICES, EXHIBITS AND SCHEDULES
Appendix A Definitions
Exhibit 2.2(b) Escrow Agreement
Exhibit 2.2(c) Form of Note
Exhibit 2.2(d) Forms of Mortgages and Guaranty
Exhibit 2.4(a)(ii) Sellers' Releases
Exhibit 2.4(b)(i) Allocation of Purchase Price Among Sellers
Exhibit 2.4(c) Form of Non-Competition Agreement, Employment Agreement
and Consulting Arrangements
Schedule 3.1 Foreign Qualifications
Schedule 3.2 Authority/No Conflict; Required Notices and Consents
Schedule 3.3 Capitalization
Schedule 3.6 Absence of Certain Changes and Events
Schedule 3.8 Liabilities/Obligations
Schedule 3.9 Environmental Matters
Schedule 3.10 Taxes
Schedule 3.11 List of Employees
Schedule 3.12 Employee Benefit Plans
Schedule 3.13 Labor and Employment Agreements
Schedule 3.14 Compliance with Legal Requirements, Governmental
Authorizations
Schedule 3.15 Legal Proceedings; Orders
Schedule 3.16(a) List of Contracts
Schedule 3.16(b) Contract Liabilities and Restrictions
Schedule 3.16(c) Exceptions to Enforceability of Contracts
Schedule 3.16(d) Contract Defaults
Schedule 3.17(b) Self Insurance
Schedule 3.17(c) Insurance Policy Information
Schedule 3.18 Title to and Condition of Assets
Schedule 3.19(b) List of Contracts Relating to the Intellectual Property
Assets
Schedule 3.19(c) Employee Assignments of Intellectual Property
Schedule 3.19(d) List of Trademarks
Schedule 3.21 Related Party Transactions
Schedule 4.2 Authority; No Conflict
Schedule 4.7 Liabilities
Schedule 4.8 Taxes
Schedule 4.9 Employee Benefit Plans
Schedule 4.10 Legal Requirements
Schedule 4.12 Commitment Letters as to Closing Payment and Liquid
Security
2
APPENDIX A
"AFFILIATE"--an AFFILIATE of, or person AFFILIATED with, a specified person, is
a person that directly, or indirectly through one or more intermediaries,
controls or is controlled by, or is under common control with, the person
specified.
"APPLICABLE CONTRACT"--any Contract (a) under which the Company has or may
acquire any rights, (b) under which the Company has or may become subject to any
obligation or liability, or (c) by which the Company or any of the assets owned
or used by it is or may become bound.
"BALANCE SHEET"--as defined in Section 3.4.
"BEST EFFORTS"--the efforts that a prudent and commercially reasonable Person
desirous of achieving a result would use in similar circumstances to ensure that
such result is achieved as expeditiously as possible; provided, however, that an
obligation to use Best Efforts under this Agreement does not require the Person
subject to that obligation to take actions that would result in a Materially
Adverse Effect on the benefits to such Person of this Agreement and the
Contemplated Transactions, or would otherwise cause a Material Adverse Effect on
such Person.
"BREACH"--a "Breach" of a representation, warranty, covenant, obligation, or
other provision of this Agreement or any Transaction Document will be deemed to
have occurred if there is or has been any inaccuracy in or breach of, or any
failure to perform or comply with, such representation, warranty, covenant,
obligation, or other provision, and the term "Breach" means any such inaccuracy,
breach, failure, claim, occurrence, or circumstance.
"BUSINESS"--as defined in the Recitals to this Agreement.
"BUYER"--as defined in the first paragraph of this Agreement.
"CHANGE IN CONTROL"--
(i) the acquisition by any entity, person or group
(including any affiliates of such entity, person or group) of beneficial
ownership, as that term is defined in Rule 13d-3 under the Securities
Exchange Act of 1934, of Buyer's capital stock entitled to twenty-five
percent (25%) or more of the outstanding voting power of all capital
stock of Buyer;
(ii) the effective time of the merger, consolidation,
division, share exchange, or any other transaction outside the ordinary
course of business involving the Company (a "Business Combination"), as
a result of which the holders of the outstanding voting capital stock of
Buyer immediately prior to such Business Combination, excluding any
shareholder who is a party to the Business Combination (other than
Buyer) or is such party's affiliate as defined in the Securities
Exchange Act of 1934, hold less than a majority of the voting capital
stock of the surviving or resulting corporation;
3
(iii) the transfer of substantially all of the assets of Buyer
other than to a wholly owned subsidiary of Buyer; or
(iv) the occurrence of any of the foregoing transactions with
respect to the Company.
"CLAIM"--as defined in Section 10.4.
"CLOSING"--as defined in Section 2.3.
"CLOSING CERTIFICATES"--the certificates delivered at Closing pursuant to
Sections 2.4(a)(iii) and 2.4(b)(iii).
"CLOSING DATE"--the date and time as of which the Closing actually takes place.
"CLOSING PAYMENT" -- as defined in Section 2.2(b).
"COMPANY"--as defined in the Recitals of this Agreement.
"COMPANY BENEFIT PLANS"--as defined in Section 3.12.
"COMPANY RELEASES"--as defined in Section 2.4(b)(ii).
"CONSENT"--any approval, consent, ratification, waiver, or other authorization
(including any Governmental Authorization).
"CONTEMPLATED TRANSACTIONS"--all of the transactions contemplated by this
Agreement, including:
(a) the sale of the Shares by Sellers to Buyer;
(b) the execution and delivery of the Transaction Documents.
"CONTRACT"--any agreement, contract, obligation, promise, or undertaking
(whether written or oral ) for the breach of which the law gives a remedy.
"DAMAGES"--as defined in Section 10.2.
"ENCUMBRANCE"--any charge, claim, community property interest, condition,
equitable interest, lien, option, pledge, security interest, right of first
refusal, or restriction of any kind, including any restriction on use, voting,
transfer, receipt of income, or exercise of any other attribute of ownership.
"ERISA"--as defined in Section 3.12.
"GAAP"--generally accepted United States accounting principles, applied on a
basis consistent with the basis on which the Balance Sheet and the other
financial statements referred to in Section 3.4(b) were prepared.
4
"GOVERNMENTAL AUTHORIZATION"--any approval, consent, license, permit, waiver, or
other authorization issued, granted, given, or otherwise made available by or
under the authority of any Governmental Body or pursuant to any Legal
Requirement.
"GOVERNMENTAL BODY"--any:
(a) federal, state, local, municipal or other government within the
United States; or
(b) body exercising, or entitled to exercise, any administrative,
executive, judicial, legislative, police, regulatory, or taxing authority or
power of any nature within the United States.
"INTELLECTUAL PROPERTY ASSETS" --as defined in Section 3.19.
"INTERIM BALANCE SHEET"--as defined in Section 3.4.
"IRC"--the Internal Revenue Code of 1986 or any successor law, and regulations
issued by the IRS pursuant to the Internal Revenue Code or any successor law.
"IRS"--the United States Internal Revenue Service or any successor agency, and,
to the extent relevant, the United States Department of the Treasury.
"KNOWLEDGE"--an individual will be deemed to have "Knowledge" of a particular
fact or other matter if such individual is actually aware of such fact or other
matter. A Person (other than an individual) will be deemed to have "Knowledge"
of a particular fact or other matter if any individual who is serving, or who
has at any time served, as a director, senior executive, officer, partner,
executor, or trustee of such Person (or in any similar capacity) has, or at any
time had, actual knowledge of such fact or other matter.
"LEGAL REQUIREMENT"--any federal, state, local, municipal, or other
administrative order, constitution, law, ordinance, principle of common law,
regulation or statute of the United States or its Governmental Bodies.
"LETTER OF INTENT" -- as defined in the recitals of this Agreement.
"MAJORITY SHAREHOLDER" - as defined in the first paragraph of this Agreement.
"MATERIAL ADVERSE EFFECT" - a material adverse effect on the business,
operations, properties, assets or financial condition of a Person (and its
subsidiaries, if applicable), taken as a whole.
"MORTGAGES"--as defined in Section 2.2.
"NONCOMPETITION AGREEMENT"--as defined in Section 5.7.
"ORDER"--any award, decision, injunction, judgment, order, ruling, subpoena, or
verdict entered, issued, made, or rendered by any court, administrative agency,
or other Governmental Body or by any arbitrator.
"ORDINARY COURSE OF BUSINESS"--an action taken by a Person will be deemed to
have been taken in the "Ordinary Course of Business" unless:
5
(a) such action is required to be authorized by the board of
directors of such Person (or by any Person or group of Persons exercising
similar authority) and is required to be specifically authorized by the parent
company (if any) of such Person; or
(b) (i) such action is materially inconsistent with the past
practices of such Person and is not taken in the normal day-to-day operations of
such Person; and
(ii) such action is not similar in nature and magnitude to
actions customarily taken, without any authorization by the board of directors
(or by any Person or group of Persons exercising similar authority), in the
normal day-to-day operations of other Persons that are in the same line of
business as such Person.
"ORGANIZATIONAL DOCUMENTS"--(a) the articles or certificate of incorporation and
the bylaws of a corporation; (b) the partnership agreement and any statement of
partnership of a general partnership; (c) the limited partnership agreement and
the certificate of limited partnership of a limited partnership; (d) any charter
or similar document adopted or filed in connection with the creation, formation,
or organization of a Person; and (e) any amendment to any of the foregoing.
"PERSON"--any individual, corporation (including any non-profit corporation),
general or limited partnership, limited liability company, joint venture,
estate, trust, association, organization, labor union, or other entity or
Governmental Body.
"PETRO FRANCHISE AGREEMENTS"--as defined in Section 5.4.
"PETRO FRANCHISE CONSENTS"--as defined in Section 5.4.
"PROCEEDING"--any action, arbitration, audit, hearing, investigation,
litigation, or suit (whether civil, criminal, administrative, investigative, or
informal) commenced, brought, conducted, or heard by or before, or otherwise
involving, any Governmental Body or arbitrator.
"REPRESENTATIVE"--with respect to a particular Person, any director, officer,
employee, agent, consultant, advisor, lender, or other representative of such
Person, including legal counsel, accountants, and financial advisors.
"SCHEDULE"--the schedules delivered by Sellers to Buyer concurrently with the
execution and delivery of this Agreement.
"SEC"--the Securities and Exchange Commission.
"SECURITIES ACT"--the Securities Act of 1933 or any successor law, and
regulations and rules issued pursuant to that Act or any successor law.
"SELLERS"--as defined in the first paragraph of this Agreement.
"SELLERS' RELEASES"--as defined in Section 2.4.
"SHARES"--as defined in the Recitals of this Agreement.
6
"SUBSIDIARY"--with respect to any Person (the "Owner"), any corporation or other
Person of which securities or other interests having the power to elect a
majority of that corporation's or other Person's board of directors or similar
governing body, or otherwise having the power to direct the business and
policies of that corporation or other Person (other than securities or other
interests having such power only upon the happening of a contingency that has
not occurred) are held by the Owner or one or more of its Subsidiaries; when
used without reference to a particular Person, "Subsidiary" means a Subsidiary
of the Company.
"TAX RETURN"--any return (including any information return), report, statement,
schedule, notice, form, or other document or information filed with or submitted
to, or required to be filed with or submitted to, any Governmental Body in
connection with the determination, assessment, collection, or payment of any Tax
or in connection with the administration, implementation, or enforcement of or
compliance with any Legal Requirement relating to any Tax.
"THREATENED"--a claim, Proceeding, dispute, action, or other matter will be
deemed to have been "Threatened" if any demand or statement has been made
(orally or in writing) or any notice has been given (orally or in writing), or
if any other event has occurred or any other circumstances exist, that would
lead a prudent Person to conclude that such a claim, Proceeding, dispute,
action, or other matter is likely to be asserted, commenced, taken, or otherwise
pursued in the future.
"TRANSACTION DOCUMENTS"--This Agreement, the Sellers' Releases, the Company
Releases, the Closing Certificates and any other contracts or certificates
signed by the parties to effectuate the Contemplated Transactions.
7
SCHEDULE 5.8
[Forms of Agreement]
SCHEDULE A
STOCKHOLDER PERCENTAGE OWNERSHIP
================================================================================
1. Riverside Financial Group, Inc. 49.43%
2. Xxxxxxxxx Family Trust 5.33%
3. Xxxxxxx X. Xxxxx 0.10%
4. Crystal Heights, L.L.C. 15.05%
5. Xxxxxx Financial Partners, Inc. 30.09%
SCHEDULE B
STOCKHOLDER PERCENTAGE OWNERSHIP
================================================================================
1. Xxxxxxxxx Family Trust 27.9%
2. CT Realty 55.9%
3. Crystal Heights, L.L.C. 16.2%
