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EXHIBIT 2
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT, dated as of February 3 ,
1997, by and between BJ LIMITED PARTNERSHIP, a Maryland
partnership ("BJ"); XXXXX X. XXXXXXXXX and XXXXXXX X. XXXXXXXXX,
the sole partners of BJ ("Partners," each a "Partner"); EASTERN
SHORE REAL ESTATE, INC., a Delaware corporation (the
"Purchaser"); and CHESAPEAKE UTILITIES CORPORATION, a Delaware
corporation ("Chesapeake"),
W I T N E S S:
WHEREAS, pursuant to the terms and subject to the
conditions set forth in this Agreement, BJ desires to transfer
certain real properties and assets to Purchaser; and
WHEREAS, Chesapeake and the Partners are parties to a
certain Agreement and Plan of Merger dated January 10, 1997, by
and among Chesapeake, the Partners,
Tri-County Gas Company, Inc. ("Tri-County"), and CPK Sub-A, Inc.
(the "Merger Agreement");
NOW THEREFORE, in consideration of the mutual covenants
and agreements hereinafter set forth, the parties hereby agree as
follows:
1. PURCHASE AND SALE
1.1 Purchase and Sale of Purchased Assets. Subject to
the terms and conditions hereof, BJ hereby agrees to sell, assign
and deliver to Purchaser and Purchaser hereby agrees to purchase
from BJ certain real properties and assets, which are hereinafter
defined as the "Purchased Assets", and described further in
Exhibits 1.1(A), 1.1(B) and 1.1(C). The Purchased Assets shall
mean any and all right, title and interest of BJ and the Partners
to the following properties and assets:
(i) cash funds as of the Closing (as defined
in Section 2.1);
(ii) those real properties described in
Exhibit 1.1(A) hereto;
(iii) those buildings and fixtures
described in Exhibit 1.1(B) hereto;
(v) the two (2) vehicles described in
Exhibit 1.1(C) hereto;
(vi) any real or personal property acquired
by BJ from December 31, 1996 until the Closing.
1.2 Assumption of Liabilities. Subject to the terms
and conditions hereof, BJ hereby agrees to assign to Purchaser
and Purchaser hereby agrees to assume from BJ certain
liabilities, which are hereinafter defined as the "Assumed
Liabilities".
(a) Assumed Liabilities. The Assumed Liabilities
shall mean the three (3) Mortgages Payable, two (2) Loans
Payable, and one (1) Note Payable, all as described in Exhibit
1.2 hereto and all accrued interest thereon through and including
the date of Closing.
(b) Excluded Liabilities. Any liability not
specifically listed on Exhibit 1.2 hereto shall remain the
responsibility of BJ, and shall not be assumed by Purchaser under
this Agreement.
2. CLOSING
2.1 Closing. The closing of the transactions
contemplated by this Agreement ("Closing") shall be simultaneous
with the Effective Time of the Merger Agreement ("Effective
Time").
2.2 BJ's Obligations at Closing. At Closing, BJ shall
deliver or cause to be delivered to Purchaser (a) a duly executed
xxxx of sale for all the Purchased Assets; (b) Deeds of Title to
the real property and vehicles included in the Purchased Assets,
which shall include customary warranties of good title; (c)
executed copies of all required third-party consents and
approvals; (d) all such other instruments as are necessary to
transfer to Purchaser good and marketable title to the Purchased
Assets at Closing; and (e) all previously undelivered documents
required pursuant to Section 6 of this Agreement, including
certificates of Partners, to be delivered by BJ to Purchaser at
or prior to Closing.
2.3 Purchaser's Obligations at Closing. At Closing,
Purchaser shall deliver or cause to be delivered in accordance
with the terms of this Agreement (a) the consideration specified
in Section 2.4 hereof; (b) executed documents assuming the
liabilities specified in section 1.2 and 2.4(b) of this
Agreement; (c) all previously undelivered documents required
pursuant to Section 6 of this Agreement, including certificates
of officers, to be delivered by Purchaser to BJ at or prior to
Closing.
2.4 Payment of Shares.
(a) At the Closing, Purchaser shall deliver or
cause to be delivered to each Partner five hundred (500) shares
(for a total of 1,000 shares) of Chesapeake Utilities Corporation
common stock. Purchaser may elect to deliver all or any portion
of such sum to a settlement agent pending the Effective Time.
(b) As of Closing, Purchaser also shall assume
all utility charges; transfer, personal property, ad valorem and
other state and local taxes and similar charges and costs and all
annual or other periodic fees, charges, or amounts paid and owed,
if any, pertaining to the Purchased Assets.
2.5 Further Assurances. After the Closing, BJ from
time to time, at the request of Purchaser and without further
cost or expense to Purchaser, will take such other actions as
Purchaser may reasonably request and are necessary in order to
consummate more effectively the transactions contemplated hereby.
2.6 Allocation of Purchase Price. The purchase price
shall be allocated by mutual agreement of BJ, the Partners, and
Purchaser at or prior to the Closing among the Purchased Assets
and the Assumed Liabilities, which allocation shall be attached
hereto as Schedule 2.6. BJ, the Partners and Purchaser agree to
report the sale and purchase of the Purchased Assets in
accordance with the allocations set forth on Schedule 2.6 for all
federal, state and local income tax purposes. BJ, the Partners
and Purchaser each also agree that, in the event any audit,
proceeding, suit, action or otherwise is brought against any of
the others, before the Internal Revenue Service ("IRS") or any
state or local counterpart, the United States Tax Court, any
state tax court, or any federal or state court of competent
jurisdiction, each will at all times maintain and reasonably
defend the reporting positions agreed on in this Agreement. Each
shall keep the others fully informed at all stages of such
proceedings and the others shall be allowed to participate at
their own cost and expense in such proceedings.
3. REPRESENTATIONS AND WARRANTIES OF BJ AND PARTNERS
BJ and each of the Partners, severally and not jointly,
represents and warrants to Purchaser and Chesapeake as follows:
SECTION 3.1 Authority Relative to this Agreement;
Binding Effect.
(a) BJ has full power and authority to execute
and deliver this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this
Agreement and the consummation of the transactions contemplated
hereby have been duly and validly authorized and approved by the
Partners and no other actions on the part of BJ are necessary to
authorize this Agreement or to consummate the transactions so
contemplated. This Agreement has been duly and validly executed
and delivered by BJ and constitutes a legal, valid and binding
agreement of BJ, enforceable against BJ in accordance with its
terms.
(b) This Agreement has been duly and validly
executed and delivered by each Partner and constitutes a legal,
valid and binding agreement of each Partner, enforceable against
each Partner in accordance with its terms.
SECTION 3.2 Consents and Approvals; No Violations.
Except as set forth in Exhibit 3.2 to this Agreement, no filing
with or notification to, and no permit, authorization, consent,
waiver or approval of, any government, executive official
thereof, governmental or regulatory authority, agency or
commission, including courts of competent jurisdiction, domestic
or foreign (a "Governmental Entity"), is necessary for the
consummation by BJ and the Partners of the transactions
contemplated by this Agreement, excluding, however, filings,
permits, authorizations, consents, or approvals of any kind
required by the Federal Energy Regulatory Commission ("FERC") or
the Public Utility Commission or similar utility regulatory body
of the States of Florida, Maryland or Delaware. Except as set
forth in Section 3.2 of BJ Disclosure Schedule, neither the
execution and delivery of this Agreement by BJ and the Partners
nor the consummation by BJ and the Partners of the transactions
contemplated hereby nor compliance by BJ and the Partners with
any of the provisions hereof will (i) conflict with or result in
any breach of any provision of the Partnership Agreement of BJ,
(ii) result in a violation or breach of, or constitute (with or
without due notice or lapse of time or both) a default (or give
rise to any right of termination, cancellation or acceleration or
result in the creation of any mortgage, pledge, charge, security
interest, claim or encumbrance of any kind (collectively, a
"Lien")) under, any of the terms, conditions or provisions of any
note, bond, mortgage, indenture, license, contract, agreement or
other instrument or obligation to which BJ or a Partner is a
party or by which they or any of their properties or assets may
be bound, or (iii) violate any order, writ, injunction, decree,
or statute applicable to BJ or a Partner or any of their
properties or assets, or (iv) result in a violation of any rule
or regulation applicable to BJ or a Partner or any of their
properties or assets, unless, in the case of this subsection (iv)
only, such violation would not result in a material adverse
effect on BJ or the Purchased Assets.
4. REPRESENTATIONS AND WARRANTIES OF PURCHASER AND CHESAPEAKE
Purchaser and Chesapeake represent and warrant to BJ and the
Partners as follows:
SECTION 4.1 Authority Relative to this Agreement.
Each of Purchaser and Chesapeake has full corporate power and
authority to execute and deliver this Agreement and to consummate
the transactions contemplated hereby. The execution and delivery
of this Agreement and the consummation of the transactions
contemplated hereby have been duly and validly authorized and
approved by the Boards of Directors of Purchaser and Chesapeake
and by Chesapeake as the sole stockholder of Purchaser, and no
other corporate proceedings on the part of Purchaser or
Chesapeake are necessary to authorize this Agreement or to
consummate the transactions so contemplated. This Agreement has
been duly and validly executed and delivered by each of Purchaser
and Chesapeake and constitutes a legal, valid and binding
agreement of each of Purchaser and Chesapeake, enforceable
against each of Purchaser and Chesapeake in accordance with its
terms.
SECTION 4.2 Consents and Approvals; No Violations.
Except as set forth in Section 4.4 of the Chesapeake Disclosure
Schedule delivered in connection with the Merger Agreement, no
filing with or notification to, and no permit, authorization,
consent, waiver or approval of, any Governmental Entity, is
necessary for the consummation by Purchaser or Chesapeake of the
transactions contemplated by this Agreement. Except as set forth
in Section 4.4 of the Chesapeake Disclosure Schedule, neither the
execution and delivery of this Agreement by Purchaser or
Chesapeake nor the consummation by Purchaser and Chesapeake of
the transactions contemplated hereby nor compliance by Purchaser
or Chesapeake with any of the provisions hereof will (i) conflict
with or result in any breach of any provision of the Certificate
of Incorporation or By-laws of Purchaser or Chesapeake or any of
Chesapeake's subsidiaries, (ii) result in a violation or breach
of, or constitute (with or without due notice or lapse of time or
both) a default (or give rise to any right of termination,
cancellation or acceleration or result in the creation of any
Lien) under, any of the terms, conditions or provisions of any
note, bond, mortgage, indenture, license, contract, agreement or
other instrument or obligation to which Chesapeake or any of its
subsidiaries is a party or by which any of them or any of their
respective properties or assets may be bound or (iii) violate any
order, writ, injunction, decree, or statute applicable to
Purchaser or Chesapeake or any of their properties or assets, or
(iv) result in a violation of any rule or regulation applicable
to Purchaser or Chesapeake or any of their properties or assets,
unless, in the case of this subsection (iv) only, such violation
would not result in a material adverse effect on Purchaser or
Chesapeake or the Agreement.
5. COVENANTS
SECTION 5.1 Amendment of Merger Agreement. Prior to
Closing, the Partners shall agree to enter into, and shall cause
Tri-County to enter into; and Chesapeake shall enter into, and
cause CPK Sub-A, Inc. to enter into, an Amendment to the Merger
Agreement substantially as follows:
Deletions. Sections 5.4, 6.5, and 8.1(d) of
the Agreement and Plan of Merger dated January
10, 1997, are hereby deleted from said
Agreement and Plan of Merger.
Additions. New Sections 5.4, 6.5 and 8.1(d)
are hereby added to the Agreement and Plan of
Merger and shall read as indicated below:
(i) SECTION 5.4 Asset Purchase
Agreement. Prior to the Closing, the
Shareholders will enter into an asset
purchase agreement by and among
Chesapeake, its wholly-owned
subsidiary Eastern Shore Real Estate,
Inc. ("ESRE"), and the Shareholders
(the "Asset Purchase Agreement"),
pursuant to which ESRE will acquire
all of the Real Property held by BJ
Limited Partnership or by either
Shareholder as of the date hereof
(the "BJ Real Property") and assume
certain liabilities and the
Shareholders will receive 1,000
shares of Chesapeake Common Stock.
The Asset Purchase Agreement will
provide that ESRE will hold good and
marketable title to the BJ Real
Property and to the structures and
fixtures attached or appurtenant to
the BJ Real Property, free and clear
of all Liens, except (i) Liens as set
forth in Section 3.24 of the
Tri-County Disclosure Schedule or
(ii) Permitted Liens as defined
in Section 3.5(c) of this Agreement.
(ii) SECTION 6.5 Asset Purchase Agreement. Chesapeake
will enter and will cause ESRE to enter into the Asset
Purchase Agreement.
(iii) (d) The Asset Purchase Agreement shall have been
entered into by all necessary parties; the Closing of
the Asset Purchase Agreement shall take place
simultaneously with the closing of this Agreement; and
the effective time under the Asset Purchase Agreement
shall occur simultaneously with the Effective Time
under this Agreement.
SECTION 5.2 Distributions. Up to and including the Effective
Time, BJ will not make any distributions other than as expressly
permitted by Section 5.2 of the Merger Agreement.
6. CONDITIONS
SECTION 6.1 Conditions to Each Party's Obligation to Effect
the Agreement. The respective obligation of each party to effect
the Agreement shall be subject to the following conditions:
(a) The representations and warranties of the other party be true
and correct in all material respects as of the date of this
Agreement and as of Closing, as if made as of such time.
(b) The Effective Time shall take place simultaneously with the
Closing.
SECTION 6.2 Conditions of Obligations of BJ and Partners. The
obligation of BJ and Partners to effect the Agreement is further
subject to the satisfaction at or prior to the Closing of the
following conditions, unless waived by BJ and Partners:
(a) The representations and warranties of Purchaser set
forth in this Agreement shall be true and correct in all material
respects as of the date of this Agreement and as of the Closing,
as if made as of such time.
(b) Purchaser shall have obtained all consents,
approvals, authorizations and permits required from third parties
and any Governmental Entity (applicable to Purchaser and its
subsidiaries) necessary for the consummation by Purchaser of the
transactions contemplated by this Agreement.
(c) Partners shall have received from Chesapeake an
officer's certificate substantially in the form of Exhibit 6.2(c)
attached hereto.
SECTION 6.3 Conditions of Obligations of Purchaser. The
obligation of Purchaser to effect the Agreement is further
subject to the satisfaction at or prior to the Closing of the
following conditions, unless waived by Purchaser:
(a) The representations and warranties of BJ and Partners
set forth in this Agreement shall be true and correct in all
material respects as of the date of this Agreement and as of the
Effective Time, as if made as of such time.
(b) BJ and Partners shall have obtained all consents,
approvals, authorizations and permits required from third parties
and any Governmental Entity (applicable to BJ) necessary for the
consummation by BJ and Partners of the transactions contemplated
by this Agreement.
(c) Purchaser shall have received from each Partner a
certificate, an investment letter and an affiliate letter
substantially in the forms set forth in Exhibit 6.3(c) attached
hereto.
7. TERMINATION
SECTION 7.1 Termination. This Agreement will terminate upon
termination of the Merger Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be signed (where applicable by their respective
officers thereunto duly authorized), as of the date first written
above.
EASTERN SHORE REAL ESTATE, INC.
By: /S/ XXXXX X. XXXXXX
Name: Xxxxx X. Xxxxxx
Title: President
CHESAPEAKE UTILITIES CORPORATION
By: /S/ XXXXX X. XXXXXX
Name: Xxxxx X. Xxxxxx
Title: President
BJ LIMITED PARTNERSHIP
By: /S/ XXXXXXX X. XXXXXXXXX
Name: Xxxxxxx X. Xxxxxxxxx
Title: Partner
PARTNERS
/S/ XXXXX X. XXXXXXXXX
Xxxxx X. Xxxxxxxxx
/S/ XXXXXXX X. XXXXXXXXX
Xxxxxxx X. Xxxxxxxxx
