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Exhibit 10.1
[UNITED XXXXXXX CORPORATION LETTERHEAD]
September 22, 1997
Xx. Xxxxxxxxx X. Xxxxxxxxx, III
President and CEO
R.P. Industries, Inc.
0000 Xxxxxxxx Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Dear Xx. Xxxxxxxxx:
The purpose of this letter is to set forth the terms of the proposed acquisition
by United Xxxxxxx Corporation ("USC") or its designee (in either case, the
"Buyer") of the outstanding common stock (the "Stock") of R.P. Industries, Inc.
(the "Company"), from the shareholders of the Company (collectively, the
"Seller"), or of a merger of the Company into an affiliate of the Buyer.
1. PURCHASE OF THE STOCK OF THE COMPANY
Subject to the terms and conditions set forth herein, on the Closing Date (as
defined below), the Buyer will purchase all of the Stock of the Company for the
purchase price described in Section 2, below.
2. PURCHASE PRICE
The Purchase Price shall be $9,300,000.00, payable as follows:
(i) $100,000.00 in cash upon execution of this Letter of Intent;
(ii) 800,000 shares of the common stock of USC (having an estimated
value of $3,200,000.00) upon execution of a definitive
Purchase and Sale Agreement (the "Agreement"), which shall
take place no later than thirty (30) days following the date
hereof;
(iii) $6,000,000.00 payable upon the consummation of the transaction
(the "Closing"), which Closing shall take place on a date no
more than ninety (90) days following the date hereof (the
"Closing Date"), in cash or by assumption of indebtedness of
the Company, or through a combination of cash and assumption
of all of the Company's outstanding indebtedness.
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Xx. Xxxxxxxxx X. Xxxxxxxxx, III
September 24, 1997
Page 2
Buyer hereby agrees and acknowledges that, in the event that, through no fault
or failure of the Seller, either (i) the Agreement has not been executed within
thirty (30) days following the execution of this Letter of Intent, or (ii) the
proposed transaction is not consummated within ninety (90) days following the
execution of this Letter of Intent, or by such date as may be mutually agreed by
the parties hereto, Seller will be entitled to terminate this Letter of Intent
and retain any amounts of cash or stock which may have been paid by Buyer in
accordance with the terms of this Section 2.
3. REPRESENTATIONS AND WARRANTIES
The Agreement will contain such representations and warranties by Buyer and
Seller as are customary in such agreements and which shall survive the Closing
for a period of one (1) year. The Agreement shall provide that the each of
Seller and Xxxxx will indemnify and hold harmless the other party from and
against any and all damages, expenses or losses resulting from breach of any of
the representations and warranties, or of failure to fulfill any covenant,
obligation or agreement, to the extent that such damages, expenses or losses
exceed $50,000.00.
4. ACCESS TO BUSINESS RECORDS
From the date hereof, the Company and the Seller shall grant to Buyer and its
attorneys, accountants and agents, the right to inspect and copy any books,
records, minute books, contracts, agreements, receivables and properties of the
Company and to consult with the officers and current shareholders of the
Company, attorneys and agents of the Company for the purpose of investigating
the business of the Company and determining the accuracy of the representations
and warranties to be made in the Agreement.
Buyer hereby acknowledges that, during the course of its due diligence
investigation, it will continue to be bound by the terms of the confidentiality
agreement executed by Xxxxx on August 12, 1997, except to the extent that Buyer
is required by applicable securities laws to make disclosures concerning the
proposed transaction.
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Xx. Xxxxxxxxx X. Xxxxxxxxx, III
September 24, 1997
Page 3
5. CONDITIONS TO BUYER'S OBLIGATION TO CLOSE
In addition to other customary conditions to the obligations of the Buyer and
the Seller to close the proposed transaction, such obligation of Buyer to close
the transaction shall be contingent upon all of the following:
(i) Xxxxx's obtaining satisfactory arrangements for the continued
employment of the Company's key employees (such condition to
be dependent upon employees' express desire to continue or to
join the Company following the Closing);
(ii) the satisfactory completion of a "due diligence" investigation
of the business and assets of the Company, including
satisfactory appraisals, environmental reports and engineering
reports from persons regularly engaged in rendering such
appraisals and reports;
(iii) Seller's obtaining all consents, permits and waivers
(governmental or other) required as a result of the change of
ownership of the Company to all leases, contracts, agreements
or other matters material to the operation of the business of
the Company as such business is now conducted;
(iv) the absence of any event or condition which would have a
material adverse effect on the business, operation or
financial condition of the Company;
(v) review satisfactory to the Buyer of the Company's financial
statements, books, records, accounts receivable, inventories
and actual and potential liabilities, which may be performed
by Xxxxx's representatives; and
(vi) maintenance by the Company of net worth of no less than
$4,500,000.00;
(vii) such other conditions as are stated in the Agreement.
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Xx. Xxxxxxxxx X. Xxxxxxxxx, III
September 24, 1997
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6. CLOSING
The Closing of the transaction shall occur at a location mutually agreeable to
the parties not later than ninety (90) days following the date of acceptance of
this Letter of Intent, unless such period is extended by mutual agreement of the
parties.
7. DEFINITIVE PURCHASE AND SALE AGREEMENT
Within 30 days hereof and subject to the terms and conditions of this Letter of
Intent, Buyer and Seller will negotiate in good faith a formal Purchase and Sale
Agreement. This Letter of Intent is intended to provide a basis for the
preparation of the Agreement. Until the Agreement has been prepared and duly
authorized and executed by each of the parties, only Sections 2(i), 4, 7 and 9
hereto shall be legally binding upon the parties. Nothing herein shall preclude
modification of, or insertion of additional provisions to, this Agreement by
either party in keeping with the intent of the parties, the financial terms of
the proposed transaction and any information which may be discovered in the due
diligence process.
Seller agrees that for a period of ninety (90) days following the date of this
letter, Buyer shall have the exclusive right to consummate an acquisition of or
merger with the Company, and that Seller will maintain confidentiality with
respect to both the terms of the proposed transaction and the identity of the
Buyer.
8. EXPENSES
Each party hereto shall pay its own expenses incurred in connection with the
negotiation, due diligence investigation and closing of the proposed
transaction, including, but not limited to, legal, accounting, appraisal and
brokerage expenses.
9. CONFIDENTIALITY
Xxxxxx and Xxxxx hereby mutually agree that they will not divulge to any party
other than their respective representatives, advisors, investment bankers or
lenders any information concerning the proposed transaction or the identity of,
or nature of the negotiations with, the other party, other than information
which is required to be disclosed under applicable securities laws.
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Xx. Xxxxxxxxx X. Xxxxxxxxx, III
September 24, 1997
Page 5
If the foregoing meets with your approval, please so indicated by signing the
enclosed copy of this Letter of Intent and returning it to the undersigned.
Very Truly Yours,
UNITED XXXXXXX CORPORATION
By: /s/ X. X. Xxxxx
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X. X. Xxxxx, CEO
Xxxxxx and Acknowledged this
22th day of September, 1997
R.P. INDUSTRIES
By: /s/ Xxxxxxxxx X. Xxxxxxxxx, III
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Xxxxxxxxx X. Xxxxxxxxx, III, President and CEO
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