EXHIBIT 2.4
REAL ESTATE PURCHASE AGREEMENT
0000 Xxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxx
SELLERS: Xxxxxx X. Xxxxxxx and Xxxxx X. Xxxxxxx, as Trustee of the Xxxxxxx
1981 Revocable Trust, and Xxxxx Xxxxxx, as Tenants in Common
BUYER: Sonoma Pacific Company, a California corporation
August 1, 1997
AGREEMENT OF PURCHASE AND SALE
This Agreement of Purchase and Sale (the "AGREEMENT") is made by and
between Xxxxxx X. Xxxxxxx and Xxxxx X. Xxxxxxx, as Trustee of the Xxxxxxx 1981
Revocable Trust, and Xxxxx Xxxxxx, as Tenants in Common (collectively,
"SELLERS"), PalEx, Inc., a Delaware corporation ("PALEX"), and Sonoma Pacific
Company, a California corporation ("BUYER").
RECITALS
Contemporaneous with the Closing (as hereinafter defined), Buyer
will become a wholly-owned subsidiary of PalEx, pursuant to the terms of that
certain Agreement and Plan of Reorganization (the "MERGER AGREEMENT"), between
the Buyer, PalEx, Inc., Sonoma Pacific Acquisition, Inc., a Delaware corporation
and wholly-owned subsidiary of PalEx ("NEWCO"), Sellers, The Xxxxxx 1982
Revocable Trust and Xxxxxx X. Xxxxxxx, through the Merger of Newco with and into
Buyer (the "MERGER").
Sellers are the owners of that certain real property commonly known
as the Sonoma Pacific Company located at 0000 Xxxxxxx Xxxxx in Sonoma,
California (the "REAL PROPERTY"), which shall be more particularly described on
the Title Commitment (as hereinafter defined). Sellers are also the owner of 2
structures containing approximately 19,800 square foot buildings situated on the
Real Property (the "IMPROVEMENTS"), and the space leases and other occupancy
agreements affecting the Real Property (the "LEASES"). The Real Property, the
Improvements and the Leases are hereinafter collectively referred to as the
"PROPERTY." Sellers desire to sell the Property to Buyer and Buyer desires to
acquire the Property from Sellers. Sellers own no personal property which is
used in conjunction with the operation of the Real Property.
NOW, THEREFORE, Sellers and Buyer hereby agree as follows:
1. PURCHASE OF THE PROPERTY. Sellers shall sell the Property to Buyer and Buyer
shall purchase the Property from Sellers upon the terms and conditions
hereinafter set forth.
2. PURCHASE PRICE; PAYMENT;CLOSING.
(A) PURCHASE PRICE. The purchase price for the Property (the
"PURCHASE PRICE") shall be an aggregate of 67,391 shares of Common Stock, par
value $.01 per share, of PalEx ("PALEX COMMON STOCK").
(B) PAYMENT OF PURCHASE PRICE. At the Closing, PalEx shall pay
Sellers the Purchase Price by delivering to Sellers certificates representing
shares of PalEx Common Stock in accordance with SECTION 2(A).
(C) CLOSING. The closing of the purchase and sale of the Property
contemplated by this Agreement (the "CLOSING") shall take place at 0000 Xxxxxxx
Xxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000, concurrently with the execution of this
Agreement or at such other time and date as Buyer and Sellers may mutually
agree, which date shall be referred to as the "CLOSING DATE."
3. TITLE INSURANCE.
(A) At the Closing, North American Title Company, Inc. (the "TITLE
COMPANY") shall furnish to Buyer a CLTA Owner's policy of title insurance
("TITLE POLICY") insuring fee title to the Real Property, subject to
nondelinquent real property taxes and assessments and utility easements that do
not interfere with the existing use of the Property, as are indicated on the
title commitment prepared by the Title Company attached hereto as EXHIBIT "A"
(the "TITLE COMMITMENT"). The Title Policy shall be subject to the exceptions
set forth in the Title Commitment.
(B) FEES. The cost of the Title Policy shall be paid by Buyer.
4. APPORTIONMENTS.
(A) INTEREST AND TAXES. Real property taxes and general and special
assessments shall be apportioned (on the basis of a 365-day year) as of 12:01
a.m. on the Closing Date. If the Closing Date occurs before the real property
tax rate is fixed, apportionment of taxes shall be made on the basis of the tax
rate for the preceding year applied to the latest assessed valuation. After the
real property taxes are finally fixed, Sellers and Buyer shall make a
recalculation of the apportionment of such real property taxes, and either
Sellers or Buyer, as the case may be, shall make appropriate payment to the
other based on such recalculation.
(B) RENTS. Rents collected during and applicable to the month in
which the Closing takes place and operating expenses shall be prorated as of the
Closing Date. All refundable security deposits, cleaning deposits, prepaid rents
or other security posted by tenants under the Leases shall be charged to Sellers
and credited to Buyer.
(C) UTILITIES. Charges and assessments for sewer and water and other
utilities, including charges for consumption of electricity, steam and gas and
any other receipts or charges for which Seller is liable and that Buyer has
accepted hereunder, as applicable, shall be apportioned by Buyer and Sellers
within four weeks after the Closing. Within two days following the Closing,
Buyer shall cause all such utilities to be transferred to Buyer's name.
5. DOCUMENTS TO BE DELIVERED AT CLOSING BY SELLERs. At the Closing, Sellers
shall deliver to Buyer:
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(A) an executed grant deed conveying the Real Property to Buyer,
which Buyer shall cause to be recorded in Sonoma County, California;
(B) an executed xxxx of sale in a form mutually acceptable to
Buyer and Seller;
(C) an executed termination of lease in a form mutually acceptable
to Buyer and Seller;
(D) an executed certificate of nonforeign status in a form
mutually acceptable to Buyer and Seller; and
(E) an executed Form 590-RE.
6. POSSESSION AND INSURANCE. Buyer shall take possession of the Property as
of the Closing. As of the Closing, Buyer shall be responsible for providing
fire and other insurance for the Property.
7. SELLERS' REPRESENTATIONS AND WARRANTIES. Sellers hereby jointly and severally
represent and warrant to Buyer as follows, excepting from such representations
and warranties the disclosures set forth in the corresponding Schedules to the
Merger Agreement:
(A) Sellers have the full legal right, power and authority to enter
into this Agreement. This Agreement has been duly and validly executed and
delivered by Sellers, and, assuming the due authorization, execution and
delivery hereof by Buyer, constitutes a valid and binding agreement of Sellers,
enforceable against Sellers in accordance with its terms, subject to (i)
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting or relating to the enforcement of creditors' rights generally and (ii)
such principles of equity as may effect the availability of equitable remedies.
(B) The execution and delivery of this Agreement by Sellers do not,
and the consummation by Sellers of the transactions contemplated hereby will
not, violate or result in a breach of any provision of, or constitute a default
(or an event which, with notice or lapse of time or both, would constitute a
default) under, or result in the termination of, or accelerate the performance
required by, or result in a right of termination or acceleration under, or
result in the creation of any lien, encumbrance, mortgage, pledge, security
interest, option, right of first refusal, reservation, restriction or other
encumbrance or defect in title upon the Propertyunder any of the terms,
conditions or provisions of, (i) any federal, state, local or foreign statutes,
laws, ordinances, proclamations, code, regulations, licenses, permits,
authorizations, approvals, consents, legal doctrine, published requirements,
orders, decrees, judgments, injunctions and rules of any governmental authority,
including, without limitation, those covering environmental, taxes, energy,
safety, health, transportation, bribery, recordkeeping, zoning, discrimination,
antitrust and wage and hour matters, in each case as amended and in effect from
time to time, applicable to Sellers or any of the Property ("LAWS"), or (ii) any
agreement, note, bond, mortgage, indenture, deed of trust,
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license, franchise, permit, concession, lease or other instrument, obligation or
agreement of any kind to which the Property may be bound or affected.
(C) Except as required under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended ("H-S-R"), no declaration, filing or
registration with, or notice to, or authorization, consent or approval of, any
governmental authority or third party is necessary for the execution and
delivery of this Agreement by Sellers or the consummation by Sellers of the
transactions contemplated hereby.
(D) Except as set forth on SCHEDULE 4.12 of the Merger Agreement, as
to the Property, (i) Sellers have complied with and the Property is in
compliance with all Environmental Laws (as herein after defined), including,
without limitation, Environmental Laws relating to air, water, land and the
generation, storage, use, handling, transportation, treatment or disposal of
Hazardous Substances; (ii) Sellers have obtained and complied with all necessary
permits and other approvals necessary to treat, transport, store, dispose of and
otherwise handle Hazardous Substances on or with respect to the Property; (iii)
there have been no "releases" or threats of "releases" (as defined in any
Environmental Laws) at, from, in or on the Property except as permitted by
Environmental Laws; (iv) there is no on-site or off-site location to which
Sellers have transported or disposed of Hazardous Substances or arranged for the
transportation or disposal Hazardous Substances which is the subject of any
federal, state, local or foreign enforcement action or any other investigation
which could lead to any claim against Sellers, Buyer or PalEx for any clean-up
cost, remedial work, damage to natural resources or personal injury, including,
but not limited to, any claim under (A) the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, (B) the Resource
Conservation and Recovery Act, (C) the Hazardous Materials Transportation Act or
(D) comparable state and local statutes and regulations; and (v) Sellers have no
known contingent liability in connection with any release of any Hazardous
Substance into the environment from the Property.
For purposes of this SECTION 7, the term "ENVIRONMENTAL LAWS" means Law or
agreement with any governmental authority relating to (1) the protection,
preservation or restoration of the environment (including, without limitation,
air, water vapor, surface water, groundwater, drinking water supply, surface
land, subsurface land, plant and animal life or any other natural resource) or
to human health or safety or (2) the exposure to, or the use, storage,
recycling, treatment, generation, transportation, processing, handling,
labeling, production, release or disposal of any substance, in each case as
amended and as in effect on the Closing Date. The term "ENVIRONMENTAL LAW"
includes, without limitation, (y) the Federal Comprehensive Environmental
Response Compensation and Liability Act of 1980, the Superfund Amendments and
Reauthorization Act, the Federal Water Pollution Control Act of 1972, the
Federal Clean Air Act, the Federal Clean Water Act, the Federal Resource
Conservation and Recovery Act of 1976 (including the Hazardous and Solid Waste
Amendments thereto), the Federal Solid Waste Disposal and the Federal Toxic
Substances Control Act, the Federal Insecticide Fungicide and Rodenticide Act,
the Federal Occupational Safety and Health Act of 1970, each as amended and as
in effect on the Closing Date, and (z) any common law
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or equitable doctrine (including, without limitation, injunctive relief and tort
doctrines such as negligence, nuisance, trespass and strict liability) that may
impose liability or obligations for injuries or damages due to, or threatened as
a result of, the presence of, effects of or exposure to any substance.
For purposes of this SECTION 7, the term "HAZARDOUS SUBSTANCES" means any
substance presently or hereafter listed, defined, designated or classified as
hazardous, toxic, radioactive or dangerous, or otherwise regulated, under any
Environmental Law. The term "HAZARDOUS SUBSTANCES" includes, without limitation,
any substance to which exposure is regulated by any governmental authority or
any Environmental Law including, without limitation, any toxic waste, pollutant,
contaminant, hazardous substance, toxic substance, hazardous waste, special
waste, industrial substance or petroleum or any derivative or by-product
thereof, radon, radioactive material, asbestos or asbestos containing material,
urea formaldehyde foam insulation, lead or polychlorinated biphenyls.
(E) Except as otherwise disclosed to Buyer in writing, Sellers are
neither involved in nor aware of any pending or threatened litigation which does
or will affect the Property, and there are no actions or proceedings pending or
threatened against Sellers of which Sellers are aware before any court or
administrative agency connected with or relating to the Property which may
adversely affect Sellers' abilities to fulfill their obligations under this
Agreement. Sellers shall notify Buyer of any lawsuits, condemnation proceedings,
re-zoning, or other governmental order or action or any threat thereof known to
Sellers which might adversely affect the Property or any interests of Buyer
therein.
(F) Sellers have received no written notice from any applicable
governmental authority that the Property is in violation of any Laws.
(G) Sellers have received no written notice from any applicable
governmental authority that any improvements constructed on the Property,
including, but not limited to, structure, driveways, roof, parking areas, and
heating and air conditioning equipment, were not completed substantially in
accordance with the as-built plans and specifications for such improvements.
(H) No Seller is a "foreign person" within the meaning of Section
1445(f)(3) of the Internal Revenue Code of 1986, as amended.
(I) Sellers have fully provided Buyer and PalEx or their respective
representatives with all the information that they have requested in analyzing
whether to purchase the Property. None of the information so provided nor any
representation or warranty of Sellers contained in this Agreement contains any
untrue statement of a material fact or omits to state a material fact necessary
in order to make the statements herein or therein, in light of the circumstances
under which they were made, not misleading. There is no fact known to Sellers
which has specific application to the Property (other than general economic or
industry conditions) and which materially adversely affects
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or, so far as Sellers can reasonably foresee, materially threatens, the value or
current use of the Property which has not been described in this Agreement
hereto or otherwise disclosed in writing to Buyer and PalEx. It is understood by
the parties hereto that any estimates, projections or other predictions that may
have been provided to Buyer and PalEx with respect to the Property are not and
shall not be deemed to be representations or warranties of Sellers, but shall be
deemed to be good faith estimates and assumptions of Sellers, which are intended
to be reasonable at the time made concerning the most likely course regarding
the Property. Notwithstanding the foregoing or anything to the contrary
contained herein, nothing in this Agreement shall be deemed or construed to
imply that Sellers have provided Buyer or PalEx with any projections or other
predictions regarding the Property on which Buyer or PalEx has relied, and PalEx
and Buyer expressly waive any right to make any claim based on any such
projections or predictions.
8. BUYER'S AND PALEX'S REPRESENTATIONS AND WARRANTIES. Buyer and PalEx hereby
respectively represent and warrant to Sellers as follows:
(A) Buyer is duly organized, validly existing and in good standing
under the Laws of the state of its incorporation.
(B) Buyer has the full legal right, power and authority to enter
into this Agreement and to consummate the transactions contemplated hereby. The
execution, delivery and performance of this Agreement have been approved by the
boards of directors of PalEx and Buyer. No additional corporate proceedings on
the part of PalEx or Buyer are necessary to authorize the execution and delivery
of this Agreement and the consummation by PalEx and Buyer of the transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by Buyer, and, assuming the due authorization, execution and delivery
by Sellers, constitutes a valid and binding agreement of Buyer, enforceable
against Buyer in accordance with its terms, subject to (i) bankruptcy,
insolvency, reorganization, moratorium or other similar Laws affecting or
relating to the enforcement of creditors' rights generally and (ii) such
principles of equity as may effect the availability of equitable remedies.
(C) Except as required under H-S-R, no declaration, filing or
registration with, or notice to, or authorization, consent or approval of, any
governmental authority is necessary for the execution and delivery of this
Agreement by Buyer or PalEx or the consummation by Buyer and PalEx of their
respective transactions contemplated hereby, other than such declarations,
filings, registrations, notices, authorizations, consents or approvals which, if
not made or obtained, as the case may be, would not, in the aggregate, have a
material adverse effect on the business, operations, properties, assets,
condition (financial or other), or results of operations of PalEx.
(D) The shares of PalEx Common Stock to be issued to Sellers
pursuant to this Agreement, when issued in accordance with the terms of this
Agreement, will be duly authorized, validly issued, fully paid and
nonassessable. The issuance of PalEx Common Stock pursuant to this Agreement
will transfer to Sellers valid title to such shares of PalEx Common Stock, free
and clear
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of all liens, claims and encumbrances except as contemplated in this Agreement
and for any liens, claims or encumbrances created by Sellers.
(E) A registration statement on Form S-1 (File No. 333-28027) (the
"REGISTRATION STATEMENT") has been filed by PalEx with the SEC and declared
effective under the Act. 60% of the shares of PalEx Common Stock issued pursuant
to this Agreement shall be issued under the Registration Statement (the
"REGISTERED SHARES"), and the SEC has not issued an order preventing or
suspending the use of any prospectus included in the Registration Statement nor,
to the knowledge of PalEx, instituted proceedings for that purpose.
9. INDEMNIFICATION. Buyer and Sellers each make the following covenants:
(A) GENERAL INDEMNIFICATION BY SELLERS. Sellers covenant and agree
that they, jointly and severally, will indemnify, defend, protect and hold
harmless PalEx and Buyer, and their respective officers, directors, employees,
stockholders, agents, representatives and affiliates, at all times from and
after the date of this Agreement until the Expiration Date (as hereinafter
defined) from and against all claims, damages, actions, suits, proceedings,
demands, assessments, adjustments, costs and expenses (including specifically,
but without limitation, reasonable attorneys' fees and expenses of
investigation) incurred by any of such indemnified persons as a result of or
arising from (a) any breach of the representations and warranties of Sellers set
forth herein and (b) any breach or nonfulfillment of any covenant or agreement
on the part of Sellers under this Agreement.
(B) INDEMNIFICATION BY BUYER. Buyer covenants and agrees that it
will indemnify, defend, protect and hold harmless Sellers and their agents,
representatives, affiliates and employees at all times from and after the date
of this Agreement until the Expiration Date from and against all claims,
damages, actions, suits, proceedings, demands, assessments, adjustments, costs
and expenses (including specifically, but without limitation, reasonable
attorneys' fees and expenses of investigation) incurred by any of such
indemnified persons as a result of or arising from (a) any breach of the
representations and warranties set forth, and (b) any breach or nonfulfillment
of any covenant or agreement on the part of Buyer under this Agreement.
(C) THIRD PERSON CLAIMS. Promptly after any party hereto
(hereinafter the "INDEMNIFIED PARTY") has received notice of or has knowledge of
any claim by a person not a party to this Agreement ("THIRD PERSON"), of the
commencement of any action or proceeding by a Third Person, the Indemnified
Party shall give to the party obligated to provide indemnification pursuant to
SECTION 9(A), or 9(B) hereof (hereinafter the "INDEMNIFYING PARTY") written
notice of such claim or the commencement of such action or proceeding. Such
notice shall state the nature and the basis of such claim and a reasonable
estimate of the amount thereof. The Indemnifying Party shall have the right to
defend and settle, at its own expense and by its own counsel, any such matter so
long as the Indemnifying Party pursues the same diligently and in good faith;
PROVIDED, HOWEVER, that the Indemnified Party shall have the right, but not the
obligation, to participate at its own expense and
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with counsel of its own choosing in such defense or any settlement negotiations
relating thereto. If the Indemnifying Party undertakes to defend or settle, it
shall promptly notify the Indemnified Party of its intention to do so, and the
Indemnified Party shall cooperate in all reasonable respects with the
Indemnifying Party and its counsel in the defense thereof and in any settlement
thereof. Such cooperation shall include, but shall not be limited to, furnishing
the Indemnifying Party with any books, records and other information reasonably
requested by the Indemnifying Party and in the Indemnified Party's possession or
control. After the Indemnifying Party has notified the Indemnified Party of its
intention to undertake to defend or settle any such asserted liability, and for
so long as the Indemnifying Party diligently pursues such defense, the
Indemnifying Party shall not be liable for any additional legal expenses
incurred by the Indemnified Party in connection with any defense or settlement
of such asserted liability. If the Indemnifying Party desires to accept a final
and complete settlement of any such Third Person claim and the Indemnified Party
refuses to consent to such settlement, then (i) the Indemnifying Party's
liability under this Section with respect to such Third Person claim shall be
limited to the amount so offered in settlement by said Third Person, (ii) the
Indemnified Party shall be entitled to assume the defense of such Third Person
claim, and (iii) if the Indemnified Party does not assume the defense of such
Third Person claim, the Indemnified Party shall reimburse the Indemnifying Party
for any additional costs of defense which it subsequently incurs with respect to
such claim and all additional costs of settlement or judgment. If the
Indemnifying Party does not undertake to defend such matter to which the
Indemnified Party is entitled to indemnification hereunder, or fails diligently
to pursue such defense, the Indemnified Party may undertake such defense through
counsel of its choice, at the cost and expense of the Indemnifying Party, and
the Indemnified Party may settle such matter, and the Indemnifying Party shall
reimburse the Indemnified Party for the amount paid in such settlement and any
other liabilities or expenses incurred by the Indemnified Party in connection
therewith, PROVIDED, HOWEVER, that under no circumstances shall the Indemnified
Party settle any Third Person claim without the written consent of the
Indemnifying Party, which consent shall not be unreasonably withheld.
(D) LIMITATION UPON INDEMNITY.
i. Neither Buyer nor Sellers shall be entitled to indemnification
from the other under the provisions of this SECTION 9 until such time as,
and to the extent that, the claims subject to indemnification by such
party exceed, in the aggregate, $7,750.
ii. The aggregate indemnification obligations of Sellers under
this SECTION 9 shall be limited to $775,000.
iii. THE RIGHTS TO INDEMNIFICATION UNDER THIS SECTION 9 INCLUDE
RIGHTS TO INDEMNIFICATION FOR THE RESULTS OF AN INDEMNIFIED PARTY'S ACTUAL
OR ALLEGED NEGLIGENCE, IF SUCH INDEMNIFIED PARTY WOULD OTHERWISE BE
ENTITLED TO INDEMNIFICATION HEREUNDER.
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10. POOLING-OF-INTERESTS ACCOUNTING.
(A) EXECUTION OF DOCUMENTS NECESSARY FOR POOLING TREATMENT. If
required, Sellers and Buyer will execute any documentation reasonably required
by PalEx's independent public accountants to enable PalEx to account for the
Merger and acquisition contemplated by this Agreement as a pooling-of-interests.
(B) RESTRICTIONS ON RESALE. PalEx and Buyer have informed Sellers
that PalEx intends to account for the Merger and the acquisition contemplated by
this Agreement as a pooling-of-interests under Opinion No. 16 of the Accounting
Principles Board ("OPINION NO. 16"). PalEx and Buyer have also informed Sellers
that PalEx's ability to account for the Merger and the acquisition contemplated
by this Agreement as a pooling-of-interests was a material factor considered by
PalEx in PalEx's decision to enter into the Merger Agreement. Therefore,
pursuant to Opinion No. 16, prior to the publication and dissemination by PalEx
of consolidated financial results which include results of the combined
operations of Buyer and PalEx for at least 30 days on a consolidated basis
following the effective time, Sellers shall not sell, offer to sell, or
otherwise transfer or dispose of, any shares of the PalEx Common Stock received
by Seller, engage in put, call, short-sale, straddle or similar transactions, or
in any other way reduce Seller's risk of owning shares of PalEx. The
certificates evidencing the PalEx Common Stock to be received by Seller will
bear a legend substantially in the form set forth below:
The shares represented by this certificate may not be sold, transferred or
assigned, and the issuer shall not be required to give effect to any
attempted sale, transfer or assignment, prior to the publication and
dissemination of financial statements by the issuer which include the
results of at least 30 days of combined operations of the issuer and the
company acquired by the issuer for which these shares are issued. Upon the
written request of the holder of this certificate, the issuer will remove
this restrictive legend when this requirement has been met.
11. FEDERAL SECURITIES ACT AND CONTRACTUAL RESTRICTIONS ON PALEX COMMON STOCK.
(A) COMPLIANCE WITH LAW. Sellers acknowledge that 40% of the shares
of PalEx Common Stock to be delivered to Sellers pursuant to this Agreement (the
"RESTRICTED SHARES") have not been and will not be registered under the
Securities Act of 1933, as amended (the "SECURITIES ACT"), and therefore may not
be resold without compliance with the Securities Act. The Restricted Shares are
being acquired by Sellers solely for their own account, for investment purposes
only, and with no present intention of distributing, selling or otherwise
disposing of them in connection with a distribution. Sellers covenant, warrant
and represent that none of the Restricted Shares will be offered, sold,
assigned, pledged, hypothecated, transferred or otherwise disposed of except
after full compliance with all of the applicable provisions of the Act and the
rules and regulations of the Securities and Exchange Commission. Certificates
representing the Restricted Shares shall bear the following legend in addition
to the legend under SECTION 10:
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The shares represented by this certificate were not issued in a
transaction registered under the Securities Act of 1933, as amended
("Securities Act"), or any applicable state securities laws. The shares
represented hereby have been acquired for investment and may not be sold
or transferred unless such sale or transfer is covered by an effective
registration statement under the Securities Act and applicable state
securities laws or, in the opinion of counsel to the issuer, is exempt
from the registration requirements of the Securities Act and such laws.
(B) ECONOMIC RISK; SOPHISTICATION. Sellers are able to bear the
economic risk of an investment in the PalEx Common Stock acquired pursuant to
this Agreement and can afford to sustain a total loss of such investment.
Sellers have such knowledge and experience in financial and business matters
that they are capable of evaluating the merits and risks of the proposed
investment and therefore have the capacity to protect their own interests in
connection with their acquisition of the PalEx Common Stock. Sellers are
"accredited investors," as that term is defined in Regulation D under the
Securities Act. Sellers or their respective representatives have had an adequate
opportunity to ask questions and receive answers from the officers of PalEx
concerning, among other matters, PalEx, its management, its plans for the
operation of its business and potential additional acquisitions.
(C) CONSENT TO SELL REGISTERED SHARES UNDER PROSPECTUS. PalEx hereby
consents to the Stockholders publicly reselling the Registered Shares they
receive in the Merger pursuant to the prospectus contained in the Registration
Statement, as such prospectus may be amended or supplemented from time to time.
PalEx shall use its commercially reasonable best efforts to maintain the
effectiveness of the Registration Statement until the earlier of (a) two years
after the Effective Time and (b) the first date on which the Stockholders no
longer hold any shares of PalEx Common Stock; PROVIDED, HOWEVER, that the
Stockholders acknowledge and agree that PalEx will be required in accordance
with the 1933 Act and the rules and regulations thereunder to file with the SEC
amendments and supplements to the Registration Statement from time to time to
maintain the effectiveness of the Registration Statement, which amendments and
supplements PalEx agrees to file as promptly as commercially practicable after
the Registration Statement becomes stale or as may otherwise be required
pursuant to the 1933 Act and the rules and regulations thereunder.
12. MISCELLANEOUS.
(A) SUCCESSORS AND ASSIGNS. This Agreement and the rights of the
parties hereunder may not be assigned (except by operation of Law) and shall be
binding upon and shall inure to the benefit of the parties hereto, the
successors, heirs or legal representatives of Buyer and Sellers, as the case may
be.
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(B) ENTIRE AGREEMENT. This Agreement and the documents delivered
pursuant hereto and the Merger Agreement constitute the entire agreement and
understanding among the Buyer and Sellers and supersede any prior agreement and
understanding relating to the subject matter of this Agreement. This Agreement
may be modified or amended only by a written instrument executed by Buyer and
Sellers.
(C) COUNTERPARTS. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original and all of
which together shall constitute but one and the same instrument.
(D) BROKERS AND AGENTS. Each party represents and warrants that it
employed no broker or agent in connection with this transaction and agrees to
indemnify the other against all loss, cost, damages or expense arising out of
claims for fees or commissions of brokers employed or alleged to have been
employed by such indemnifying party.
(E) NOTICES. All notices and communications required or permitted
hereunder shall be in writing and may be given by depositing the same in the
United States mail, addressed to the party to be notified, postage prepaid and
registered or certified with return receipt requested, or by delivering the same
in person to an officer or agent of such party, as follows:
i. If to Buyer, addressed to it at:
Sonoma Pacific Company
c/o PalEx, Inc.
0000 Xxxxxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attn: Xxxxx X. Xxxxxxxx, Xx.
and
Xxxxxx X. Xxxxx
xx. If to Sellers, addressed to them, respectively, at:
Xxxxx X. Xxxxxx
00 Xxxxx Xxx
Xxx Xxxxxxx, XX 00000
The Xxxxxxx 1981 Revocable Trust
c/o Mr. and Xxx. Xxxxxx Xxxxxxx
0000 Xxx Xxxxxx Xxxxx
Xxxxx Xxxx, XX 00000
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With a copy to:
Xxxxxx Xxxxxxxx Xxxxxxx & Share LLP
Four Xxxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
or such other address as any party hereto shall specify pursuant to this SECTION
12(E) from time to time.
(F) SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations
and warranties set forth in SECTION 7 and SECTION 8 shall survive the Closing
for a period of 12 months from the Closing Date (the "EXPIRATION DATE").
(G) EXERCISE OF RIGHTS AND REMEDIES. Except as otherwise provided
herein, no delay of or omission in the exercise of any right, power or remedy
accruing to any party as a result of any breach or default by any other party
under this Agreement shall impair any such right, power or remedy, nor shall it
be construed as a waiver of or acquiescence in any such breach or default, or of
any similar breach or default occurring later; nor shall any waiver of any
single breach or default be deemed a waiver of any other breach or default
occurring before or after that waiver.
(H) TIME OF ESSENCE. Time is of the essence with respect to this
Agreement.
(I) REFORMATION AND SEVERABILITY. In case any provision of this
Agreement shall be invalid, illegal or unenforceable, it shall, to the extent
possible, be modified in such manner as to be valid, legal and unenforceable,
but so as to most nearly retain the intent of the parties, and if such
modification is not possible, such provision shall be severed from this
Agreement, and in either case, the validity, legality and enforceability of the
remaining provisions of this Agreement shall not in any way be affected or
impaired thereby.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
PALEX, INC.
By: /s/ XXXXX X. XXXXXXXX
Name: Xxxxx Xxxxxxxx
Title:President and Chief Executive Officer
SONOMA PACIFIC COMPANY
By: /s/ XXXXXX XXXXX
Name: Xxxxxx Xxxxx
Title:Secretary
THE XXXXXXX 1981 REVOCABLE TRUST
By: /s/ XXXXX X. XXXXXX
Xxxxx X. Xxxxxx, Trustee
By: N/A
Xxxxx Xxxxxxx, Trustee
/S/ XXXXX X. XXXXXX
Xxxxx X. Xxxxxx
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