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Exhibit 2.1
PURCHASE AND SALE AGREEMENT
THIS AGREEMENT, made as of the 10th day of September, 1997 by and
among XXXXXX X. XXXXX, XXXXX X. XXXXX AND XXXXX X. XXXXX ("SELLERS" as
hereinafter defined); XXXXXX X. XXXXX AND XXXXXXXX XXXXX ("REAL ESTATE LESSORS"
as hereinafter defined); XXXXX X. XXXXX AND XXXXX X. XXXXX, TRADING AS E&L
CYLINDERS ("CYLINDER SELLERS" as hereinafter defined); VALLEY NATIONAL GASES,
INC., a West Virginia corporation, ("STOCK PURCHASER" as hereinafter defined);
and WEST RENTALS, INC., ("WEST" as hereinafter defined).
WITNESSETH, that for and in consideration of the mutual covenants and
agreements contained in this Agreement and in reliance with the representations
and warranties set forth herein, the parties intending to be legally bound,
agree as follows:
1. DEFINITIONS.
In this Agreement, whenever the context so indicates, the singular or
plural and the masculine, feminine or neutral gender shall be deemed to include
the others, the reference to any statutory provision of law shall include any
subsequent amendments thereto; and the capitalized terms shall have the
following meanings:
(a) "ADVERSE TITLE CONDITION" means any restriction,
limitation, adverse claim of right or interest in and/or to all or part of the
Xxxxx Cylinders or Real Estate as well as any lien assessments, charges,
encumbrances, or other cloud on or exception to title, of any nature which
affecting the Xxxxx Cylinders or Real Estate, except for any Permitted
Encumbrances.
(b) "AGREEMENT" means this Purchase and Sale Agreement dated
as of the 10th day of September, 1997, by and among Sellers, Real Estate
Lessors, Cylinder Sellers, Stock Purchaser, and West.
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(c) "XXXX OF SALE" means the Xxxx of Sale and Assignment of
the Xxxxx Cylinders to Stock Purchaser by Cylinder Seller in the form and upon
the terms of Xxxx of Sale and Assignment attached hereto and incorporated
herein by reference as Exhibit "A".
(d) "BUSINESS" means the business of Xxxx for the sale and
distribution of welding supply products, industrial and specialty gases as well
as liquid propane.
(e) "CERCLA" means Comprehensive Environmental Response,
Compensation and Liability Act of 1980.
(f) "CLAIMS" means any claim, liability, expense, loss or
other damage, including, without limitation, reasonable attorneys' fees and
expenses incurred or expended with respect to any of the foregoing; provided,
however, Claims shall not include any right to recover or indemnification for
consequential damages.
(g) "CLOSING" means the following:
(i) The sale, transfer and delivery of the Stock by
Sellers to Stock Purchaser, and Stock Purchaser's
acquisition of one hundred percent (100%) ownership
interest in and to Xxxx, as of the Effective Date,
free and clear of restrictions, limitations, liens
or encumbrances, for and in consideration of the
payment of the Stock Purchase Price, subject to Post
Closing Adjustments.
(ii) The execution and delivery by all appropriate
parties of any and all incidental and related
documents, instruments and assurances as well as the
consummation of all prerequisite activities required
of any of the parties hereto contemplated and
required by the terms and conditions of this
Agreement.
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(h) "CLOSING DATE" means the 29th day of September, 1997, at
10:00 o'clock, A.M. (EDT) or such later date and/or time agreeable to all
parties hereto, when the Closing will take place.
(i) "CLOSING DATE STOCK PAYMENT" means the Stock Purchase
Price, subject to and less the Escrow.
(j) "CYLINDER SELLERS" means Xxxxx X. Xxxxx and Xxxxx X.
Xxxxx, trading as E&L Cylinders, who own the Xxxxx Cylinders and who at Closing
shall lease the Xxxxx Cylinders to Stock Purchaser under the terms of the Xxxxx
Cylinders Lease and at the Xxxxx Cylinder Closing shall sell, transfer and
assign the Xxxxx Cylinders to Stock Purchaser at Closing by means of the Xxxx
of Sale for and in consideration of the Xxxxx Cylinder Purchase Payment.
(k) "CYLINDERS AND TANKS" means merchantable high and low
pressure gas cylinders, liquid containers and bulk tanks owned by Xxxx.
(l) "DEED" means the instrument wherein Xxxxxx X. Xxxxx and
Xxxxxxxx Xxxxx sell and convey West marketable fee simple title in and to the
Real Estate by conveyance with general warranty.
(m) "EFFECTIVE DATE" means the 29th day of September, 1997
at 12:01 o'clock A.M. (EDT).
(n) "EFFECTIVE DATE FINANCIAL STATEMENT" means the balance
sheet and operating and revenue statement with all supplementary information
and notes reflecting Xxxx'x financial condition as of the Effective Date.
(o) "EMPLOYMENT AGREEMENTS" means the following:
(i) The Employment Agreements by and between Stock
Purchaser and Xxxxx X. Xxxxx, Xxxxx X. Xxxxx, Xxxxx
X. Xxxxx, and Xxxx
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Xxxxx upon all terms and conditions contained in the
Employment Agreements subject of Paragraph 10(b),
upon the terms and in the form of Employment
Agreements attached hereto and incorporated herein
by reference as Exhibits "B-1", "B-2", "B-3", and
"B-4".
(ii) The Employment Agreements by and between Stock
Purchaser as Purchaser, Xxxx as Employer, and as
well four (4) key employees, namely, Xxxxx Xxxxx,
Xxxxx Xxxxxx, Xxxx Xxxxx, and Xxxxxx Xxxxxxxx, upon
all terms and conditions contained in the respective
Employment Agreements subject of Paragraph
10(b)(ii), upon the terms and in the form of
Employment Agreement attached hereto and
incorporated herein by reference as Exhibits "B-5",
"B-6", "B-7", and "B-8".
(p) "ENVIRONMENTAL LAW" means CERCLA, XXXX, RCRA, TSCA, or any
other law or regulation relating to the environment as well as Hazardous
Materials enacted or promulgated by any Federal, state or other governmental
authority.
(q) "ESCROW" means the Three Hundred Thirty-one Thousand
Dollars ($331,000.00) which shall be deducted from the Closing Date Stock Price
payment due at Closing, and deposited into an interest bearing Escrow account
pursuant to the terms of the Escrow Agreement, to provide assurance and payment
of cash funds necessary to reimburse Stock Purchaser for Post Closing
Adjustments.
(r) "ESCROW AGREEMENT" means the agreement establishing an
governing the Escrow in the term and upon the terms and conditions contained in
the Escrow Agreement attached hereto and incorporated herein by reference as
Exhibit "C".
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(s) "EXCLUDED ASSETS" means the following:
(i) Personal notes of Sellers to Xxxx evidencing
corporate loans to shareholders as reflected upon
the June 30, 1997 Financial Statements; which
indebtedness has been cancelled as of the date of
this Agreement as set forth in Paragraph 10(e); and,
(ii) Dividend declared and paid by Xxxx to Sellers
prior to date of this Agreement in the form of
marketable securities owned by Xxxx with a market
value as of date of dividend distribution in the
amount of Forty-seven Thousand Seven Hundred
Seventy-one Dollars ($47,771.00), as set forth in
Paragraph 10(e).
(t) "FAIR MARKET VALUE" means the value of the Real
Estate determined as follows:
(i) In the event West exercises any of the Purchase
Options no later than ninety (90) days prior to any
applicable Real Estate Closing, West shall procure a
real estate appraisal from a qualified, independent,
Certified Real Estate Appraiser, at its sole cost
and expense, a real estate appraiser of the
applicable Real Estate (the Primary Business Site as
well as either or both of the Secondary Business
Sites pursuant to the terms of this Agreement) to
determine its Fair Market Value. The Fair Market
Value of the applicable Real Estate as established
by West's appraiser shall be the Fair Market Value
of the applicable Real Estate, if agreed to by Real
Estate Lessors.
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(ii) In the event that Real Estate Lessors disagree
and dispute the Fair Market Value established by
West's appraiser, within fifteen (15) days after
receipt of West's Certified Real Estate Appraisal,
Real Estate Lessors shall retain, at their sole cost
sand expense, a qualified, independent, Certified
Real Estate Appraiser to appraise the real estate to
determine the Fair Market Value for the applicable
Real Estate. In the event that the value of the
applicable tract of real estate as determined by
Real Estate Lessors' and West's appraisers varies by
ten percent (10%) or less, then the Fair Market
Value for the purposes of establishing the Real
Estate Purchase Price hereunder shall be the average
of the two values established by the said qualified,
independent, Certified Real Estate Appraisers. In
the further event that the Fair Market Value as
determined by said appraisers varies by more than
ten percent (10%), then the said appraisers shall
retain a third, independent, qualified, Certified
Real Estate Appraiser to determine Fair Market Value
of the applicable Real Estate. In this further
event, Fair Market Value for the purposes of
establishing the Real Estate Purchase Price shall be
the average between the Fair Market Value determined
by the third independent appraiser and the appraiser
whose Fair Market Value more closely equals the Fair
Market Value determined by the third independent
appraiser. The cost and expense of the third
appraiser shall be borne equally by the Real Estate
Lessors and the West.
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(u) "FINANCIAL STATEMENTS" means the following: (i) all
balance sheets together with operating and revenue statements for Xxxx, with all
supplementary information and notes for the three (3) twelve (12) month periods
ending December 31, 1994, 1995, and 1996, attached hereto and incorporated
herein collectively as Exhibit "D"; (ii) the June 30, 1997 balance sheet
together with operating and revenue statements for Xxxx, with all supplementary
information and notes; (iii) the Effective Date Financial Statement, as
herein before defined; and (iv) Xxxx'x Federal income tax returns and state
income tax returns for its three (3) fiscal years 1994, 1995 and 1996. None of
the Financial Statements shall be audited Financial Statements.
(v) "GAAP" means Generally Accepted Accounting Principles.
(w) "XXXX" means Xxxx Brothers Welding Supply, Inc., a
Pennsylvania corporation, which has its principal place of business at the
Primary Business Site, 000 Xxxxx Xxxxxx, Xxxxx Xxxxx, Xxxxxxxxxxxx 00000, and
which has branch operations at the Secondary Business Sites and at the Tertiary
Business Sites.
(x) "HAZARDOUS MATERIALS" means any hazardous or toxic
material, waste or substances now identified as hazardous or toxic by CERCLA,
XXXX, RCRA, TSCA or any other Environmental Law.
(y) "INTERIM ORDINARY COURSE LIABILITIES" means Xxxx'x costs
and expenses incurred in the operation of the Business in the ordinary and
customary course (non-capital costs and/or expenditures) during the period of
time from June 30, 1997 up through and including Closing Date.
(z) "XXXXX CYLINDER LEASE" means the Lease of all of the
Xxxxx Cylinders by Cylinder Sellers, as Lessor, to Stock Purchaser, as Lessee,
for a lease term extending from Closing Date up through the Xxxxx Cylinder
Purchase Closing Date for an
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aggregate monthly rental of One Dollar ($1.00), in the form and upon the term of
Xxxxx Cylinder Lease attached hereto and incorporated herein by reference as
Exhibit "E".
(aa) "XXXXX CYLINDER PURCHASE CLOSING" means the following:
(i) Sale, transfer and assignment by means of the
Xxxx of Sale of the Xxxxx Cylinders by the
Cylinder Sellers to Stock Purchaser, and Stock
Purchaser's acquisition of all of the Xxxxx
Cylinders as of the Xxxxx Cylinder Purchase
Closing Date free and clear of restrictions,
limitations, liens and encumbrances for and in
consideration of payment by Stock Purchaser to
Cylinder Sellers, of the Xxxxx Cylinder Purchase
Price by bank wire transfer.
(ii) The execution and delivery by all appropriate
parties of any and all incidental and related
documents, instruments and assurances as well as
the consummation of all prerequisite activities
required of any of the parties hereto contemplated
and required by the terms and conditions of this
Agreement.
(bb) "XXXXX CYLINDER PURCHASE CLOSING DATE" means the 1st
day of June, 1998, at 10:00 o'clock A.M. (EDT) or such later date and/or time
agreeable to all parties hereto, when the Xxxxx Cylinder Purchase Closing will
take place.
(cc) "XXXXX CYLINDER PURCHASE PAYMENT" means One Million
Dollars ($1,000,000.00), together with interest accrued thereon for and during
the eight (8) month period from Closing Date to the Xxxxx Cylinder Purchase
Closing Date equivalent to the per annum rate one (1) year U.S. treasury xxxx
rate in effect on the 26th day of September, 1997, plus one-half percent (1/2%).
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(dd) "XXXXX CYLINDER PURCHASE PAYMENT LETTER OF CREDIT"
means an irrevocable letter of credit issued by Bank One, Indiana, N.A. securing
the Xxxxx Cylinder Purchase Price Payment.
(ee) "XXXXX CYLINDERS" means all merchantable high and low
pressure gas cylinders, liquid containers and bulk tanks owned by Cylinder
Sellers of the number, type and unit value, set forth on Exhibit "F".
(ff) "NON-COMPETITION AGREEMENTS" means the agreements in
the form and upon the terms of the Non-Competition Agreements attached hereto
and incorporated herein by reference as Exhibits "G-1", "G-2", and "G-3".
(gg) "PERMITTED ENCUMBRANCES" shall mean the following:
(i) Existing zoning ordinances, rules and regulations;
and
(ii) Real Estate taxes and assessments not due and
payable.
(hh) "POST CLOSING ADJUSTMENTS" means any applicable
adjustment to Stock Purchase Price, to be made one hundred forty (140) days
after Closing, as required by and pursuant to Paragraph 3(b) and all
subparagraphs thereof.
(ii) "PRIMARY BUSINESS SITE" means the Real Estate with all
buildings and improvements situate at 000 Xxxxx Xxxxxx, Xxxxx Xxxxx,
Xxxxxxxxxxxx, currently owned by Xxxxxx X. Xxxxx and Xxxxxxxx Xxxxx, and
utilized by Xxxx in and about the operation of the Business as its primary
business location.
(jj) "PURCHASE OPTION" means the following:
(i) The sole right and option of West to purchase
the Primary Business Site Real Estate at the
termination of the Primary Business Site Real
Estate Lease for and in consideration of payment
at the Real Estate Closing by West, its successors
and
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assigns, of the Real Estate Purchase Price
to Real Estate Lessors, their successors and
assigns, pursuant to and in accordance with
the "Purchase Option" provision contained in
the Primary Business Site Real Estate Lease,
Exhibit "H-1" attached hereto.
(ii) The sole right and option of West to
purchase the Brookville Real Estate, one of
the Secondary Business Sites Real Estate at
the termination of the Real Estate Lease
for the Brookville Real Estate for and in
consideration of payment at the Real Estate
Closing by West, its successors and
assigns, of the Real Estate Purchase Price
to Real Estate Lessors, their successors
and assigns, pursuant to and in accordance
with the "Purchase Option" provision
contained in the Secondary Business Sites
Real Estate Lease, Exhibit "H-2" attached
hereto.
(iii) The sole right and option of West to
purchase the Clearfield Real Estate, one of
the Secondary Business Sites Real Estate at
the termination of the Real Estate Lease for
the Clearfield Real Estate for and in
consideration of payment at the Real Estate
Closing by West, its successors and assigns,
of the Real Estate Purchase Price to Real
Estate Lessors, their successors and
assigns, pursuant to and in accordance with
the "Purchase Option" provision contained in
the Secondary Business Sites Real Estate
Lease, Exhibit "H-3" attached hereto.
(kk) "RCRA" means the Resource Conservation and Recovery
Act.
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(ll) "REAL ESTATE" means the Primary Business Site, the
description of which is attached hereto and incorporated herein by reference as
Exhibit "I-1", as well the Secondary Business Sites, the descriptions of which
are attached hereto as Exhibits "I-2" and "I- 3", respectively; all of which
owned by Real Estate Lessors are to be leased by Real Estate Lessors to West,
and are subject to the Purchase Option.
(mm) "REAL ESTATE CLOSING" means the following:
(i) In the event West exercises the Purchase
Option for the Primary Business Location,
Real Estate Lessors' sale, transfer and
conveyance of marketable fee simple title
to the Primary Business Site by General
Warranty Deed, free and clear of any
Adverse Title Condition on the 1st day of
October, 2007, at 000 Xxxxx Xxxxxx, Xxxxx
Xxxxx, Xxxxxxxxxxxx 00000, or such other
location in the Village of Falls Creek,
Pennsylvania, or such other location
mutually agreeable to Real Estate Lessors
and West, for and in consideration of the
payment by West to Real Estate Lessors of
the Real Estate Purchase Price for the
Primary Business Site; and as well the
execution and delivery by all appropriate
parties of any and all incidental and
related documents, instruments and
assurances as well as the consummation of
all prerequisite activities required of any
of the parties hereto contemplated and
required by the terms and conditions of
this Agreement.
(ii) In the event West exercises the Purchase
Option for either or both of the Secondary
Business Sites, Real Estate Lessors' sale,
transfer and conveyance of marketable fee
simple title to the Secondary
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Business Sites to be sold and conveyed by
General Warranty Deed, free and clear of
any Adverse Title Condition on the 1st day
of October, 2002, at 000 Xxxxx Xxxxxx,
Xxxxx Xxxxx, Xxxxxxxxxxxx 00000, or such
other location in the Village of Falls
Creek, Pennsylvania, or such other location
mutually agreeable to Real Estate Lessors
and West, for and in consideration of the
payment by West to Real Estate Lessors of
the Real Estate Purchase Price for the
Secondary Business Sites for which West has
exercised its Purchase Option; and as well
the execution and delivery by all
appropriate parties of any and all
incidental and related documents,
instruments and assurances as well as the
consummation of all prerequisite activities
required of any of the parties hereto
contemplated and required by the terms and
conditions of this Agreement.
(nn) "REAL ESTATE LEASES" means the following:
(i) The ten (10) year lease between Real Estate
Lessors and West for the Primary Business
Site in the form and upon all terms of the
Primary Business Site Lease attached hereto
and incorporated herein by reference as
Exhibit "H-1".
(ii) The five (5) year lease between Real Estate
Lessors and West for the Brookville,
Pennsylvania Real Estate, one of the
Secondary Business Sites, in the form and
upon all terms of the Secondary Business
Sites Lease attached hereto and
incorporated herein by reference as Exhibit
"H-2".
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(iii) The five (5) year lease between
Real Estate Lessors and West for
the Clearfield, Pennsylvania Real
Estate, one of the Secondary
Business Sites, in the form and
upon all terms of the Secondary
Business Sites Lease attached
hereto and incorporated herein by
reference as Exhibit "H-3".
(oo) "REAL ESTATE LESSORS" means Xxxxxx X. Xxxxx and
Xxxxxxxx Xxxxx, owners of the Primary Business Site and Secondary Business
Sites.
(pp) "REAL ESTATE PURCHASE PRICE" means the Fair Market Value
of the Real Estate as determined for each of the Primary Business Site and
Secondary Business Sites as applicable, in the event West exercises its
Purchase Option for the purchase of Primary Business Site and/or either or both
of the Secondary Business Sites.
(qq) "XXXX" means the Superfund Amendment and
Re-authorization Act of 1986.
(rr) "SECONDARY BUSINESS SITES" means the Real Estate with
all buildings and improvements situate in or about Brookville, Pennsylvania and
Clearfield, Pennsylvania, currently owned by Xxxxxx X. Xxxxx and Xxxxxxxx
Xxxxx, and utilized by Xxxx in and about the operation of the Business as
branch Business locations.
(ss) "SELLERS" means Xxxxxx X. Xxxxx, Xxxxx X. Xxxxx and
Xxxxx X. Xxxxx. Sellers, who collectively are all of the [one hundred percent
(100%)] owners of the Stock of Xxxx in the following shareholding amounts:
SHAREHOLDER NUMBER OF SHARES
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Xxxxxx X. Xxxxx 249 shares
Xxxxx X. Xxxxx 1 share
Xxxxx X. Xxxxx 1 share
TOTAL SHARES: 251 shares
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(tt) "STOCK" means all [one hundred percent (100%)] of the
issued and outstanding capital stock of Xxxx, comprised of two hundred
fifty-one (251) shares of Xxxx common stock with Ten Dollar ($10.00) par value.
(uu) "STOCK PURCHASE PRICE" means Six Million Six Hundred
Twenty Thousand Dollars ($6,620,000.00), subject to Post Closing Adjustments.
(vv) "TERTIARY BUSINESS SITES" means the five (5) Business
locations in St. Mary's, Pennsylvania; Indiana, Pennsylvania, Punxsutawney,
Pennsylvania; XxXxxx, Pennsylvania; and Clarion, Pennsylvania, utilized by Xxxx
in and about the operation of the Business and branch Business locations.
(ww) "TSCA" means the Toxic Substances Control Act.
(xx) "WEST" means West Rentals, Inc., a West Virginia
corporation, with its principal place of business at 00 - 00xx Xxxxxx,
Xxxxxxxx, Xxxx Xxxxxxxx 00000.
2. AGREEMENT TO SELL AND PURCHASE. Subject to the terms and conditions
contained in this Agreement, at Closing the Sellers hereby agree to sell,
assign, transfer and deliver the Stock as of the Effective Date to Stock
Purchaser, and Stock Purchaser agrees to purchase all of the Stock from
Sellers; said sale and purchase of the Stock to be made free and clear of all
restrictions, limitations, liens, pledges, charges and encumbrances of any
nature for and in consideration of the payment of the Stock Purchase Price by
Stock Purchaser to Sellers;
3. PURCHASE PAYMENTS.
(a) Closing Payments. At Closing, the Stock Purchaser
shall pay to Sellers the Closing Date Stock Payment subject to and less the
Escrow, by means of Stock Purchaser's bank wire transfer.
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(b) Post Closing Adjustments.
(i) CYLINDER AND TANK ADJUSTMENT: As of
Closing, Xxxx and Cylinder Sellers will own
free and clear of any and all liens and
encumbrances at least sixteen thousand
three hundred twenty-six (16,326) Cylinders
and Tanks (excluding liquid containers
hereinafter referenced) with an agreed upon
unit value of Seventy- five Dollars
($75.00) per cylinder as well as at least
one hundred twenty (120) liquid containers
with an agreed upon unit value of One
Thousand Dollars ($1000.00) each. Within
one hundred forty (140) days after Closing,
Sellers and Stock Purchaser shall have
jointly conducted (1) a book audit of
Sellers' Cylinder and Tank records and/or
(2) a physical inventory of Sellers'
Cylinders and Tanks, to determine that Xxxx
and Cylinder Sellers have at least the said
sixteen thousand three hundred twenty-six
thousand (16,326) Cylinders and Tanks and
one hundred twenty (120) liquid containers.
In the event after audit and inventory, the
number of Cylinders and Tanks owned by Xxxx
as of Closing, free and clear of liens and
encumbrances, is less than the said number
of Cylinders and Tanks represented as owned
by Xxxx and Cylinder Sellers in this
Paragraph 3(b)(i), the Stock Purchase Price
shall be reduced as part of the Post
Closing Adjustment by a dollar amount equal
to the aggregate value of such deficiency
of Cylinders and Tanks. The value of any
such deficiency shall be calculated by
multiplying the number of of Cylinders and
Tanks and liquid
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containers determined by the audit and
inventory to be actually owned by Xxxx and
Cylinder Sellers by Seventy-five Dollars
($75.00) per unit for missing cylinders and
One Thousand Dollars ($1,000.00) per unit
for missing containers. Notwithstanding the
foregoing, Stock Purchaser and Sellers
agree that:
(A) In any instance wherein
Stock Purchaser declines to xxxx a
customer for lost Cylinders
determined after the Cylinder
audit and inventory aforesaid, there
shall be no reduction in the
Purchase Price attributable to such
missing and lost Cylinders and
Tanks and/or liquid containers;
(B) Notwithstanding Settlement pursuant
to Paragraph 3(b)(iv) hereinafter,
Sellers shall be entitled to credit
for and repayment by Stock
Purchaser or its successors in an
amount not to exceed the amount of
deductions to the Stock Purchase
Price arising out of any Post
Closing Adjustments to the Stock
Purchase Price with respect to
missing and lost Cylinders and
Tanks, and/or liquid containers,
which Xxxx receives with respect to
the recovery and return of such
Cylinders and Tanks and/or liquid
containers by Xxxx or its
successors during the period
following settlement up to one (1)
year after Closing Date;and,
(C) There shall be no reduction in the
Purchase Price with respect to any
Cylinder and Tanks lost or missing
on with respect to the Xxxxxxxxxx
Corp. account.
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(ii) ACCOUNTS RECEIVABLE: at Closing, Sellers
shall furnish Stock Purchaser a schedule of
Xxxx'x accounts receivable certified as of
Closing Date, fully itemized as to
customer, amount and account aging history.
After Closing Date, Stock Purchaser shall
first apply all accounts receivable
payments collected from each pre- closing
account debtor to the oldest outstanding
and unpaid account invoice for such
pre-closing account debtor. As of one
hundred forty (140) days after Closing
Date, Stock Purchaser (having used its best
efforts to do so) expects to have collected
all of Xxxx'x Closing Date accounts
receivable. In the event that, as of one
hundred forty (140) days after Closing
Date, Stock Purchaser has not collected all
of Xxxx'x accounts receivable, the Stock
Purchase Price shall be reduced as part of
the Post Closing Adjustment by the
equivalent dollar amount by which accounts
receivable actually collected by Stock
Purchaser is less than the amount reflected
upon Sellers' certified schedule of Closing
Date accounts receivable pursuant to an
itemization of such uncollected accounts
receivable, and delivered by Stock
Purchaser to Sellers. After payment to
Stock Purchaser of Post Closing Adjustments
hereunder in accordance with Paragraph
3(b)(iv) Stock Purchaser shall assign and
transfer all such uncollected Closing Date
accounts receivables to Sellers.
(iii) INVENTORY: Prior to Closing, Sellers and
Xxxx shall permit Stock Purchaser to conduct
a physical Inventory of Xxxx'x inventory to
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determine the amount and value of Saleable
Hardgoods Inventory. The term "Saleable
Hardgoods Inventory" shall be defined for
the purposes of this provision as (1) non
shopworn, non defective hardgoods inventory
items, and (2) listed for sale in the
manufacturer's current catalog. The value
of all Saleable Hardgoods Inventory shall be
calculated at Xxxx'x historical cost, or in
the absence thereof at the manufacturer's
current pricing for Xxxx. The term
"Inventory Value" shall be defined for the
purposes of this Agreement as the value of
Inventory as reflected upon Xxxx'x Xxxx 30,
1997 Financial Statement, as adjusted for
variations to date of the physical inventory
arising out of sale and acquisition of gas
and hardgoods inventory in the ordinary
course of business. In the event that at the
date of the physical inventory, Saleable
Hardgoods Inventory does not equal the
Inventory Value, the Stock Purchase Price
shall be reduced as part of Post Closing
Adjustments, by an amount equal to the per
dollar amount by which the value of the
Saleable Hardgood Inventory as determined
herein is less than the Inventory Value.
(iv) SETTLEMENT: One hundred forty (140) days
after Closing Date, Sellers shall pay Stock
Purchaser by wire transfer, an amount equal
to all applicable Post Closing Adjustments
to the Stock Purchase Price as required
under this Paragraph 3(b) and subparagraphs
thereof, if any, less Escrow funds which
will be first applied to any and all such
Post Closing Adjustments pursuant
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to the Escrow Agreement. Any and all Escrow
Funds which are not required to extinguish
Post Closing Adjustments payment
requirements hereunder shall be the
property of and paid over to Sellers in
accordance with the terms and conditions of
the Escrow Agreement.
4. CLOSING. The consummation of the Stock transaction described
herein, including, but not limited to, the sale, transfer and delivery of the
Stock to Stock Purchaser, as well as any and all other related transactions
required to be consummated at the Closing but effective as of the Effective
Date; provided all conditions precedent to Closing are satisfied, the Closing
shall take place on the Closing Date at the office of Xxxx X. Xxxxxxxx, XX,
Esquire, 000 Xxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000, or at such other
place, date and time to be mutually agreeable to Stock Purchaser and Sellers.
5. CLOSING ITEMS.
(a) At Closing, Sellers shall deliver to Stock Purchaser
the following items:
(i) Certificates representing all of the Stock
properly endorsed for transfer or
accompanied by duly executed stock powers as
provided for in paragraph 9(a)(iii);
(ii) Stock Purchaser Certificates required in
paragraphs 9(a)(i), 9(a)(ii) and 9(a)(iv);
(iii) Resignation of all officers and directors
of Xxxx as required in paragraph 9(v);
(iv) Certified schedule of Xxxx account
receivables as of Closing Date as required
in paragraph 3(b)(ii);
(v) Non-Competition Agreement as required in
paragraph 10(a);
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(vi) Employment Agreements as required in
paragraph 10(b)(i) and paragraph 10(b)(ii);
(vii) Sellers' Affidavit as required in
paragraph 9(a)(v);
(viii) All other documents, instruments and
certificates required to be delivered by
Sellers pursuant to the terms of this
Agreement.
(b) On or before the Closing Date, Stock Purchaser shall deliver to
Sellers the following items:
(i) The Closing Date Payment as provided for in
paragraphs 3(a);
(ii) Certificates required in
paragraphs 9(b)(i), 9(b)(ii), and 9(b)(iii);
(iii) Certified resolution the certificate of
Purchaser required in paragraph 9(c)(iv);
(iv) All other documents, instruments and
certificates required to be delivered by
Stock Purchaser pursuant to the terms of
this Agreement.
6. REPRESENTATIONS AND WARRANTIES.
(a) To the best of Sellers' knowledge, Sellers represent and
warrant to Stock Purchaser as of the date hereof, and as of the Closing Date as
follows:
(i) ORGANIZATION, STANDING AND QUALIFICATION.
Xxxx is a duly organized, validly existing
corporation and chartered and in good
standing under the laws of the State of
Pennsylvania; is duly licensed, qualified
to do business; and has full corporate
power and authority and all material
permits, consents and authorizations
necessary to own and lease its properties
and to carry on its
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business as now conducts, including but not
limited to, any fictitious name
registrations required to be filed.
(ii) SUBSIDIARIES. Xxxx has no subsidiaries.
(iii) CAPITALIZATION OF XXXX. The authorized
capital stock of Xxxx consists of two
hundred fifty-one (251) shares of the Stock,
with $10.00 par value per share. As of the
Closing Date, the issued and outstanding
Stock of Xxxx shall consist of two hundred
fifty-one (251) shares of capital stock;
which Stock shall be validly issued, fully
paid, non-assessable and owned by Sellers.
There are no outstanding subscriptions,
options, rights, warrants, conversion
rights, agreements, or commitments of any
kind outstanding which obligate Xxxx to
issue, acquire or transfer any shares of the
Stock.
(iv) OWNERSHIP AND TRANSFER OF STOCK. Sellers
own all of the Stock, beneficially and of
record, free and clear of all liens,
encumbrances, pledges, options, claims,
charges, and restrictions of any nature.
(v) CORPORATE DOCUMENTS. All Xxxx corporate
record books are accurate as to the actions
contained therein, and the Bylaws contained
therein are the Bylaws of Xxxx as of the
date of this Agreement and shall be the
Bylaws of Xxxx as of the Closing Date.
(vi) AUTHORIZATION. The execution and delivery
of this Agreement and the consummation of
the transactions contemplated hereby will
not
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violate any provision of, or result in the
breach of, or accelerate or permit the
acceleration of the performance required by
the terms of: (i) the Articles of
Incorporation or Bylaws of Xxxx (ii) any
agreement to which Sellers, Xxxx are party
or by which any of them may be bound, or
(iii) any order, judgment, or decree
applicable to Sellers or Xxxx will not
result in the creation of any claim, lien,
charge or encumbrance upon the Stock, any
property or assets of Xxxx; and will not
terminate or result in the termination of
any such agreement, or in any way affect or
violate the terms or conditions of, or
result in the cancellation, modification,
revocation, or suspension of, any of the
licenses, franchises, approvals,
certificates, permits, or authorizations
held by Xxxx.
(vii) FINANCIAL STATEMENTS. Within sixty (60)
days after Closing Date, Sellers, at their
sole cost and expense, shall furnish Stock
Purchaser the Effective Date Financial
Statement. Stock Purchaser shall provide
Sellers, and their agents free and
unrestricted access to all books and records
of Xxxx up to and including sixty (60) days
after Closing Date, at 000 Xxxxx Xxxxxx,
Xxxxx Xxxxx, Xxxxxxxxxxxx 00000, or such
other place as Stock Purchaser and Sellers
mutually agree, to allow Sellers to prepare
and deliver the Effective Date Financial
Statement. The Financial Statements are and
will be (1) in accordance with the books and
records of Xxxx
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and prepared in accordance with GAAP
consistently applied; and (2) present fairly
and accurately the financial condition of
Xxxx as of the Closing Date or other date of
respective periods and results of the
operations of Xxxx and the Business for each
respective period then ending.
(viii) UNDISCLOSED LIABILITIES. Except as set
forth on Exhibit "J", Xxxx has not incurred
or suffered any debt, liability or other
obligation of a material nature, whether
accrued, absolute, contingent, or otherwise,
and whether due or to become due, other than
(1) debts, liabilities, or other obligations
reflected in the June 30, 1997 Financial
Statements and (2) Interim Ordinary Course
Liabilities.
(ix) TAXES, TAX RETURNS, AND AUDITS. Xxxx has
timely filed, caused to be timely filed, or
shall timely file, all Federal, state, and
local tax returns as to the operations of
Xxxx which are required by law to be filed
on or before Closing Date, and all such tax
returns are complete and accurate in
accordance with all legal requirements
applicable thereto insofar as they relate
to the operations of Xxxx and the Business.
Xxxx has paid all taxes for said periods
which have become due pursuant to said tax
returns, or pursuant to any assessment or
otherwise, and there is no further
liability (whether or not disclosed on such
returns or assessments) for any taxes,
interest, or penalties relating to such
periods. Further, Xxxx has filed or prior
to the Closing shall file the necessary
documents for
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and paid all payroll, real or personal
property taxes, business and occupation
taxes, and any interest assessments and/or
penalties on any of same, required to be
filed prior to the Closing Date and that
same are or shall be complete and accurate
in accordance with all legal requirements,
applicable thereto.
(x) TITLE TO ASSETS. Xxxx has good and
marketable title to all of the assets and
properties owned by it as of Closing Date
as reflected in the Financial Statements,
whether real, personal, or mixed, tangible
or intangible, free and clear of
restrictions on, or conditions to, transfer
or assignment, and of mortgages, liens,
pledges, charges, encumbrances, security
interests, equities, claims, easements,
rights of way, covenants, conditions, and
restrictions except:
(A) As expressly set forth as liens and
encumbrances upon Exhibit "K";
(B) Liens for current taxes not yet due
and payable;
(C) Possible minor liens or encumbrances
that, in the aggregate, are not
material in amount and do not
materially detract from or interfere
with the present use of any material
properties, or materially impair the
business operations of Xxxx. For
purposes of this subparagraph,
"material" shall be deemed to mean in
excess of One Hundred Dollars ($100.00)
in the aggregate; and,
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(D) Property leased by Xxxx set forth on
Exhibit "L".
(xi) NO THIRD PARTY RIGHTS OR OPTIONS.
There are no outstanding rights or options
in any third party to acquire Xxxx or any
interest therein, or as well to acquire any
assets or other properties of Xxxx or any
interest therein, except as expressly set
forth on Exhibit "M".
(xii) COMPLIANCE WITH LAWS. Xxxx has not
received any currently effective notice of
any violations of any existing applicable
federal, state, or local law or regulation
affecting its assets or the operation of its
business, and, as to any past notices which
are no longer effective, appropriate
remedial steps have been taken. Xxxx is in
substantial compliance with all existing
applicable Federal, state, and local laws
and regulations including, without
limitation, those respecting the health and
safety of its employees, the benefit or
welfare plans provided for its employees,
the hiring, firing, and conditions of
employment of its employees and the
protection of the environment. Further, Xxxx
has not unlawfully stored, dumped, or
deposited nor participated in the unlawful,
dumping or depositing of any Hazardous
Materials upon any of its properties, or
elsewhere; and Xxxx has not, at any time,
received, nor does it have any knowledge or
reason to believe that it may receive notice
of all alleged violation of any existing
Environmental Law, rule,
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regulations or orders issued with respect thereto
from any governmental authority.
(xiii) CONTRACTS. Except for the leases set forth
on Exhibit "L", third party rights and
options set forth on Exhibit "M", and
contracts set forth on Exhibit "N" to this
Agreement, Xxxx is not bound by any written
or oral:
(A) Agreement or understanding not made
in the ordinary course of the
Business;
(B) Employment contract or contract for
personal services not terminable at
will;
(C) Continuing contract for the future
purchase of material, supplies,
machinery, or other equipment in
excess of the requirements of the
Business now booked or of normal
operating requirements;
(D) Sales agency agreement or
advertising contracts;
(E) Except in the ordinary course of
business, any contract or
commitment for goods, services
and/or capital expenditures, in
excess of $1,000.00 in the
aggregate;
(F) Contract or agreement containing
covenants by Xxxx not to compete in
any lines or business or with any
person; or
(G) Leases not cancelable upon not
greater than thirty (30) days
notice.
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(xiv) LITIGATION. There are no actions,
suits, proceedings, or investigations
pending or to the best of Sellers' knowledge
threatened, (1) in any court or before any
governmental agency or instrumentality
against, by or adversely affecting Xxxx or
the Business, financial condition or any of
the properties or assets of it, or (2) which
would prevent the carrying out of this
Agreement or any of the transactions
contemplated hereby, or (3) which would
render the transactions provided for
hereunder to be unlawful or cause the
recision thereof.
(xv) ABSENCE OF ADVERSE CHANGES OR OTHER EVENTS.
Except as expressly contemplated by and
stated in this Agreement, after June 30,
1997 and up to Closing Date, Xxxx shall not
have:
(A) Except as set forth on Exhibit "O"
to this Agreement, created or
incurred any liability (absolute or
contingent) except for unsecured
current liabilities under oral or
written contracts entered into in
the ordinary course of business;
(B) Loaned any money or otherwise
pledged the credit of Xxxx or
mortgaged, pledged, or subjected
its assets to any tangible or
intangible lien or encumbrance;
(C) Except as set forth on Exhibit "M"
to this Agreement, or otherwise
expressly contemplated by this
Agreement, sold or otherwise
disposed of, or contracted to sell
or dispose of, any of its assets,
tangible or intangible; or canceled
any
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debts owed it or claims held by it
against third party, except in each
case, in the ordinary course of
business;
(D) Except in the ordinary course of
the Business made or become a party
to any contract or commitment or
renewed, extended, amended, or
modified any contract or commitment
which in any one case involves an
amount in excess of One Thousand
Dollars ($1,000.00) or a
noncancellable term in excess of
thirty (30) days;
(E) Issued or sold any shares of its
capital stock or rights, options,
or warrants to purchase its capital
stock, or any securities
convertible into its capital stock;
(F) Except for sales bonuses in the
amount of Five Thousand Dollars
($5,000.00) each, paid or to be
paid to Xxxxx X. Xxxxx and Xxxxx
Xxxxx; paid or agreed to pay,
conditionally or otherwise, any
bonus, extra compensation, or
severance pay to any director,
officer, or employee, or increased
the compensation, including
salaries, fees, commissions,
bonuses, profit sharing, incentive,
pension, retirement, or other
similar payments paid to any of its
directors, officers, or employees;
(G) Become bound by or entered into any
contract, commitment, or
transaction other than in the
ordinary course of business;
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(H) Made or become a party to any
contract or otherwise enter into
any transaction with Sellers or any
other related party other than in
the ordinary course of business;
or,
(I) Entered into any contract or
agreement to do or perform any of
the foregoing actions.
(xvi) NO EMPLOYEES TO LEAVE EMPLOYMENT WITH XXXX.
As of the date of this Agreement, neither
Sellers nor Xxxx have actual knowledge that
any current employee intends to leave
employment of Xxxx within six (6) months of
Closing Date. Sellers shall promptly furnish
Purchaser notice of any employee who
notifies Xxxx or Sellers that they intend to
or may leave the employment of Xxxx.
(xvii) NO UNION, EMPLOYEE COLLECTIVE
BARGAINING UNIT OR ORGANIZING ACTIVITY.
Xxxx is not signatory to any collective
bargaining agreement and is not currently
subject to any present labor collective
bargaining process or organizing efforts by
any union or other collective bargaining
representative; and neither Sellers nor Xxxx
has any actual knowledge or information,
that any Xxxx employee, union or collective
bargaining representative is considering or
threatening to organize Xxxx employees to
form a union or collective bargaining unit.
(xviii) NO LOSS OF CURRENT CUSTOMERS. After
June 30, 1997 up to and including Closing
Date, no customers of Xxxx, which in the
aggregate represent and constitute a
material volume of the
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Business, shall have terminated transacting
business with Xxxx or shall have furnished
Xxxx notice of termination or intention to
terminate with respect to transacting
business with Xxxx. For purposes of this
subparagraph, "material volume of the
Business" for the purposes of this
subparagraph shall mean two percent (2%) or
more of Xxxx'x annual, year end December 31,
1996 gross sales.
(xix) CONTINUOUS OPERATION OF BUSINESS. Xxxx
shall be operated in the ordinary course of
business up to and including the Closing
Date except as otherwise expressly
contemplated by this Agreement.
(xx) LONG TERM (NON-CURRENT) LIABILITIES.
Except as set forth on Undisclosed
Liabilities, Exhibit "J" to this Agreement,
Xxxx has no other long term (non-current)
liabilities.
(xxi) ACCURACY OF INFORMATION. Copies of all
documents furnished by, or on behalf of,
Sellers or Xxxx to Stock Purchaser pursuant
to the terms of this Agreement are complete
and accurate. No representation or warranty
by Sellers in this Agreement, nor any
statement or certificate furnished to Stock
Purchaser by Xxxx contains or will contain
any untrue statement of a material fact.
(xxii) EXCESS LIABILITIES. As of Closing Date,
Xxxx shall have no liabilities in excess of
the total liabilities reflected and stated
upon the June 30, 1997 Financial Statement
as adjusted for Interim Ordinary Course
Liabilities; which liabilities shall include
interest
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bearing debt of no more than One Hundred
Thousand Dollars ($100,000.00).
(xxiii) XXXX EQUITY. Except as adjusted for
Interim Ordinary Course Liabilities and the
value of the Excluded Assets as of Closing
Date, Xxxx shall have balance sheet net
equity of no less than the net equity
reflected and stated upon the June 30, 1997
Financial Statements.
(b) To the best of its knowledge, Stock Purchaser represents
and warrants to Sellers as of the date hereof and respectively as of the
Closing Date as follows:
(i) ORGANIZATION, STANDING AND QUALIFICATION.
Stock Purchaser each is a duly organized,
validly existing corporation, and is in
good standing under the laws of all
applicable states and jurisdictions,
including the State of Pennsylvania; is
duly licensed, qualified to do business,
and in good standing in each jurisdiction
in which the current ownership and
operation of its business requires such
licensing or qualification, including the
State of Pennsylvania; and has full
corporate power and authority, and, to its
knowledge, has all permits, consents and
authorizations, necessary to own and lease
its properties and to carry on its business
as now conducted.
(ii) NO BREACH. The execution and delivery of
this Agreement by Stock Purchaser, and the
consummation by Stock Purchaser of the
transactions contemplated hereby will not
(i) violate any provisions of, or result in
the breach or termination of, or accelerate
or
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permit the acceleration of the performance
required by, the terms of: (A) the Articles
of Incorporation or By-Laws of Stock
Purchaser; (B) any agreement to which Stock
Purchaser is a party or by which either is
bound; or (C) any order, judgment, or
decree applicable to Stock Purchaser; (ii)
result in the creation of any claim, lien,
charge or encumbrance upon any property or
assets of Stock Purchaser; or (iii) in any
way affect or violate the terms or
conditions of, or result in the
cancellation, modification, revocation, or
suspension of, any of the licenses,
franchises, approvals, certificates,
permits, or authorizations held by Stock
Purchaser.
(iii) AUTHORITY; ENFORCEABILITY. Stock
Purchaser has all requisite corporate power
and authority to enter into this Agreement
and to consummate the transactions
contemplated hereby. This Agreement and
each other agreement herein contemplated to
be executed in connection herewith by Stock
Purchaser have been duly executed and
delivered by Stock Purchaser, as the case
may be, and constitute legal, valid and
binding obligations of Stock Purchaser, as
the case may be, enforceable against Stock
Purchaser, as the case may be, in accordance
with their respective terms.
(iv) LITIGATION. There are no actions, suits,
proceedings or investigations pending or,
to Stock Purchaser's knowledge,
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threatened, in any court or before any
governmental agency or instrumentality
against any of the property or assets of
Stock Purchaser, which would prevent Stock
Purchaser from carrying out the transactions
contemplated hereby or would declare the
same unlawful or cause the recision thereof.
(v) ACCURACY OF INFORMATION. Copies of all
documents furnished by, or on behalf of,
Stock Purchaser to Sellers pursuant to the
terms of this Agreement are complete and
accurate in all material respects. To Stock
Purchaser's knowledge and belief, no
statement or certificate furnished to
Sellers by Stock Purchaser pursuant to the
terms of this Agreement contains or will
contain any untrue statement of a material
fact.
7. INDEMNIFICATIONS.
(a) Indemnification by Sellers of Stock Purchaser. Sellers agree to
defend, indemnify and hold Stock Purchaser, its successors and assigns,
harmless from and against any Claims (except those liabilities expressly
provided for and disclosed in Xxxx'x Xxxx 30, 1997 Financial Statements,
undisclosed liabilities reflected upon Exhibit "J" hereto, or Interim Ordinary
Course Liabilities) in respect of:
(i) Any and all Claims resulting from or
arising out of Xxxx and the Business prior
to Closing Date.
(ii) Any and all Claims resulting from the
breach of any representations and
warranties pursuant to and under Paragraph
6(a) hereunder.
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(iii) Any and all other misrepresentations or
breach of warranty or violation of any
covenant made by Sellers hereunder, or as
well in any schedule or other instrument or
document furnished or to be furnished by
Sellers hereunder, including, without
limitation, any documents furnished at the
Closing.
(iv) Any and all Claims in respect of any
liabilities of Xxxx as of the Closing Date.
(v) Any and all Claims in respect of Xxxx'x
federal, state or local taxes, incurred and
due on or before the Closing Date,
including but not limited to income taxes
based upon or measured by income or any
gain or sales or transfer taxes, or which
may be asserted against Xxxx as a result of
any operations of Xxxx whether such taxes
be trust fund or employment taxes or taxes
based on property, income, gain or
otherwise.
(vi) Any and all Claims with respect to any and
all plans, policies, labor contracts or
arrangements relating to commissions,
bonuses, group insurance, severance pay,
pensions, profit sharing, any deferred
compensation arrangements or health and
welfare or other benefit plans for
employees of Xxxx or otherwise arising out
of or related to Xxxx'x business prior to
the Closing Date, including, but not
limited to, any liability imposed under the
provisions of the Employee Retirement
Income Security Act of 1974, Multiemployer
Pension Plan Amendment Acts of 1980, the
Consolidated Omnibus
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Budget Reconciliation Act of 1985 or the
Omnibus Budget Reconciliation Act of 1987
as well as any other federal or state law
or regulation.
(vii) Any and all Claims arising out of a
violation of any federal or state
law or regulation, including, but
not limited to, outstanding
grievance, arbitration award, NLRB
unfair labor practice charge, OSHA
citation, EEOC charge, Fair Labor
Standards Act charge, Americans
with Disabilities Act charge,
Family and Medical Leave Act
charge, Immigration Reform and
Control Act charge, or Civil Rights
Restoration Act charge, compliance
review, consent decree,
conciliation agreement, benefit
claim, wage and hour complaint, and
any litigation involving any
personnel practices or policies of
Xxxx with respect to any employment
relationship, attributable to the
Business prior to the Closing Date.
(viii) Any and all Claims which are
asserted by any governmental or
regulatory authority for any
penalties or other obligations
attributable to the operations of
Xxxx and the Business, provided
that the basis for such Claims
existed prior to the Closing. Said
"other obligations" shall include,
but are not limited to, any
violation by Xxxx prior to the
Closing in connection with its
business of any applicable federal,
state or local environmental or
health and safety statute,
regulation, ordinance or code or
other governmental requirement,
including, but not limited to,
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regulations establishing environmental or
health and safety quality criteria or
standards for air, water or land.
(ix) Any and all Claims asserted by third
parties, including governmental entities
and Claims arising from Stock Purchaser's
affirmative duty to furnish notice to third
parties, including governmental entities,
arising from or out of any Hazardous
Materials, spilled, released, discharged or
disposed of by Xxxx, or arising out of
Xxxx'x business operations prior to the
Closing, including without limitation: (A)
cost of investigation, removal, restoration
or any other remedial work done in
connection with any Hazardous Materials
spilled, released, discharged or disposed
of by Xxxx or arising out of Xxxx'x
business operations prior to the Closing;
(B) costs incurred to correct a violation
of any applicable Environmental Law,
arising out of or resulting from Xxxx'x
operations prior to the Closing Date; and
(C) costs incurred as a result of being
named a responsible party under CERCLA as
amended by XXXX.
(x) Any and all Claims for defective products
or unsatisfactory services furnished to
Xxxx'x customers prior to the Closing Date,
to the extent not indemnified under
currently enforceable insurance coverage.
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(b) Indemnification by Stock Purchaser to Sellers. Stock
Purchaser agrees to defend, indemnify and hold Sellers and his respective
successors and assigns, harmless from and against any Claims in respect of:
(i) Any and all Claims resulting from or
arising out of Stock Purchaser's operation
of Xxxx and the Business as well as the
possession, use and control of Xxxx'x
assets after Closing Date.
(ii) Any and all Claims resulting from any
misrepresentation or breach of warranty or
violation of any covenant made by Stock
Purchaser hereunder, or in any document
furnished or to be furnished by Stock
Purchaser hereunder, including, without
limitation, any documents or instruments
furnished at the Closing.
(c) Determination of Loss. Indemnification pursuant to this Paragraph
7 shall be payable with respect to Claims described herein as subject to
indemnification upon the happening of the earlier of the following:
(i) Resolution of Claims by mutual agreement
among or between Stock Purchaser and
Sellers as well as any applicable
combination thereof; or,
(ii) The issuance of a final award, order or
other ruling by an arbitrator pursuant to
Paragraph 8 hereof.
(d) Indemnification Payments. All amounts payable by one party
to the other pursuant to the provisions of this Paragraph 7 shall be payable
within ten (10) days after final determination thereof in accordance with the
provisions hereof.
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(e) Limitations on Indemnification.
(i) Any amounts which any party hereto may be
obligated to pay another party hereto
pursuant to this Paragraph 7 will be
reduced by an amount equal to: (A) the tax
benefit, if any, realized as a result of
such losses (for purposes of determining
the "tax benefit", if any, the reasonable
joint determination by Stock Purchaser's
and Sellers' outside accountants will be
binding and conclusive as to all parties
hereto); (B) any insurance recovery with
respect to such losses received by the
indemnified party; and/or (C) any insurance
payments paid on behalf of and in
indemnification of the indemnified party.
(ii) Neither Stock Purchaser nor Sellers shall
assert Claims against the other party which
aggregate more than the Stock Purchase
Price.
(iii) Except for Claims pursuant breach of
representations and warranties under
Paragraphs 6(a)(iv) of this Agreement which
warrant and represent good and marketable
title to the Stock; all of which warranties
and represents shall not be limited as to
time, the right of indemnification afforded
to Stock Purchaser and Sellers pursuant to
this Paragraph 7 shall be available for the
following periods of time:
(A) With respect to any Claim asserted
under Paragraph 7(a)(v) or any
other tax Claim arising out of and
related to periods of time prior to
Closing Date, for a period of time
limited
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only by the expiration of any and
all applicable statutes of
limitations.
(B) With respect to any and all other
Claims, for and during a period of
three (3) years from and after the
Closing Date.
(C) Notwithstanding anything herein to
the contrary, any Claim for which
specific written notice is given to
any party which has an
indemnification obligation prior to
the date on which such right of
indemnification otherwise
terminates as provided in this
Paragraph 7(e), may continue to be
asserted and shall be indemnified
against pursuant to this Paragraph
7.
(f) Notification and Duty of Indemnifying Parties. Stock Purchaser and
Sellers, as the case may be, shall, within thirty (30) days of obtaining
knowledge of a Claim, notify the other of the existence or occurrence of any
facts or events which give rise to the assertion of any Claim under the
provisions of this Paragraph 7. If such Claims are due to the claims of third
parties, the indemnifying parties shall promptly and diligently take such
actions as may be reasonably required to defend or settle such claims and shall
keep the indemnified parties advised of the current status thereof. The
indemnified parties shall, at the indemnifying parties' expense, reasonably
cooperate with the indemnifying parties' defense and the indemnifying parties
shall reasonably consider the indemnified parties' advice. The indemnified
party shall make available to the indemnifying party or its representatives all
records and other materials reasonably required to contest any third party
claim and shall cooperate fully with the indemnifying party until defense of
all such claims.
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8. ARBITRATION.
(a) Any controversy, dispute or claim arising out of, in
connection with, or in relation to the interpretation, performance or breach of
this Agreement, including, without limitation, Claims based on contract, tort
or statute and Claims arising out of or relating to the provisions of Paragraph
7 hereof, shall be settled by arbitration. Any arbitration pursuant to this
Agreement shall be conducted in Falls Creek, Pennsylvania before and in
accordance with the then existing Rules for Commercial Arbitration of the
American Arbitration Association, provided that only one arbitrator as selected
by the American Arbitration Association shall conduct any arbitration
proceeding. Any arbitration shall be final and binding. Any judgment upon any
interim or final award or order rendered by the arbitrator may be entered by
any federal or state court having jurisdiction thereof.
(b) The parties intend that any agreement pursuant hereto to
arbitrate be valid, enforceable and irrevocable. Each party in any arbitration
proceeding commenced hereunder shall bear such party's own costs and expenses
(including expert witness and attorneys' fees) of investigating, preparing and
pursuing such arbitration claim. The parties to any arbitration shall have the
right to discover the relevant books and records of the other side that are not
privileged or the subject of a bona fide confidentiality or non-disclosure
agreement.
9. CONDITIONS PRECEDENT TO CLOSING.
(a) Stock Purchaser's obligations hereunder are subject, at
its option, to the fulfillment at or prior to the Closing Date of each of the
following conditions, any one or more of which may be waived by Stock
Purchaser:
(i) TRUTH OF SELLERS' WARRANTIES AND
REPRESENTATIONS AT CLOSING. All
representations and warranties of Sellers
contained in this
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Agreement or in any writing delivered
pursuant hereto shall be true and correct
in all material respects when made and,
except as otherwise expressly provided for
in this Agreement, on and as of the Closing
Date as if made on and as of the Closing
Date, and Sellers and Xxxx shall deliver to
Purchaser a certificate, dated the Closing
Date, to such effect.
(ii) SELLERS' PERFORMANCE OF COVENANTS AND
AGREEMENTS. Sellers shall have performed
and complied with all material terms,
covenants, and conditions of this Agreement
required to be performed or complied with
by them or any of them at or prior to the
Closing Date and shall have delivered to
Stock Purchaser a certificate, dated the
Closing Date to such effect.
(iii) DELIVERY OF STOCK. Sellers shall have
delivered to Stock Purchaser the Stock, duly
endorsed in blank or with duly executed
powers attached, in proper form for
transfer, as shall be required, or as may be
desirable in order effectively to vest in
Stock Purchaser's good and enforceable title
to the Stock free and clear of all liens,
charges, and encumbrances of any nature.
(iv) ABSENCE OF LITIGATION. No action, suit or
proceeding shall have been instituted or
threatened before any court or governmental
body by any governmental agency or body to
restrain or prevent the carrying out of the
transactions contemplated hereby, or which
has had or may have, in the opinion of
Stock Purchaser, a
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materially adverse effect on the business
of Xxxx taken as a whole, and Sellers shall
deliver to Purchaser a certificate dated
the Closing Date to such effect.
(v) RESIGNATIONS OF OFFICERS AND DIRECTORS.
There shall have been delivered to Stock
Purchaser the written resignations,
effective immediately, of all of the
directors and officers of Xxxx.
(vi) EXECUTION AND DELIVERY OF AGREEMENTS AND
PERFORMANCE OF PRE- CLOSING ACTIVITY. All
of Sellers' agreements contemplated and
required to be performed prior to Closing
by the terms of this Agreement shall have
been duly fulfilled by all appropriate
parties and as well the Non-Competition
Agreements, Employment Agreements, Primary
Site Lease, and Secondary Site Leases and
Xxxxx Cylinder Lease, shall have been duly
executed for delivery at Closing, with all
terms and conditions thereof as fully
binding Agreements of all necessary parties
thereto as of Closing Date; and as well all
requisite pre-closing activity under this
Agreement shall have been fully completed.
(b) Sellers' obligations hereunder are subject, at their
option, to fulfillment at or prior to the Closing Date of each of the following
conditions, any one or more of which may be waived by Sellers:
(i) TRUTH OF STOCK PURCHASER'S AND WEST'S
WARRANTIES AND REPRESENTATIONS. Except as
otherwise expressly provided for in this
Agreement, the representations and
warranties of Stock
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Purchaser and West contained in this
Agreement or in any writing delivered
pursuant hereto shall be true and correct in
all material respects when made and on and
as of the Closing Date as if made on and as
of the Closing Date and Real Estate Closing
Date, and Stock Purchaser as well as West
shall deliver to Sellers a certificate to
such effect.
(ii) STOCK PURCHASER'S AND WEST'S PERFORMANCE OF
COVENANTS. Stock Purchaser and West shall
have performed and complied with all
material terms, covenants, and conditions
of this Agreement to be performed or
complied with by it at or prior to the
Closing Date and Real Estate Closing Date,
as applicable, and the Stock Purchaser and
West shall have delivered to Sellers a
certificate to such effect.
(iii) ABSENCE OF LITIGATION. No action, suit or
proceeding shall have been instituted or
threatened before any court or governmental
body by any governmental agency or body to
restrain or prevent Stock Purchaser and West
from carrying out of the transactions
contemplated hereby, and Stock Purchaser and
West shall deliver to Sellers a certificate
to such effect.
(iv) STOCK PURCHASER'S AND WEST'S AUTHORITY.
The execution, delivery and performance of
this Agreement and the transactions
contemplated hereby shall have been duly
authorized and approved by any and all
requisite corporate action of Stock
Purchaser and
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West and they shall deliver to Sellers at
or before Closing and Real Estate Closing,
as applicable, a proper corporate
certificate to this effect.
10. ADDITIONAL MATERIAL CONSIDERATION.
(a) Non-Competition Agreements. At Closing, Sellers and
Stock Purchaser shall enter into, execute and deliver the Non-Competition
Agreement.
(b) Employment Agreements. At or prior to Closing,
Sellers shall cause to be executed and delivered to Stock Purchaser the
Employment Agreements.
(c) Real Estate.
(i) LEASE OF REAL ESTATE. At Closing, West, as
Lessee, and Real Estate Lessors, as Lessors,
shall enter into, execute and deliver the Real
Estate Leases.
(ii) OPTION PURCHASE OF REAL ESTATE. In the event
West exercises its Purchase Option, Real Estate
Lessors shall sell and convey the applicable
Real Estate subject of the Purchase Option at
the applicable Real Estate Closing, to West,
for consideration of the payment by West to
Real Estate Lessors of the Real Estate Purchase
Price applicable to such Purchase Option
transaction.
(iii) SITE ASSESSMENT. West, at its sole
cost and expense, shall have the right to
perform an environmental site assessment
("AUDIT") of the Real Estate prior to the
Closing Date. If the Audit reflects the
presence of Hazardous Materials or some other
environmental condition or impairment and
indicates that a Phase II
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environmental survey ("PHASE II
SURVEY") is necessary, West and
Real Estate Lessors shall jointly
cause a Phase II Survey, to be
conducted upon the affected Real
Estate within thirty (30) days
after Closing Date. The cost of
any Phase II Survey required
hereunder shall be borne equally by
West and Real Estate Lessors. Real
Estate Lessors shall, at their sole
cost and expense, remediate any and
all Hazardous Materials or other
adverse environmental condition or
impairment reflected in the Audits
and/or Phase II Survey.
(iii) RIGHT TO ENTRY. At times agreed
upon by the parties, West, its
agents or its consultants may enter
upon the Real Estate for purposes
of conducting the Audit and Phase
II Survey. West shall indemnify,
defend and hold harmless Real
Estate Lessors, their employees,
agents and beneficiaries, their
heirs, personal representatives,
successors and assigns from any and
all losses, claims, actions,
demands, expenses and liabilities,
including reasonable attorney fees
and consultant fees, which may
arise against any or all of them by
virtue of any activities of West,
its employees, agents, contractors
or licensees, or their agents or
employees, taken, performed or
permitted pursuant to the rights
granted hereunder.
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(iv) REAL ESTATE LESSOR'S REPRESENTATIONS AND
WARRANTIES. Real Estate Lessors represent
and warrant to West as of the date hereof,
and as of each respective Real Estate
Closing Date as follows:
(A) OWNERSHIP OF REAL ESTATE. As of the
date of this Agreement, Real Estate
Lessors own the Real Estate,
beneficially and of record. As of the
date of any Real Estate Closing pursuant
to the Purchase Option, Real Estate
Lessors shall convey the applicable Real
Estate to West, free and clear of any
Adverse Title Condition except for
Permitted Encumbrances, and there shall
be no outstanding rights or options in
any third party to acquire the Real
Estate or any interest therein.
(B) AUTHORIZATION. The execution and
delivery of this Agreement and the
consummation of the transactions
contemplated hereby by Real Estate
Lessors (A) will not violate any
provision of, or result in the breach of
or accelerate or permit the acceleration
of the performance required by the terms
of: (I) any agreement to which Real
Estate Lessors are a party or by which
he may be bound; or (II) any order,
judgment, or decree applicable to Real
Estate Lessors; (B) will not result in
the creation of any claim, lien, charge
or encumbrance upon the Real Estate; (C)
and will not terminate or result in the
termination of
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any such agreement, or in any way affect
or violate the terms or conditions of,
or result in the cancellation,
modification, revocation, or suspension
of, any of the licenses, franchises,
approvals, certificates, permits, or
authorizations held by Real Estate
Lessors with respect to the Real Estate.
(C) COMPLIANCE WITH LAWS. Real Estate
Lessors have not received any currently
effective notice of any violations of
any applicable federal, state, or local
law or regulation affecting the Real
Estate, and, as to any past notices
which are no longer effective,
appropriate remedial steps have been
taken. With respect to the Real Estate,
Real Estate Lessors are in substantial
compliance with all existing applicable
Federal, state, and local laws and
regulations including, without
limitation, those respecting the health
and safety of its employees, the benefit
or welfare plans provided for its
employees, the hiring, firing, and
conditions of employment of its
employees and the protection of the
environment. Further, Real Estate
Lessors have not unlawfully stored,
dumped, or deposited nor participated in
the unlawful, dumping or depositing of
any Hazardous Materials upon any of its
Real Estate; Real Estate Lessors are not
in violation of any existing federal,
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state, local, Environmental Law as well
as all rules, regulations or orders
issued with respect to the Real Estate;
and Real Estate Lessors have not, at any
time, received, nor does he have any
knowledge or reason to believe that he
may receive notice of an alleged
violation of any existing law, rule,
regulations or orders issued with
respect to the Real Estate from any
governmental authority; including but
not limited to any notices that the Real
Estate is not in full compliance with
existing applicable building codes,
environmental, zoning and land use laws
and other existing local, state and
federal laws and regulations.
(D) NO ADVERSE PROCEEDINGS. To Real
Estate Lessors' knowledge, no
condemnation, environmental, zoning or
other land-use regulation proceedings
have been instituted nor are any of
those proceedings planned to be
instituted, that would detrimentally
affect the use and operation of the Real
Estate or the value of the Real Estate,
nor has Real Estate Lessors received
notice of any special assessments or
special assessment proceedings affecting
the Real Estate.
(E) NO LEASES. Except for a lease to
Xxxxx X. Xxxxx, one of the Seller
herein, for commercial space in the
building and improvements situate upon
the Secondary Business Site real estate
at Brookville, Pennsylvania, which lease
shall
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continue in effect as long as Real Estate
Lessors own the Brookville, Pennsylvania real
estate; there are no leases, tenancy rights
or other contracts or arrangements with
respect to the Real Estate, other than a
Lease between Real Estate Lessors, as
landlord, and Xxxx, as tenant, which will be
terminated at the Closing.
(d) Xxxxx Cylinders.
(i) LEASE OF XXXXX CYLINDERS. At Closing,
Stock Purchaser, as Lessee, and Cylinder
Sellers, as Lessors, shall enter into,
execute and deliver the Xxxxx Cylinder
Lease.
(ii) SALE OF XXXXX CYLINDERS. At the Xxxxx
Cylinder Purchase Closing, Cylinder Sellers
shall sell, assign and transfer by means of
the Xxxx of Sale, the Xxxxx Cylinders to
Stock Purchaser, as set forth and subject
of Paragraph 1(bb) for and in consideration
of payment by Stock Purchaser to Cylinder
Sellers of the Xxxxx Cylinder Purchase
Payment by means of Stock Purchaser's bank
wire transfer.
(iii) CYLINDER SELLERS REPRESENTATIONS
AND WARRANTIES. Cylinder Sellers represent
and warrant to Stock Purchaser as of the date
hereof and as of the Xxxxx Cylinder Purchase
Closing Date as follows:
(A) Authorization. The execution and
delivery of this Agreement and the
consummation of the transactions
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contemplated hereby by Cylinder
Sellers (A) will not violate any
provision of, or result in the
breach of or accelerate or permit
the acceleration of the performance
required by the terms of: (I) any
agreement to which Cylinder Sellers
are a party or by which it may be
bound; or (II) any order, judgment,
or decree applicable to Cylinder
Sellers; (B) will not result in the
creation of any claim, lien, charge
or encumbrance upon Xxxxx Cylinders;
and (C) will not terminate or result
in the termination of any agreement,
or in any way affect or violate the
terms or conditions of, or result in
the cancellation, modification,
revocation, or suspension of, any of
the licenses, franchises, approvals,
certificates, permits, or
authorizations held by Cylinder
Sellers, which would adversely
affect or in any way impair
Purchaser's free and unrestricted
ownership possession or use of as
well as its title to the Xxxxx
Cylinders.
(B) TITLE TO AND MERCHANTABILITY OF
XXXXX CYLINDERS. Cylinder Sellers
own one hundred percent (100%) and
have good and marketable title to
the Xxxxx Cylinders free and clear
of all liens and encumbrances as
well as any other Adverse Title
Condition; and that the Xxxxx
Cylinders are
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merchantable and fit for the ordinary,
customary and intended use in and about Xxxx'
Business operations.
(e) Excluded Assets.
(i) Sellers shall not be required to repay
shareholder loans to Sellers from Xxxx
outstanding as reflected upon the June 30,
1997 Financial Statements, and all such
shareholder debt owed by Sellers to Xxxx has
been cancelled as of date of this Agreement.
(ii) Prior to date of this Agreement, Xxxx has
paid a dividend to Sellers in the form of
distribution of marketable securities owned
by Xxxx having a market value at date of
dividend distribution of no more than
Forty-seven Thousand Seven Hundred
Seventy-one Dollars ($47,771.00). Such
dividend shall be without tax and liability
to either Xxxx or Stock Purchaser; and in
that regard, Sellers shall reimburse Xxxx
the amount of any income tax liability to
Xxxx or Stock Purchaser arising out of and
related to the dividend by distribution of
marketable securities aforesaid.
11. FEES AND EXPENSES. Except as expressly provided herein, Sellers,
Stock Purchaser and West shall pay all of their respective costs and expenses,
including any and all legal and accounting fees, incident to the execution of
this Agreement and the consummation of the transactions contemplated hereby
whether or not such transactions shall be consummated.
12. BROKERAGE. Each of the Sellers, Stock Purchaser and West
shall indemnify and hold harmless the others from and against any claim, cost
or expense arising out of any claim for brokerage commission, finders fees and
the like, relating to this Agreement or any
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transaction contemplated hereby based upon the actions of the indemnifying
party. Stock Purchaser and/or West shall pay all fees and expenses of ADE
Vantage, Inc. and/or Xxxxxxx X. Xxxxxxxxxx.
13. WARRANTIES, REPRESENTATIONS AND AGREEMENTS TO SURVIVE
CLOSING. All representations, covenants, warranties and agreements contained
in this Agreement shall survive the execution and delivery of this Agreement
and Closing as expressly set forth in this Agreement.
14. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which taken together shall constitute one instrument.
15. ENTIRE AGREEMENT. This Agreement together with all Exhibits and
attachments hereto is an integrated document, contains the entire agreement
between the parties, wholly cancels, terminates and supersedes any and all
previous and/or contemporaneous oral agreements, negotiations, commitments and
writings between the parties hereto with respect to the subject matter hereof.
No change, modification, extension, termination, notice of termination,
discharge, abandonment or waiver of this Agreement or any of the provisions
hereof, nor any representations, promise, or condition relating to this
Agreement, shall be binding upon the parties hereto.
16. CAPTIONS. The captions of paragraph hereof are for
convenience only and shall not control or affect the meaning or construction of
any of the provisions of this Agreement.
17. INCORPORATION BY REFERENCE. Any and all schedules, exhibits,
statements, reports, certificates, or other documents or instruments referred
to herein or attached
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hereto are incorporated herein by reference thereto as though fully set forth
at the point referred to in this Agreement.
18. ASSIGNMENT AND BENEFIT. This Agreement may not be assigned
by any party without prior written consent. This Agreement shall be binding
upon and inure to the benefit of Sellers, Stock Purchaser and West, and their
respective heir, executors, administrators, successors, and assigns.
19. NOTICES. Any notice, request, instruction, consent, approval or
other communication provided for herein shall be in writing and delivered
personally or sent by first class mail, certified, return receipt requested,
postage prepaid as follows: If to Stock Purchaser and/or West, addressed to 00
- 00xx Xxxxxx, Xxxxxxxx, Xxxx Xxxxxxxx, Attention: Xxxxxxxx X. Xxxxx, with a
copy to Xxxxx X. XxXxxxx, Esquire, GOMPERS, MCCARTHY, HILL & XXXXXXX, 000 Xxxxx
xx Xxxxx Xxxxxxxx, Xxxxxxxx, Xxxx Xxxxxxxx, 00000; If to Sellers, Real Estate
Lessors, or Cylinder Sellers, addressed to 000 Xxxxx Xxxxxx, Xxxxx Xxxxx,
Xxxxxxxxxxxx 00000, with a copy to Xxxx X. Xxxxxxxx, XX, Esquire, 000 Xxxx
Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000.
20. APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the internal law of the State of Pennsylvania
without regard to its conflicts of law principles.
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IN WITNESS WHEREOF, this Agreement is executed and delivered by all of
the parties hereto, with full authority therefore, to be effective as of the
date and year first written above.
VALLEY NATIONAL GASES, INC., A WEST
VIRGINIA CORPORATION
WITNESSES:
/s/ XXXXXX STEUENS
--------------------------------- By /s/ XXXXXXXX X. XXXXX
/s/ XXXXXXXX XXXXXXXX ---------------------------------
--------------------------------- Its President
WEST RENTALS, INC., A WEST VIRGINIA
WITNESSES: CORPORATION
/s/ XXXXXX STEUENS
--------------------------------- By /s/ XXXXXXXX X. XXXXX
/s/ XXXXXXXX XXXXXXXX ---------------------------------
--------------------------------- Its Vice President
WITNESSES:
/s/ XXXX X. XXXX
--------------------------------- /s/ XXXXXX X. XXXXX
/s/ XXXX X. XXXXXX ---------------------------------
--------------------------------- XXXXXX X. XXXXX, INDIVIDUALLY
WITNESSES:
/s/ XXXX X. XXXX
--------------------------------- /s/ XXXXX X. XXXXX
/s/ XXXXXX X. XXXX ---------------------------------
--------------------------------- XXXXX X. XXXXX, INDIVIDUALLY
WITNESSES:
/s/ XXXX X. XXXX
--------------------------------- /s/ XXXXX X. XXXXX
/s/ XXXXXX X. XXXX ---------------------------------
--------------------------------- XXXXX X. XXXXX
WITNESSES:
/s/ XXXX X. XXXX
--------------------------------- /s/ XXXXXX X. XXXXX
/s/ XXXX X. XXXXXX -----------------------------------
--------------------------------- XXXXXX X. XXXXX, REAL ESTATE LESSOR
WITNESSES:
/s/ XXXX X. XXXX
--------------------------------- /s/ XXXXXXXX XXXXX
/s/ XXXX X. XXXXXX ----------------------------------
--------------------------------- XXXXXXXX XXXXX, REAL ESTATE LESSOR
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WITNESSES:
/s/ XXXX X. DEMI
--------------------------------- /s/ XXXXX X. XXXXX
/s/ XXXXXX X. XXXX ---------------------------------
--------------------------------- XXXXX X. XXXXX, CYLINDER SELLER
WITNESSES:
/s/ XXXX X. DEMI
--------------------------------- /s/ XXXXX X. XXXXX
/s/ XXXXXX X. XXXX ---------------------------------
--------------------------------- XXXXX X. XXXXX, CYLINDER SELLER
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