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EXHIBIT 2.1
PURCHASE AND SALE AGREEMENT
THIS AGREEMENT, made as of the 19th day of December, 1997, by and among
BUCKEYE WELDER SERVICES, INC., an Ohio Corporation (hereinafter referred to as
"SELLER"), VALLEY NATIONAL GASES, INC., a West Virginia Corporation (hereinafter
referred to as "PURCHASER"), ▇▇▇▇▇▇ ▇. ▇▇▇▇ (hereinafter referred to as "▇▇▇▇"),
▇▇▇▇▇ ▇. ▇▇▇▇ (hereinafter referred to as "▇▇▇. ▇▇▇▇") and WEST RENTALS, INC., a
West Virginia Corporation (hereinafter referred to as "WEST").
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) "ACCOUNTS RECEIVABLE" means all of the Seller's Business
Accounts Receivable, including the GM Receivable, as of Closing Date, subject to
Post Closing Adjustment in Paragraph 5(b)(ii).
(b) "ADVERSE TITLE CONDITION" means any restriction,
limitation, adverse claim of right or interest in and/or to all or part of the
Purchase Assets or Real Estate as well as any lien assessments, charges,
encumbrances, or other cloud on or exception to title, of any nature which
affects the Purchase Assets or Real Estate, except for any Permitted
Encumbrances.
(c) "AGREEMENT" means this Purchase and Sale Agreement dated
as of the 19th day of December, 1997, by and among Seller, Purchaser, ▇▇▇▇, ▇▇▇.
▇▇▇▇ and West.
(d) "ASSUMED CONTRACTS" means each of the Product Supply
Agreements, to which Seller is a party at Closing, the GM Contract and those
other leases and contracts described on Exhibit "A" hereto.
(e) "ASSUMED LIABILITIES" means each of (i) Seller's ▇▇▇▇▇▇,
non-executory, non-contingent monetary Long-Term Liabilities and Current
Liabilities, as of September 30, 1997; (ii) the GM Payables; and (iii) Interim
Ordinary Course Liabilities.
(f) "▇▇▇▇ OF SALE" means the ▇▇▇▇ of Sale, Assignment and
Assumption Agreement by which Seller, ▇▇▇▇ and ▇▇▇. ▇▇▇▇ shall sell, transfer
and assign the Purchase Assets to Purchaser free and clear of any Adverse Title
Condition (except for Seller's Real Estate which shall be conveyed by the Deed),
and by which Purchaser assumes the Assumed Liabilities; all in the form and upon
the terms of ▇▇▇▇ of Sale, Assignment and Assumption Agreement attached hereto
and incorporated herein by reference as Exhibit "B".
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(g) "BUSINESS" means the business of Seller for the sale and
distribution of welding supply products, industrial and specialty gases as well
as liquid propane which Business includes certain Cylinders and Tanks owned
individually by ▇▇▇▇ and ▇▇▇. ▇▇▇▇.
(h) "BUSINESS LOCATION" means Seller's headquarters, primary
Business location situate at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, which is
also the site of the Real Estate.
(i) "CAPITAL EXPENDITURES" means capital expenditures by
Seller subsequent to September 30, 1997 for cylinders and tanks and a vacuum
pump up to a maximum amount of $23,000.
(j) "CERCLA" means Comprehensive Environmental Response,
Compensation and Liability Act of 1980.
(k) "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.
(l) "CLOSING" means the following:
(i) The sale, transfer and delivery of the
Purchase Assets by Seller, ▇▇▇▇ and ▇▇▇.
▇▇▇▇, as applicable, to Purchaser and
Purchaser's acquisition of the Purchase
Assets, as of the Effective Date, free and
clear of Adverse Title Condition for and in
consideration of the payment of the Purchase
Price, subject to Post Closing Adjustment.
(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.
(iii) The Closing shall take place on the Closing
Date at the offices of ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇,
LLP, ▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ or such other location
as the parties may agree upon.
(m) "CLOSING DATE" means the 19th day of December, 1997, at
10:00 o'clock, A.M. (EST) or such later date and/or time agreeable to all
parties hereto, when the Closing will take place.
(n) "CLOSING DATE PURCHASE PRICE PAYMENT" means the payment of
the Purchase Price in accordance with Section 5 [subject to Post Closing
Adjustment] by Purchaser to Seller at Closing, less the Deposit if Closing
occurs on or before December 31, 1997 and as well subject to and less the
Escrow.
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(o) "CONTRACT RIGHTS AND INTANGIBLES" means all of Seller's
right, title and interest in the Assumed Contracts, other commitments, licenses
and warranties relating to the Business, and all Business files, records and
customer lists as well as all intangible rights, privileges, general and special
intangible property and goodwill of Seller relating to the Business, including,
but not limited to, the unregistered trade name Buck-Weld and the Business
telephone and/or telefax numbers, excluding, however, the Excluded Assets.
(p) "CYLINDERS AND TANKS" means all merchantable high and low
pressure gas cylinders, liquid containers and bulk tanks owned by Seller, ▇▇▇▇
and ▇▇▇. ▇▇▇▇; which shall consist at a minimum of the number and type of
Cylinders and Tanks set forth on Exhibit "C" hereto.
(q) "DEEDS" means the instruments wherein Seller and ▇▇▇▇
shall sell and convey to Purchaser or its designee, Seller's Real Estate in the
form of general warranty deeds which conform to Section 5302.05, Ohio Revised
Code and which contain only Permitted Encumbrances as encumbrances, reservations
and exceptions.
(r) "DEPOSIT" means the One Hundred Thousand Dollars
($100,000.00) deposited by Purchaser with Seller's attorneys prior to the
execution and delivery of this Agreement subject to the terms of that certain
letter dated December 10, 1997 among Seller, Purchaser and ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇,
LLP (the "Deposit Letter").
(s) "EFFECTIVE DATE" means the Closing Date.
(t) "EFFECTIVE DATE FINANCIAL STATEMENT" means the (i)
statement of assets, liabilities and equity, and (ii) statement of revenue and
expenses reflecting Seller's financial condition as of the Effective Date.
(u) "EMPLOYMENT AGREEMENTS" means the Employment Agreements by
and between Purchaser as Employer, and as well five (5) key employees, namely,
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ and ▇▇▇ ▇▇▇▇▇▇, upon all
terms and conditions contained in the respective Employment Agreements, upon the
terms and in the form of Employment Agreement attached hereto and incorporated
herein by reference as Exhibits "D-1" through D-5" inclusive.
(v) "ENVIRONMENTAL LAW" means CERCLA, ▇▇▇▇, RCRA, TSCA, or any
other currently effective law or regulation relating to the environment as well
as Hazardous Materials enacted or promulgated by any Federal, state or other
governmental authority.
(w) "EQUIPMENT AND FIXTURES" means all Business, office and
warehouse equipment, furniture and fixtures together with all other tangible
property and assets of Seller or the Business, except for Cylinders and Tanks,
Vehicles and Inventory.
(x) "ESCROW" means the Five Hundred Thousand Dollars
($500,000.00) which shall be deducted from the Closing Date Purchase Price
Payment due at Closing, and deposited into an interest bearing Escrow account
pursuant to the terms of the Escrow Agreement,
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to provide assurance and payment of cash funds necessary to reimburse Purchaser
for any Post Closing Adjustment.
(y) "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 as Exhibit "E".
(z) "EXCLUDED ASSETS" means (i) Seller's corporate and stock
records, tax returns, and supporting information, cash and bank deposit
accounts, all of which are not being purchased by Purchaser as part of the
Contract Rights and Intangibles (ii) non-saleable Inventory and (iii) the 1988
Mercedes automobile reflected on Seller's books and records.
(aa) "FAIR MARKET VALUE" means the value of the Real Estate
determined as follows:
(i) Prior to or immediately after Closing, West shall
procure a Real Estate appraisal from an Independent
Appraiser to appraise the Real Estate to determine
its Fair Market Value. The Fair Market Value of the
Real Estate as established by West's Independent
Appraiser shall be the Fair Market Value of the Real
Estate if agreed to by ▇▇▇▇. In the event ▇▇▇▇
disagrees and disputes the valuation established by
West's Independent Appraiser, then, within fifteen
(15) days after receipt of the appraisal rendered by
West's independent appraiser, ▇▇▇▇ shall retain, at
his sole cost and expense, an Independent Appraiser
to determine the Fair Market Value for the Real
Estate. In the event the valuation of the Real
Estate as determined by West's Independent Appraiser
varies by ten percent (10%) or less from the value
determined by ▇▇▇▇'▇ Independent Appraiser, then the
Fair Market Value for the purposes of establishing
the Real Estate Purchase Price shall be the average
of the two (2) values determined by West and ▇▇▇▇'▇
respective Independent Appraisers. In the further
event that the Fair Market Value as determined by
the said Independent Appraisers varies by more than
ten percent (10%), then the two (2) Independent
Appraisers shall jointly retain a third Independent
Appraiser to determine the Fair Market Value of the
Real Estate. In this further event, Fair Market
Value for the purposes of establishing the Purchase
Price shall be the average between the Fair Market
Value determined by the third Independent Appraiser
and the Fair Market Value determined by the other
Independent Appraiser whose determination of Fair
Market Value more closely equals (whether greater or
less) the Fair Market Value determined by the third
Independent Appraiser. The cost and expense of the
third Independent Appraiser shall be born equally by
▇▇▇▇ and West.
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(bb) "FINANCIAL STATEMENTS" means the following: (i) all
statements of assets, liabilities and equity and statements of revenue and
expenses for Seller, for the three (3) twelve (12) month periods ending December
31, 1994, 1995, and 1996, attached hereto collectively as Exhibit "F"
(collectively, the "Compiled Statements"); (ii) the September 30, 1997 statement
of assets, liabilities and equity and statement of revenue and expenses for
Seller, attached hereto as Exhibit "G" (the "Internal Statement"); (iii) the
Effective Date Financial Statement; and (iv) Seller's Federal Income Tax Returns
and State Income Tax Returns for its three (3) fiscal and/or tax years 1994,
1995 and 1996 attached hereto collectively as Exhibit "H". The Compiled
Statements shall have been compiled by the firm of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇. The
Internal Statement and the Effective Date Financial Statements shall have been
internally prepared by Seller. All Financial Statements shall be prepared in
accordance with GAAP except to the extent they have been prepared on a tax basis
utilizing the lesser of cost or market method for purposes of Inventory
valuation.
(cc) "GAAP" means Generally Accepted Accounting Principles.
(dd) "GM CONTRACT" means the product supply agreement between
Seller and the Delphi ▇▇▇▇▇▇▇▇ Division of General Motors located in Dayton,
Ohio which requires Seller to supply approximately $400,000 of product through
the end of 1997.
(ee) "GM PAYABLES" means accounts payable directly
attributable to the GM Contract.
(ff) "GM RECEIVABLE" means the account receivable from the
Delphi ▇▇▇▇▇▇▇▇ Division of General Motors related to the supply of product
under the GM Contract.
(gg) "HAZARDOUS MATERIALS" means any hazardous or toxic
material, waste or substances currently identified or listed as hazardous or
toxic by CERCLA, ▇▇▇▇, RCRA, TSCA or any other Environmental Law.
(hh) "INDEPENDENT APPRAISER" means an independent, certified
real estate appraiser, qualified to perform and render commercial real estate
appraisals in and about the Columbus, Ohio Metropolitan Area and who is also a
MAI Appraiser.
(ii) "INTERIM ORDINARY COURSE LIABILITIES" means Seller's
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 September 30, 1997 up through and including Closing Date.
(jj) "INVENTORY" means all Saleable Inventory comprised of
hardgoods, gas and equipment, inventory, including resale cylinders, if any.
(kk) "NON-COMPETITION AGREEMENTS" means the agreement entered
into by and between Purchaser and ▇▇▇▇ in the form and upon the terms of the
Non-Competition Agreement attached hereto as Exhibit "I".
(ll) "PERMITTED ENCUMBRANCES" shall mean the following:
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(i) Existing zoning ordinances, rules and regulations;
and
(ii) Real estate and/or personal property taxes and
assessments not due and payable.
(iii) Easements, conditions, restrictions and covenants
of record which do not interfere with the current
operation of the Business.
(iv) Title Objections waived by West in accordance with
Paragraph 15(b)(ii).
(mm) "POST CLOSING ADJUSTMENT" means any applicable adjustment
to Purchase Price, to be made no later than one hundred twenty (120) days after
Closing, as required by and pursuant to Paragraph 5(b) and all subparagraphs
thereof.
(nn) "PURCHASE ASSETS" means the Accounts Receivables,
Inventory, Equipment and Fixtures, Cylinders and Tanks, Contract Rights and
Intangibles, Vehicles as well as Seller's Real Estate.
(oo) "PURCHASE PRICE" means (i) an amount equal to $9,860,000
less an amount equal to any Post-Closing Adjustment plus (ii) Purchaser's
assumption of the Assumed Liabilities.
(pp) "RCRA" means the Resource Conservation and Recovery Act.
(qq) "REAL ESTATE" means the site of the Business Location
which is owned by ▇▇▇▇, a description of which is attached hereto as Exhibit
"J".
(rr) "REAL ESTATE CLOSING" means the following:
(i) The sale, conveyance, transfer and delivery of the
Real Estate by ▇▇▇▇ to West and West's acquisition
of the Real Estate, as of the Real Estate Closing
Date, free and clear of Adverse Title Condition for
and in consideration of the payment of the Real
Estate Purchase Price.
(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.
(iii) The Real Estate Closing shall take place on the
Real Estate Closing Date at the offices of ▇▇▇▇▇ &
▇▇▇▇▇▇▇▇▇, LLP, ▇▇ ▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇; provided, however, that the Real
Estate Closing may be conducted as an escrow
closing pursuant to written instructions from ▇▇▇▇
and West.
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(ss) "REAL ESTATE CLOSING DATE" means 10:00 o'clock A.M. (EST)
on the 19th day of March, 1998 or such other date and/or time mutually
acceptable to ▇▇▇▇ and West, when the Real Estate Closing will take place.
(tt) "REAL ESTATE DEED" means the instrument wherein Ward
sells and conveys to West fee simple title free and clear of any Adverse Title
Condition in and to the Real Estate by conveyance in the form of a general
warranty deed which conforms to Section 5302.05, Ohio Revised Code and which
contains only Permitted Encumbrances as encumbrances, reservations and
exceptions.
(uu) "REAL ESTATE LEASE" means the Lease of the Real Estate by
▇▇▇▇ as Lessor, and West as Lessee, for a term of approximately three (3) months
commencing on the Closing Date and terminating on the Real Estate Closing Date,
substantially upon the terms and conditions of the current lease between ▇▇▇▇
and Seller, a copy of which is attached hereto as Exhibit "K".
(vv) "REAL ESTATE PURCHASE PRICE" means the Fair Market Value
of the Real Estate.
(ww) "SALEABLE INVENTORY" means all items of merchantable
Inventory comprised of hardgoods, gas, and resale equipment, inventory,
including, especially, resale cylinders (which are not part of the Cylinders and
Tanks) which is merchantable and not shopworn, damaged or defective and which is
listed for sale in the manufacturers current catalog.
(xx) "▇▇▇▇" means the Superfund Amendment and Re-authorization
Act of 1986.
(yy) "SECONDARY BUSINESS LOCATION" means Seller's branch store
and operation at ▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇.
(zz) "SELLER" means Buckeye Welder Services, Inc.
(aaa)"SELLER'S REAL ESTATE" means all of the real estate
owned by Seller, including, especially, but not limited to, fee simple title in
and to the real estate site of Seller's Secondary Business Location, as more
particularly described upon Exhibit "L-1" attached hereto together with all real
estate owned by ▇▇▇▇ which constitutes a part of the Secondary Business
Location, as more particularly described upon Exhibit L-2 attached hereto.
(bbb)"TSCA" means the Toxic Substances Control Act.
(ccc)"VEHICLES" means all the trucks, vehicles and automotive
equipment of Seller set forth and scheduled on Exhibit "M", attached hereto
excluding the 1988 Mercedes shown on Seller's books and records.
(ddd)"WEST" means West Rentals, Inc., a West Virginia
corporation, with its principal place of business at ▇▇ - ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
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2. DEPOSIT PAYMENT. In consideration of the terms and conditions of the
Letter of Intent dated November 11, 1997, by and between Purchaser and ▇▇▇▇ and
the Deposit Letter, the Purchaser and Seller agree that the Deposit shall be
applied at Closing as partial payment of the Purchase Price if Closing occurs on
or before December 31, 1997; (ii) the Deposit shall be a premium payment in
addition to the Purchase Price, if Closing occurs on or after January 1, 1998;
and (iii) in the event there is no Closing, the Deposit shall be non-refundable
and remain the property of Seller. Any and all interest earned on the Deposit
shall belong to Seller with no credit given against the Purchase Price.
3. AGREEMENT TO SELL AND PURCHASE.
(a) Subject to the terms and conditions contained herein, at
Closing, the Seller, ▇▇▇▇ and ▇▇▇. ▇▇▇▇ hereby agree to sell, convey, assign,
transfer and deliver their respective shares of the Purchase Assets as of the
Effective Date to Purchaser by means of the execution and delivery of the Deeds
for Seller's Real Estate and the ▇▇▇▇ of Sale for all Purchase Assets other than
Seller's Real Estate; and Purchaser agrees to purchase all of the Purchase
Assets from Seller, ▇▇▇▇ and ▇▇▇. ▇▇▇▇ upon the terms and conditions of this
Agreement; said sale and purchase of the Purchase Assets to be made free and
clear of all Adverse Title Conditions and in consideration of the payment of the
Purchase Price by Purchaser to Seller, ▇▇▇▇ and ▇▇▇. ▇▇▇▇.
(b) Subject to the terms and conditions contained herein, at
the Real Estate Closing, ▇▇▇▇ hereby agrees to sell and convey to West by means
of the execution and delivery of the Real Estate Deed to West; and West agrees
to purchase the Real Estate and accept the Real Estate Deed from ▇▇▇▇ upon the
terms and conditions of this Agreement; said sale and purchase of the Real
Estate to be made free and clear of any Adverse Title Condition for and in
consideration of the payment of the Real Estate Purchase Price by West to ▇▇▇▇.
4. ASSUMPTION OF SELLER LIABILITIES. At Closing, Purchaser shall assume
from Seller the Assumed Liabilities and shall assume Seller's obligations under
the Assumed Contracts, by means of the execution and delivery of the ▇▇▇▇ of
Sale.
5. PURCHASE PAYMENTS.
(a) Closing Date Purchase Price Payment. At Closing, Purchaser
shall pay Seller the Purchase Price as follows:
(i) At Closing, if the Closing occurs on or before
December 31, 1997, the Purchaser shall pay Seller,
▇▇▇▇ and ▇▇▇. ▇▇▇▇ the Closing Date Purchase Price,
subject to and less (y) the $500,000.00 Escrow
pursuant to the Escrow Agreement; and (z) the
Deposit. In the event the Closing occurs after
December 31, 1997, the Deposit shall not be applied
to the Purchase Price and deducted from the Closing
Date Purchase Price Payment. The Purchase Price
shall be allocated among Seller, ▇▇▇▇ and ▇▇▇. ▇▇▇▇
in accordance with the Allocation of Purchase Price
set forth on Exhibit "N" hereto.
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(ii) At Closing, Seller and Purchaser shall execute and
deliver the Escrow Agreement and deposit the Escrow
amount with the Escrow Agent to be held and
distributed pursuant to the terms and conditions of
the Escrow Agreement to provide assurance that cash
funds will be available to fund any necessary
payment to Purchaser arising out of any Post
Closing Adjustment to the Purchase Price pursuant
to Paragraph 5(b) and all subsections thereof.
(iii) REAL ESTATE CLOSING PAYMENTS: At the Real Estate
Closing, West shall pay the Real Estate Purchase
Price by check, bank wire transfer, or cash
equivalent to be applied as follows:
(A) To discharge the outstanding balance of any
Real Estate loan secured by mortgage or other
lien upon the Real Estate; and,
(B) To discharge any other outstanding monetary
liens or encumbrances; and,
(C) To payment of ▇▇▇▇ for the balance of the Real
Estate Purchase Price.
(iv) WIRE TRANSFER: Payment of the Purchase Price and
the Real Estate Purchase Price shall be made by
wire transfer of immediately available funds to an
account specified in writing by ▇▇▇▇ prior to the
Closing. Seller, ▇▇▇▇ and ▇▇▇. ▇▇▇▇ shall have no
claim against Purchaser or West if Purchaser and
West make payment to the account(s) specified by
▇▇▇▇.
(v) ALLOCATION OF PURCHASE PRICE: The Purchase Price
shall be allocated among the Purchase Assets in the
manner set forth on Exhibit "O" hereto. Neither
Purchaser, Seller, ▇▇▇▇ nor ▇▇▇. ▇▇▇▇ shall take
any position inconsistent with the allocation of
Purchase Price in the preparation of any tax
return.
(b) Post Closing Adjustment.
(i) CYLINDER AND TANK ADJUSTMENT: As of Closing,
Seller, ▇▇▇▇ and ▇▇▇. ▇▇▇▇ will own free and clear
of any and all liens and encumbrances, at least the
number and type Cylinders and Tanks set forth on
Exhibit "C". Prior to Closing, Seller and Purchaser
shall jointly conduct (1) a book audit of Cylinder
and Tank records and/or (2) a selective physical
inventory of Cylinders and Tanks located at the
Business Location, the Secondary Business Location
and the premises of Seller's major accounts as
follows: (x) for accounts with less than ten
Cylinders in the possession of customers, as
indicated by Seller's Cylinder records, no audit
will be performed and no
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adjustment will be made; (y) for accounts with
between eleven and ninety-nine Cylinders in the
possession of customers as indicated by Seller's
customer records, Cylinders will be counted as in
the possession of such customer if such customers
are paying rent to Seller for the Cylinders. Where
no rent is being paid to Seller, either a physical
or telephone audit will be performed prior to
closing by Purchaser and ▇▇▇▇; and (z) for accounts
with 100 Cylinders or more in the possession of
customers, as indicated by Seller's customer
records, a physical audit of such accounts will be
performed jointly by Purchaser and ▇▇▇▇ In the
event after the Cylinder and Tank audits, the
Purchaser determines that the number of Cylinders
and Tanks owned by Seller, ▇▇▇▇ and ▇▇▇. ▇▇▇▇ as of
Closing, free and clear of liens and encumbrances,
is less than the number of Cylinders and Tanks
listed on Exhibit C, the 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 aggregate
value of any such deficiency shall be calculated by
multiplying the number of each style of Cylinders
and Tanks determined by the audits and inventories
to be actually owned by Seller, ▇▇▇▇ and ▇▇▇. ▇▇▇▇
by the negotiated replacement unit value for each
style of such Cylinders and Tanks as set forth on
Exhibit C and subtracting the aggregate value of
all Cylinders and Tanks so determined from the
aggregate value of the Cylinders and Tanks
represented to be owned by Seller as set forth on
Exhibit "C".
(ii) ACCOUNTS RECEIVABLE: At Closing, Seller shall
furnish Purchaser a schedule of Accounts Receivable
certified as of Closing Date as representing all of
the Accounts Receivable as of such date and marked
as Exhibit "P" hereto, fully itemized as to
customer, amount and account aging history. In the
preparation of Exhibit "P", Seller may not
write-off as uncollectible accounts more than
$15,000 of accounts that were not written off as
uncollectible in the preparation of the Internal
Statement. After Closing Date, 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 twenty (120) days after Closing Date,
Purchaser (having used its best efforts to do so)
expects to have collected all of the Accounts
Receivable. In the event that, as of one hundred
twenty (120) days after Closing Date, Purchaser has
not collected all of the Accounts Receivable, the
Purchase Price shall be reduced as part of the Post
Closing Adjustment by the equivalent dollar amount
by which Accounts Receivable actually collected by
Purchaser is less than the amount reflected upon
Exhibit "P". Purchaser shall prepare a listing
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of such uncollected accounts receivable, and
deliver such listing to Seller. After payment to
Purchaser of Post Closing Adjustments hereunder in
accordance with Paragraph 5(b)(v) Purchaser shall
assign and transfer all such listed uncollected
Accounts Receivables to Seller.
(iii) INVENTORY: Prior to Closing, Seller shall permit
Purchaser to conduct a physical inventory of
Seller's Inventory to determine the amount and
value of Inventory. The value of all Inventory
shall be calculated in the same manner as used in
preparation of the Seller's September 30, 1997
Financial Statement at the lesser of Seller's cost
or market. The term "Inventory Value" shall be
defined for the purposes of this Agreement as the
value of Inventory as reflected upon Seller's
September 30, 1997 Financial Statement, as adjusted
for variations to date of the physical inventory
arising out of sale and acquisition of inventory in
the ordinary course of business. In the event that
at the date of the physical inventory, the value of
Inventory is less than the Inventory Value, the
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 Inventory
as determined herein is less than the Inventory
Value.
(iv) EXCESS ASSUMED LIABILITIES: At Closing, Assumed
Liabilities, as reflected by the Effective Date
Financial Statement, shall not exceed the sum of
(w) Five Hundred Ninety-Two Thousand Five Hundred
Three Dollars ($592,503), plus (x) the GM Payables,
plus (y) the Capital Expenditures (z) the Interim
Ordinary Course Liabilities. Said sum shall be
referred to herein as the "Maximum Allowable
Assumed Liabilities". In the event the Assumed
Liabilities of Seller, as of Closing Date as
reflected by and upon Effective Date Financial
Statement, exceed the Maximum Allowable Assumed
Liabilities, the Purchase Price shall be reduced as
part of the Post Closing Adjustment by a dollar
amount equal to the excess of the Assumed
Liabilities over the Maximum Allowable Assumed
Liabilities. Seller acknowledges and agrees that it
shall not reduce its accounts payable with any
third party borrowing or financing. At Closing the
amount of accounts payable (said amount being
referred to as the "Payables Amount") shall not
exceed an amount determined as follows: (cost of
sales/365) x 30 plus the GM Payable plus the
Capital Expenditure. In the event that Payables
Amount exceeds the amount determined by the
aforesaid formula, then in such event the Purchase
Price shall be reduced by the dollar amount by
which Accounts Payable exceed such Adjusted
Payables Amount.
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(v) SETTLEMENT: One hundred twenty (120) days after
Closing Date, the Seller and Purchaser shall
jointly direct the Escrow Agent to pay Purchaser by
check, wire transfer, or cash equivalent, an amount
equal to all applicable Post Closing Adjustments to
the Purchase Price, together with the prorata
shares of the interest, as required under this
Section 5(b) and subparagraphs thereof. To the
extent that Post Closing Adjustments exceed the
Escrow amount, Seller shall promptly pay to
Purchaser the amount of such excess. Any and all
Escrow Funds, together with the pro-rata share of
interest, which are not required to extinguish Post
Closing Adjustments payment requirements hereunder
shall be the property of and paid over to Seller in
accordance with the terms and conditions of the
Escrow Agreement.
6. EXPENSES AND TAXES. Each party hereto shall pay its, his or her own
expenses incident to this Agreement and the transactions contemplated hereby.
Except for sales tax due on the transfer of the Vehicles and real estate tax,
all excise, sales, transfer, documentary and similar taxes, if any, imposed
upon, payable or collectible by any party in connection with the purchase and
sale of the Purchased Assets shall be paid by Seller, ▇▇▇▇ and ▇▇▇. ▇▇▇▇.
Purchaser shall pay sales taxes due upon transfer of title to the Vehicles. Real
Estate taxes on the Seller's Real Estate which were a lien on the Seller's Real
Estate as of January 1, 1997 shall be prorated to the Closing Date. Real estate
taxes for 1997 on the Real Estate shall be paid by Seller prior to the Real
Estate Closing Date. Real estate taxes on the Real Estate which become a lien on
January 1, 1998 and which are not yet due and payable on the Real Estate Closing
Date shall not be prorated. West shall purchase the Real Estate subject to 1998
real estate taxes. Any personal property taxes on the Purchased Assets due and
payable in calendar year 1997 (regardless of lien date) shall be paid by Seller,
▇▇▇▇ and ▇▇▇. ▇▇▇▇. Any personal property taxes on the Purchase Assets due and
payable in calendar year 1998 or later shall be paid by Purchaser even if the
Closing Date is subsequent to December 31, 1997. Each party shall promptly
reimburse the paying party upon receipt of proof of payment of any taxes by the
paying party for which the reimbursing party is responsible in accordance with
the terms of this Section 6.
7. INSTRUMENTS OF TRANSFER AND CONVEYANCE.
(a) Pursuant to the terms and conditions hereof, Seller and
▇▇▇▇ shall at the Closing convey, sell, transfer, and assign to Purchaser
Seller's Real Estate by means of the Deed executed and delivered to Purchaser or
its designee. Seller, ▇▇▇▇ and ▇▇▇. ▇▇▇▇ shall convey, sell, transfer, and
assign the Purchase Assets other than Seller's Real Estate to Purchaser by means
of the ▇▇▇▇ of Sale and Assignment executed and delivered to Purchaser or its
designee. ▇▇▇. ▇▇▇▇ shall release her dower interest in the Deed from ▇▇▇▇.
(b) Pursuant to the terms and conditions hereof, ▇▇▇▇, in
respect of the Real Estate, shall at the Real Estate closing, convey, sell,
transfer, and assign the Real Estate to West, or its designee, by means of the
Real Estate Deed. ▇▇▇. ▇▇▇▇ shall release her dower interest in the Deed from
▇▇▇▇.
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8. BULK SALES LAW, WAIVER AND INDEMNITY. Purchaser hereby waives
compliance by Seller with any Bulk Transfer provisions of the Uniform Commercial
Code of any applicable state and bulk transfer tax. Seller agrees to indemnify
Purchaser against as well as hold Purchaser harmless from any costs, expenses
(including all legal expenses and attorney's fees), losses, claims, damages, and
liabilities arising out of the failure of Seller to comply with any such bulk
sales law with respect to any of the Purchase Assets.
9. WARRANTIES AND REPRESENTATIONS OF SELLER ▇▇▇▇, AND ▇▇▇. ▇▇▇▇ TO THE
EXTENT PROVIDED, AS TO SELLER, THE BUSINESS AND PURCHASE ASSETS. Seller, ▇▇▇▇
and ▇▇▇. ▇▇▇▇ to the extent provided, represent and warrant to Purchaser as of
the date hereof and as of the Closing Date as follows:
(a) Organization, Standing and Qualification. Seller is a duly
organized, validly existing corporation which is in good standing under the laws
of the State of Ohio; is duly licensed, qualified to do business, and in good
standing in each jurisdiction in which the ownership and operation of its
business requires such licensing or qualification except where the failure to be
so licensed or qualified would not have a material adverse effect on Seller, the
Purchase Assets or the Business; and has full corporate power and authority,
and, to its best knowledge, has all permits, consents and authorizations,
necessary to own and lease its properties and to carry on its business as now
conducted.
(b) No Breach. The execution and delivery of this Agreement by
Seller and the consummation by Seller of the transactions contemplated hereby
will not (i) violate any provision of, or result in the breach or termination
of, or accelerate or permit the acceleration of the performance required by, the
terms of: (A) the Articles of Incorporation or Code of Regulations of Seller;
(B) any agreement to which Seller is a party or by which it is bound; or (C) any
order, judgment, or decree applicable to Seller; (ii) result in the creation of
any claim, lien, charge or encumbrance upon the Purchase Assets 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 Seller.
(c) Title to Assets. Each of ▇▇▇▇ and Seller has, or as of the
Closing date shall have good and marketable title to his or its respective share
of the Purchase Assets, free and clear of any Adverse Title Condition. ▇▇▇. ▇▇▇▇
represents that she has, or as of the Closing Date shall have, good and
marketable title to the Cylinders and Tanks listed on Exhibit C as belonging to
her free and clear of any Adverse Title Condition.
(d) Financial Statements. Within sixty (60) days after Closing
Date, Seller, at its sole cost and expense, shall furnish Purchaser the
Effective Date Financial Statement. Purchaser shall provide Seller, and its
agents free and unrestricted access to all books and records of Seller up to and
including sixty (60) days after Closing Date, at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇, or such other place as Purchaser and Seller mutually agree, to allow
Seller to prepare and deliver the Effective Date Financial Statement. The
Financial Statements are and will be (i) in accordance with the books and
records of Seller and prepared in accordance with GAAP consistently applied
except to the extent set forth in the definition of Financial Statements; and
(ii) present fairly and
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accurately the financial condition of Seller as of the Closing Date or other
date of respective periods and results of the operations of Seller and the
Business for each respective period then ending.
(e) Taxes. Except for real estate taxes and assessments not
yet due and payable, there are no currently outstanding assessments or
reassessments for any taxes, interest or penalties relating to the Business and
Seller is not liable for any taxes, levies, duties, assessments, charges,
penalties, interest, fines or other taxes of any nature due and unpaid at the
date hereof in respect of the Business or for the payment of any tax installment
due in respect of its current taxation year, which would constitute a lien or
charge against the Purchase Assets.
(f) No Third Party Rights or Options. As of the Closing Date,
there will be no outstanding rights or options in any third party to acquire or
lease any of the Purchase Assets or any interest therein.
(g) Litigation. There are no actions, suits, proceedings or
investigations pending or, to the best of Seller's knowledge, threatened, in any
court or before any governmental agency or instrumentality against the Business
or any the Purchase Assets, which would prevent Seller and/or ▇▇▇▇ from carrying
out the transactions or performing the obligations contemplated in this
Agreement or would declare the same unlawful or cause the recision thereof.
(h) Absence of Adverse Changes or Other Events. Except as
expressly contemplated by and stated in this Agreement, after the date of this
Agreement and up to Closing Date, Seller will operate the Business in the
ordinary course. From and after December 31, 1996 up to and including Closing
Date, no customers of Seller, which in the aggregate represent and constitute a
material volume of the Business, shall have terminated transacting business with
Seller have or shall have furnished Seller notice of termination or intention to
terminate with respect to transacting business with Seller. For purposes of this
subparagraph, "material volume of the Business" for the purposes of this
subparagraph shall mean two percent (2%) or more of Seller's annual, year end
December 31, 1996 gross sales. After date of this Agreement, up through Closing
Date, ▇▇▇▇ shall make his best, good faith effort to assure that all current
Seller's customers, customer accounts and other customer commitments and
arrangements of the Business shall remain with Seller without termination or
modification by customers.
(i) No Employees to Leave Employment with Seller. Except for
▇▇▇▇ ▇▇▇▇▇▇, the warehouse manager of the Secondary Business Location, and ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, as of the date of this Agreement, no employee of Seller has furnished
written notice to Seller that he or she intends to leave employment of Seller,
and Seller has no knowledge or information, directly or indirectly, that any
such employee intends to leave the employment of Seller. After the date of this
Agreement and prior to the Closing Date, Seller shall promptly furnish Purchaser
notice of any employee who indicates to Seller that he or she intends to leave
the employment of Seller.
(j) No Union, Employee Collective Bargaining Unit or
Organizing Activity. Seller is not signatory to any collective agreement or
member of any bargaining unit; and Seller is not, to its knowledge, currently
subject to any present labor collective process or organizing efforts by any
union or other collective bargaining representative. Seller has no knowledge
that any union
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or collective bargaining unit is threatening to organize Seller's employees
to form a union or collective bargaining unit.
(k) Compliance with Laws. Seller has not received any
currently effective notice of any violations of any existing applicable federal,
state, or local law or regulation affecting the Purchase Assets or the operation
of the Business, and, as to any past notices which are no longer effective,
appropriate remedial steps have been taken. Seller 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, Seller has not unlawfully stored, dumped, or deposited nor
participated in the unlawful, dumping or depositing of any Hazardous Materials
as a result of its Business on Seller's Real Estate or elsewhere which would
materially effect any of the Purchase Assets or Purchaser after Closing; and
Seller 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, regulation or orders issued with respect thereto from
any governmental authority. The Purchase Assets are as of the Closing free of
any environmental impairment or contamination or other adverse condition caused
by Hazardous Material.
(l) Accuracy of Information. Copies of all documents furnished
by, or on behalf of, Seller to Purchaser pursuant to the terms of this Agreement
are complete and accurate in all material respects. To the best of Seller's
knowledge and belief, no statement or certificate furnished to Purchaser by
Seller pursuant to the terms of this Agreement contains or will contain any
untrue statement of a material fact.
(m) No Brokerage Fees. No broker or finder has acted for
Seller, ▇▇▇▇ or ▇▇▇. ▇▇▇▇ in connection with this Agreement or the transactions
contemplated hereby, and no broker or finder is entitled to any brokerage or
finder's fee or other commission in respect of such transactions based in any
way on agreements, arrangements or understandings made by or on behalf of
Seller, ▇▇▇▇ or ▇▇▇. ▇▇▇▇.
10. REPRESENTATIONS AND WARRANTIES OF ▇▇▇▇ AS TO REAL ESTATE. ▇▇▇▇
represents and warrants to West as of the date hereof, and as of the Real Estate
Closing Date as follows:
(a) OWNERSHIP AND TRANSFER OF REAL ESTATE. As of the date of
this Agreement, ▇▇▇▇ owns the Real Estate, beneficially and of record, free and
clear of any Adverse Title Condition, except for Permitted Encumbrances. As of
the Real Estate Closing Date, ▇▇▇▇ shall have the full right and power to convey
the Real Estate to West without obtaining the consent of any person,
corporation, entity or governmental authority except for the release of dower
rights by ▇▇▇. ▇▇▇▇.
(b) AUTHORIZATION. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby by ▇▇▇▇
(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 ▇▇▇▇ is a party or by which he may be bound, except,
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however, Agreements arising out of and related to financing; or (II) any order,
judgment, or decree applicable to ▇▇▇▇; (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 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 ▇▇▇▇ with respect
to the Real Estate.
(c) NO THIRD PARTY RIGHTS OR OPTIONS. Except for the lease of
the Real Estate by ▇▇▇▇ to Seller there are no outstanding rights or options in
any third party to acquire the Real Estate or any interest therein.
(d) COMPLIANCE WITH LAWS. ▇▇▇▇ has 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, ▇▇▇▇ 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,
▇▇▇▇ has not unlawfully stored, dumped, or deposited nor participated in the
unlawful, dumping or depositing of any Hazardous Materials upon any of its Real
Estate; to the best of ▇▇▇▇'▇ knowledge, ▇▇▇▇ is not in violation of any
existing federal, state, local, Environmental Law as well as all rules,
regulations or orders issued with respect to the Real Estate. The Real Estate
shall be conveyed to West free of any environmental impairment or contamination.
▇▇▇▇ has not, at any time, received nor does ▇▇▇▇ 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.
(e) NO ADVERSE PROCEEDINGS. To ▇▇▇▇'▇ 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 ▇▇▇▇ received notice of any special
assessments or special assessment proceedings affecting the Real Estate.
(f) NO LEASES. There are no leases, tenancy rights or other
contracts or arrangements with respect to the Real Estate, other than a Lease
between ▇▇▇▇, as landlord, and Seller, as tenant, which will be terminated as of
the Closing Date.
(g) NO MECHANIC'S LIENS. No work has been performed or labor,
materials, equipment or fuel furnished to the Real Estate within the last ninety
(90) days (or, if any of the same have been performed or furnished, all persons
who may have the right to assert a mechanic's lien have been fully paid).
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11. REPRESENTATIONS AND WARRANTIES OF PURCHASER AND WEST. Purchaser and
West respectively represent and warrant to Seller and ▇▇▇▇ as of the date hereof
and respectively as of the Closing Date and Real Estate Closing Date as follows:
(a) ORGANIZATION, STANDING AND QUALIFICATION. Purchaser and
West are duly organized, validly existing corporation, and are in good standing
under the laws of all applicable states and jurisdictions, including the State
of Ohio; are 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 Ohio.
(b) NO BREACH. The execution and delivery of this Agreement by
Purchaser and West, and the consummation by Purchaser and West of the
transactions contemplated hereby will not (i) violate any provisions of, or
result in the breach or termination of, or accelerate or permit the acceleration
of the performance required by, the terms of: (A) the Articles of Incorporation
or By-Laws of Purchaser or West; (B) any agreement to which Purchaser or West is
a party or by which either is bound; or (C) any order, judgment, or decree
applicable to Purchaser or West; (ii) result in the creation of any claim, lien,
charge or encumbrance upon any property or assets of Purchaser or West; 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
Purchaser or West.
(c) AUTHORITY; ENFORCEABILITY. Purchaser and West have 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 Purchaser
or West have been duly executed and delivered by Purchaser or West, as the case
may be, and constitute legal, valid and binding obligations of Purchaser or
West, as the case may be, enforceable against Purchaser or West, as the case may
be, in accordance with their respective terms.
(d) LITIGATION. There are no actions, suits, proceedings or
investigations pending or, to Purchaser's and West's knowledge, threatened, in
any court or before any governmental agency or instrumentality against any of
the property or assets of Purchaser or West, which would prevent Purchaser or
West from carrying out the transactions contemplated hereby or would declare the
same unlawful or cause the recision thereof.
(e) ACCURACY OF INFORMATION. Copies of all documents furnished
by, or on behalf of, Purchaser or West to Seller and/or ▇▇▇▇ pursuant to the
terms of this Agreement are complete and accurate in all material respects. To
Purchaser's or West's knowledge and belief, no statement or certificate
furnished to Seller and/or ▇▇▇▇ by Purchaser or West pursuant to the terms of
this Agreement contains or will contain any untrue statement of a material fact.
(f) EMPLOYEES. Purchaser shall make an offer of employment to
all of Seller's full-time employees at each such employee's present compensation
level (but with Purchaser's standard benefit package). Such employment shall, if
accepted by the employee, commence on the first business day following the
Closing Date.
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12. PURCHASER NOT TO ASSUME ANY OF SELLER'S INCHOATE CONTINGENT AND/OR
EXECUTORY LIABILITIES. Notwithstanding anything in this Agreement to the
contrary, Purchaser and Seller expressly agree and acknowledge that Purchaser
shall not assume, succeed to or discharge any inchoate, contingent and/or
executory liability or obligation of Seller (except with respect to the Assumed
Contracts) with regard to the Business, Purchase Assets, the termination by
Seller of its employees or any other matter; and in that regard, Purchaser shall
not succeed to any inchoate, contingent and/or executory obligation, liability,
contract, lessee's leasehold obligations or commitments arising out of
transactions between Seller and any lender, vendor, supplier, lessor, employee
or any other such third party.
13. INDEMNIFICATIONS.
(a) Indemnification by Seller and ▇▇▇▇ of Purchaser. Seller
and ▇▇▇▇ agree to defend, indemnify and hold Purchaser, its successors and
assigns, harmless from and against any Claims (except those Claims arising out
of or relating to Purchaser's failure to pay or to perform any Assumed
Liabilities) in respect of:
(i) Any and all Claims resulting from or arising out of
Seller's ownership and operation of the Business,
the Purchase Assets, and the Real Estate prior to
Closing Date.
(ii) Any and all Claims resulting from the breach of any
representations and warranties pursuant to and
under Paragraph 9 hereunder.
(iii) Any and all other misrepresentations or breach of
warranty or violation of any covenant made by
Seller hereunder, or as well in any schedule or
other instrument or document furnished or to be
furnished by Seller hereunder, including, without
limitation, any documents furnished at the Closing.
(iv) Any and all Claims in respect of any liabilities of
Seller as of the Closing Date, other than Assumed
Liabilities hereunder.
(v) Any and all Claims in respect of Seller's 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 Seller as a result of any
operations of Seller 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
Seller or otherwise arising out of or related to
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Seller's 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 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
Seller 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 Seller 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 Seller
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,
regulations establishing environmental or health
and safety quality criteria or standards for air,
water or land.
(ix) Any and all Claims arising from or out of any
Hazardous Materials, spilled, released, discharged
or disposed of by Seller, or arising out of
Seller's Business operations or otherwise effecting
the Purchase Assets relating back to and resulting
from occurrences prior to 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
Seller or arising out of Seller's business
operations prior to the Closing; (B) costs incurred
to correct a violation of any applicable
Environmental Law, arising out of or resulting from
Seller's operations prior to the Closing Date; and
(C) costs incurred as a result of being named a
responsible party under CERCLA as amended by ▇▇▇▇.
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(x) Any and all Claims for defective products or
unsatisfactory services furnished to Seller's
customers prior to the Closing Date.
(xi) If ▇▇▇▇ fails to sell the Real Estate on the Real
Estate Closing Date (unless such failure is
permitted by the terms of this Agreement), West
shall be entitled to specific performance of ▇▇▇▇'▇
obligation to sell upon the terms and conditions of
this Agreement.
(b) Indemnification by ▇▇▇▇ of West. ▇▇▇▇ agrees to defend,
indemnify and hold West, its successors and assigns, harmless from and against
any Claims in respect of:
(i) Any and all Claims related to, resulting from or
arising out of Real Estate prior to Closing Date;
(ii) Any and all Claims resulting from any breach of
Representations and Warranties pursuant to and
under Paragraph 10 hereunder;
(iii) Any other misrepresentation or breach of warranty
or violation of any covenant made by Seller
hereunder, or as well in any schedule or other
instrument or document furnished or to be furnished
by Seller hereunder, including, without limitation,
any documents furnished at the Closing.
(c) Indemnification by Purchaser to Seller. (i) Purchaser
agrees to defend, indemnify and hold Seller and its respective successors and
assigns, harmless from and against any Claims in respect of or arising out of
the breach of any representation or warranty made by Purchaser under this
Agreement and for the Claims in respect of Purchaser's failure to pay, or to
perform Seller's obligations under the Assumed Liabilities.
(ii) If West fails to purchase the Real Estate on the
Real Estate Closing Date (unless such failure is
permitted by the terms of this Agreement),
Purchaser or West shall, in full satisfaction of
West's obligation to purchase, lease the Real
Estate from ▇▇▇▇ for a period of five years
commencing April 1, 1998 at an annual rental of
$66,000 with the other terms of the lease to be
substantially similar to the terms of the Real
Estate Lease. Such lease shall also provide the
Purchaser or West shall have the option to purchase
the Real Estate for its then fair market value at
any time during the five year lease term.
(d) Indemnification by West to ▇▇▇▇. West agrees to defend,
indemnify and hold ▇▇▇▇ and his respective successors and assigns, harmless from
and against any Claims in respect of or arising out of West's breach of any
representation or warranty made by West in this Agreement:
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(e) Determination of Loss. Indemnification pursuant to this
Section 13 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 Purchaser and Seller as well as any
applicable combination thereof; or,
(ii) The issuance of a final award, order or other
ruling by an arbitrator pursuant to Section 14
hereof.
(f) Indemnification Payments. All amounts payable by one party
to the other pursuant to the provisions of this Section 13 shall be payable
within ten (10) days after final determination thereof in accordance with the
provisions hereof.
(g) Limitations on Indemnification.
(i) Any amounts which any party hereto may be obligated
to pay another party hereto pursuant to this
Section 13 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 Purchaser's or West's and Seller's
outside accountants will be binding and conclusive
as to all parties hereto); and (B) any insurance
recovery with respect to such losses received by
the indemnified party.
(ii) Neither Purchaser nor Seller shall assert Claims
against the other party which aggregate more than
the Purchase Price.
(iii) Neither West nor Seller shall assert Claims against
the other party which aggregate more than the Real
Estate Purchase Price.
(iv) Purchaser shall not assert any Claim against Seller
or ▇▇▇▇ for any item which was included in a Post
Closing Adjustment for which Purchaser was
reimbursed.
(v) Purchaser shall not assert any Claim against Seller
or ▇▇▇▇ until the total amount of all Claims
(excluding Claims for which Purchaser was
reimbursed as a Post Closing Adjustment) exceeds
Fifty Thousand Dollars ($50,000.00). Seller and
▇▇▇▇ shall not be obligated to indemnify Purchaser
for the first Fifty Thousand Dollars ($50,000) of
indemnity claims.
(vi) No party shall have a Claim against any other party
arising out of this Agreement and the transactions
contemplated thereunder which first became known to
the party seeking indemnification after the
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third anniversary of the Closing; except with
respect to Claims relating to a breach by Seller of
its representation and warranty set forth in
Section 9(e) which shall survive for the applicable
statute of limitations.
(vii) Neither Seller nor ▇▇▇▇ shall assert any Claim
against Purchaser until the total amount of all
Claims exceeds Fifty Thousand Dollars ($50,000.00).
Purchaser shall not be obligated to indemnify
Seller or ▇▇▇▇ for the first Fifty Thousand Dollars
($50,000) of indemnity claims.
(h) Notification and Duty of Indemnifying Parties. Purchaser,
West, Seller and ▇▇▇▇, as the case may be (each an "Indemnified Party"), shall,
within thirty (30) days of obtaining knowledge of a Claim, notify the other
party or parties having an indemnification obligation under this Section 13
(each an "Indemnitor") of the existence or occurrence of any facts or events
which give rise to the assertion of any Claim under the provisions of this
Section 13 (an "Indemnifiable Claim"). If an Indemnifiable Claim is due to the
claims of third parties, the Indemnitor shall promptly and diligently take such
actions as may be reasonably required to defend or settle such claims and shall
keep each Indemnified Party advised of the current status thereof. Each
Indemnified Party shall, at the Indemnitor's expense, reasonably cooperate with
the Indemnitor's defense and each Indemnitor shall reasonably consider the
Indemnified Party's advice. The Indemnified Party shall make available to each
Indemnitor or its representatives all records and other materials reasonably
required to contest any Indemnifiable Claim and shall cooperate fully with the
Indemnitor until defense of all such claims.
14. 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 Section 13
hereof, shall be settled by binding arbitration. Any arbitration pursuant to
this Agreement shall be conducted in Columbus, Ohio 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
arbitrator's award shall be final and binding on the parties to the arbitration.
Any final arbitration award or order rendered by the arbitrator shall be
enforceable by any federal or state court having jurisdiction over the affected
party. Each party hereto consents to the entry of judgment by a court of
appropriate jurisdiction which incorporates the terms of the arbitration award.
(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
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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.
15. CLOSING CONDITIONS. It shall be a condition to the obligations of
the parties to close the transactions contemplated by this Agreement that (i)
the applicable parties shall have executed and delivered each of the items
described in Section A. "Business Assets of Closing" of the Closing Items Index
attached hereto as Exhibit Q and (ii) Exhibit P (the listing of Accounts
Receivable) to be delivered at Closing by Seller shall be in form and content
acceptable to Purchaser.
16. ADDITIONAL MATERIAL CONSIDERATION.
(a) Real Estate Matters.
(i) CLOSING. At Closing, West and ▇▇▇▇ shall enter into
the Real Estate Lease. At the Real Estate Closing,
▇▇▇▇ shall deliver the Real Estate Deed to West
conveying marketable fee simple title in and to the
Real Estate to West free and clear of any Adverse
Title Condition. West shall have the exclusive
possession of the Real Estate on the Closing Date.
(ii) SURVEY AND TITLE. West, at its sole cost, expense
and risk, may obtain a survey ("SURVEY") and shall
obtain a title examination ("TITLE EXAM") of the
Real Estate. West shall forward a copy of the
Survey, if any, and the Title Exam, if any, to ▇▇▇▇
within ten (10) days of receiving it. If the Title
Exam or the Survey shows that the Real Estate is
unmarketable, or subject to a defect, lien,
encumbrance, easement, condition or restriction
which is unacceptable to West (each, "TITLE
OBJECTION"), West shall give ▇▇▇▇ written notice of
such Title Objection. ▇▇▇▇ shall promptly cure any
Title Objection which is curable at his sole cost
and expense. The Title Objection is uncurable, ▇▇▇▇
shall give West written notice of that fact.
Thereafter, West shall elect to either: (i) waive
such Title Objection and accept such title to the
Real Estate as Seller is able to convey; or (ii)
terminate ▇▇▇▇'▇ obligation to sell the Real Estate
by giving ▇▇▇▇ written notice of termination and
thereupon neither West nor ▇▇▇▇ shall have any
further obligations hereunder or liability to the
other, except for those obligations which survive
the termination of this Agreement to sell the Real
Estate. Any notice of termination for the failure
of this Condition must be furnished ▇▇▇▇ on or
before March 15, 1998, or this Condition shall be
deemed to have been met.
All matters contained in the Title Exam and/or
disclosed in the Survey which are not objected to
by West shall be deemed to have been approved by
West. All matters deemed to have been approved
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by West and all Title Objections subsequently
waived by West shall thereinafter be deemed to be
Permitted Encumbrances.
It is agreed by the parties hereto that the
marketability of the title to the Real Estate shall
be determined in accordance with the Standards of
Title Examination adopted by the Ohio State Bar
Association ("STANDARDS") and any matter which
comes within the scope of said Standards shall not
constitute a Title Objection, provided Seller
complies with the requirements of said Standards.
(iii) SITE ASSESSMENT. West, at its sole cost, expense
and risk, shall have the right to perform
environmental site assessment as well as Phase I
and Phase II environmental surveys (collectively
"AUDIT") of the Real Estate. If the results of the
Audit show that the Real Estate is contaminated
with Hazardous Materials in excess of levels
requiring remediation under any Environmental Law,
Purchaser shall give ▇▇▇▇ written notice of that
fact, and supply a copy of the Audits to ▇▇▇▇. If
the objectionable conditions can be remediated for
an aggregate expenditure by Seller of One Hundred
Thousand Dollars ($100,000.00) or less (as
determined by bona fide third party estimates),
Seller shall be obligated to remediate the
objectionable conditions with a consultant of his
choice.
If the remediation of the objectionable conditions
requires the expenditure by Seller of more than One
Hundred Thousand Dollars ($100,000.00) or if Seller
is unable to remediate the objectionable conditions
at any cost, Seller shall give West written notice
of that fact. Thereafter, West shall elect to
either: (i) acquire the Real Estate subject to the
conditions, excepting that the Real Estate Purchase
Price shall be reduced by One Hundred Thousand
Dollars ($100,000.00), or (ii) terminate Seller's
obligation to sell the Real Estate by giving Seller
written notice of termination and thereafter
neither West nor Seller shall have any further
obligations under this Section 15(b), except for
the obligation to lease the Real Estate to West as
set forth in the paragraph (v) hereof. Any notice
of termination for failure of this Condition must
be received by ▇▇▇▇ on or before March 15, 1998, or
this Condition shall be deemed to have been met.
(iv) DAMAGE OR DESTRUCTION. If any buildings or other
improvements on the Real Estate are damaged or
destroyed prior to the Closing and the Real Estate
Closing, West shall consummate the purchase of the
Real Estate on the terms set forth herein. In such
event, ▇▇▇▇ shall assign to West his rights to
receive part or all of any insurance proceeds
payable in connection with damage to the Real
Estate. If
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West fails to consummate the purchase of the Real
Estate for any reason, including the exercise of
its termination rights under the is Agreement, West
shall assign to ▇▇▇▇ the right to receive all of
the insurance proceeds payable in connection with
damage to the Real Estate and, in addition, shall
pay to Ward cash in an amount of any deductible
under the insurance policy. West, at its sole cost,
shall insure the buildings and improvements on the
Real Estate for the full replacement value of all
buildings and improvements on the Real Estate from
the Closing to the Real Estate Closing Date. ▇▇▇▇
and ▇▇▇. ▇▇▇▇ shall be named as additional named
insured and loss payees under any insurance policy
purchased by West. At the Closing, West shall
provide a certificate of insurance with terms
consistent with this paragraph.
(v) TERMINATION OF REAL ESTATE PURCHASE TRANSACTION AND
SUBSEQUENT LEASE. In the event West elects its
option to terminate the real estate purchase and
sale transaction, pursuant to either Section
15(c)(ii) or Section 15(c)(iii) hereinabove, then
and in such event Seller and West shall enter into
a Lease for a term of at least one (1) year for an
annual rent of $66,000, and otherwise substantially
upon the terms and conditions of the Real Estate
Lease, which would then be superseded and replaced
in full.
(vi) RIGHT TO ENTRY. At reasonable times agreed upon by
the parties, West, or its consultants may enter
upon the Real Estate for purposes of conducting the
Survey and the Audit. West shall indemnify, defend
and hold harmless ▇▇▇▇, his 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: (i) any activities of
West, its employees, agents, contractors or
licensees, or their agents or employees, taken,
performed or permitted pursuant to the rights
granted under this Paragraph; (ii) any mechanic's
lien being filed on the Real Estate as a result of
any acts of West, its employees, contractors,
agents or licensees or their agents or employees,
taken or performed prior to the Real Estate
Closing; and (iii) any default by West with respect
to its duties and obligations under this Right of
Entry. West's indemnification obligations under
this Paragraph shall survive the Closing and the
delivery of the deed and any rescission,
cancellation or termination of this Agreement.
(b) General Motors Receivable. It is the intent of the parties
that Purchaser receive the benefit of any profit received in respect to the GM
Contract. Accordingly, in the event the Seller receives any payment in respect
of the GM Receivable prior to the Effective Date, the
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parties agree that both the Accounts Receivable reflected on Exhibit P and the
Assumed Liabilities shall be reduced by an amount equal to the amount of such
payment.
(c) Special Employee Bonus. The parties acknowledge that
Seller has obligations to make certain bonus payments to certain of its
employees which bonus payments are not calculable or payable prior to Closing.
The Seller pays monthly sales commissions to its sales personnel based upon full
monthly sales performance. In the event any sales personnel of Seller are
entitled to a sales commission for the month of December, 1997 the parties agree
that Seller shall be responsible for payment of 18/31 of such payments and
Purchaser shall be responsible for payment of 13/31 of such payments. Purchaser
shall make all such required payments directly to the employees and the Purchase
Price shall be reduced by the amount of Seller's share of such payments. The
manager of Seller's Lima store is entitled to a bonus equal to ten percent (10%)
of the net profit of the Lima store. The Seller shall determine the amount of
the 1997 bonus to be paid to such individual. The Purchaser shall make the
required payment directly to the employee and the Purchase Price shall be
reduced by the full amount of such payment. Seller is required to pay a sales
performance incentive bonus to ▇▇▇ ▇▇▇▇▇▇▇▇. Seller will notify Purchaser of the
amount of such bonus and Seller will make the required payment directly to ▇▇.
▇▇▇▇▇▇▇▇. The Purchase Price shall be reduced by the full amount of such
payment.
All reductions to the Purchase Price pursuant to this Section
16(c) shall be effected by payments to the Purchaser under the Escrow Agreement.
17. BROKERAGE. Each of the Seller, 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 transaction contemplated hereby based upon the actions
of the indemnifying party. Purchaser and/or West shall pay all fees and expenses
of ADE Vantage, Inc. and/or ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇.
18. 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, Closing
and Real Estate Closing as expressly set forth in this Agreement.
19. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which taken together shall constitute one instrument.
20. 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.
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21. 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.
22. INCORPORATION BY REFERENCE. Any and all schedules, exhibits,
statements, reports, certificates, or other documents or instruments referred to
herein or attached hereto are incorporated herein by reference thereto as though
fully set forth at the point referred to in this Agreement.
23. 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 Seller, Purchaser and West, and their respective heir,
executors, administrators, successors, and assigns.
24. 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 Purchaser and/or West, addressed to ▇▇ - ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, with a copy to
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esquire, GOMPERS, MCCARTHY, HILL & ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇; If to Seller, or ▇▇▇▇ or ▇▇▇. ▇▇▇▇,
addressed to ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇
▇. ▇▇▇▇, with a copy to J. ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇, Esquire, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, LLP,
▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇.
25. APPLICABLE LAW. This Agreement shall be governed by and construed
in accordance with the internal law of the State of Ohio without regard to its
conflicts of law principles.
[THE NEXT PAGE IS THE SIGNATURE PAGE]
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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
By:
----------------------------------------
Its President
WEST RENTALS, INC.
By:
----------------------------------------
Its President
BUCKEYE WELDER SERVICES, INC.
By:
----------------------------------------
Its President
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▇▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇
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