EXHIBIT 10.24
AGREEMENT FOR PURCHASE AND SALE
OF
ASSETS
OF
▇▇▇▇ REFRIGERATION, INC.
AND
▇▇▇▇ REFRIGERATION OF HIALEAH, INC.
BY AND AMONG
PAMECO CORPORATION
▇▇▇▇ REFRIGERATION, INC.
▇▇▇▇ REFRIGERATION OF HIALEAH, INC.
▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
AND
▇▇▇▇▇ ▇▇▇▇
DATED AUGUST 11, 1997
AGREEMENT FOR PURCHASE AND SALE OF ASSETS
OF ▇▇▇▇ REFRIGERATION, INC.
AND ▇▇▇▇ REFRIGERATION OF HIALEAH, INC.
THIS AGREEMENT is made and entered into on this 11th day of august,
1997, by and among PAMECO CORPORATION, a Georgia corporation ("PURCHASER"), ▇▇▇▇
REFRIGERATION, INC., a florida corporation ("REFRIGERATION"), ▇▇▇▇ REFRIGERATION
OF HIALEAH, INC., a Florida corporation ("HIALEAH"; Hialeah and Refrigeration
each, a "SELLER" and collectively "SELLERS"), ▇▇▇▇▇ ▇. ▇▇▇▇ ("▇▇▇▇▇ ▇▇▇▇"),
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇ ("▇▇▇▇▇▇▇▇ ▇▇▇▇") and ▇▇▇▇▇ ▇▇▇▇ ("▇▇▇▇▇ ▇▇▇▇"; and together
with ▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇▇▇▇ ▇▇▇▇, the "▇▇▇▇ SHAREHOLDERS").
W I T N E S S E T H:
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WHEREAS, sellers are engaged in the business of wholesale distribution
of heating, ventilating, air conditioning and refrigeration systems and
equipment at the respective business locations identified in EXHIBIT A attached
hereto (the "SELLERS' BUSINESS"); and
WHEREAS, upon the terms and subject to the conditions contained in
this Agreement, each seller desires to sell, convey, transfer and assign to
purchaser, and purchaser desires to purchase and acquire from each seller,
substantially all of such Seller's assets;
NOW, THEREFORE, for and in consideration of the premises and the
mutual covenants and agreements contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. PURCHASE AND SALE
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1.1. PURCHASE AND SALE OF ASSETS. Subject to the terms and
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conditions contained herein, each Seller hereby sells, conveys, transfers and
assigns to Purchaser, and in reliance on and subject to the representations,
warranties, covenants and agreements contained herein, Purchaser hereby
purchases and acquires from each Seller, all of such Seller's right, title and
interest in and to all of the assets and properties of such Seller, free and
clear of all Liens (such term and certain other capitalized terms being defined
in ARTICLE 7), other than the Permitted Exceptions (as defined in SECTION 3.8)
(all of such assets and properties of Sellers collectively, the "TRANSFERRED
ASSETS"), including, without limitation,
(i) all of such Seller's fixed assets, including, without limitation,
those described and identified in SCHEDULE 1.1(A) (collectively, the "FIXED
ASSETS");
(ii) all of such Seller's inventories, including those described and
identified in SCHEDULE 1.1(B) (collectively, the "INVENTORIES");
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(iii) all of such Seller's trade accounts receivables, including
those identified in SCHEDULE 1.1(C) (collectively, the "RECEIVABLES");
(iv) all of such Seller's right, title and interest under the material
contracts and agreements identified in SCHEDULE 1.1(d) and any personal or other
guarantees made in favor of such Seller (or both Sellers) to secure the
obligations of any customer (the "ASSIGNED CONTRACTS"); and
(v) all of the trade names under which any location of such Seller
has been or is operated, as set forth in EXHIBIT A; and
(vi) all of such Seller's right, title and interest in and to all
other operating assets of such Seller (collectively, the "OTHER ASSETS"),
including:
A. all of such Seller's business, proprietary or
confidential information;
B. all of such Seller's telephone and facsimile numbers;
C. all rights in and to insurance and indemnity claims
relating to the Transferred Assets;
D. all rights, choses in action and claims (known or
unknown, matured or unmatured, accrued or contingent) against third Persons (as
defined in ARTICLE 7) arising out of or related to the other Transferred Assets;
and
E. all goodwill and going concern rights of such Seller.
1.2. EXCLUDED ASSETS. Notwithstanding anything in this Agreement
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to the contrary, the Transferred Assets shall not include the following assets
and properties (the "EXCLUDED ASSETS"): (a) any right, title and interest of
either Seller under or related to this Agreement and the agreements, instruments
and documents contemplated to be executed in connection herewith; and (b) the
items listed on SCHEDULE 1.2.
1.3. ASSUMPTION OF CERTAIN LIABILITIES. Purchaser hereby assumes
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and agrees to pay or perform, in accordance with their terms, (a) each of the
trade payables of Sellers reflected in the Reference Date Balance Sheet (as
defined in SECTION 3.6) and updated through the Closing and reflected on the
Estimated Closing Date Balance Sheet, (b) all obligations under the Assigned
Contracts, and (c) the liabilities and obligations identified on SCHEDULE 1.3
(collectively, the "ASSUMED LIABILITIES"). Following the Closing, and as a
convenience for Sellers, Purchaser will, upon receipt of documentation
acceptable to Purchaser, satisfy up to $200,000 of trade accounts payable
arising prior to the Closing which were not reflected on the Estimated Closing
Date Balance Sheet, and Sellers and the ▇▇▇▇ Shareholders shall reimburse
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Purchaser for all such payments, first from the Escrow Fund to the extent
thereof, and thereafter from Sellers and the ▇▇▇▇ Shareholders, jointly and
severally.
1.4. OBLIGATIONS NOT ASSUMED. Except for the Assumed Liabilities
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(which shall not include any obligation or Liability (as defined in ARTICLE 7)
arising from any default, breach, misfeasance, malfeasance or nonfeasance by
Sellers), Purchaser shall not assume any Liability of either Seller of any kind,
and each Seller shall pay, satisfy and perform all of its respective Liabilities
when lawfully due (other than the Assumed Liabilities), which may affect in any
way the Transferred Assets or Purchaser's ownership or operation thereof after
the Closing (as defined in SECTION 1.8) (collectively, the "EXCLUDED
LIABILITIES"). Without limiting the generality of the foregoing, the Excluded
Liabilities shall include, and under no circumstances shall Purchaser be deemed
to assume any Liability of either Seller arising out of or relating to: (a) any
actual or alleged tortious conduct of such Seller or any of its employees or
agents (other than post-Closing conduct by Purchaser's employees, including
former employees of Sellers); (b) any product liability claim arising out of a
product sold by either Seller prior to the Closing; (c) any claim for breach of
warranty or contract by such Seller; (d) any claim predicated on strict
liability or any similar legal theory based on acts, omissions, events or
circumstances prior to the Closing; (e) any actual or alleged violation of any
Law (as defined in ARTICLE 7) occurring prior to the Closing; (f) any business
or business activities of such Seller which are not part of the operation of the
Sellers' Business; (g) any Liability for Taxes (as defined in ARTICLE 7) of any
kind or character of Sellers; (h) any Liability relating to an Excluded Asset;
(i) any Liability relating to such Seller's ERISA Plans (as defined in SECTION
3.17); or (j) any Liability of such Seller under or arising by reason of this
Agreement, or incurred in connection with the transactions contemplated by this
Agreement, including, without limitation, legal and accounting fees and
expenses. Notwithstanding any other provision of this Agreement, the
obligations of each Seller with respect to all Liabilities other than the
Assumed Liabilities shall survive the Closing and the transactions contemplated
by this Agreement.
1.5. SALES TAXES. Purchaser shall be responsible for the payment
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of all sales, use, excise, transfer, value added and similar taxes imposed by
any Government (as defined in ARTICLE 7) in any jurisdiction in connection with
the transactions contemplated by this Agreement.
1.6. PRORATION. There shall be prorated between Purchaser and each
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Seller as of the close of business on the date hereof, the following accrued or
prepaid items relating to such Seller's operations: rents, utilities and other
payments due under the Assigned Contracts. Such proration shall be determined
by the parties within thirty (30) days after the date hereof.
1.7. ALLOCATION. The Purchase Price shall be allocated among the
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Transferred Assets as set forth in SECTION 1.9 in conformity with Section
1060(b) of the Internal Revenue Code of 1986, as amended (the "CODE"), and the
regulations promulgated thereunder. After the date hereof, Purchaser's
accountants in consultation with Sellers' accountant shall make any adjustments
required to such allocations, and Sellers agree to cooperate in filing all
information required by Section 1060(b) of the Code and the regulations
thereunder, and to take no position on or with
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respect to any income tax return, report or filing (including, without
limitation, amendments thereto) inconsistent with such allocation.
1.8. CLOSING. (a) Consummation of the transactions contemplated in
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this Agreement (the "CLOSING") shall take place at the offices of ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, at 10:00 a.m.
Atlanta, Georgia time, on August 11, 1997 (the "CLOSING DATE").
(b) Promptly following the close of business on the last business day
preceding the Closing Date, each Seller and Purchaser shall have jointly
conducted a physical count of all of such Seller's inventory, equipment, and
other tangible personal property to be transferred hereunder, and each Seller
shall have marked all such property in any reasonable manner requested by
Purchaser for the purpose of identifying such property as Transferred Assets
subject to the interest of Purchaser hereunder.
(c) At the Closing:
(i) Each Seller shall convey to Purchaser all of such Seller's right,
title and interest in and to the Transferred Assets, free and clear of any and
all Liens (other than the Permitted Exceptions), and in furtherance thereof
shall deliver to Purchaser an Assignment and ▇▇▇▇ of Sale in substantially the
form of EXHIBIT B attached hereto, and such other deeds, bills of sale,
assignments, certificates of title, documents and other instruments of transfer
and conveyance as Purchaser and its legal counsel shall reasonably request.
(ii) Upon such delivery by each Seller, Purchaser shall pay the
Preliminary Purchase Price in accordance with SECTION 1.10, and Purchaser shall
assume the Assumed Liabilities by delivering to each Seller an Assumption
Agreement in substantially the form of EXHIBIT C attached hereto.
(iii) The parties shall mutually agree upon an estimated consolidated
balance sheet reflecting the assets and liabilities of Sellers as of the Closing
Date (the "ESTIMATED CLOSING DATE BALANCE SHEET"). Except as expressly provided
herein, the Estimated Closing Date Balance Sheet shall have been prepared in
accordance with GAAP (as defined in ARTICLE 7), and the estimated figure for
inventory, equipment and other tangible personal property shall be based on the
physical count conducted pursuant to SECTION 1.8(B), provided that inventory
shall be valued at the lower of the relevant Seller's cost or fair market value
on the Closing Date, and tangible fixed assets shall be included on the
Estimated Closing Date Balance Sheet only if they are identifiable, and those
which are identifiable shall be reflected at their book value (net of
depreciation).
(d) All deliveries, payments and other transactions and documents
relating to the Closing shall be interdependent and none shall be effective
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unless and until all are effective (except to the extent that the party entitled
to the benefit thereof has waived satisfaction or performance thereof as a
condition precedent to the Closing).
(e) (i) From time to time and at any time, at Purchaser's request,
whether on or after the Closing, and without further consideration, each Seller
shall, at its own expense, execute and deliver such further documents and
instruments of sale, transfer, conveyance and assignment, and shall take such
further reasonable actions as may be necessary or desirable, in the opinion of
Purchaser, to transfer and convey to Purchaser all right, title and interest in
and to the Transferred Assets, free and clear of all Liens (other than the
Permitted Exceptions) or as may otherwise be necessary or desirable to carry out
the intent of this Agreement.
(ii) From time to time and at any time, at either Seller's request,
whether on or after the Closing, and without further consideration, Purchaser
shall, at its own expense, execute and deliver such further documents and
instruments of assumption and shall take such further reasonable actions as may
be necessary or desirable, in the reasonable opinion of Seller, to evidence the
assumption of the Assumed Liabilities as contemplated hereby, or as may
otherwise be necessary or desirable to consummate the transactions contemplated
hereunder at the Closing or to carry out the intent of this Agreement.
1.9. PURCHASE PRICE. The aggregate consideration (the "PURCHASE
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PRICE") for the Transferred Assets shall be equal to the sum of (a) $4,500,000,
adjusted on a dollar for dollar basis, by the amount of any changes in the net
assets of Sellers, as reflected on the Estimated Closing Date Balance Sheet,
from that reflected on the Reference Date Balance Sheet, plus (b) the assumption
of the Assumed Liabilities. The Purchase Price will be calculated, paid, and
subject to adjustment as set forth in the remainder of this ARTICLE. In all
cases, unless otherwise provided herein or agreed by the parties, 70% of the
Purchase Price payable to the Sellers shall be payable to Refrigeration and 30%
shall be payable to Hialeah.
1.10. PRELIMINARY PURCHASE PRICE. At the Closing, (a) the parties
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will estimate the amount payable pursuant to SECTION 1.9(A) (the "PRELIMINARY
PURCHASE PRICE") based upon the Estimated Closing Date Balance Sheet, (b)
Purchaser shall pay to Sellers in cash an amount equal to the Preliminary
Purchase Price less $400,000, and (c) Purchaser shall deposit with First Union
National Bank ("ESCROW AGENT") the sum of $400,000, to be invested, held and
disbursed in accordance with that certain Escrow Agreement, of even date
herewith, among Purchaser, Sellers and Escrow Agent in substantially the form
attached hereto as EXHIBIT D (such sum, together with all interest thereon and
other accretions thereto, the "ESCROW FUND").
1.11. PREPARATION OF CLOSING DATE BALANCE SHEET. (a) Within 180
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days after the Closing Date, Purchaser, at its sole cost and expense, will
prepare and deliver to Sellers a consolidated balance sheet with respect to the
Sellers (the "DRAFT BALANCE SHEET") as of the start of business on the Closing
Date, and a written calculation of the net assets of Sellers therefrom (the
"CALCULATION"). Purchaser will prepare the Draft Balance Sheet in accordance
with GAAP, with the exceptions noted in SECTION 1.8(C)(III).
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(b) Sellers shall have thirty (30) days after receiving the Draft
Balance Sheet and the Calculation in which to deliver written notice of
objection thereto to Purchaser. Failure to object in writing within such thirty
(30) day period shall constitute Sellers' final and binding acceptance of the
Draft Balance Sheet and the Calculation. If Purchaser and Sellers cannot agree
upon the Draft Balance Sheet and the Calculation within thirty (30) days after
Purchaser receives Sellers' written notice of objection, if any, they shall
retain the accounting firm of Deloitte & Touche LLP to resolve the remaining
issues. Sellers and Purchaser shall each pay 50% of such accounting firm's fees
and expenses.
(c) The determination of such accounting firm will be conclusive and
binding upon the parties and shall be reflected in a final consolidated balance
sheet with respect to Sellers approved or prepared by such accountants in
accordance with the principles set forth in SECTION 1.8(C)(III). The
consolidated balance sheet of Sellers as at the start of business on the Closing
Date and the Calculation, whether determined by agreement of the parties or by
such accountants as the case may be, shall be referred to herein as the "CLOSING
DATE BALANCE SHEET."
1.12. POST-CLOSING SETTLEMENT. (a) If the net assets of Sellers as
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reflected on the Closing Date Balance Sheet:
(i) exceed their net assets as reflected on the Estimated Closing Date
Balance Sheet, the Purchaser shall pay to Sellers in cash an amount equal to
such excess.
(ii) is less than their net assets as reflected on the Estimated
Closing Date Balance Sheet, then Sellers shall reimburse Purchaser in cash an
amount equal to such difference, provided that such reimbursement shall be made
first, from the Escrow Fund to the extent thereof, and thereafter by Sellers and
the ▇▇▇▇ Shareholders, jointly and severally.
(b) Any payment or reimbursement required to be made pursuant to
SECTION 1.12(A) shall be made no later than fifteen (15) days after the date the
Closing Date Balance Sheet is adopted.
1.13. RECEIVABLES. (a) Sellers hereby grant to Purchaser the
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power, right and authority, coupled with an interest, to receive, endorse, cash,
deposit, and otherwise deal with, in the name of either Seller and in a manner
consistent with this SECTION 1.13, any checks, drafts, documents, and
instruments evidencing payment of the Receivables which are payable to, payable
to the order of, or endorsed in favor of, either Seller.
(b) Each Seller shall provide Purchaser prior to the Closing a
schedule describing in reasonable detail each of the Receivables which are being
transferred hereby. Purchaser shall have the right during the period beginning
on the Closing Date and ending on the date which is one hundred eighty (180)
days after the Closing Date (such date, the "SETTLEMENT DATE"; such period, the
"COLLECTION PERIOD") to notify the account debtors of the Receivables to
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direct payment to such place as Purchaser shall from time to time designate.
Sellers shall indemnify Purchaser and its Affiliates (as defined in ARTICLE 7)
from and against any and all claims, demands, actions, damages, losses,
Liabilities and expenses (including reasonable attorneys' fees and amounts paid
in settlement) suffered or incurred by Purchaser or its Affiliates by reason of
or arising out of any defense, setoff, counterclaim, recoupment, or reduction of
liability of any account debtors under the Receivables and which are
attributable to any act or omission on the part of Sellers that occurred prior
to the Closing. Sellers hereby ratify, to the extent permitted by law, all acts
that Purchaser lawfully does or causes to be done pursuant to the powers granted
pursuant to this SECTION 1.13, and neither Purchaser, its Affiliates nor their
respective officers, directors, employees, agents or representatives shall be
responsible to either Seller for any act or failure to act under this SECTION
1.13, except for their own gross negligence or willful misconduct.
Notwithstanding anything in this SECTION 1.13 to the contrary, Purchaser shall
not compromise any Receivable without the prior written consent of the Seller
that transferred such Receivable to Purchaser (the "TRANSFERRING SELLER").
(c) During the Collection Period, Purchaser shall have the exclusive
right to collect the Receivables and neither Seller shall, directly or
indirectly, engage in any collection efforts with respect to the Receivables
other than with respect to Receivables the collection of which has been
relinquished by Purchaser to such Seller in writing.
(d) Any Receivables which were ninety (90) days past due as of the
Closing Date and which are not collected by Purchaser within the Collection
Period using commercially reasonable collection efforts (which shall include
sending invoices and other notices of amounts due, but shall not include the use
of outside collection services) shall be re-transferred to the Transferring
Seller within five days after the expiration of the Collection Period.
Thereafter, the Transferring Seller shall be authorized to attempt to collect
such Receivables for such Transferring Seller's own account. Sellers shall pay
to Purchaser in cash an amount equal to the amount of such re-transferred
Receivables, provided that such amount shall be paid from the Escrow Fund to the
extent thereof, and thereafter by Sellers and the ▇▇▇▇ Shareholders, jointly and
severally.
(e) If, within the Collection Period, after using commercially
reasonable collection efforts, Purchaser collects with respect to the
Receivables that were less than 90 days past due as of the Closing Date (the
"RECENT RECEIVABLES") less than the amount of the Recent Receivables reflected
on the Estimated Closing Date Balance Sheet (less the reserve for bad debts
applicable thereto), then Sellers and the ▇▇▇▇ Shareholders shall promptly pay
the Purchaser in cash an amount equal to the difference between the amount
collected by Purchaser with respect to the Recent Receivables during the
Collection Period and the amount of such Receivables reflected on the Estimated
Closing Date Balance Sheet (less the reserve for bad debts applicable thereto).
Such payment shall be made first from the Escrow Fund, to the extent thereof,
and thereafter from Sellers and the ▇▇▇▇ Shareholders, jointly and severally.
If, within the Collection Period, Purchaser collects with respect to the Recent
Receivables more than the amount reflected on the Estimated Closing Date Balance
Sheet with respect thereto (less the
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applicable reserve for bad debts), then the excess of such collections shall be
applied on a dollar for dollar basis to offset any amount otherwise payable to
Purchaser pursuant to SECTION 1.13(D).
2. ADDITIONAL AGREEMENTS
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2.1. EXPENSES. All expenses incurred by Purchaser in connection
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with the negotiations among the parties, and the authorization, preparation,
execution and performance of this Agreement and the transactions contemplated
hereby, including, without limitation, all fees and expenses of agents, counsel
and accountants for Purchaser, shall be paid by Purchaser. All expenses incurred
by Sellers or the ▇▇▇▇ Shareholders in connection with the negotiations among
the parties, and the authorization, preparation, execution and performance of
this Agreement and the transactions contemplated hereby, including, without
limitation, all fees and expenses of agents, counsel and accountants for Sellers
or the ▇▇▇▇ Shareholders shall be paid by Sellers or the ▇▇▇▇ Shareholders.
2.2. BROKERS. Sellers and the ▇▇▇▇ Shareholders hereby represent
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and warrant that no broker or finder has acted on their behalf in connection
with this Agreement or the transactions contemplated herein. Purchaser hereby
represents and warrants that no broker or finder has acted on its behalf in
connection with this Agreement or the transactions contemplated herein.
2.3. COVENANT AGAINST COMPETITION. (a) In order to induce
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Purchaser to enter into and perform this Agreement, each Seller and each ▇▇▇▇
Shareholder covenants and agrees that, for a period of five years beginning on
the Closing Date, it will not, without the prior written consent of Purchaser,
for its own account or jointly with another, directly or indirectly, for or on
behalf of any Person, as principal, agent, shareholder, participant, partner,
promoter, manager, consultant, sales representative, employee or otherwise,
except on behalf of Purchaser:
(i) engage or invest in, consult with, or own, control, manage, assist
or otherwise participate in the ownership, control or management of, or render
services or advice to, or lend its name to, any business engaged in the purchase
for resale, sale or distribution within the Territory (as defined in ARTICLE 7)
(which is the territorial extent of the Sellers' Businesses on the date hereof)
of heating, ventilating, air conditioning and refrigeration systems and
equipment ("PRODUCTS");
(ii) solicit or assist in the solicitation of any Person having an
office or place of business within the Territory and to whom either Seller sold
or provided any Products on, or during the two year period prior to, the Closing
Date, for the purpose of obtaining the patronage of such Person for the purchase
of any Products;
(iii) solicit or induce, or in any manner assist in the solicitation
or inducement of, any Person employed by either Seller (as an employee,
independent contractor or
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otherwise) to leave such employment, whether or not such employment is pursuant
to a contract and whether or not such employment is at will; or
(iv) use, disclose or reveal to any Person, any Confidential
Information (as defined below); provided, however, that this SECTION 2.3(A)(IV)
shall cease to apply after the second anniversary of the Closing Date with
respect to Confidential Information that does not constitute a trade secret
under applicable Law; provided, further, that the obligations imposed by this
SECTION 2.3(A)(IV) shall continue indefinitely with respect to Confidential
Information that constitutes a trade secret under applicable Law.
(b) Notwithstanding anything herein to the contrary, it shall not be
a breach of the covenants contained in SECTION 2.3(A) for Sellers and the ▇▇▇▇
Shareholders, in the aggregate, to own up to three percent of any class of
publicly traded securities of any Person.
(c) Although the parties have, in good faith, used their best efforts
to make the provisions of this SECTION 2.3 reasonable in both geographic area
and in duration in light of the financial aspects of the transaction, and it is
not anticipated, nor is it intended, by any party hereto that a Tribunal (as
defined in ARTICLE 7) of competent jurisdiction would find it necessary to
reform the provisions hereof to make it reasonable in both geographic area or in
duration, the parties understand and agree that if a Tribunal of competent
jurisdiction determines it necessary to reform the scope of this SECTION 2.3 in
order to make it reasonable in either geographic area or duration, or otherwise,
then damages, if any, for a breach hereof, as so reformed, would be deemed to
accrue to Purchaser as of and from the date of such a breach only in so far as
the damages for such breach relate to an action which occurred within the scope
of the geographic area or duration as so reformed.
(d) For purposes of this Agreement, "CONFIDENTIAL INFORMATION" means
any and all technical, business and other information of either Seller (which
information is being acquired by Purchaser under this Agreement) which derives
economic value, actual or potential, from not being generally known to the
public, including, without limitation, technical or nontechnical data,
compositions, devices, methods, techniques, drawings, inventions, processes,
financial data, financial plans, product plans, lists or information concerning
actual or potential customers or suppliers, information regarding business plans
and operations, methods and plans of operation, marketing strategies, sales and
distribution plans or strategies, cost information, pricing strategies, and
acquisition and investment plans.
2.4. GOVERNMENT FILINGS. The parties shall make, or cause to be
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made, all filings and submissions required to be made to any Government in
connection with the transactions contemplated by this Agreement. Each party
shall furnish to the other parties such necessary information and reasonable
assistance as such other party may reasonably request in connection with its
preparation of necessary filings or submissions to any Government.
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2.5. EMPLOYEES. (a) ▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇ will enter into
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employment agreements with Purchaser in the forms attached hereto as EXHIBIT E-1
and E-2, respectively.
(b) Purchaser agrees to offer employment at will to those employees of
Sellers, listed on SCHEDULE 2.5, subject to the terms, conditions and policies
applicable to Purchaser's employees generally, including acceptance of non-
competition, non-disclosure and non-solicitation covenants satisfactory to
Purchaser. Prior to the Closing, Sellers shall have provided all employees of
Sellers not listed on SCHEDULE 2.5 with notice of termination and severance
benefits in accordance with Seller's policies and practices. Notwithstanding
anything to the contrary herein, Purchaser agrees to offer employment, subject
to the other terms, conditions and policies applicable to Purchaser's employees
generally, to ▇▇▇▇▇ ▇▇▇▇▇ for a period of not less than six (6) months after the
Closing Date, and to provide ▇▇. ▇▇▇▇▇ with six (6) months severance pay upon
any termination of his employment by Purchaser without cause, provided that the
amount of such severance pay shall have been accrued on Sellers' books prior to
the Closing Date and reflected on the Estimated Closing Date Balance Sheet and
the Closing Date Balance Sheet. Notwithstanding the foregoing, no employee of
Sellers shall be deemed a third party beneficiary of this Agreement.
2.6. LEASES. The ▇▇▇▇ Shareholders shall cause Cope Investment,
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Inc., a Florida corporation and Affiliate of ▇▇▇▇▇ ▇▇▇▇ ("▇▇▇▇"), as landlord,
to execute and deliver to Purchaser, as tenant, a lease with respect to the
Leased Real Property at ▇▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇, which
Leased Real Property is owned by Cope and currently used, occupied or operated
by a branch of Sellers, and such lease agreement shall be mutually agreeable to
Cope and Purchaser. Leases on real property occupied by other branches of
Sellers have been assigned to Purchaser contemporaneously with the execution
hereof.
2.7. EQUIPMENT LEASES AND SERVICE AGREEMENTS. Sellers shall obtain,
---------------------------------------
as soon as practicable after the Closing and, at no cost, expense or liability
(other than any Assumed Liability) to Purchaser, the written consent, in form
and substance reasonably satisfactory to Purchaser, of each of the other parties
to those Assigned Contracts identified on SCHEDULE 2.7 to the assignment of such
Assigned Contracts to the Purchaser, with effect from the Closing and without
change in the respective terms and conditions thereof.
3. REPRESENTATIONS AND WARRANTIES OF SELLER AND THE ▇▇▇▇ SHAREHOLDERS
------------------------------------------------------------------
To induce Purchaser to enter into and perform this Agreement, Seller
and the ▇▇▇▇ Shareholders hereby jointly and severally represent, warrant and
covenant to Purchaser as follows:
3.1. ORGANIZATION, AUTHORITY AND QUALIFICATION. Each Seller is a
-----------------------------------------
corporation duly organized and validly existing under the Laws of Florida. Each
Seller has full corporate power and authority and is entitled to own or lease
its respective properties and to carry on its business as and in all places
where such business is conducted and such properties are owned or
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leased. Neither Seller is required to be qualified as a foreign corporation in
any jurisdiction. Each Seller has previously furnished to Purchaser true,
correct and complete copies of its articles of incorporation and bylaws. There
are no outstanding contracts, demands, commitments or other agreements or
arrangements under which either Seller is obliged to sell, convey, transfer or
assign any of the Transferred Assets (other than items of inventory in the
ordinary course of the Sellers' Business).
3.2. CAPACITY; INCONSISTENT OBLIGATIONS. (a) Each Seller has the
----------------------------------
full corporate power and authority to execute, deliver and perform its
obligations under this Agreement and any other agreements contemplated hereby to
which it is a party (the "OTHER AGREEMENTS"). Each ▇▇▇▇ Shareholder has the
full legal capacity to execute, deliver and perform his obligations under this
Agreement and the Other Agreements to which he is a party. This Agreement and
each of the Other Agreements has been duly and validly executed and delivered by
each Seller and each ▇▇▇▇ Shareholder and constitutes the valid and legally
binding obligation of each such Seller and ▇▇▇▇ Shareholder, subject to general
equity principles, enforceable in accordance with its terms, except as the same
may be limited by bankruptcy, insolvency or similar Laws affecting the rights of
creditors generally.
(b) The execution, delivery and performance of this Agreement and each
Other Agreement by Sellers and the ▇▇▇▇ Shareholders, as applicable, will not
(i) result in a violation of either Seller's articles of incorporation or bylaws
or any Law or (ii) result in a breach of, conflict with or default under any
term or provision of any indenture, note, mortgage, bond, security agreement,
loan agreement, guaranty, pledge, or other instrument, contract, agreement or
commitment, or any Order, to which either Seller or any ▇▇▇▇ Shareholder is a
party or by which it or any of its respective assets and properties, including,
without limitation, the Transferred Assets, is subject or bound; nor will such
actions result in (w) the creation of any Lien on any of the Transferred Assets,
(x) the acceleration or creation of any Liability or obligation of either Seller
or any ▇▇▇▇ Shareholder, or (y) the forfeiture of any right or privilege of
either Seller or any Saez Shareholder.
(c) All of the issued and outstanding shares of capital stock of each
Seller are owned of record and beneficially by the ▇▇▇▇ Shareholders and other
individuals as set forth on SCHEDULE 3.2, free and clear of any and all Liens,
including any adverse claim of any former shareholder of either Seller. Except
as set forth on SCHEDULE 3.2, there are no outstanding contracts, demands,
commitments or other agreements or arrangements under which any of the ▇▇▇▇
Shareholders or either Seller are or may become obligated to sell, transfer or
assign any such shares.
3.3. CONSENTS. The execution, delivery and performance by each
--------
Seller and each ▇▇▇▇ Shareholder of this Agreement and any Other Agreement to
which each of them is a party do not (a) require the consent, approval or action
of, or any filing with or notice to, any Government or other Person, or (b)
impose any other term, condition or restriction on Purchaser or either Seller
pursuant to any business combination or takeover Law.
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3.4. LEGAL COMPLIANCE. Neither Seller is in default under or in
----------------
violation of (a) its respective articles of incorporation or bylaws or (b) any
Order. The operations of each Seller and its predecessors have been conducted
in all material respects in compliance with all applicable Laws. (For purposes
of this Section, any violation of applicable Law that could result in imposition
of a fine or other monetary penalty upon either Seller or any ▇▇▇▇ Shareholder
shall be deemed to be a material non-compliance.) Neither Seller has received
any notification of any asserted past or present failure by either Seller to
comply with any applicable Law in connection with such Seller's operations.
3.5. POSSESSION OF LICENSES. Each Seller possesses all franchises,
----------------------
certificates, licenses, permits and other authorizations from Governments and
other Persons that are necessary for the ownership, maintenance and operation of
its properties and assets and the conduct of its business (except where failure
to so possess would not have a material adverse effect on such Seller or its
business), and neither Seller is in violation of any thereof.
3.6. FINANCIAL STATEMENTS. Prior to the date hereof, Sellers have
--------------------
delivered to Purchaser copies of their consolidated financial statements and
related documents, as identified in SCHEDULE 3.6 (collectively, the "FINANCIAL
STATEMENTS"). The Financial Statements include a Consolidated Balance Sheet of
Sellers (the "REFERENCE DATE BALANCE SHEET") as of December 31, 1996 (the
"REFERENCE DATE"), which is the most recent balance sheet with respect to
Sellers. The Financial Statements are true and correct in all material
respects, have been prepared in accordance with GAAP, present fairly the
financial condition of the Sellers as of the respective dates thereof and the
results of operations and cash flows of the Sellers for the periods then ended,
and are consistent with the books and records of Sellers. The books and records
of the Sellers are currently maintained in accordance with GAAP and are true,
correct and complete in all material respects.
3.7. LIABILITIES. Neither Seller has any Liability relating to any
-----------
Transferred Asset or the operations of such Seller, except (i) those reflected
on the Reference Date Balance Sheet, (ii) Liabilities incurred in the ordinary
course of business since the Reference Date consistent with such Seller's past
experience during the periods covered by the Financial Statements (none of which
results from, arises out of, relates to, is in the nature of, or was caused by
any breach of contract, breach of representation or warranty, tort, product
liability, infringement or violation of any Law or Order), and (iii) as may be
set forth on SCHEDULE 3.7.
3.8. TITLE TO PROPERTIES. Except for any leased items of personal
-------------------
property set forth in SCHEDULE 3.8(I) and any Liens identified on SCHEDULE
3.8(II) (the "PERMITTED EXCEPTIONS"), Sellers have good, valid and complete
title to all of the Transferred Assets, free and clear of all Liens. Each
Seller holds a valid and enforceable leasehold interest, free and clear of any
other Liens, with respect to each item of personal property identified under
such Seller's name in SCHEDULE 3.8(I).
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3.9. INVENTORIES. (a) The Inventories of each Seller are
-----------
merchantable and conform in all material respects to all orders, contracts or
commitments for such goods and customary trade standards for merchantable goods.
None of the items included in the Inventories is below standard quality. Each
item included in the Inventories reflected on the Reference Date Balance Sheet
and the books and records of Sellers has been valued at the lower of cost or
market in accordance with GAAP.
(b) All products held by Sellers for sale to their customers meet the
standards of (i) all applicable Laws and (ii) all contractual commitments and
warranties of such Seller to its customers. Neither Seller has any Liability,
and there is no basis for any Action (as defined in ARTICLE 7), for repair or
replacement of any products sold by such Seller or other damages in connection
therewith, except for Liabilities and Actions fully covered by manufacturers'
warranties.
(c) No customer of either Seller has any right to return any goods for
credit or refund pursuant to any oral or written agreement, understanding or
practice which individually or in the aggregate is material, and neither Seller
presently has any goods in the possession of any customer on consignment or a
similar basis.
3.10. PERSONAL PROPERTY. (a) All machinery, equipment, vehicles,
-----------------
and other items of tangible personal property included in the Transferred Assets
which are owned or leased by either Seller are in good condition and repair,
subject to normal wear and tear, suited for the use intended and are and have
been operated in conformity with all applicable Laws.
(b) To the knowledge of Sellers and the ▇▇▇▇ Shareholders, all lessors
of machinery, equipment or other tangible personal property included in the
Transferred Assets leased by either Seller have performed and satisfied their
respective duties and obligations under such leases. Neither Seller has brought
or threatened any Action against any such lessor for failure to perform and
satisfy its duties and obligations thereunder.
3.11. REAL PROPERTY. (a) Neither Seller owns or has any interest
-------------
in any parcel or tract of real property. Each parcel or tract of real property
used by either Seller is subject to a written lease or sublease to which such
Seller is a party as lessee or sublessee (individually a "REAL PROPERTY LEASE").
All such Real Property Leases are valid and in full force and effect in
accordance with their terms. Each Seller has previously furnished Purchaser
with true, correct and complete copies of all its Real Property Leases. There
is not, with respect to any Real Property Lease (i) any default by either
Seller, or any event of default or event which with notice or lapse of time, or
both, would constitute a default by either Seller or (ii) to the knowledge of
Sellers and the ▇▇▇▇ Shareholders, any existing default by any other party to
any Real Property Lease, or event of default or event which with notice or lapse
of time, or both, would constitute a default by any other party to any Real
Property Lease.
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(b) The present use, occupancy and operation of the Leased Real
Property (as defined in ARTICLE 7), and all Improvements (as defined in ARTICLE
7) to the Leased Real Property, by each Seller are in compliance with all Laws
and private restrictive covenants, and to Sellers' and the ▇▇▇▇ Shareholders'
knowledge there has not been any proposed change thereto that would affect any
of the Leased Real Property or its use, occupancy or operation. There exists no
conflict or dispute involving either Seller (or to the knowledge of either
Seller or the ▇▇▇▇ Shareholders, any other Person) with any Government or other
Person relating to any Leased Real Property or the activities thereon. No
portion of the Leased Real Property is subject to any classification,
designation or preliminary determination of any Government or pursuant to any
Law which would restrict its use, development, occupancy or operation in
connection with either Seller; provided, however, that to the extent any of the
Leased Real Property is owned by a Person other than one or more of the ▇▇▇▇
Shareholders or their Affiliates, this representation and warranty shall be made
to the knowledge of the Sellers and the ▇▇▇▇ Shareholders.
(c) Neither Seller nor, to the knowledge of Sellers and the ▇▇▇▇
Shareholders, any other Person, has caused any work or improvements to be
performed upon or made to any of the Leased Real Property for which there
remains outstanding any payment obligation that would or might serve as the
basis for any Lien in favor of the Person who performed the work.
(d) To the knowledge of Sellers or the ▇▇▇▇ Shareholders, all
requisite certificates of occupancy and other permits and approvals required of
either Seller with respect to the Leased Real Property or the Improvements and
the use, occupancy and operation thereof by each Seller have been obtained and
paid for and are currently in effect and free of restrictions.
(e) Cope: (i) is an Affiliate of ▇▇▇▇▇ ▇▇▇▇; (ii) is a corporation
duly organized and validly existing under the Laws of Florida; and (iii) has the
full corporate power and authority to execute, deliver and perform its
obligations under the lease contemplated by SECTION 2.6 hereof. The lease
contemplated by SECTION 2.6 has been duly and validly executed and delivered by
Cope and constitutes the valid and legally binding obligation of Cope, subject
to general equity principles, enforceable in accordance with its terms, except
as the same may be limited by bankruptcy, insolvency or similar Laws affecting
the rights of creditors generally. The execution, delivery and performance of
such lease by Cope will not (i) result in a violation of Cope's articles of
incorporation or bylaws or any Law or (ii) result in a breach of, conflict with
or default under any term or provision of any indenture, note, mortgage, bond,
security agreement, loan agreement, guaranty, pledge, or other instrument,
contract, agreement or commitment, or any Order, to which Cope, either Seller or
any ▇▇▇▇ Shareholder is a party or by which it or any of its respective assets
and properties, including, without limitation, the Transferred Assets, is
subject or bound; nor will such actions result in (w) the creation of any Lien
on any of the Transferred Assets, (x) the acceleration or creation of any
Liability or obligation of Cope, either Seller or any ▇▇▇▇ Shareholder, or (y)
the forfeiture of any right or privilege of Cope, either Seller or any ▇▇▇▇
Shareholder. Except as set forth on SCHEDULE 3.11(E), such execution, delivery
and performance do not require the consent, approval or action of, or any filing
with or notice to, any Government or other Person.
-14-
3.12. CONTRACTS. (a) All of the Assigned Contracts have been
---------
entered into in the ordinary course of business on commercially reasonable
terms, are valid and enforceable in all material respects in accordance with
their terms, are in full force and effect, and will continue to be valid and
enforceable and in full force and effect on identical terms following the
Closing and their assignment to Purchaser. All Assigned Contracts can be
fulfilled or performed by the respective Seller in accordance with their
respective terms without undue or unusual expenditures of money or effort. Each
Seller has delivered to Purchaser a true, correct and complete copy of each of
the written Assigned Contracts and a complete and accurate summary of the
material terms of each oral Assigned Contract.
(b) Each Seller has performed all obligations to be performed by it as
of the date of this Agreement under all Assigned Contracts. Except as set forth
in SCHEDULE 1.1(D), there are no existing material defaults, events of default
or events which, with the giving of notice or lapse of time or both, would
constitute a material default by either Seller under any Assigned Contract. To
the knowledge of Sellers and the ▇▇▇▇ Shareholders, no event has occurred which
may hereafter give rise to any right of termination, acceleration, damages or
any other remedy by either Seller under any Assigned Contract against any other
party thereto.
(c) To the knowledge and Sellers and the ▇▇▇▇ Shareholders, neither
the Closing nor the relationship between Sellers and Purchaser has caused or is
likely to cause the termination or nonrenewal of any Assigned Contract.
3.13. CUSTOMERS AND SUPPLIERS. SCHEDULE 3.13 sets forth the names
-----------------------
of the top twenty-five customers of each Seller ("SIGNIFICANT CUSTOMERS").
Neither Seller is aware, except as disclosed in SCHEDULE 3.13, that any
Significant Customer intends to discontinue or substantially diminish or change
its relationship with Purchaser after the date hereof.
3.14. LITIGATION; CONTINGENCIES. No Action is pending or, to the
-------------------------
knowledge of Sellers and the ▇▇▇▇ Shareholders, threatened against, by or
affecting Sellers or the Transferred Assets. There are no unsatisfied judgments
or Orders against Sellers, or any of their respective predecessors that
constitute a Lien on any Transferred Asset.
3.15. TAXES. Sellers have duly and timely filed all federal,
-----
state, municipal, local and foreign, if any, Tax returns and reports (including
returns for estimated tax), and all reports and returns of all other Governments
having jurisdiction (collectively, "RETURNS") with respect to all Taxes; all
such Returns show the correct and proper amount due; and the Taxes shown on all
Returns and all Tax assessments received by either Seller have been paid to the
extent that such Taxes or estimates are due. Sellers have previously provided
true, correct and complete copies of all Returns filed with respect to the two
(2) tax years ending December 31, 1994 and 1995. All Taxes imposed on Sellers
by any Government (including all deposits in connection therewith required by
applicable Law, and all interest and penalties thereon) which have become due
and payable for all periods through the date hereof have been paid in full, and
-15-
adequate reserves for all other Taxes, whether or not due and payable, and
whether or not disputed, have been set up on the books of each Seller, and such
reserves will be adequate to pay all Taxes of such Seller for all periods
through Closing. There is not now any proposed assessment against either Seller
of additional Taxes of any kind. Neither Seller is a party to any Tax sharing
or Tax allocation agreement, understanding, arrangement or commitment. There is
no dispute or Action concerning any Tax Liability of Sellers raised by a
Government in writing. Each Seller has duly, validly and timely elected to be
taxed as an S corporation under Subchapter S of the Code. Such elections have
never been revoked or terminated and remain in full force and effect as of the
date hereof. Except as set forth in SCHEDULE 3.15, such elections were made at
a time and in such a manner as not to subject either Seller to any tax on built-
in gains in respect of its assets.
3.16. EMPLOYMENT AND LABOR MATTERS. (a) To the knowledge of
----------------------------
Sellers and the ▇▇▇▇ Shareholders, no employee, agent, consultant or independent
contractor who performs services on a regular basis for either Seller plans to
discontinue such relationship with Purchaser after the date hereof.
(b) Neither Seller is a party to any agreement of any kind which deals
with wages, conditions of employment, benefits or other matters affecting the
employer/employee relationship with any union, labor organization or employee
group. There are no controversies pending, or to the knowledge of Sellers and
the ▇▇▇▇ Shareholders, threatened, between either Seller and any union, labor
organization or employee group representing, or seeking to represent, any of its
employees, and there has been no attempt by any union, labor organization or
employee group to organize any of either Seller's employees at any time in the
past five years. Each Seller has complied in all material respects with all
applicable Laws relating to wages, hours, health and safety, payment of social
security, withholding and other taxes, maintenance of workers' compensation
insurance, labor and employment relations and employment discrimination.
(c) SCHEDULE 3.16 lists all contracts, agreements or arrangements
(written or oral) concerning the employment of any individual employed by
Sellers.
3.17. EMPLOYEE BENEFIT MATTERS. (a) SCHEDULE 3.17(A) lists all
------------------------
practices, commitments, arrangements and agreements pursuant to which either
Seller provides, directly or indirectly, any benefits for employees of each
Seller, including pension, bonus, medical, insurance, profit sharing or any
other employee benefits, under any agreements or Laws. Except as set forth on
SCHEDULE 3.17(A), neither Seller, either now or at any time in the past,
sponsors, maintains or contributes to any employee pension benefit plan, within
the meaning of Section 3(2) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"). Neither Seller is required to contribute, or has
ever been required to contribute, to any multi-employer plan within the meaning
of Section 3(37)(A) of ERISA.
-16-
(b) SCHEDULE 3.17(B) lists separately all employee benefit plans
within the meaning of Section 3(3) of ERISA maintained by each Seller or to
which either Seller contributes or is required to contribute (collectively,
"ERISA PLANS") for the benefit of any employees of such Seller. True, correct
and complete copies of all ERISA Plans, together with related trusts, insurance
contracts, summary plan descriptions, annual reports and Form 5500 filings for
the past three years, have been delivered to Purchaser.
(c) Each ERISA Plan has been operated and administered in all material
respects in accordance with all applicable Laws, including, without limitation,
ERISA and the Code. Neither Sellers nor any of their respective directors,
officers, employees or agents, nor to the knowledge of Sellers or the ▇▇▇▇
Shareholders, any "party in interest" or "disqualified person" (as such terms
are defined in Section 3(14) of ERISA and Section 4975 of the Code) have been
engaged in or been a party to any "prohibited transaction" (as such term is
defined in Section 406 of ERISA or Section 4975 of the Code). Each ERISA Plan
that is a group health plan within the meaning of Section 607(1) of ERISA and
Section 4980B of the Code is in compliance with the continuation coverage
requirements of Section 601 of ERISA and Section 4980B of the Code. There are
no pending claims or, to the knowledge of Sellers and the ▇▇▇▇ Shareholders,
threatened claims by or on behalf of any ERISA Plan, by any employee or
beneficiary covered under such ERISA Plan or by any Government or otherwise
involving such ERISA Plan or any of its fiduciaries (other than for routine
claims for benefits).
(d) Neither Seller is bound to provide, and neither provides,
benefits, including, without limitation, death, health or medical benefits
(whether or not insured), with respect to current or former employees of either
Seller beyond their retirement or other termination of service with such Seller
other than (i) coverage mandated by applicable Law, (ii) deferred compensation
benefits accrued as Liabilities, or (iii) benefits, the full cost of which is
borne by the current or former employee or his beneficiary.
(e) Neither this Agreement nor any transaction contemplated hereby
will (i) entitle any current or former employee, officer or director of either
Seller to severance pay, unemployment compensation or any similar or other
payment, except as provided in SECTION 2.5 hereof, or (ii) accelerate the time
of payment or vesting, or increase the amount of compensation or benefits due
any such employee, officer or director.
3.18. ENVIRONMENTAL MATTERS. Each Seller holds all Environmental
---------------------
Permits (as defined in ARTICLE 7) necessary for conducting the business and
operations of such Seller and has conducted, and is presently conducting, its
business and operations in full compliance with all applicable Environmental
Laws (as defined in ARTICLE 7) and Environmental Permits, including, without
limitation, all record keeping and filing requirements. Sellers and the ▇▇▇▇
Shareholders are not aware of any existing or pending Environmental Law or
Environmental Permit requirement with a future compliance date that will require
operational changes, business practice modifications or capital expenditures at
any Leased Real Property (or any other property presently or formerly owned,
operated or controlled by either Seller or as to which either Seller
-17-
may bear responsibility or Liability), or any Improvements thereon. All
Hazardous Materials (as defined in ARTICLE 7) and Solid Waste (as defined in
ARTICLE 7), on, in, or under the Leased Real Property, or owned by either
Seller, wherever located, have been properly removed and disposed of, and no
past or present disposal, discharge, spill or other release of, or treatment,
transportation or other handling of Hazardous Materials or Solid Waste on, in,
under or off-site from any Leased Real Property, or to the knowledge of Sellers
and the ▇▇▇▇ Shareholders, adjacent property, will subject either Seller or any
subsequent owner, occupant or operator of such Leased Real Property to
corrective or compliance action or any other Liability. There are no presently
pending, or to the knowledge of Sellers and the ▇▇▇▇ Shareholders, threatened,
inquiries, Actions or Orders against or involving Seller (including any other
Person for whose acts or omissions either Seller is responsible) relating to any
alleged past or ongoing violation of any Environmental Laws or Environmental
Permits, nor do Sellers or the ▇▇▇▇ Shareholders have any basis to expect any
such Action or Order to be threatened, issued or commenced, nor is either Seller
subject to any Liability for any such past or ongoing violation.
3.19. ABSENCE OF MATERIAL ADVERSE CHANGE. Since the date of the
----------------------------------
Reference Balance Sheet, Sellers have conducted their businesses only in the
ordinary course and consistent with their prior practices, and there have been
no events or occurrences that, individually or in the aggregate, have had, or
with the passage of time are reasonably likely to have, a material adverse
effect on either Seller or its business, operations, condition (financial or
otherwise), or prospects.
3.20. FULL DISCLOSURE. No representation or warranty of Sellers or
---------------
the ▇▇▇▇ Shareholders contained in this Agreement or any instrument,
certificate, agreement or other writing delivered by or on behalf of Sellers or
the ▇▇▇▇ Shareholders pursuant to this Agreement, or in connection with the
transactions contemplated herein contains any untrue or incomplete statement of
a material fact or omits to state a material fact necessary to make the
statements contained herein not misleading. To the knowledge of Sellers and the
▇▇▇▇ Shareholders, there is no fact which adversely affects, or in the future
may adversely affect, the business, assets, properties, liabilities, affairs,
actual or anticipated results of operations, condition (financial or otherwise),
cash flows or prospects of either Seller which has not been or is not disclosed
in this Agreement or in the other instruments, certificates, agreements and
writings furnished to Purchaser by or on behalf of Sellers or the ▇▇▇▇
Shareholders pursuant to this Agreement or in connection with the transactions
contemplated herein.
4. REPRESENTATIONS AND WARRANTIES OF PURCHASER
-------------------------------------------
As an inducement to Sellers to enter into and perform this Agreement,
Purchaser hereby represents, warrants and covenants to Sellers as follows:
4.1. ORGANIZATION. Purchaser is a corporation duly organized and
------------
validly existing under the Laws of the State of Georgia.
-18-
4.2. AUTHORIZATION; NO INCONSISTENT AGREEMENTS. Purchaser has full
-----------------------------------------
corporate power and authority to execute, deliver and perform this Agreement.
This Agreement has been duly and validly executed and delivered by Purchaser and
constitutes its valid and legally binding obligation, subject to general equity
principles, enforceable in accordance with its terms, except as the same may be
limited by bankruptcy, insolvency, reorganization or similar laws affecting the
rights of creditors generally.
4.3. INCONSISTENT OBLIGATIONS. The execution, delivery and
------------------------
performance of this Agreement, and the consummation of the transactions
contemplated herein will not result in a violation of Purchaser's articles of
incorporation or bylaws or any Law, or in a breach of, conflict with or default
under any indenture, note, mortgage, bond, security agreement, loan agreement,
guaranty, pledge, or other instrument, contract, agreement or commitment, or any
Order, to which Purchaser is a party or by which any of Purchaser's assets or
properties are subject or bound; nor will such actions result in the creation of
any Lien on any of Purchaser's assets or properties, or the acceleration or
creation of any debt of Purchaser.
4.4. FULL DISCLOSURE. No representation or warranty of Purchaser
---------------
contained in this Agreement, or in any schedule, instrument, certificate,
agreement or other writing delivered by Purchaser pursuant to this Agreement or
in connection with the transactions contemplated herein, contains any untrue
statement of a material fact or omits to state a material fact necessary to make
the statements contained herein or therein not misleading.
5. INDEMNITIES
5.1. INDEMNIFICATION OF PURCHASER. In accordance with and subject
----------------------------
to the provisions of this ARTICLE 5, Sellers and the ▇▇▇▇ Shareholders shall
jointly and severally indemnify and hold harmless Purchaser, its Affiliates and
their respective officers, directors, agents and employees (collectively, the
"PURCHASER INDEMNITEES") from and against and in respect of any loss, damage,
Liability, cost and expense, including reasonable attorneys' fees and amounts
paid in settlement (collectively, "INDEMNIFIED LOSSES"), suffered or incurred by
any Purchaser Indemnitee by reason of, or arising out of:
(a) any misrepresentation or breach of representation or warranty
contained in this Agreement, or in any instrument, certificate, agreement or
other writing delivered by or on behalf of either Seller or any Saez Shareholder
pursuant to this Agreement or in connection with the transactions contemplated
herein, or the breach of any covenant or agreement of either Seller or any ▇▇▇▇
Shareholder contained in this Agreement;
(b) notwithstanding anything to the contrary in any instrument of
assignment that may be executed by either Seller and Purchaser, all obligations
and Liabilities of Sellers other than the Assumed Liabilities, including,
without limitation, all obligations and Liabilities resulting from or arising
out of any default, performance or non-performance by either Seller prior to the
Closing under or with respect to any Assigned Contract or any of the
Receivables;
-19-
(c) any claims, Liabilities, obligations, damages, costs, and
expenses, known or unknown, fixed or contingent, claimed or demanded by third
Persons arising out of or resulting from Sellers' ownership or operation of
their businesses or the Transferred Assets prior to and including the Closing
Date;
(d) any and all losses, Liabilities or damages resulting from or
arising out of any failure to comply with any "bulk sales" laws applicable to
the transactions contemplated by this Agreement; and
(e) all Actions, Orders, assessments, fees and expenses incident to
any of the foregoing or incurred in investigating or attempting to avoid the
same or to oppose the imposition thereof, or in enforcing this indemnification.
5.2. INDEMNIFICATION BY PURCHASER. Purchaser shall indemnify and
----------------------------
hold harmless Sellers from, against and in respect of any Indemnified Losses
suffered or incurred by either of them by reason of or arising out of (a)
Purchaser's failure to pay or perform any of the Assumed Liabilities, (b) any
Liability that arises after the Closing Date from Purchaser's ownership or
operation of the Transferred Assets; (c) breach of any representation or
warranty of Purchaser contained in this Agreement; and (d) breach of any
covenant or agreement of Purchaser contained in this Agreement, provided,
however, that nothing contained in this SECTION 5.2 shall obligate Purchaser to
indemnify Sellers with respect to any matter as to which Sellers or the ▇▇▇▇
Shareholders are obligated to indemnify any Purchaser Indemnitee pursuant to
SECTION 5.1.
5.3. PAYMENT. Any party having an indemnification obligation
-------
pursuant to this ARTICLE 5 (an "INDEMNITOR") shall, subject to the provisions of
SECTION 5.4, reimburse any other party entitled to recover Indemnified Losses
(an "INDEMNITEE") in accordance with this Section. If the Indemnitor objects to
any claim made by an Indemnitee hereunder and the Indemnitee initiates legal
action with respect thereto, the Indemnitee agrees to join all affected parties
in such action so that the rights and liabilities of the parties under this
Agreement with respect to such claim may be resolved in one action. If any
claim for Indemnified Losses that does not relate to a claim or Action by a
third party arises after the date hereof, the Indemnitee shall provide written
notice thereof to the applicable Indemnitor. The amount and liability for such
claim shall be deemed final unless the Indemnitor notifies the Indemnitee in
writing within 15 days of its receipt of such written notice that it disputes
such claim. The Indemnitor shall pay or reimburse the Indemnitee for any such
Indemnified Loss within 30 days after such loss is deemed final. Any
indemnification claims by Purchaser shall be satisfied first from the Escrow
Fund, to the extent thereof, and thereafter by Sellers and the ▇▇▇▇
Shareholders, jointly and severally.
5.4. DEFENSE OF CLAIMS. (a) If any claim or Action by a third
-----------------
party arises after the date hereof for which any party may be liable to
indemnify another party under the terms of this
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Agreement, then the Indemnitee shall notify the Indemnitor within a reasonable
time after such claim or Action arises and is known to the Indemnitee, and shall
give the Indemnitor a reasonable opportunity: (i) to conduct any proceedings or
negotiations in connection therewith and necessary or appropriate to defend the
Indemnitee; (ii) to take all other required steps or proceedings to settle or
defend any such claim or Action; and (iii) to employ counsel to contest any such
claim or Action in the name of the Indemnitee or otherwise.
(b) The expenses of all proceedings, contests or lawsuits with respect
to such claims or Actions shall be borne by the Indemnitor. If the Indemnitor
wishes to assume the defense of such claim or Action, then the Indemnitor shall
give written notice to the Indemnitee within 30 days after notice from the
Indemnitee of such claim or Action (unless the claim or action reasonably
requires a response in less than 30 days after the notice is given to the
Indemnitor, in which event the Indemnitor shall notify the Indemnitee at least
10 days prior to such reasonably required response date), and the Indemnitor
shall thereafter assume the defense of any such claim or liability, through
counsel reasonably satisfactory to the Indemnitee; provided that the Indemnitee
may participate in such defense at its own expense. The Indemnitee shall have
the right to control the defense of the claim or Action unless and until the
Indemnitor shall (i) assume the defense of such claim or Action, and (ii)
acknowledge in writing to the Indemnitee that the Indemnitor shall be obligated
under the terms of its indemnity hereunder to the Indemnitees in connection with
such claim or Action.
(c) If the Indemnitor does not assume the defense of, or if after so
assuming the Indemnitor fails to defend, any such claim or Action, then
Indemnitee may defend against such claim or Action in such manner as the
Indemnitee may deem appropriate (provided that the Indemnitor may participate in
such defense at its own expense) provided that the Indemnitee may not settle
such claim or Action without the Indemnitor's prior written consent, which will
not be unreasonably withheld, and the Indemnitor shall promptly reimburse the
Indemnitee for the amount of all expenses, legal and otherwise, reasonably and
necessarily incurred by the Indemnitee in connection with the defense against
and settlement of such claim or Action. If no settlement of such claim or
Action is made, the Indemnitor shall satisfy any judgment rendered with respect
to such claim or in such Action, before the Indemnitee is required to do so, and
pay all expenses, legal or otherwise, reasonably and necessarily incurred by the
Indemnitee in the defense of such claim or Action.
(d) If an Order is rendered against the Indemnitee in any Action
covered by the indemnification hereunder, or any Lien in respect of such Order
attaches to any of the assets of the Indemnitee, the Indemnitor shall
immediately upon such entry or attachment pay any amount required by such Order
in full, or discharge such Lien unless, at the expense and request of the
Indemnitor, an appeal is taken under which the execution of the Order or
satisfaction of the Lien is stayed. If and when a final Order is rendered in
any such Action, the Indemnitor shall forthwith pay any amount required by such
Order or discharge such Lien before the Indemnitee is compelled to do so.
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(e) Sellers and the ▇▇▇▇ Shareholders hereby irrevocably appoint ▇▇▇▇▇
▇. ▇▇▇▇ ("AGENT") as their agent and attorney-in-fact, with full power to
negotiate and settle claims for indemnification under ARTICLE 5 hereof, and to
perform any other act arising under or pertaining to this Agreement, and the
transactions contemplated hereby. The appointment of Agent being coupled with
an interest, it shall be irrevocable and shall be binding upon Sellers and the
▇▇▇▇ Shareholders and their respective heirs, personal representatives,
successors and assigns, and shall not be revoked by the dissolution, death or
incapacity of any thereof, provided that Sellers and the ▇▇▇▇ Shareholders may,
by written notice to Purchaser and duly executed by each Seller and ▇▇▇▇
Shareholder, designate a new Agent, any such notice to become effective two (2)
business days after the actual receipt thereof by Purchaser. Any notice to the
Agent provided in accordance with this Agreement shall be effective as notice
upon each Seller and ▇▇▇▇ Shareholder.
5.5. SURVIVAL. (a) No investigation made heretofore by Purchaser
--------
shall limit or affect the representations, warranties, covenants and indemnities
of Sellers and the ▇▇▇▇ Shareholders hereunder, each of which shall survive any
such investigation. For purposes of the indemnification provided in this
ARTICLE 5, the representations and warranties of Sellers and the ▇▇▇▇
Shareholders contained in this Agreement, and all certificates, instruments,
agreements or other writings delivered by or on behalf of either Seller or any
▇▇▇▇ Shareholder pursuant to this Agreement or in connection with the
transactions contemplated herein shall survive any investigation heretofore or
hereafter made by Purchaser and the Closing, and shall continue in full force
and effect for the periods specified below (the "SURVIVAL PERIOD"):
(i) the representations and warranties relating to the reporting,
payment or liability for Taxes shall survive until the expiration of
any applicable statute or period of limitations, and any extensions
thereof;
(ii) the representations and warranties relating to environmental
matters shall be of no further force and effect upon the fourth
anniversary of the Closing; and
(iii) all other representations and warranties of Sellers and the
▇▇▇▇ Shareholders (other than those contained in SECTIONS 3.1, 3.2,
3.3 AND 3.8, which shall survive indefinitely) shall be of no further
force and effect upon the date that is twenty-four (24) months after
the Closing.
(b) Anything herein to the contrary notwithstanding, the Survival
Period shall be extended automatically to include any time period necessary to
resolve a claim for indemnification which was made prior to the expiration of
the Survival Period but not resolved prior to its expiration, but any such
extension shall apply only as to the claims asserted and not so resolved within
the Survival Period. Liability for any such item shall continue until such
claim shall have been finally settled, decided or adjudicated.
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5.6. LIMITATIONS. (a) Seller shall not be obligated under this
-----------
ARTICLE 5, other than pursuant to SECTIONS 5.1(B) and 5.1(E) or for breaches of
any representation and warranty contained in SECTIONS 3.1, 3.2, 3.3 OR 3.8
hereof, to indemnify the Purchaser Indemnitees with respect to any Indemnified
Losses unless, until, and only to the extent that, the Indemnified Losses exceed
$25,000.00.
(b) The maximum liability of Sellers and the ▇▇▇▇ Shareholders in the
aggregate under this Agreement for a breach of the representations and
warranties contained in ARTICLE 3 shall be limited to the Preliminary Purchase
Price, as adjusted pursuant to SECTION 1.12.
6. MISCELLANEOUS
-------------
6.1. NOTICES. All notices and other communications required or
-------
permitted to be given or made hereunder shall be in writing and delivered
personally or sent by pre-paid, first class certified or registered mail, return
receipt requested, or by facsimile transmission, to the intended recipient
thereof at its address or facsimile number set out below. Any such notice or
communication shall be deemed to have been duly given immediately (if given or
made in person or by facsimile confirmed by mailing a copy thereof to the
recipient in accordance with this SECTION 6.1 on the date of such facsimile), or
three days after mailing (if given or made by mail), and in proving same it
shall be sufficient to show that the envelope containing the same was delivered
to the delivery or postal service and duly addressed, or that receipt of a
facsimile was confirmed by mailing as provided above. The addresses and
facsimile numbers of the parties for purposes of this Agreement are:
(i) If to Purchaser: Pameco Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to: ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP
Suite 2800
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
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(ii) If to the Sellers/: ▇▇▇▇ Refrigeration, Inc.
▇▇▇▇ Shareholders ▇▇▇▇ Refrigeration of Hialeah, Inc.
▇▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to: ▇▇▇▇▇▇ & ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
(b) Any party may change the address(es) or facsimile number(s) to
which notices or other communications to such party shall be delivered, mailed
or transmitted by giving notice thereof to the other parties hereto in the
manner provided herein.
6.2. COUNTERPARTS. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument.
6.3. GOVERNING LAW. The validity and effect of this Agreement
-------------
shall be governed by and construed and enforced in accordance with the laws of
the State of Georgia, without regard to its conflicts of laws rules.
6.4. SUCCESSORS AND ASSIGNS AND SUBSTITUTE PURCHASER. This
-----------------------------------------------
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and permitted assigns. Sellers and the
▇▇▇▇ Shareholders may not assign, delegate or otherwise transfer any of their
respective rights or obligations under this Agreement without the prior written
consent of Purchaser. This Agreement may be assigned by Purchaser to any
Affiliate of Purchaser, but no such assignment shall relieve Purchaser of its
obligations hereunder.
6.5. PARTIAL INVALIDITY AND SEVERABILITY. All rights and
-----------------------------------
restrictions contained herein may be exercised and shall be applicable and
binding only to the extent that they do not violate any Law and are intended to
be limited to the extent necessary to render this Agreement legal, valid and
enforceable. If any term of this Agreement, or part thereof, not essential to
the commercial purpose of this Agreement is held to be illegal, invalid or
unenforceable by a Tribunal of competent jurisdiction, then the remaining terms
hereof, or part thereof, shall constitute the agreement of the parties with
respect to the subject matter hereof and all such
-24-
remaining terms, or parts thereof, shall remain in full force and effect. To the
extent legally permissible, any illegal, invalid or unenforceable provision of
this Agreement shall be replaced by a valid provision which will implement the
commercial purpose of the illegal, invalid or unenforceable provision.
6.6. WAIVER. Any term or condition of this Agreement may be waived
------
at any time by the party which is entitled to the benefit thereof, but only if
such waiver is evidenced by a writing expressly referring to this Agreement and
signed by such party. No failure on the part of any party hereto to exercise,
and no delay in exercising any right, power or remedy created hereunder, shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power or remedy by such party preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. No waiver by any
party hereto of any breach of or default in any term or condition of this
Agreement shall constitute a waiver of or assent to any succeeding breach of or
default in the same or any other term or condition hereof.
6.7. CONSTRUCTION. As used herein, unless the context otherwise
------------
requires: (i) references to "Article" or "Section" are to an article or section
hereof; (ii) references to "Exhibits" and "Schedules" are to Exhibits and
Schedules attached hereto, which are incorporated herein by reference and made a
part hereof; (iii) "include", "includes" and "including" are deemed to be
followed by "without limitation" whether or not they are in fact followed by
such words or words of like import; (iv) the headings of the various articles,
sections and other subdivisions hereof are for convenience of reference only and
shall not modify, define or limit any of the terms or provisions hereof; (v) the
use of the singular form herein shall include the plural, the use of the plural
shall include the singular, and the use of any gender shall include all genders,
and (vi) references to "Sellers" or "the ▇▇▇▇ Shareholders" (or to "either
Seller" or "any Saez Shareholder") are deemed to apply to them both individually
and collectively.
6.8. INTERPRETATION. The parties are equally responsible for the
--------------
content of this Agreement. In any Action which involves the interpretation of
an alleged ambiguity, the language herein shall not be more strictly construed
against one party (as the drafter) than the other.
6.9. ENTIRE AGREEMENT. This Agreement supersedes all prior
----------------
discussions and agreements between the parties with respect to the subject
matter hereof, and this Agreement (together with the Exhibits and Schedules
hereto) contains the sole and entire agreement between the parties with respect
to the matters covered hereby. This Agreement shall not be altered or amended
except by an instrument in writing signed by or on behalf of the party entitled
to the benefit of the provision against whom enforcement is sought.
6.10. DISPUTE RESOLUTION. (a) Any and all disputes arising out of
------------------
or in connection with the negotiation, execution, interpretation, performance or
nonperformance of this Agreement and the transactions contemplated herein (other
than the payment of monies) shall be solely and finally settled by arbitration
which shall be conducted in Atlanta, Georgia, in
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accordance with the Rules for Non-Administered Arbitration of Business Disputes
(the "RULES") as promulgated from time to time by the CPR Institute for Dispute
Resolution in New York, New York (the "CPR"), by a panel of three arbitrators
selected by the CPR in accordance with the Rules (the "ARBITRATORS"). The
Arbitrators shall be lawyers experienced in corporate acquisition transactions
and shall not have been employed by or affiliated with any of the parties or
their Affiliates. The parties hereby renounce all recourse to litigation and
agree that the award of the Arbitrators shall be final and subject to no
judicial review. The Arbitrators shall decide the issues submitted to them, in
writing, and in accordance with: (i) the provisions and commercial purposes of
this Agreement; and (ii) the laws of the State of Georgia (without regard to its
conflicts of laws rules).
(b) The parties agree to facilitate the arbitration by: (i) making
available to one another and to the Arbitrators for examination, inspection and
extraction all documents, books, records and personnel under their control if
determined by the Arbitrators to be relevant to the dispute; (ii) conducting
arbitration hearings to the greatest extent possible on successive days; and
(iii) observing strictly the time periods established by the Rules or by the
Arbitrators for submission of evidence or briefs.
(c) Judgment on the award of the Arbitrators may be entered in any
court having jurisdiction over the party against which enforcement of the award
is being sought. The Arbitrators shall divide all costs (other than fees of
counsel) incurred in conducting the arbitration in their final award in
accordance with what they deem just and equitable under the circumstances.
7. DEFINITIONS
-----------
For purposes of this Agreement, the following terms have the meanings
specified in this ARTICLE 7. All accounting terms not specifically defined
herein shall be construed in accordance with GAAP.
"ACTION" means any action, suit, litigation, complaint, counterclaim,
claim, petition, investigation, mediation contest, set-off or administrative
proceeding, whether at law, in equity, in arbitration or otherwise, and whether
conducted by or before any Government, any Tribunal or any other Person.
"AFFILIATE" of any Person means any other Person directly or
indirectly controlling, controlled by, or under direct or indirect common
control with the former person, where "control" means the power, directly or
indirectly, to direct or cause the direction of the management and policies of
another Person, whether through the ownership of voting securities, by contract
or otherwise.
"ENVIRONMENTAL LAW" means a Law relating to health, safety or the
environment, including, without limitation, a Law relating to the manufacture,
generation, processing,
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distribution, application, use, treatment, transport or handling, storage
(whether alone or below ground) of, or emissions, discharges, releases or
threatened releases into the environment (including ambient air, surface water,
ground water, soil and subsoil) of, pollutants, contaminants, petroleum
products, chemicals, or industrial waste, Hazardous Materials, other solids,
liquids, gases or wastes (including Solid Waste), heat, light, noise, radiation,
electro-magnetic fields and other forms of matter or energy of every kind and
nature and the proper containment and disposal of the same, or to occupational
or worker safety and health.
"ENVIRONMENTAL PERMITS" means all permits, licenses, certificates,
approvals, authorizations, regulatory plans and compliance schedules required by
applicable Environmental Laws, or issued by a Government pursuant to applicable
Environmental Law, or entered into by agreement of the party to be bound,
relating to activities that affect health, safety or the environment, including
without limitation, permits, licenses, certificates, approvals, authorizations,
regulatory plans and compliance schedules for air emissions, water discharges,
pesticide and herbicide or other agricultural chemical storage, use or
application, and Hazardous Material or Solid Waste generation, use, storage,
treatment and disposal.
"GAAP" means generally accepted accounting principles, consistently
applied.
"GOVERNMENT" means any federal, national, state, provincial, local,
municipal, or foreign government or any department, commission, board, bureau,
agency, instrumentality, unit, or taxing authority thereof.
"HAZARDOUS MATERIAL" means any substance or material, including,
without limitation, any raw material, commercial product, waste or waste product
that, because of its quantity, concentration, or physical, chemical or
infectious characteristics may cause or significantly contribute to an increase
in mortality or an increase in serious, irreversible or incapacitating illness,
or pose a substantial hazard to human health or the environment, including
without limitation all substances and materials designated as hazardous or toxic
under any applicable Environmental Law and including, without limitation,
gasoline, fuel oil and other petroleum products.
"IMPROVEMENTS" means all buildings, structures and other improvements
of any and every nature located on the Leased Real Property and all fixtures
attached or affixed, actually or constructively, to the Leased Real Property or
to any such buildings, structures or other improvements.
"KNOWN," "TO THE KNOWLEDGE OF," "AWARE" or words of similar import
employed in this Agreement with reference to any individual or entity shall be
conclusively presumed to mean that the individual or entity has made reasonable
and diligent efforts under the circumstances to become knowledgeable; in the
case of each Seller, "knowledge" shall be deemed to be the individual and
collective knowledge (as defined above) of its directors and senior officers and
managers, and the "knowledge" of either Seller shall be deemed the
-27-
"knowledge" of both; the knowledge of the ▇▇▇▇ Shareholders shall be deemed to
be their individual and collective knowledge (as defined above). Notwithstanding
the foregoing, for purposes of SECTIONS 3.13 AND 3.16(A) only, "known," "to the
knowledge of," "aware" and any words of similar import shall mean actual
knowledge without any obligation to investigate.
"LAWS" mean all federal, national, international, state, provincial,
local, municipal or foreign constitutions, statutes, rules, regulations,
ordinances, acts, codes, legislation, treaties, conventions, judicial decisions,
common law, equity or similar laws or legal requirements as in effect from time
to time.
"LEASED REAL PROPERTY" means all leasehold and similar interests in
real property leased from third parties by either Seller, and all of Sellers'
rights, title and interest in and to all Improvements thereon, together with all
easements, rights of way, licenses and other interests therein.
"LIABILITY" means any liability or obligation whether known or
unknown, asserted or unasserted, absolute or contingent, accrued or unaccrued,
liquidated or unliquidated and whether due or to become due.
"LIEN" means any mortgage, pledge, hypothecation, security interest,
encumbrance, claim, restriction on use, lien or charge of any kind, or any
rights of others, however evidenced or created (including any agreement to give
any of the foregoing, any conditional sale or other title retention agreement,
any lease in the nature thereof, and the filing of or agreement to give any
financing statement under the lien notice records, Uniform Commercial Code
indices or other similar public records of any jurisdiction.
"ORDERS" means any order, writ, judgment, decree, ruling, citation,
summons, directive, consent agreement, or award of or by any Tribunal or entered
by consent of the party to be bound.
"PERSON" means an individual, partnership, joint venture, corporation,
limited liability company, trust, unincorporated organization, or Government.
"TAXES" means any present or future taxes, levies, imposts, duties,
fees, assessments, deductions, withholdings or other charges of whatever nature,
including without limitation income, gross receipts, excise, property, sales,
use, customs, value added, consumption, transfer, license, payroll, employee
income, withholding, social security, and franchise taxes, now or hereafter
imposed or levied by the United States of America, any state, or any Government
or by any department, agency or other political subdivision or taxing authority
thereof or therein, all deposits required in connection therewith, and all
interests, penalties, additions to tax, and other similar liabilities with
respect thereto.
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"TERRITORY" means the State of Florida and the countries identified on
SCHEDULE F attached hereto.
"TRIBUNAL" means any federal, national, state, local, municipal or
foreign court, governmental agency, administrative body or agency, tribunal,
private alternative dispute resolution system, or arbitration panel.
[Remainder of Page Intentionally Blank]
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IN WITNESS WHEREOF, the parties have executed this Agreement or caused
it to be executed by their duly authorized officers and agents as of the day and
year first above written. Signatures of the parties transmitted by facsimile
shall be valid and binding for all purposes.
PURCHASER: PAMECO CORPORATION
(CORPORATE SEAL) By:
-----------------------------
Name:
-----------------------
Title:
----------------------
SELLERS: ▇▇▇▇ REFRIGERATION, INC.
(CORPORATE SEAL) By:
-----------------------------
Name:
-----------------------
Title:
----------------------
▇▇▇▇ REFRIGERATION OF HIALEAH, INC.
(CORPORATE SEAL) By:
-----------------------------
Name:
-----------------------
Title:
----------------------
▇▇▇▇
SHAREHOLDERS: --------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------
▇▇▇▇▇ ▇▇▇▇
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