AGREEMENT OF SALE
For
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Between
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▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, NOW KNOWN AS ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
TRUSTEE UNDER WILL OF
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, DECEASED
as Seller
and
PENN ENGINEERING AND MANUFACTURING CORP.
as Buyer
AGREEMENT OF SALE
This AGREEMENT OF SALE (this "Agreement") is dated as of the 30th day of
September, 1999 (The "Delivery Date") by and among ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇ ▇.
▇▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇, now known as
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Trustee under the Will of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Deceased, each an
adult individual, (collectively, the "Seller"), and Penn Engineering and
Manufacturing Corp., a Delaware corporation, (the "Buyer").
1. PURCHASE AND SALE; PROPERTY
a. Purchase and Sale.
Seller shall sell and convey to Buyer, and Buyer shall purchase and accept
from Seller, the Property (hereafter defined) for the Purchase Price (hereafter
defined) on and subject to the terms and conditions of this Agreement.
b. Property.
The Property consists of all of the following:
i. All that certain tract or parcel of land containing approximately
2.15 acres having an address of ▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, as more particularly described by metes and bounds on Exhibit
(I)(B)(1) (the "Land");
ii. All improvements erected on, over and beneath the Land including,
without limitation, the one story building located on the Land containing
approximately 30,600 square feet (the "Building");
iii. All easements, rights-of-way or use, privileges, licenses,
hereditaments, appurtenances, interests and other rights belonging to or
inuring to the benefit of the Land and all right, title and interest of
Seller, if any, in and to any land lying in the bed of any highway, street,
road or avenue, opened or proposed, in front or abutting or adjoining the
Land (the items mentioned in subsections (1), (2) and (3) being sometimes
referred to as the "Real Property");
iv. All tangible personal property owned by Seller and located in or
on, attached or appurtenant to, or used in connection with the ownership,
financing, operation and maintenance of the Real Property, including,
without limitation, all furniture, furnishings, carpeting, draperies,
fixtures and equipment, all building systems (including the heating, air
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conditioning, ventilating, electrical, plumbing, sprinkling, security, and
telecommunication systems), ranges, refrigerators, building supplies,
maintenance equipment (including spare parts, tools, lawnmowers and
snowblowers), signs and landscaping; and
v. All intangible personal property owned by Seller and used in
connection with the ownership, financing, operation, and maintenance of the
Real Property including, without limitation, all right, title and interest
of the Seller in and to:
(1) all contract rights, escrow accounts, deposits, instruments,
documents of title, general intangibles, and business records
pertaining to the Real Property (except for documents of a proprietary
nature);
(2) the contracts affecting the Real Property set forth in
Exhibit (I)(B)(5)(c) (the "Service Contracts"); and
(3) the licenses and permits applicable to the Property as set
forth in Exhibit (I)(B)(5)(c) (the "Permits") (the items mentioned in
subsections 4 and 5 being sometimes collectively referred to as the
"Personal Property").
2. PURCHASE PRICE
a. Purchase Price.
The total purchase price for the Property (the "Purchase Price") shall be
Two Million Two Hundred Thousand ($2,200,000.00) DOLLARS which shall be paid by
Buyer to Seller on the Closing Date in cash, by wire transfer of immediately
available funds to a single account designated by Seller's written notice to
Buyer and Escrow Agent (hereafter defined) not less than two (2) business days
prior to the Closing Date, or by bank certified, treasurer's or cashier's check
or plain check of the Escrow Agent subject to adjustments as provided in this
Agreement.
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b. Allocation of the Purchase Price.
i. The Purchase Price shall be allocated as follows:
Land $ 682,000.00
Buildings, Improvements and
Personal Property
(Section 1250 and 1245 Property
as defined in the Internal Revenue Code) $1,518,000.00
Total $2,200,000.00
ii. To the extent that the Purchase Price is at variance from the
Total stated above, each of the categories comprising the allocation of the
Purchase Price shall be adjusted proportionately.
iii. Buyer and Seller acknowledge that in arriving at the above
allocation, they took into account the respective fair market values of the
properties and that such allocation shall be used for all purposes
including, but not limited to federal income tax, realty transfer tax, and
financial reporting services.
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3. CLOSING; CONDITIONS PRECEDENT TO CLOSING
a. Closing.
Closing (the "Closing") under this Agreement shall take place on the date
(the "Closing Date") on which closing is effectuated under that certain Stock
Purchase Agreement dated as of the date of this Agreement among Seller, Buyer
and ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ (the "Stock Purchase Agreement"). Closing procedures
shall be handled through the escrow offices of Chicago Title Insurance Company
("Escrow Agent").
b. Condition of Title.
1. Buyer shall obtain a Preliminary title Report from Chicago Title
Insurance Company ("Title Company") for its review and approval. If Buyer is not
satisfied with the exceptions shown on the Preliminary Title Report or if Buyer
is not able to arrange for the Title Company to satisfy Buyer's title insurance
requirements, then Buyer may deliver written notice to Seller prior to the date
which is thirty (30) days after the Delivery Date that Buyer disapproves a title
matter and elects to terminate the Agreement.
2. Notwithstanding the Foregoing, title to the Real Property at the Closing
shall be good and marketable and free and clear of all liens, security
interests, leases, title-retention agreements and other encumbrances (excepting
only those encumbrances, if any, which Buyer has agreed to accept as Permitted
Exceptions under this Agreement).
3. The following items are agreed to be "Permitted Exceptions":
a. The printed exclusions from coverage appearing in the standard form
of ALTA Owner's Title Policy (Form B, amended 10-17-70) (provided that this
exception is for insurability purposes only) and provided that there shall
be deleted therefrom any exception for possible unfiled mechanics' liens or
claims for labor or material furnished at or prior to Closing upon Seller's
certification or, in the event that Seller is unable to certify to the
Title Company that no building, construction, alterations, additions or
repairs have been made to the Property within the four (4) month period
preceding the Closing Date, then the exception for mechanics' liens shall
be insured over by affirmative coverage, Seller to pay any special premiums
for mechanics' lien coverage charged because of Seller's failure to make
such certification;
b. Subsurface public utility easements for local distribution, such as
for gas, water and sewer lines or electric, telephone or CATV cable, the
location of which is
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ascertainable and fixed, provided that the exercise of the rights thereunder
does not and will not interfere with the use of any present or potential future
improvements on the Property;
c. Surface public utility easements for local distribution along one
or more of the property lines and extending not more than ten (10) feet
therefrom, the location of which is ascertainable and fixed, providing that
the exercise of the rights thereunder does not and will not interfere with
the use of any present or potential future improvements on the Property or
the use of that part of the Property outside of the easements and not
occupied by improvements; and
d. Current real property taxes not yet due and payable.
C. Inspection Contingency.
1. Within thirty (30) days after the Delivery Date, Buyer shall have
received a favorable report or reports of the physical inspection of the
Property (collectively the "Inspection Reports") by the engineer, inspector,
architect, surveyor, environmental testing company, or other inspection company
selected and paid for by Buyer.
2. If Buyer is dissatisfied for any reason with the condition of the
Property as disclosed in the Inspection Reports described in (1) above on the
Preliminary Title Report, Buyer shall have the right to terminate this Agreement
by delivering written notice of termination to Seller and Escrow Agent prior to
the expiration of such 30 day period, in which case this Agreement shall be
terminated.
D. Other Conditions.
Buyer's obligation to close under this Agreement is also subject to the
following conditions (any one or more of which may be waived in writing in whole
or in part by Buyer at Buyer's option):
1. Seller shall have performed, observed and complied with all
covenants, agreements and conditions required by this Agreement to be
performed, observed and complied with on its part prior to or at Closing.
2. All instruments and documents required on the part of Seller to be
delivered under this Agreement shall have been delivered to Buyer and shall
be in form reasonably satisfactory to Buyer and Buyer's counsel.
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3. All representations and warranties by Seller set forth in this
Agreement shall be true and correct at and as of Closing in all respects as
though such representations and warranties were made at and as of the
Closing.
4. No representation, statement or warranty by Seller contained in
this Agreement or in any Exhibit attached to this Agreement contains or
will contain any untrue statement or omits or will omit a material fact
necessary to make the statement of fact therein recited not misleading.
5. Closing of the transactions contemplated by the Stock Purchase
Agreement shall occur concurrently with the Closing hereunder pursuant to
the terms and conditions of the Stock Purchase Agreement.
E. Failure of Condition.
In the event that all of the conditions set forth in this Article III above
are not satisfied on or before the Closing Date, then, upon termination of this
Agreement as provided above, this Agreement shall become null and void and
neither party shall have any further liabilities or obligations under this
Agreement.
IV. REPRESENTATIONS AND WARRANTIES
A. Capacity/Organization.
1. Seller warrants and represents that each individual Seller is at least
eighteen (18) years of age.
2. Buyer warrants and represents that Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has the requisite power and authority to enter into and consummate
the transaction contemplated by this Agreement.
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B. Authorization.
1. Seller warrants and represents that all actions of Seller and other
authorizations necessary or appropriate for the execution and delivery of and
compliance with this Agreement have been taken or obtained and, upon their
execution, this Agreement and the other documents and instruments contemplated
by this Agreement, shall constitute the valid and legally binding obligations of
Seller, enforceable against Seller in accordance with their respective terms.
2. Buyer warrants and represents that the persons executing this Agreement
on behalf of Buyer are authorized to bind the Buyer. All actions of Buyer and
other authorizations necessary or appropriate for the execution and delivery of
and compliance with this Agreement have been taken or obtained and, upon their
execution, this Agreement and the other documents and instruments contemplated
by this Agreement, shall constitute the valid and legally binding obligations of
Buyer, enforceable against Buyer in accordance with their respective terms.
C. Required Consents.
1. Seller warrants and represents that no consent, approval or other
authorization of or by any court, administrative agency or other governmental or
quasi-governmental authority is required in connection with Seller's execution
and delivery of or compliance with this Agreement or any other document or
instrument relating to this Agreement, executed, or to be executed by Seller.
2. Buyer warrants and represents that no consent, approval, or other
authorization of or by any court, administrative agency or other governmental or
quasi-governmental authority is required in connection with Buyer's execution
and delivery of or compliance with this Agreement or any other document or
instrument relating to this Agreement executed, or to be executed, by Buyer.
D. No Conflict.
1. Seller warrants and represents that the execution and delivery of this
Agreement, the consummation of the purchase and sale contemplated by this
Agreement, and Seller's compliance with the terms and conditions of this
Agreement will not conflict with, or result in a breach of any mortgage, lease,
agreement, or other instrument, or any applicable law, judgment, order, writ,
injunction, decree, rule or regulation of any court, administrative agency or
other governmental authority to which Seller is a party or by which Seller or
Seller's properties is bound.
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2. Buyer warrants and represents that the execution and delivery of this
Agreement, the consummation of the purchase and sale contemplated by this
Agreement, and Buyer's compliance with the terms and conditions of this
Agreement will not conflict with, or result in a breach of (i) the terms,
conditions or provisions of the Articles of Incorporation or ByLaws of Buyer or
(ii) any mortgage, lease, agreement, or other instrument, or any applicable law,
judgment, order, writ, injunction, decree, rule or regulation of any court,
administrative agency or other governmental authority to which Buyer is a party
or by which Buyer or Buyer's properties is bound.
E. Zoning and Regulatory Compliance.
Seller warrants and represents that Seller has received no notice from any
governmental authority of any violation of any federal, state or local law,
regulation or ordinance regarding any portion of the Property which remains
uncured. Seller shall cure, prior to Closing, or as soon thereafter as
reasonably practicable, any violation of which Seller receives written notice
from any governmental agency prior to the Closing or which results from any
inspection of the Property which occurs prior to Closing.
F. Service Contracts.
Seller warrants and represents that:
1. The Schedule of Service Contracts attached as Exhibit (I)(B)(5)(b) is
true, correct and complete;
2. Seller has delivered to Buyer true, correct and complete copies of all
Service Contracts affecting the Property;
3. There are no management, service, equipment, supply, maintenance or
concession contracts or agreements with respect to or affecting the Property
except as set forth in the Schedule of Service Contracts;
4. Neither Seller nor any person on behalf of Seller has received or given
any notice of cancellation or termination of any Service Contract; and
5. Seller is not in default under the terms of any Service Contract nor has
any event occurred which, but for the giving of notice or passage of time would
constitute an Event of Default under any of the Service Contracts.
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G. Insurance.
Seller warrants and represents that:
1. No notice has been received by Seller from any insurance company
providing insurance coverage for the Property that policies insuring the
Property will not be renewed or will be renewed at a higher premium than is
presently payable for such policy.
2. No notice has been received by Seller from, or issued by, any insurance
company which has issued a policy with respect to the Property or from any board
of fire underwriters (or any other body exercising similar functions) claiming
any defects or deficiencies or requesting the performance of any repairs,
alterations or other work.
3. The Property is not located within a "flood plain area" as defined by
the Federal Insurance Administration pursuant to the Federal Flood Disaster
Protection Act of 1973, as amended.
4. No notice has been received to the effect that any portion of the
Property has been subjected to damage by fire or other casualty which damage is
unrepaired as of the Delivery Date and, to the best of Seller's knowledge, no
portion of the Property has any unrepaired fire damage.
H. Litigation.
Seller warrants and represents that there is no action, suit or proceeding
pending or, to the knowledge of Seller, threatened against or affecting the
Property or related to or arising from the ownership, management or operation of
the Property in any court or before or by any federal, state or local
departments, commission, board, bureau or agency or other governmental
instrumentality. There are no outstanding decrees, orders, awards or specific
administrative determinations relating to the Property or Seller's ownership,
management or operation of the Property.
I. Public Improvements.
Seller warrants and represents to Buyer that:
1. Except for the assessments listed on Exhibit (IV)(J)(1), no assessment
for public improvements has been made with respect to the Property which remains
unpaid including, but not limited to, assessments for construction of sewer or
water lines or mains, streets, sidewalks and curbing. No notice or order by any
governmental agency or authority has been served upon Seller which (i) requires
the performance of any work or the making of any repairs or
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alterations on the Property or in the streets bounding thereon or (ii) orders
the installation, repair or alteration of any public improvements on or about
the Property or the streets bounding thereon which may or might create a lien on
the Property.
2. Provided that Closing occurs under this Agreement, Buyer will be
responsible for and shall comply with the requirements of all notices of
assessment for public improvements issued after the Delivery Date and Seller
will be responsible for and shall comply with the requirements of all notices of
assessment for public improvements issued on or before the Delivery Date.
3. The Building located on the Property is connected to public water and
sewer lines in sufficient capacity to service the Building for its present use.
4. There are no outstanding charges or fees in connection with the use,
installation, connection or tap-in to any utilities, public or private, serving
the Property.
5. All public improvements required to be constructed in connection with
the approval of the development plan of the Property have been installed and
dedication to the applicable governmental authority has been completed.
J. Condemnation.
Seller warrants and represents that Seller has not received any notice of
any condemnation proceedings or other proceeding in the nature of eminent domain
with respect to the Property and, to the best of Seller's knowledge, no such
proceedings are threatened.
K. Condition of Property.
Seller warrants and represents that, to the best of Seller's knowledge the
Property has not been used at any time during or prior to Seller's ownership
thereof, for the disposal of any industrial refuse or waste or for the
processing, manufacture, storage, handling, treatment or disposal of any
hazardous or toxic substance or material. No asbestos containing materials have
been installed or used on the Property at any time during or, to the best of
Seller's knowledge, prior to Seller's ownership of the Property. To the best of
Seller's knowledge, no machinery, equipment or fixtures containing
polychlorinated biphenyls (PCBs) have been located on the Property at any time
during, or, prior to, Seller's ownership of the Property. To the best of
Seller's knowledge, no storage tanks for gasoline or any other substance have
been located on the Property at any time during or, prior to, Seller's ownership
of the Property. To the best of Seller's knowledge, no toxic or hazardous
substances or materials have been located on the Property during, or prior to,
Seller's ownership of the Property, which substances or materials, if found on
the Property, would subject the owner or occupant of the Property to damages,
penalties,
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liabilities or an obligation to remove such substances or materials under any
applicable federal, state or local law, regulation or ordinance, and no notice
from any governmental body has ever been served upon Seller, its agents or
employees or, any prior owner of the Property, claiming any violation of any
federal, state or local law, regulation or ordinance concerning the
environmental state, condition, or quality of the Property, or requiring or
calling attention to the need for any work, repair, construction alteration,
demolition, renovation or installation on or in connection with the Property in
order to comply with any law, regulation or ordinance concerning the
environmental state, condition or quality of the Property.
L. Brokers.
1. Seller and Buyer each warrant and represent to the other that such party
has made no agreement and has had no dealings, negotiations or communications
with any brokers, finders or other intermediaries, nor has such party taken any
action which may cause anyone to become entitled to a commission as a result of
the purchase and sale contemplated by this Agreement. Seller shall pay any
commission due to the Broker pursuant to a separate agreement with the Broker.
2. Buyer and Seller each will indemnify, defend and hold the other harmless
from any and all claims, actual or threatened, for compensation by reason of
such party's breach of its representation, warranty or obligation contained in
this section. This provision shall survive Closing and any termination of this
Agreement.
M. Reliance; "As-Is" Sale.
Except for the specific representations of Seller contained in this
Agreement and in the Stock Purchase Agreement, Buyer agrees that (a) neither
Seller nor anyone purporting to act for Seller has made any representations or
warranties, express or implied, concerning zoning regulations or other
governmental requirements, site or physical conditions, the conditions of or any
matters relating to the improvements on the Property, soil or geologic
conditions, hazardous materials, matters affecting use or occupancy, the
condition or use of the Property or compliance of the Property with any or all
past, present or future Federal, State or local ordinances, rules, regulations
or laws, building code or fire or zoning ordinances, prospects for future
development, economic feasibility, leasing, financing or refinancing, title
matters, marketability or any other matter concerning the Property; (b) Buyer
shall rely solely on Buyer's examination, investigation and audit; and (c) Buyer
is purchasing the Property in its "as is" and "where is" condition, with all
faults. Buyer acknowledges that it has or will complete all physical and
financial examinations relating to the acquisition of the Property and will
acquire the same solely on the basis of such examinations, together with the
specific representations of the Seller contained herein and in the Stock
Purchase Agreement.
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V. RIGHTS AND DUTIES PENDING CLOSING
Between the Delivery Date and the Closing Date:
A. Operation and Management.
1. Seller shall continue to operate and manage the Property in the
ordinary course of business and in the same manner as operated and managed
to date, with no obligation to make any extraordinary capital improvements.
2. Seller shall perform such necessary repairs and replacements of the
Property so that on the Closing Date the Property shall be in substantially
the same condition, reasonable wear and tear excepted, as on the Delivery
Date, with no obligation to make any extraordinary capital improvements.
3. Seller shall not remove any Personal Property from the Property.
4. Seller shall maintain all existing fire and extended coverage
insurance on the Property.
B. Service Contracts.
Seller may not, without the prior written approval of Buyer:
1. renew or extend any Service Contract expiring prior to Closing;
2. modify the terms of any Service Contract affecting the Property;
3. accede to any termination of any Service Contract not permitted
under the terms of the Service Contract; or
4. enter into any contract or commitment with respect to the Property
that will survive Closing or otherwise affect the use, development or
operation of the Property after the Closing.
C. No Transfer.
Seller shall not, without the prior written approval of Buyer, sell,
assign, transfer, alienate, lien or encumber Seller's interest in the Property.
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D. Satisfaction of Conditions.
Buyer shall promptly, diligently and in good faith take all action
reasonably necessary to bring about the satisfaction of the Conditions Precedent
to Closing described in Article III of this Agreement.
E. Entry for Inspections.
1. Seller shall permit Buyer and Buyer's authorized representatives to
inspect all areas of the Property (including occupied spaces) for the purpose of
conducting the inspections described in Section (III)(C). In addition, Seller
shall permit any of Buyer's prospective lenders and appraisers and other
professionals engaged by such lenders to inspect all areas of the Property.
2. Seller shall permit Buyer's accountants to examine (during regular
business hours) Seller's business and financial records pertaining to the
ownership, operation, leasing and management of the Property. Seller shall
provide Buyer with all available information pertaining to expenditures made on
repairs, maintenance, upkeep and operation of the Property, including all taxes
and utility payments for the three (3) years immediately preceding Closing and
dates of construction, installation and major repairs to the Property.
3. Buyer shall notify Seller, in writing, of its intention or of the
intention of its agents or representatives, to enter the Property at least 24
hours prior to such intended entry, and Buyer shall obtain Seller's prior
written consent to any tests to be conducted. Buyer shall bear the cost of all
inspections and tests. At Seller's option, Seller or its representatives may be
present for any inspection or test. In conducting any inspections,
investigations or tests of the Property, Buyer and its agents and
representatives has and/or shall: (i) not contact any tenant without Seller's
prior written consent or disturb the tenants or interfere with their use of the
Property pursuant to their respective leases; (ii) not interfere with the
operation and maintenance of the Property; (iii) not damage any part of the
Property or any personal property; (iv) promptly pay when due the costs of all
tests, investigations and examinations done with regard to the Property; (v) not
permit any liens to attach to the Property by reason of the exercise of its
rights hereunder. Buyer shall indemnify, protect, defend and hold the Property
and Seller harmless from and against any and all liens, claims, causes of
action, damages, liabilities and expenses (including reasonable attorneys' fees)
arising of out Buyer's inspections or tests of the Property. Buyer's obligations
pursuant to this Section shall survive Closing. Notwithstanding any provision of
this Agreement, no termination hereof shall terminate Buyer's obligations
pursuant to this paragraph.
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F. Notices.
Seller shall give Buyer prompt written notice of:
1. any notice received by Seller of a proposed taking of any part of
the Property by eminent domain;
2. any notice received by Seller of a proposed increase in real estate
tax assessments or market valuation of any part of the Property;
3. any notice received by Seller from any governmental agency or
authority or insurance company or underwriting agency pertaining to
noncompliance with any law, regulation or insurance requirement;
4. any notice of the commencement of any legal or equitable claim or
proceeding with respect to the Property;
5. any notice received in regard to the Service Contracts; and
6. any notice of violation, suspension or non-renewal of any of the
Licenses or Permits.
VI. RISK OF LOSS; CONDEMNATION
A. Loss by Fire or Other Casualty.
1. If prior to the Closing, the Property, or any part thereof, shall
be damaged by fire or other casualty, Seller shall notify Buyer promptly
thereof.
2. If the fire or other casualty damages the Property so that the cost
of repair shall reasonably be estimated to exceed $100,000.00, Buyer shall
have the option to
a. consummate this transaction without any abatement of the
Purchase Price whatsoever, in which event
(1) at the Closing, all of the insurance proceeds payable as
a result of such damage shall belong (and, to the extent received
by Seller, shall be paid) to Buyer, or if such proceeds have not
then been received by Seller, such proceeds and all of Seller's
rights thereto shall be assigned by Seller to Buyer;
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(2) Seller shall reimburse Buyer at Closing for the amount
of the deductible under Seller's policies of insurance; and
(3) the Seller shall not settle or compromise any claim for
such insurance proceeds without the Buyer's prior written
consent; or
b. cancel this Agreement, in which event Seller shall cause the
Deposit to be returned to Buyer, and thereupon, neither party shall have
any further liability or obligation under this Agreement.
3. If the fire or other casualty damages the Property so that the estimated
cost of repair and restoration is $100,000.00 or less, Buyer shall not have the
option to cancel this Agreement but shall complete the Closing as provided under
option (2)(a) above. If the loss is uninsured, or the insurance company denies
coverage, Buyer shall receive a credit against the cash portion of the Purchase
Price for the cost of restoration and repair but Buyer shall assign to Seller
all rights against any surety or any other person which the Buyer may have with
respect to such claim.
4. If Buyer accepts title as provided in Subsection (2)(a) or (3) above,
Seller, in accordance with the direction of Buyer, shall make any temporary
repairs or restorations required to preserve or protect the Property, and Buyer
shall reimburse the Seller for the cost thereof at Closing.
B. Condemnation or Eminent Domain.
If, prior to the Closing, all or any portion of the Property shall be taken
by condemnation or eminent domain, this Agreement may be canceled by Buyer, by
notice to Seller, within ten (10) days of the Seller's notice to Buyer of the
taking. If Buyer elects not to terminate, Seller shall be relieved of the duty
to convey title to the portion so taken or condemned, and at the Closing, the
proceeds of any award or payment in respect of any such taking shall belong (and
to the extent received by Seller, shall be paid) to Buyer or, if such proceeds
have not then been received by Seller, such proceeds and all of Seller's rights
thereto, shall be assigned by Seller to Buyer. Any moneys received by Seller
after the Closing in connection with any such taking shall be promptly paid over
to Buyer. In no event shall Seller settle or compromise any claim for such an
award without Buyer's prior written consent. If Buyer shall accept title subject
to any such taking, Seller, in accordance with the directions of Buyer, shall
make any temporary repairs required to preserve or protect the Property, and
Buyer shall reimburse Seller for the cost thereof at the Closing
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VII. CLOSING DOCUMENTS; EXPENSES AND PRORATIONS
A. Seller's Obligations.
At Closing, Seller shall deliver, or cause to be delivered, to Buyer all of
the following:
1. A grant deed for the Real Property, duly executed and acknowledged
by Seller and in form satisfactory to counsel for Buyer;
2. A ▇▇▇▇ of Sale conveying the Personal Property with warranty of
title free and clear of all liens, security interests and encumbrances
other than Permitted Exceptions;
3. Assignment of Contracts, Licenses and Permits;
4. An affidavit, in accordance with the Foreign Investments in Real
Property Tax Act, stating the Seller is not a foreign person within the
meaning of such Act and that Seller is not subject to the withholding
requirements set forth in such Act;
5. Such affidavits or letters of indemnity as the Title Company may
require in order to issue, without extra charge, policies of title
insurance free of any exceptions for unfiled mechanic's or materialmen's
liens;
6. A certificate in form and substance satisfactory to Buyer stating
that Seller's representations and warranties contained in this Agreement
are true and correct as of the Closing Date and any conditions precedent to
Closing required to be performed by Seller have been satisfied;
7. Certified or original counterparts of all Licenses and Permits;
copies of all certificates issued by the local board of fire underwriters;
copies of all plans and specifications for the Building and other
improvements or Property; copies of all manuals, warranties and guaranties
applicable to the Property; all keys to the Property; the access codes to
all security systems on the Property and all books, records,
correspondence, maintenance records and advertising brochures, if any, as
may be reasonably required for the continued operation of the Property; and
8. Such other documents as may be required to be delivered by Seller
by the provisions of this Agreement or as may be reasonably required to
consummate Closing.
16
B. Buyer's Obligations.
At Closing, Buyer shall deliver, or cause to be delivered, to Seller all of
the following:
1. the Purchase Price as required by the provisions of Article II of this
Agreement;
2. A certificate in form and substance satisfactory to Seller stating that
Buyer's representations and warranties contained in this Agreement are true and
correct as of the Closing Date and that the conditions precedent to Closing
required to be performed by Buyer have been satisfied; and
3. Such other documents as may be required by the provisions of this
Agreement or as may be reasonably required to consummate Closing.
C. Apportionments.
The following items shall be apportioned between Seller and Buyer as of the
Closing Date.
1. Real estate taxes assessed against the Property on a per diem basis,
without discount or penalty and on the basis of the fiscal year of the authority
levying same;
2. Water and sewer charges based upon final meter readings obtained by
Seller not earlier than two (2) business days prior to Closing;
3. Electricity, gas and other utility charges based upon final meter
readings obtained by Seller not earlier than two (2) business days prior to
Closing;
4. Payments under those Service Contracts assumed by Buyer at the Closing
as follows:
a. Amounts prepaid by Seller for the current billing period in which
Closing occurs shall be apportioned on a per diem basis.
b. Amounts due as of the Closing Date under Service Contracts shall be
paid by Seller at the Closing.
5. All fees prepaid to state or local governmental authorities for Permits
and Licenses with respect to the Property shall be apportioned as of the
Closing.
17
D. Expenses.
1. All realty transfer taxes imposed by any governmental authority upon the
conveyance of the Property shall be divided equally between Seller and Buyer.
2. Buyer shall pay for all title insurance premiums and all recording fees
for the deed and other documents to be recorded at the Closing (except documents
required to be produced by Seller to remove matters affecting title).
3. Each party shall bear its own counsel fees.
4. Buyer shall pay costs and expenses in connection with obtaining any
financing for the purchase of the Property.
5. Seller shall obtain and pay for a survey of the Property, and the deed
to be delivered under this Agreement shall describe the Property in accordance
with the survey, if any of the following circumstances has occurred:
a. a physical change in the metes and bounds of the Real Property by
subdivision, highway or road changes or improvements on or abounding the
Property;
b. a change in ownership to a portion of the Property which would
render the existing legal description incomplete, incorrect or inadequate
to describe properly the Property to be conveyed under this Agreement; or
c. if the Title Company requires production of a survey in order to
insure Buyer's title.
In any other case, Buyer shall obtain and pay for any survey desired by
Buyer.
VIII. INDEMNIFICATION
A. Indemnification by Seller.
Provided Closing is completed hereunder, Seller shall indemnify and hold
harmless the Buyer against and in respect to any and all claims, losses,
obligations, liabilities, damages, costs and expenses (including reasonable
attorneys' fees and court costs) which Buyer may incur or suffer arising out of,
in connection with or based upon any breach of any of Seller's representations,
warranties or covenants under this Agreement.
18
B. Indemnification by Buyer.
Provided Closing is held hereunder, Buyer shall indemnify, defend and hold
harmless Seller against and in respect of any and all claims, losses,
obligations, liabilities and damages which Seller may incur or suffer from or
after the date of Closing arising out of, in connection with or based upon (a)
the breach of Buyer's representations, warranties or covenants or (b) Buyer's or
Buyer's representatives' access to the Property.
C. Indemnification Procedure.
The party claiming to be entitled to be indemnified under this Article (the
"Indemnitee") shall give written notice to the party by whom the Indemnitee
seeks to be indemnified pursuant to this Article VIII (the "Indemnitor")
promptly after the assertion of any claim or demand and the Indemnitor shall
have the right to elect, but shall not be obligated, to defend, pay or settle
any such claim or demand by notice in writing given to the Indemnitee within
five (5) business days after the Indemnitee's notification to the Indemnitor of
the same. If the Indemnitor shall elect to defend, pay or settle any such claim
or demand thereafter, Indemnitee shall not admit liability for nor settle any
such claim or demand or incur any costs in connection therewith without the
prior written consent of the Indemnitor, which consent shall not be unreasonably
withheld or delayed. Any amount that may become due from an Indemnitor to an
Indemnitee shall be paid by the Indemnitor immediately upon demand.
D. Survival.
This Article VIII shall survive Closing for a period of two (2) years.
IX. DEFAULT; REMEDIES
A. Buyer's Default.
If Buyer breaches any of the terms of this Agreement applicable to Buyer,
then, Seller may pursue any remedies available at law or in equity.
B. Seller's Default.
If Seller breaches any of the terms of this Agreement applicable to it,
then Buyer shall have the right to (i) specifically enforce this Agreement
against Seller, (ii) complete Closing and maintain a claim against Seller for
breach of this Agreement or (iii) terminate this Agreement, in which latter
event, the Deposit and all other monies paid by Buyer on account of the Purchase
Price shall be reimbursed to Buyer and, upon such reimbursement, Buyer and
Seller shall each be
19
released from all liability or obligation under this Agreement, and this
Agreement shall become null and void. If such violation, breach or default is
willful or intentional, Buyer shall have the right to recover all out-of-pocket
costs and expenses Buyer shall have incurred in connection with this
transaction.
X. MISCELLANEOUS
A. Assignability.
This Agreement and the rights and obligations hereunder shall not be
assignable by either party without the written consent of the other except in
the case of an assignment by Buyer to a corporation or partnership controlled by
Buyer or the stockholders of Buyer.
B. Governing Law; Heirs, Successors and Assigns.
This Agreement shall be governed by the laws of the State of California.
This Agreement shall bind and inure to the benefit of the parties hereto and
their respective heirs, successors and assigns.
C. Time of Essence.
All times, wherever specified herein, are of the essence of this Agreement.
D. Headings.
The headings preceding the text of the Sections and Subsections of this
Agreement are inserted solely for convenience of reference and shall not
constitute a part of this Agreement, nor shall they affect the meaning,
construction or effect of this Agreement.
E. Exhibits.
All exhibits which are referred to in this Agreement and which are attached
hereto or bound separately and initialed by the parties are expressly
incorporated into and constitute a part of this Agreement.
F. Survival.
Except as otherwise provided in this Agreement, the provisions of this
Agreement shall survive Closing.
20
G. Entire Agreement; Amendments.
This Agreement sets forth all of the promises, covenants, agreements,
conditions and undertakings between the parties with respect to the subject
matter of this Agreement and supersedes all prior and contemporaneous agreements
and understandings, inducements or conditions, express or implied, oral or
written, except as specifically set forth in this Agreement. This Agreement may
not be changed orally but only by an agreement in writing, duly executed by or
on behalf of the party against whom enforcement of any waiver, change,
modification, consent or discharge is sought.
H. Recording.
This Agreement shall not be recorded in the office for the recording of
deeds or in any other office or place of public record except with the prior
written consent of Seller. If Buyer shall record this Agreement or cause or
permit the same to be recorded other than as expressly permitted above, Seller
may, at Seller's option elect to treat such act as a breach of this Agreement
and, in addition to Seller's other rights and remedies hereunder, Seller shall
have the right to institute appropriate legal proceedings to have the same
removed from record at Buyer's expense.
I. Tender.
Formal tender of an executed deed and Purchase Price is hereby waived but
nothing herein shall be deemed a waiver, concurrently with Closing hereunder, of
the obligation of Seller to execute, acknowledge and deliver a deed for the
Property or the concurrent obligation of Buyer to pay the balance of the
Purchase Price.
J. Severability.
If any provision of this Agreement is found by a court of competent
jurisdiction to be illegal, invalid, or unenforceable, the remainder of this
Agreement will not be affected and in lieu of each provision which is found to
be illegal, invalid or unenforceable, there will be added as a part of this
Agreement a provision as similar to such illegal, invalid or unenforceable
provision as may be possible and be legal, valid and enforceable.
K. Construction.
This Agreement has been prepared by Buyer and its professional advisors and
reviewed by Seller and its professional advisors. Seller, Buyer and their
separate advisors believe that this Agreement is the product of all of their
efforts, that it expresses their agreement and that
21
it should not be interpreted in favor of either Seller or Buyer or against
either Seller or Buyer merely because of their efforts in preparing it.
L. Attorneys' Fees.
If Seller and Buyer litigate any provision of this Agreement or the subject
matter of this Agreement, the unsuccessful litigant will pay to the successful
litigant all costs and expenses, including reasonable attorneys' fees and court
costs, incurred by the successful litigant at trial and on any appeal. If,
without fault, either Seller or Buyer is made a party to any litigation
instituted by or against the other, the other will indemnify the faultless one
against all loss, liability and expense, including reasonable attorneys' fees
and court costs, incurred by it in connection with such litigation.
M. Waiver of Jury Trial.
Seller and Buyer waive trial by jury in any action, proceeding or
counterclaim brought by either of them against the other on all matters arising
out of this Agreement or the use and occupancy of the Property.
N. Notices.
Any notice, request, demand, consent, approval or other communication
required or permitted under this Agreement will be written and will be deemed to
have been given (a) when personally delivered; or (b) on the next following day
after it is delivered to any nationally recognized express delivery service; or
(c) on the second day after it is deposited in any depository regularly
maintained by the United States postal service, postage prepaid, certified or
registered mail, return receipt requested, addressed to:
Seller:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇. ▇. ▇▇▇▇▇ & Co., Inc.
▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
With a copy at the same time to:
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, Shore & ▇▇▇▇▇▇▇, a law corporation
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esquire
22
Buyer:
Penn Engineering & Manufacturing Corp.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Chairman
With a copy at the same time to:
Duane, Morris & Heckscher LLP
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esquire
Legal counsel for the respective parties may send to the other party any
notices, requests, demands or other communications required or permitted to be
given by such party.
Either Seller or Buyer may change its address or addresses for purposes of
this Section by giving ten (10) days' prior notice according to this Section.
O. Offer.
This Agreement, executed by the Buyer, shall constitute an offer of the
Buyer which the Seller must accept or reject by 5:00 pm EDT on the third
business day from the date of Buyer's execution hereto (as indicated under the
Buyer's signature line) or the offer shall be deemed revoked by Buyer upon the
expiration of such time period and any payment delivered on account of the
Deposit shall be refunded by Escrow Agent to Buyer.
P. Execution in Counterparts.
This Agreement may be executed in two or more counterparts, each of which
shall be an original, but all of which shall constitute one and the same
instrument.
Q. Locative Adverbs.
Whenever in this Agreement locative adverbs such as "herein," "hereby,"
"hereof," "hereto" and "hereunder" are used, the same shall be made in reference
to this Agreement in its entirety and not to any specific section, subsection,
subpart, paragraph or subparagraph. The terms "include," "including" and similar
terms shall be construed as if followed by the phrase "without being limited
to."
R. Time Periods.
23
Whenever, under the terms of this Agreement, the time for performance of a
covenant or condition falls upon a Saturday, Sunday or holiday, such time for
performance shall be extended to the next business day. Except as otherwise
provided herein, all references herein to "days" shall mean calendar days.
S. 1031 Exchange
Buyer acknowledges that Seller may desire to sell the Property pursuant to
a like-kind exchange qualifying under Section 1031 of the Internal Revenue Code.
Buyer agrees to cooperate with Seller in order to enable Seller to consummate
the transfer of the Property as part of a like-kind exchange qualifying pursuant
to Section 1031. At Seller's request, Buyer shall execute or consent to such
additional documents and transactions as may be requested by Seller, including,
but not limited to, any assignments of documents or interest in the contemplated
transactions, provided that (a) there shall be no delay in the consummation of
the transactions contemplated in this Agreement; and (b) Buyer need not incur
any additional costs or assume any additional liabilities or obligations as a
result of the exchange or attempted exchange.
24
IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties
have hereunto executed this Agreement as of the date first above written.
Witness/Attest SELLER:
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------- ----------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Date: September 30, 1999
-------------------
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------- ----------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Date: September 30, 1999
-------------------
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------- ----------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇
Date: September 30, 1999
-------------------
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------- ----------------------------------------
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Date: September 30, 1999
-------------------
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------- ----------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇, now known as ▇▇▇▇▇▇▇
▇▇▇▇▇▇, Trustee under the
Will of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Deceased
Date: September 30. 1999
-----------------------------------
BUYER:
PENN ENGINEERING AND
MANUFACTURING CORP.,
a Delaware corporation
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------- -------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Corporate Secretary Title: President/C.O.O.
Date: September 30, 1999
-------------------
25
EXHIBIT (I)(B)(1)
Legal Description of the Land
EXHIBIT (I)(B)(5)(c)
Service Contracts
None
EXHIBIT (I)(B)(5)(6)
Permits
None
EXHIBIT (IV)(J)(1)
Assessments
None
