Exhibit 10.1
ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT ("Agreement") made the 1st day of October, 2004,
by and between NuCO2 Inc., a Florida corporation having its principal place of
business at 0000 XX Xxxxxx Xxxxx, Xxxxxx, Xxxxxxx 00000 ("Purchaser") and Pain
Enterprises, Inc., an Indiana corporation having its principal place of business
at 000 Xxxxxxx Xxx, Xxxxxxxxxxx, Xxxxxxx 00000 ("Seller").
WHEREAS, Seller is engaged in the business of leasing or renting bulk CO2
cylinders and supplying liquid and gaseous CO2 to retail establishments for use
in the carbonation of fountain beverages at such bulk CO2 customers (the
"Business");
WHEREAS, Purchaser is engaged in the business of, among other things,
leasing or renting bulk CO2 cylinders and supplying liquid and gaseous CO2 to
retail establishments for use in the carbonation of fountain beverages;
WHEREAS, Seller desires to sell, and Purchaser desires to purchase, certain
assets of Seller described in this Agreement relating to the Business on the
terms and conditions stated herein; and
WHEREAS, in connection with the asset purchase transaction set forth in
this Agreement, Purchaser will enter into a non-competition agreement in the
form attached hereto as Exhibit A (the "Non-Compete") on the date hereof with
Xxxx X. Pain (the "Principal");
NOW, THEREFORE, for Ten Dollars ($10) and other good and valuable
consideration, the receipt and sufficiency of which are acknowledged by each of
the parties, Seller and Purchaser agree as follows:
1. SALE OF ASSETS. (a) Subject to the terms and conditions of this
Agreement, on October 1, 2004, or such other date as the parties shall agree
(the "Closing Date"), Seller shall sell, transfer and assign to Purchaser, free
and clear of all liens and encumbrances of any kind, the following assets of
Seller described below used by Seller in the Business except for the Excluded
Assets (as hereinafter defined) (the "Assets"):
(i) the bulk CO2 cylinders listed on EXHIBIT B hereto owned by
Seller and leased or rented to customers together with all fill boxes, piping,
lines and fittings, which EXHIBIT B shall include the location, size and serial
numbers of such bulk CO2 cylinders (the "Bulk CO2 Cylinders");
(ii) the contracts or accounts with customers listed on EXHIBIT C
hereto for the lease or rental of the Bulk CO2 Cylinders and the purchase of CO2
(the "Bulk CO2 Cylinder Accounts");
(iii) the bulk CO2 cylinders listed on EXHIBIT D hereto owned by
Seller and held in Seller's inventory, which EXHIBIT D shall include the
location, size and serial numbers of such bulk CO2 cylinders (the "Inventory
Bulk CO2 Cylinders");
(iv) the contracts or accounts with customers listed on EXHIBIT E
hereto for the purchase of CO2 to fill bulk CO2 cylinders (the "Fill Only
Accounts");
(v) the high pressure backup systems listed on EXHIBIT F hereto
owned by Seller and leased or rented to customers, which EXHIBIT F shall include
the location and serial numbers of such high pressure backup systems (the "High
Pressure Backup Systems");
(vi) the vehicles, delivery units and equipment listed on EXHIBIT
G hereto owned by Seller, which Exhibit G shall include the location, make,
model and vehicle identification numbers of such vehicles (the "Vehicles");
(vii) the bulk CO2 cylinder refurbishing equipment and parts
inventory listed on EXHIBIT R hereto owned by Seller (the "Refurbishing
Equipment");
(viii) all of Seller's service records with regard to the Bulk
CO2 Cylinders, the Inventory Bulk CO2 Cylinders, bulk CO2 cylinders owned by
customers of the Business to which Seller distributes and sells CO2, the High
Pressure Backup Systems and the Vehicles (the "Service Records");
(ix) all goodwill, and all files and other records relating to
the Business and the Assets, including, without limitation, all route lists,
customer CO2 usage records, bulk CO2 systems rental registers, high pressure
cylinder rental registers, customer lists and customer payment histories
relating to the Business; and
(x) all other assets of Seller, tangible or intangible, directly
used in the Business, other than the Excluded Assets.
(b) EXCLUDED ASSETS. All accounts receivable, cash and cash
equivalents of Seller pertaining to the Business as of the Closing Date and all
assets of Seller used by Seller in the conduct of its stand-alone high pressure
CO2 beverage carbonation business and any other business other than the Business
(the "Excluded Assets") shall be retained by Seller and shall not constitute
part of the Assets sold to Purchaser hereunder.
(c) NON-ASSIGNMENT OF CERTAIN ASSETS. To the extent that the
assignment hereunder of any of the Assets shall require the consent of any other
party (or in the event that any of the same shall be nonassignable) (each, a
"Consent Contract"), neither this Agreement nor any action taken pursuant to its
provisions shall constitute an assignment or an agreement to assign if such
assignment or attempted assignment would constitute a breach thereof; provided,
however, that in each such case, Seller shall use its good faith efforts to
obtain the consents of such other party to an assignment to Purchaser without
being obligated to pay any fees or to make any other payments to any party to
obtain any such consents. If such consent is not obtained, (i) such Consent
Contract shall not be deemed assigned at Closing, (ii) Purchaser shall act as
Seller's agent to perform Seller's obligations thereunder and shall so perform,
and (iii) Seller, at Purchaser's expense, shall cooperate with Purchaser in any
reasonable arrangement designed to provide for Purchaser the full benefits of
any such Consent Contract including, without limitation, enforcement, for the
account and benefit of Purchaser, of any and all rights of Seller against any
other person with respect to any such Consent Contract. When such consents to
the transfer, conveyance and assignment of a Consent Contract have been
obtained, if ever, such Consent Contract shall thereupon automatically be
transferred, conveyed and assigned to Purchaser, and the obligations and
liabilities of Seller under such Consent Contract shall automatically cease to
be excluded from the Assignment and Assumption (referenced in Section 6(b)(i)
hereof) by reason of this Section 1(c), without the payment of any additional
consideration.
2. PURCHASE PRICE. (a) Subject to adjustment as provided in Section 2(b)
herein, the purchase price for the Assets and the Non-Compete shall be Fifteen
Million Four Hundred Thousand Dollars ($15,400,000) (the "Purchase Price"). The
Purchase Price reflects a credit of $100,000 representing a prior payment made
by Purchaser to Seller in accordance with the Letter of Intent, dated August 24,
2004 between Seller and Purchaser.
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(b) If prior to February 1, 2005, Purchaser determines that on the
Closing Date it acquired fewer than (i) 6,950 Bulk CO2 Cylinders (the "Agreed
Upon Number of Bulk CO2 Cylinders"), (ii) 6,950 Bulk CO2 Cylinder Accounts (the
"Agreed Upon Number of Bulk CO2 Cylinder Accounts"), (iii) 000 Xxxxxxxxx Xxxx
XX0 Xxxxxxxxx (the "Agreed Upon Number of Inventory Bulk CO2 Cylinders") or (iv)
2,817 Fill Only Accounts (the "Agreed Upon Number of Fill Only Accounts"), then
on February 4, 2005, Seller shall pay to Purchaser (y) the sum of Seven Hundred
Dollars ($700) multiplied by the number of Bulk CO2 Cylinders and Inventory Bulk
CO2 Cylinders acquired by Purchaser fewer than the Agreed Upon Number of Bulk
CO2 Cylinders and Agreed Upon Number of Inventory Bulk CO2 Cylinders and (z) the
sum of Five Hundred Dollars ($500) multiplied by the number of Bulk CO2 Cylinder
Accounts and Fill Only Accounts acquired by Purchaser fewer than the Agreed Upon
Number of Bulk CO2 Cylinder Accounts and Agreed Upon Number of Fill Only
Accounts (collectively, the "Adjustment"), provided that notwithstanding the
foregoing, unless the Adjustment exceeds Five Hundred Thousand Dollars
($500,000) (the "Basket"), Seller shall not pay to Purchaser the Adjustment and
then shall pay the Adjustment only to the extent that the Adjustment exceeds the
Basket.
(c) Seller and Purchaser hereby agree that the Purchase Price for the
Assets and the Non-Compete shall be allocated for purposes of this Agreement and
for federal, state and local tax purposes as set forth on Internal Revenue Form
8594 (the "Allocation Form") and attached as EXHIBIT H hereto. Purchaser and
Seller shall file all federal, state and local tax returns, including Internal
Revenue Form 8594, in accordance with the allocation set forth in such
Allocation Form.
3. PAYMENT OF PURCHASE PRICE. (a) Purchaser shall pay the Purchase Price to
Seller and the Principal on the Closing Date in immediately available funds by
wire transfer, or by certified or bank check.
(b) On the Closing Date, Seller and Purchaser shall make such
customary pro-rated adjustments as are reasonably required relating to the
Assets, including, but not limited to, adjustments for prepaid rent under any
Bulk CO2 Cylinder Account transferred to Purchaser pursuant to the terms hereof,
for property taxes on the Assets and for customer deposits as provided in
Section 4 hereof.
4. LIABILITIES. (a) Except with respect to the Bulk CO2 Cylinder Accounts
and Fill Only Accounts assigned by Seller to Purchaser, with respect to which
Purchaser shall assume the obligations of Seller thereunder from and after the
Closing Date only, Purchaser will not assume any liabilities or obligations of
Seller of any kind, including, without limitation, any accounts payable
administrative claims and contracts of Seller, except that if Seller holds a
deposit in respect of any account of a customer listed on EXHIBIT I hereto,
Purchaser shall assume such deposit liabilities based upon a payment on the
Closing Date from Seller to Purchaser equal to the aggregate amount of such
deposits. Seller represents and warrants that the only such customer deposits
are those set forth on EXHIBIT I hereto.
(b) Seller shall terminate the employees of Seller in the Business as
listed on EXHIBIT J hereto (the "Employees") on the Closing Date and shall be
responsible for all costs of any kind relating to such termination, including,
but not limited to, severance pay, pension benefits, employee benefits, vacation
and holiday benefits, sick pay and accrued bonuses and Purchaser shall offer
employment to each of the Employees (provided that each such Employee desires to
be employed by Purchaser). Seller shall retain responsibility for any claims
under its health insurance policies made by Employees arising out of insurable
losses incurred or claims accrued on or prior to the Closing Date. Each of the
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Employees, upon acceptance of Seller's offer of employment, is to be employed on
an "at will" basis. The current compensation (salary, bonus, etc.) of the
Employees is included in Exhibit J.
5. CLOSING. The closing (the "Closing") of the transaction contemplated by
this Agreement shall take place on the Closing Date at the offices of Xxxxxx
Xxxxxxxx Frome Xxxxxxxxxx & Xxxxxxx LLP, 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000.
6. DELIVERIES AT CLOSING. (a) At the Closing, Seller shall deliver to
Purchaser the following:
(i) a Xxxx of Sale and Assignment, in the form attached hereto as
EXHIBIT K, conveying all of the Assets including, without limitation, the Bulk
CO2 Cylinders, the Bulk CO2 Cylinder Accounts, the Inventory Bulk CO2 Cylinders,
the Fill Only Accounts, the High Pressure Backup Systems, the Vehicles, the
Refurbishing Equipment and the Service Records;
(ii) counterparts, duly executed by the Principal of the
Non-Compete (attached as EXHIBIT A hereto);
(iii) true and complete copies of the written Bulk CO2 Cylinder
Accounts and Fill Only Accounts;
(iv) the Inventory Bulk CO2 Cylinders at a mutually agreed upon
site;
(v) the Vehicles at a mutually agreed upon site and the titles
thereto duly executed by Seller along with a xxxx of sale for each Vehicle in
form acceptable for transfer of each Vehicle by the Department of Motor Vehicles
of the appropriate State;
(vi) the Refurbishing Equipment at a mutually agreed upon site;
(vii) the Service Records;
(viii) all other property constituting part of the Assets to be
sold, transferred and assigned to Purchaser pursuant to this Agreement;
(ix) an opinion of counsel to Seller substantially in the form
attached hereto as EXHIBIT L;
(x) a receipt for payment of the Purchase Price; and
(x) a letter to the customers of Seller in the form attached
hereto as EXHIBIT M executed by its Chairman.
(b) At the Closing, Purchaser shall deliver to Seller the following:
(i) an Assignment and Assumption of the written Bulk CO2 Cylinder
Accounts and Fill Only Accounts in the form attached hereto as Exhibit N;
(ii) the Purchase Price; and
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(iii) a letter to the customers of Seller in the form attached
hereto as Exhibit O executed by its Chief Operating Officer.
(c) The parties shall jointly mail the letter attached as Exhibits M
and O to customers of Seller on the Closing Date.
7. Representations and Warranties of Seller to Purchaser. As an inducement
for Purchaser to enter into and perform its obligations under this Agreement,
except for the exceptions set forth on the Schedule of Exceptions attached
hereto as Schedule A and furnished to Purchaser, which exceptions shall not be
deemed to be representations and warranties as made herein, Seller hereby
represents and warrants to Purchaser, which representations shall be deemed made
as of the Closing Date that:
(a) Seller is a corporation duly organized, validly existing and in
good standing under the laws of the State of Indiana, has full corporate power
and authority to own, operate and lease its properties and to carry on the
Business as now being conducted, and is duly qualified or licensed to do
business and is in good standing as a foreign corporation in every jurisdiction
in which the conduct of the Business or the ownership or leasing of the Assets
requires it to be so qualified or licensed, except where the failure to be so
qualified or licensed, would not have a material adverse effect on the Business.
(b) The execution and delivery of this Agreement and the other
instruments of transfer and assignment delivered by Seller to Purchaser
hereunder have been duly and validly authorized by all necessary action on the
part of Seller, and this Agreement and such instruments constitute valid and
legally binding obligations of Seller enforceable in accordance with their
respective terms except as enforceability may be limited by the United States
Bankruptcy Code, as amended, or other laws affecting creditor rights generally
and except as the application of equitable principles may limit the right to
specific performance or other equitable remedies.
(c) As of the date hereof, Seller has good and marketable title to all
of the Assets being sold hereunder free and clear of any liens or encumbrances
of any kind. Simultaneously with the execution and delivery of this Agreement,
Seller has conveyed to Purchaser, and Purchaser has acquired, good and
marketable title to the Assets, free and clear of all liens and encumbrances of
any kind. No third party has the right to receive any payments or fees in
respect of the Assets. Each of the Bulk CO2 Cylinders and Inventory Cylinders
was, when purchased, accompanied by a Form U-1A Manufacturer's Data Report for
Pressure Vessels in accordance with specifications issued by the American
Society of Mechanical Engineers respecting that pressure vessel.
(d) The gross revenue earned by Seller from the Business, exclusive of
taxes and revenue from the Excluded Assets, was not less than $9,500,000 for the
12 month period ended August 31, 2004 (the "2004 Revenue"). Since September 1,
2004 there has been no material adverse change in the 2004 Revenue. In addition,
no customer of Seller who accounted for more than 5% of the 2004 Revenue has:
(i) cancelled, suspended or otherwise terminated its relationship
with Seller or has given written or oral notice to Seller of such; or
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(ii) has decreased, or given written or oral notification to
Seller that such customer intends to decrease the level of such
business with Seller.
(e) The general ledgers, books of account and other records of Seller
in respect of the Business are complete and correct in all respects and have
been maintained in accordance with good business practices and on a consistent
basis from period to period reflected therein.
(f) There are no clams, actions, suits, proceedings or investigations
pending or, to the best knowledge of Seller, threatened against or affecting
Seller with respect solely to the Business or the Assets before any federal,
state, local or foreign court or other governmental body. Seller is not subject
to or in default with respect to any judgment, order, writ, injunction or decree
or any governmental restriction, which relates to or restricts the transfer of
the Assets to Purchaser or the operation of the Business by Purchaser.
(g) Seller has all requisite corporate power and authority to enter
into this Agreement and the other instruments of transfer and assignment
delivered by Seller to Purchaser hereunder, perform its obligations hereunder or
thereunder and to consummate the transactions contemplated hereby and thereby
without the approval or consent of any governmental authority or other third
party.
(h) Neither the execution, consummation and performance of this
Agreement and the other instruments of transfer and assignment delivered by
Seller to Purchaser hereunder, nor the consummation by Seller of the
transactions contemplated hereby or thereby conflicts with or violates (i)
Seller's Certificate of Incorporation or Bylaws, (ii) any federal, state or
local statute, law or regulation or (iii) any contract or agreement to which
Seller or any of Seller's Affiliates is a party (for purposes of this Agreement,
"Seller's Affiliates" shall mean any entities, directly or indirectly,
controlling, controlled by, or under common control with Seller).
(i) To the best of the knowledge of Seller:
(i) Seller has obtained all permits and licenses and filed all
documents which are required to be obtained or filed by Seller for the
operation of the Business under federal, state and local laws relating
to pollution or protection of the environment;
(ii) Seller is in compliance in all material respects with all
terms and conditions of such required permits, licenses and
authorizations relating to pollution or protection of the environment
that affect the Business or the Assets;
(iii) Seller is in compliance in all material respects with all
other applicable limitations, conditions, standards, requirements and
schedules contained in those laws or contained in any regulation,
code, order, decree, judgment, notice or demand letter issued,
entered, promulgated or approved thereunder, and has not received
notice of any violation thereof relating to pollution or protection of
the environment that affects the Business or the Assets; and
(iv) Except for compliance with XXXX Title III reporting
requirements, there are no currently existing Environmental Conditions
with respect to the Business or the Assets.
For purposes of this Section 7(i), these terms shall have the meanings
set forth below:
"Hazardous Substances" include any pollutants, dangerous substances,
toxic substances, hazardous materials or hazardous substances as defined in or
pursuant to the Comprehensive Environmental Response, Compensation and Liability
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ct, 42 U.S.C. ss.9601, et seq., as amended (CERCLA), the Resource Conservation
and Recovery ct, 42 U.S.C. ss.6901, et seq., as amended (RCRA), or any similar
laws of any state in which the Business is operated, as well as any other
applicable environmental ordinance, rule or regulation.
"Release" means releasing, spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, disposing or dumping;
"Notice" means any summons, citation, directive, order, claim,
litigation, investigation, proceeding, judgment, letter or other communication,
written or oral, actual or threatened, from the United States Environmental
Protection Agency ("USEPA") or other similar agency or department of any state
in which the Business is operated or other federal, state or local agency or
authority or any other entity or any individual concerning any intentional,
unintentional act or omission which has resulted or may result in the Release of
Hazardous Substances into the waters or onto the lands of any State in which the
Business is operated, or into waters outside the jurisdiction of any State in
which the Business is operated, or into the "environment," from or on property
of Seller, and shall include the imposition of any lien on property of Seller,
pursuant to any violation of federal, state or local environmental laws,
ordinances, rules, regulations, government actions, orders or permits, or any
knowledge, after due inquiry and investigation, or any acts which could give
rise to any of the above; and
"Environmental Conditions" means material conditions with respect to
soil, surface waters, ground waters, stream sediments and similar conditions
on-site and off-site of properties owned and operated by Seller related to the
presence or Release of Hazardous Substances, which conditions could require
remedial action or may result in claims, demands and liabilities to Seller by
third parties, including without limitation, governmental entities, adjacent
property owners and any individuals suffering property damage or personal
liability.
(j) Seller is not a party to any written or oral agreements of any
kind whatsoever relating to the Assets except those Bulk CO2 Cylinder Accounts
and Fill Only Accounts as set forth in EXHIBITS B and D attached hereto and made
a part hereof. To the knowledge of Seller, there is no default in performance or
event that with notice or lapse of time, or both, would constitute a default in
performance by Seller, of a Bulk CO2 Cylinder Account or a Fill Only Account.
Copies of the written agreements relating to the Bulk CO2 Cylinder Accounts and
Fill Only Accounts and standard invoicing terms and conditions have been
delivered to Purchaser.
(k) Seller has not dealt with or retained any finder or broker for
whose fees or expenses Purchaser would be responsible in connection with this
Agreement or the transactions contemplated hereby.
(l) No permit, consent, approval or authorization of, or declaration,
filing or registration with, or the giving of notice to, any public body or
authority or other person, firm or entity is necessary in connection with the
execution and delivery by Seller of this Agreement or the consummation of Seller
of the transactions contemplated hereby.
(m) Within the times and in the manner prescribed by law, Seller has
filed all Federal and State tax returns and reports required to be filed by law,
including, without limitation, estimated returns with respect to Federal, State
and local income taxes, sales tax returns, and personal property returns and has
paid all taxes, interest, penalties, assessments and deficiencies which have
become due and payable in connection with such returns. Seller is not a party to
any material, pending action or proceeding and, to the knowledge of Seller,
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there is no material action or proceeding threatened by any government authority
for the assessment or collection of taxes or other governmental charges and no
unresolved claim or lien for assessment or collection of taxes or have such
charges been asserted against Seller or the Assets being conveyed hereunder.
There are no outstanding waivers or extensions of time with respect to the
assessment or audit of any tax or tax return of Seller, or claims now pending or
matters under discussion with any taxing authority in respect to any taxes of
Seller. Seller has paid all unpaid taxes of Seller to any taxing authority
wherever located for any period ended on or before the Closing Date. If any
assessment of Seller is made by any taxing authority in respect of any tax,
including sales taxes, claimed by such authority to be payable by Seller, Seller
shall pay such tax or contest the same in good faith.
(n) Except as disclosed in the Schedule of Exceptions, Seller has not
adopted, established, maintained or contributed to, nor is Seller a party to or
have liability under, nor are any Employees (or their beneficiaries) eligible to
participate in, or derive a benefit from, any pension, retirement,
profit-sharing, deferred compensation, bonus, stock option or other incentive
plan, or other employee benefit program, arrangements, agreement or
understanding, or medical, vision, dental or other health plan, or life
insurance or disability plan, or any other employee benefit plan as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"). There shall be included within the meaning of Seller, for this
purpose and for the purpose of the representations in this Section 7(n), all
"affiliates," whether or not incorporated, within the meaning of Section
407(d)(7) of ERISA. Seller shall be solely liable for all contributions,
benefits and other obligations with respect to all employee benefit plans of
which the Seller is or ever has been a party or by which it is or ever has been
bound in connection with the Business, including, without limitation, (i) any
profit-sharing, deferred compensation, bonus, stock option, phantom stock, stock
purchase, pension, consulting, retirement, severance, welfare or incentive plan,
agreement or arrangement (including, without limitation, all employee benefit
plans which are intended to be qualified under Section 401(a) of Internal
Revenue Code (including any "multiemployer" plans within the meaning of Section
3(37) of ERISA)), (ii) any plan, agreement or arrangement providing for "fringe
benefits" or perquisites to employees, officers, directors or agents, including,
but not limited to, benefits relating to automobiles, clubs, vacation, child
care, parenting, sabbatical, sick leave, medical, dental, hospitalization, life
insurance and other types of insurance of the Business, (iii) any employment
agreement, or (iv) any other "employee benefit plan" within the meaning of
ERISA.
(o) The Schedule of Exceptions sets forth a summary of all existing
insurance policies held by Seller relating to the Business or the Assets. To the
best of Seller's knowledge, copies of all such policies have been delivered or
made available to Purchaser and are in full force and effect. To the best of
Seller's knowledge, Seller has not received any notice threatening a suspension,
revocation, modification or cancellation of any such policy. To the best of
Seller's knowledge, all premiums due and payable on such policies have been
paid.
(p) To the best of Seller's knowledge, Seller holds all licenses,
certificates, authorizations and permits necessary for the use and operation of
the Assets and the present conduct of the Business except where the failure to
hold such license, certificate, authorization or permit would not have a
material adverse effect on the Business. There is no agreement, arrangement or
understanding with any person, or any judgment, order, writ, injunctions or
decree of any court or governmental body of any jurisdiction, that could prevent
in any manner the use by Purchaser of the Assets or the conduct by Purchaser of
the Business from and after the Closing Date.
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(q) No labor union or other collective bargaining unit represents or
has represented any of the Employees and no organizational effort by any labor
union or other collective bargaining unit currently is underway or threatened
with respect to any of the Employees.
(r) No representation or warranty of Seller in this Agreement, nor any
information or certificate delivered by Seller pursuant to this Agreement,
contains any untrue statement of a material fact or omits to state a material
fact necessary to make the statements herein or therein not misleading. All
information required to be disclosed by Seller under this Agreement and all
other material information concerning the Business and the Assets has been
disclosed to Purchaser. There is no fact known to Seller which materially
adversely affects, or which Seller believes may materially adversely affect, the
Business or the Assets which has not been disclosed in this Agreement, any
Schedules or Exhibits hereto or any certificates or documents delivered or to be
delivered by Seller under this Agreement.
(s) EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS
SECTION 7 (TO INCLUDE THE SCHEDULE OF EXCEPTIONS) SELLER IS SELLING AND
PURCHASER IS PURCHASING THE ASSETS "AS IS, WHERE IS" AND "WITH ALL FAULTS" AND
SELLER EXPRESSLY DISCLAIMS ALL OTHER REPRESENTATIONS AND WARRANTIES EXPRESSED
AND IMPLIED INCLUDING BUT NOT LIMITED TO ALL WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE.
8. Representations and Warranties of Purchaser To Seller. As an inducement
to Seller to enter into and perform its obligations under this Agreement,
Purchaser hereby represents and warrants to Seller, which representations shall
be deemed made as of the date hereof and as of the Closing Date, that:
(a) Purchaser has been duly incorporated in, and is now validly
existing and in good standing under the laws of the State of Florida with full
power to own, lease and operate its property and carry on its business as now
presently conducted.
(b) Purchaser has full corporate power and authority to enter into and
perform this Agreement and to execute and deliver this Agreement, and when
executed and delivered by Purchaser, this Agreement will constitute a valid and
legally binding agreement and obligation of Purchaser enforceable in accordance
with its terms except as enforceability may be limited by the Bankruptcy Code or
other laws generally affecting creditor's rights.
(c) No permit, consent, approval or authorization of, or declaration,
filing or registration with, or the giving of notice to, any public body or
authority or any other person, firm or entity is necessary in connection with
the execution and delivery by Purchaser of this Agreement, and the consummation
of the transactions contemplated herein.
(d) Purchaser has not dealt with or retained any finder or broker for
whose fees or expenses Seller would be responsible in connection with this
Agreement or the transactions contemplated herein.
(e) The execution, delivery and performance of this Agreement has been
approved by the Board of Directors of Purchaser and Purchaser has taken all
necessary corporate action to authorize the same.
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(f) There is no material claim, suit, proceeding or investigation
pending or to the best of the knowledge of Purchaser, threatened against or
affecting Purchaser with respect to this Agreement or the transactions
contemplated hereby.
(g) The execution, consummation and performance of this Agreement by
Purchaser and Purchaser's right to conduct its business does not violate, in any
material respect, any federal, state or local statute, law or regulation (other
than zoning restrictions) or any contract or agreement to which Purchaser or any
of Purchaser's Affiliates is a party (for purposes of this Agreement,
"Purchaser's Affiliates" are any entities, directly or indirectly, controlling,
controlled by, or under common control with Purchaser).
9. ACCESS TO INFORMATION. (a) Purchaser shall retain and preserve all
records and books of Seller delivered to Purchaser for a period of three (3)
years from the date hereof and upon written request of Seller, shall provide
Seller with reasonable access to such business records and copies of such
documents when requested at Seller's expense; provided that Purchaser may
dispose, destroy or discard any such records if it shall have given Seller at
least sixty (60) days prior written notice of its intent and Seller shall have
not requested Purchaser to deliver such records to a location designated by
Seller within such period. Purchaser acknowledges that Seller shall retain
unpaid accounts receivable records.
(b) From and after the date hereof, including subsequent to the
Closing Date, Seller shall also provide Purchaser and its accountants with such
accounting and financial information relating to the Assets and the Business as
Purchaser shall reasonably request in order for Purchaser to prepare and
complete audits by Purchaser's independent certified public accountants and to
file such other financial information relating to the Assets and the Business as
shall be required to be filed by Purchaser with the Securities and Exchange
Commission.
10. SELLER'S INDEMNITY OF PURCHASER. Seller shall defend, indemnify and
hold Purchaser forever harmless from and against any and all losses,
liabilities, damages, costs, claims, judgments and expenses (including
attorney's fees) whatsoever arising out of or resulting from:
(a) Any breach of warranty or misrepresentation by Seller contained
herein, or the non-performance of any covenant or obligation to be performed by
Seller or from any misrepresentation, omission or inaccuracy in any schedule,
exhibit or certificate delivered or to be delivered by Seller hereunder in
connection with the execution of this Agreement or at the Closing;
(b) Any breach by the Principals of any of the terms and provisions of
their respective Non-Competes;
(c) Any liability or matter arising out of the conduct of the Business
prior to the Closing Date, including but not limited to income taxes, sales
taxes and property taxes (other than liabilities accruing after the Closing Date
with respect to agreements, leases or other obligations specifically assumed by
Purchaser);
(d) Any attempt (whether or not successful) by any person to cause or
require Purchaser to pay or discharge any debt, obligation or liability relating
to Seller;
(e) Any claim which may be asserted against Purchaser or any of the
Assets being sold hereunder, by any of Seller's employees, independent
contractors or agents with respect to liabilities incurred by or on Seller's
behalf prior to their termination by Seller;
10
(f) Any and all losses asserted against Purchaser incurred in
connection with the termination by Seller, of its employees, whether covered by
a collective bargaining agreement or not, including, without limitation, labor
costs, severance pay, pension benefits, employee benefits, vacation and holiday
benefits, sick pay, multiemployer withdrawal liability, accrued bonuses, any and
all employee benefits, and any other costs associated therewith;
(g) Any claim which may be asserted relating to the Assets or the
Business by any third party, but only to the extent arising on or before the
Closing Date.
The foregoing indemnifications by Seller shall be limited to the Purchase
Price paid to Seller pursuant to this Agreement.
11. Purchaser's Indemnity. Purchaser shall indemnify and hold Seller
forever harmless from and against any and all losses, liability, damages, costs,
claims, judgments and expenses (including attorney's fees) whatsoever arising
out of or resulting from:
(a) Any breach of warranty or misrepresentation by Purchaser contained
herein, or the non-performance of any covenant or obligation to be performed by
Purchaser or from any misrepresentation, omission or inaccuracy in any schedule,
exhibit or certificate delivered or to be delivered by Purchaser hereunder in
connection with the execution of this Agreement or at the Closing;
(b) the non-performance or non-payment of any obligations or
liabilities incurred or assumed by the Purchaser under this Agreement;
(c) the operation of the Business, but only to the extent arising
after the Closing Date.
12. NON-COMPETE. Seller covenants and agrees that for a period of three (3)
years from and after the Closing Date, it will not, without the prior written
consent of Purchaser: (i) directly, indirectly or in association with others,
manage, operate, join, control or participate or become interested in, or be
connected with as a partner, shareholder, investor or otherwise in the operation
of any business involving the sale of bulk or liquid carbon dioxide to carbonate
fountain beverages or the sale, lease or rental of bulk CO2 cylinders within the
geographic area of the following States: Arkansas, Florida, Georgia, Illinois,
Indiana, Iowa, Kentucky, Michigan, Minnesota, Missouri, Montana, Nebraska, North
Carolina, North Dakota, Ohio, Pennsylvania, Tennessee, Texas, West Virginia,
Wisconsin, (ii) interfere with, disrupt or attempt to disrupt the relationship,
contractual or otherwise, between the Purchaser and any other person or entity,
including, without limitation, any customer, supplier, employee or consultant of
the Purchaser, or (iii) induce any employee (including the Employees) of the
Purchaser to terminate his employment with Purchaser. By reason of the fact that
irreparable harm would be sustained by Purchaser if there is any breach by
Seller of this Section 12, it is agreed that in addition to any other rights
which Purchaser may have under this Agreement or at law or in equity, Purchaser
shall be entitled to apply to any court of competent jurisdiction for, and
obtain, injunctive relief against Seller in order to prevent any breach or
threatened breach of the provisions of this Section 12. The provisions of this
Section 12 shall not apply to Seller's stand-alone high pressure CO2 beverage
carbonation business.
13. POST CLOSING SERVICES. [Intentionally Deleted]
14. SALE OR TRANSFER TAXES. Any liability for sales, transfer and/or
documentary taxes (but not income or similar type taxes) in connection with the
sale and delivery of the Assets and rights acquired by Purchaser hereunder shall
be paid by Xxxxxxxxx.
00
00. BULK SALES. Seller hereby agrees to defend, indemnify and forever hold
Purchaser harmless from and against any and all liability (including any claims,
suits or demands against Purchaser), loss, cost (including attorney's fees),
expense or damage of any kind which Purchaser may suffer as a result of any
non-compliance with any provision of any applicable bulk sales law in connection
with this transaction.
16. BENEFIT. All the terms of this Agreement shall be binding upon, and
inure to the benefit of, and be enforceable by, the respective successors and
assigns of Seller and Purchaser.
17. ENTIRE AGREEMENT AND MODIFICATION. This Agreement (including the
Exhibits and Schedules) constitutes the entire agreement between the parties
hereto with respect to the subject matter hereof and no amendment thereof or
modifications hereof, or additions hereto shall be valid or effective unless the
same shall be in writing and signed by each of the parties hereto.
18. BINDING AGREEMENT; ASSIGNMENT. This Agreement shall be binding upon and
inure to the benefit of the parties named herein and to their respective
successors and permitted assigns. Neither this Agreement nor any of the rights,
interests of obligations hereunder may be assigned by either party without the
prior written consent of the other party.
19. SURVIVAL OF WARRANTIES AND REPRESENTATIONS. All representations,
covenants, warranties and indemnities made by the parties hereto as set forth in
this Agreement (including Exhibits and Schedules) shall survive the Closing for
a period of three (3) years and shall be deemed material and to have been relied
upon by the parties.
20. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
21. HEADINGS. The headings contained in this Agreement have been inserted
for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
22. NOTICES. Except during the continuance of a known interruption of
service in the method of delivery used, all notices, requests, demands and other
communications hereunder shall be deemed to have been duly given if the same
shall be in writing and shall be delivered personally, sent via facsimile
transmission or sent by registered or certified mail, postage prepaid, and
addressed as set forth below:
If to Purchaser:
NuCO2 Inc.
0000 X.X. Xxxxxx Xxxxx
Xxxxxx, Xxxxxxx 00000
Attn: Chief Financial Officer
Facsimile: (000) 000-0000
Copies to:
Xxxx X. Xxxxxxxx, Esq.
NuCO2 Inc.
0000 X.X. Xxxxxx Xxxxx
Xxxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
Xxxxx Xxxxxxx, Esq.
Xxxxxx Xxxxxxxx Frome Xxxxxxxxxx & Xxxxxxx LLP
Park Avenue Tower
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
If to Seller:
Pain Enterprises, Inc.
000 Xxxxxxx Xxx
Xxxxxxxxxxx, Xxxxxxx 00000
Attn: Chief Executive Officer
Facsimile: (000) 000-0000
Copies to:
Xxxxxxx X. Xxxxxx, Esq.
00000 Xxxxxx Xxxx.
Xxxxxxxxx Xxxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
Any party hereto may change the address to which notices are to be
addressed by giving the other party notice in the manner herein set forth. All
notices shall be effective upon delivery.
23. REMEDIES. Purchaser and Seller agree that included among the remedies
available to them for a breach by the other of this Agreement shall be the
remedy of specific performance.
24. WAIVER. Any failure of any party hereto to comply with any of the
obligations or agreements set forth in this Agreement or to fulfill any
condition set forth may be waived only by written instrument signed by all of
the parties. No failure by any party to exercise, and no delay in exercising,
any right hereunder shall operate as a waiver of such right, nor shall any
single or partial exercise of any right hereunder by any party preclude any
other or future exercise of that right or any other right hereunder by that
party.
25. EXPENSES. All costs and expenses incurred in connection with this
Agreement or any of the transactions contemplated hereby including, but not
limited to, accounting, consulting and attorney's fees shall be paid by the
party incurring such expenses.
26. GOVERNING LAW/JURISDICTION AND VENUE. This Agreement shall be construed
under the laws of the State of Florida. Each party to the extent that it may
lawfully do so, hereby submits to the jurisdiction and venue of the United
States District Court located in and for the Southern District of Florida as
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well as to the jurisdiction of all courts from which an appeal may be taken from
the aforesaid courts, for the purpose of any suit, action or other proceeding
arising out of or with respect to this Agreement, and expressly waives any and
all objections it may have as to venue in any of such courts.
27. ATTORNEY'S FEES. The parties agree that in connection with any
litigation arising out of this Agreement, the prevailing party shall be entitled
to recover all costs incurred including reasonable attorney's fees, and costs
and reasonable attorney's fees in any appellate proceeding(s).
28. PUBLIC ANNOUNCEMENTS. Unless required by applicable law or regulatory
authority, neither Purchaser nor Seller will issue any report, statement or
press release to the general public, to the trade, or to the general trade
press, or to any third party (other than its advisors and representatives),
relating to this Agreement and the transactions contemplated hereby, except as
may be mutually agreed by Purchaser and Seller. Copies of any such public
announcements or disclosures, including any announcements or disclosures
mandated by law or regulatory authorities, shall be delivered to each party
prior to the release thereof. The parties agree that Purchaser shall issue a
press release in the form attached hereto as Exhibit P promptly following the
Closing.
29. PROCEDURE FOR INDEMNIFICATION. (a) In the event that a party (the
"Indemnified Party") asserts the existence of a claim for indemnification (an
"Indemnifiable Claim"), it shall give prompt written notice to the other party
(the "Indemnifying Party") specifying the nature and amount of the claim
asserted. In the event that the Indemnifiable Claim does not involve a
third-party claim then, if the Indemnifying Party, within 30 days or such
greater time as may be necessary for the Indemnifying Party to investigate such
Indemnifiable Claim not to exceed 90 days, after receiving the notice from the
Indemnified Party, shall not give written notice to the Indemnified Party
announcing its intent to contest such assertion of the Indemnified Party, such
assertion shall be deemed accepted and the amount of claim shall be deemed a
valid Indemnifiable Claim. During the time period set forth in the preceding
sentence, the Indemnified Party shall cooperate fully with the Indemnifying
Party in respect of such Indemnifiable Claim. In the event, however, that the
Indemnifying Party contests the assertion of a claim by giving such written
notice to the Indemnified Party within said period, then if the parties hereto,
acting in good faith, cannot reach agreement with respect to such claim within
ten days after such notice, either party may bring legal action to resolve such
issue.
(b) In order for an Indemnified Party to be entitled to any
indemnification provided under this Agreement in respect of, arising out of or
involving a claim or demand made by any person, firm, governmental authority or
corporation against the Indemnified Party (a "Third Party Claim"), such
Indemnified Party must notify the Indemnifying Party in writing of the Third
Party Claim within twenty (20) days after receipt by such Indemnified Party of
written notice of the Third Party Claim. Thereafter, the Indemnified Party shall
deliver to the Indemnifying Party, promptly after the Indemnified Party's
receipt thereof, copies of all notices and documents (including court papers)
received by the Indemnified Party relating to the Third Party Claim. If a Third
Party Claim is made against an Indemnified Party, the Indemnifying Party will be
entitled to participate in the defense thereof and, if it so chooses, to assume
the defense thereof with counsel selected by the Indemnifying Party. Should the
Indemnifying Party so elect to assume the defense of a Third Party Claim, the
Indemnifying Party will not be liable to the Indemnified Party for any legal
expense subsequently incurred by the Indemnified Party in connection with the
defense thereof. With respect to all Third Party Claims, the Indemnified Party
will cooperate in all reasonable respects with the Indemnifying Party in
connection with such claims and the defense and/or compromise thereof. Such
cooperation shall include the retention and (upon the Indemnifying Party's
request) the provision to the Indemnifying Party of records and information
which are reasonably relevant to such Third Party Claim, making employees
14
available on a mutually convenient basis to provide additional information and
explanation of any material provided hereunder. Whether or not the Indemnifying
Party shall have assumed the defense of a Third Party Claim, the Indemnified
Party shall not, without first waiving the indemnity as to such claim, admit any
liability with respect to, or settle, compromise or discharge, such Third Party
Claim without the Indemnifying Party's prior written consent, which consent
shall not be unreasonably withheld or delayed.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the day and year first above written.
NUCO2 INC.
By: /s/ Xxxxxxx X. XxXxxxxxxx
------------------------------------------
Name:
Title:
PAIN ENTERPRISES, INC.
By: /s/ Xxxx X. Pain
------------------------------------------
Name:
Title:
15
