EXHIBIT 2.1
PURCHASE AND SALE AGREEMENT
This Agreement is entered into this 17th day of October , 2000 by Xxxx Xxxxxx &
Associates, Inc. ("JPA"), the Seller, and Post, Xxxxxxx, Xxxxx & Xxxxxxxx, Inc.
("PBS&J"), the Purchaser. Whereas PBS&J desires to purchase and JPA desires to
sell certain business assets described below, the parties therefore agree as
follows:
1. Purchase and Sale of Assets. Upon the terms and subject to the conditions set
forth in this Agreement, JPA agrees to sell and deliver to PBS&J on the
Effective Date and PBS&J agrees to purchase certain business assets of JPA as
set forth in Section 2, below (hereinafter the "Assets").
1.1. Definitions. For purposes of the transaction described in this Agreement,
the "Closing Date" means the date on which this Agreement is executed by both
JPA and PBS&J and thereby becomes binding and enforceable, and the "Effective
Date" means January 1, 2001, the date on which ownership of the Assets (as that
term is defined below) is conveyed from JPA to PBS&J.
2. Assets Included. The Assets to be purchased by PBS&J pursuant to this
Agreement and the values agreed to for each category of assets shall be:
Asset Value
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i.) Fixed assets as described in Exhibit 1 attached hereto
ii.) Trade Name and Goodwill
iii.) Deposits as described in Exhibit 2 attached hereto
3. Assets Excluded. The following assets are not being sold to PBS&J by JPA and
as of the date of the closing will be retained by JPA: i.) Cash, ii.) Cash
Equivalents, iii.) JPA Collectibles (as that term is defined in Section 8,
below) and identified on Exhibit 3 attached hereto and iv.) Work in Progress
described on Exhibit 4 attached hereto.
4. Price. PBS&J will pay the sum of two million two hundred thousand dollars
($2,200,000.00) less the amount of accrued vacation/PTO liability assumed by
PBS&J as stated in Exhibit 11 attached hereto in exchange for the Assets,
payable as follows:
i.) On the Closing Date a non-refundable deposit in the amount of One
Million Two Hundred Thousand Dollars ($1,200,000) less the estimated amount of
accrued vacation/PTO liability to be assumed by PBS&J (the "Down payment
Deposit") shall be provided to the Law Office of Xxxxx X. Xxxxx, APC ("the
Escrow Holder") who shall hold the Down payment Deposit in escrow pending
consummation of the transaction described in this Agreement. The delivery of the
Down payment Deposit by PBS&J to the Escrow Holder shall be by wire transfer in
accordance with the wire transfer instructions provided to PBS&J by the Escrow
Holder.
ii.) The balance of One Million Dollars ($1,000,000) will be paid in
accordance with the
terms and conditions of a Promissory Note executed by PBS&J in the form attached
hereto as Exhibit 6 and delivered to the Escrow Holder on or before the Closing
Date, which note shall require PBS&J to make three equal annual payments of
Three Hundred Thirty Three Thousand Three Hundred Thirty Three and 33/100
Dollars ($333,333.33) plus accrued interest to JPA, commencing on the first
anniversary of the Closing Date and continuing on the second and third
anniversaries of the Closing Date, when all unpaid principal and accrued
interest due under the note shall be paid in full, provided that Xxxx Xxxxxx has
not voluntarily terminated his employment with PBS&J prior to the date of the
payment. If Xxxxxx'x employment with PBS&J is involuntarily terminated, or if he
dies or become disabled, the above described payments will be made as required
by the note. JPA and PBS&J agree that, in the case of any legal proceeding
relating to the payment of the aforesaid balance pursuant to the terms of this
Section 4(ii), the only defense to payment that may be raised by PBS&J is that
Xxxxxx voluntarily terminated his employment with PBS&J prior to the due date of
the payment. Interest will be paid on the amounts outstanding at a fixed rate,
which will be the rate paid by PBS&J under its line of credit as of the Closing
Date.
iii) The obligation of PBS&J described in Section 4(ii) above may be
assigned in whole of in part to the shareholders of JPA.
5. Certain Expenses. It may be appropriate for JPA to incur certain expenses
prior to closing in contemplation of future operations as part of PBS&J. PBS&J
will reimburse JPA for such expenses, subject to prior approval by Xxxx Xxxxxx.
6. Liabilities. PBS&J shall assume JPA's office lease obligations as described
in Exhibits 6, 7, 8 and 9 attached hereto and the equipment lease obligations
described in Exhibit 10 attached hereto to the extent assumable. Accrued
vacation/PTO obligations owed to current JPA employees by JPA as of the
Effective Date as described in Exhibit 11 attached hereto shall be paid by PBS&J
and any payments due or arising from this liability will be the responsibility
of PBS&J, provided, however that the total amount of the accrued vacation/PTO
liability assumed by PBS&J pursuant to this Section 6 will be deducted from the
purchase price described in Section 4, above.
6.1 Leases. If any landlord should decline to allow assumption of an office
lease by PBS&J, JPA shall retain that lease, but PBS&J shall make all lease
payments due for the duration of the lease term on JPA's behalf and pay all
associated expenses, insurance payments and costs.
6.2 Mutual Indemnity For Work. PBS&J and JPA shall each indemnify, defend and
hold harmless the other party and its officers, directors, shareholders,
employees, agents and representatives (hereinafter the "Party Indemnities")
against any and all liability, demands, claims, costs, losses, damages,
recoveries, reimbursements, settlements and expenses (including, but not limited
to interest, penalties, attorney fees, accounting fees, expert witness fees,
costs and expenses) directly or indirectly arising from work performed by its
employees and subcontractors during its period of ownership of the Assets. Each
party shall maintain for the benefit of the Party Indemnities ongoing insurance
to cover the obligations of the party providing the indemnity described in this
Section 6.2.
7. Xxxxxx Stock Purchase. Xxxx Xxxxxx may elect to purchase up to $220,000 in
common stock
of The PBSJ Corporation, PBS&J's parent company. Xxxxxx will make this election
on or before the Effective Date and will make payment for stock purchased under
this provision within seven (7) days of the Effective Date.
8. Collections. JPA will prepare a list of the accounts receivable and unbilled
work in progress outstanding as of the Effective Date ("the JPA Collectibles"),
which shall be attached to this Agreement as Exhibit 3. During the due diligence
process, the parties will review JPA's revenue recognition methods and resolve
any issues regarding the manner in which the JPA Collectibles will be measured.
JPA will xxxx and collect its receivables for work performed prior to the
Effective Date and will pay its payables incurred through that date. PBS&J will
xxxx and collect for work performed subsequent to the Effective Date, and as
requested by JPA, will also xxxx and collect on JPA's behalf for JPA work in
progress unbilled as of the Effective Date and pay all amounts collected on
JPA's behalf to JPA on receipt. JPA and PBS&J will, in good faith and using
sound accounting principles, agree on these amounts. In the event that questions
arise regarding whether unpaid balances apply to JPA collectibles or PBS&J
collectibles, the parties will resolve those questions on a good faith basis.
9. Employees. All JPA staff will become PBS&J employees as of the Effective
Date. Employment tenure at JPA will be credited as equivalent tenure at PBS&J.
In addition to any other benefits or payments described in this Agreement, PBS&J
shall provide all former JPA employees that it hires pursuant to this Section 9
with a compensation package as agreed to by PBS&G and Xxxx Xxxxxx during the due
diligence process and described on the Schedule of Employee Compensation
attached to this Agreement as Exhibit 12 The parties recognize that compensation
and benefits programs are subject to change in the future at the discretion of
PBS&J's Board of Directors. However, the parties agree that staff retention is
critical to the success of the business and will address compensation planning
with that fact in mind. During due diligence, key JPA employees will be reviewed
and candidates identified for nomination to PBS&J's Incentive Program. Nominees
will include Xxxx Xxxxxx, Xxxx Xxxxxx, Skip Xxxxxxx and Xxxxx Xxxxxx. Those
nominated and elected by PBS&J's Board of Directors will be eligible to purchase
PBSJ stock during the next stock window, first quarter 2001. It is understood
that under the rules of the Program only the Board can elect participants, and
participants must be re-nominated and re-elected each year.
10. Contracts. JPA will assign all of its existing client contracts to PBS&J as
of the Effective Date and will obtain the approval of clients for such
assignment to the extent necessary. PBS&J agrees to fully perform all of JPA's
duties and obligations under those client contracts. If any client contracts
cannot be assigned, JPA will engage PBS&J on a subcontract basis to complete
those contracts.
11. Special Incentive Fund. In addition to existing compensation programs to be
provided to current JPA employees pursuant to Section 9, above, PBS&J will
provide three hundred thousand dollars ($300,000) to fund a special program
intended to promote retention of certain key employees of JPA (the "Special
Incentive Fund"). A portion of the funds allocated for each participant will be
paid at or immediately after the Effective Date in the form of PBS&J restricted
common stock awards. The stock will convert to unrestricted common stock upon
completion of three years of service by the holder as an employee of PBS&J, but
will be forfeit if
three years of service are not completed. The remaining amount of the special
incentive fund will be paid in cash upon completion of one full year of service
with PBS&J, and will be forfeit only if the employee voluntarily resigns his/her
employment prior to completing such service. Whether paid in cash or stock,
distributions under this Special Incentive Fund are subject to employee payroll
and income taxes that will be the responsibility of the recipients and all
applicable federal, state and local withholding and reporting requirements. The
list of participants and amounts allocated to each will be determined by Xxxx
Xxxxxx subject to review and approval by PBS&J.
12. Xxxxxx Stock Award. Reference Xxxx Xxxxxx Employment Agreement attached to
this Agreement as Exhibit 12.
13. Organization/Operations. JPA will become the core unit of PBS&J's California
Environmental Services Division, which will also include existing PBS&J
Environmental Services personnel located in California. The Division Manager of
California Environmental will report to Xxxx Xxxxxx, Acting Western Region
Environmental Services Director.
14. Management. Xxxx Xxxxxx, Xxxx Xxxxxx, Skip Xxxxxxx and Xxxxx Xxxxxx will
become corporate officers of PBS&J and will assume leadership roles in its
Western Environmental Services unit. Specific responsibilities will be addressed
during integration planning. Xxxxxx and Xxxxxx will each receive three year
employment agreements in the forms attached to this Agreement as Exhibits 13 and
14, and Xxxxxx will also enter into a non-compete agreement with PBS&J covering
the services currently provided by JPA for one year from the date his employment
by PBS&J terminates.
15. Name. PBS&J is acquiring all rights to JPA's corporate name and trade name
and may elect to use that name until JPA is fully integrated into PBS&J. JPA may
operate under its own name for a limited period for the purposes of collecting
its receivables and winding up its business. The timing of conversion to the
PBS&J name will be determined by the parties during the integration planning
process. At such time as PBS&J ceases using the JPA corporate name for
transition purposes, or earlier if it should become necessary, Xxxx Xxxxxx &
Associates, Inc. will change its name if its shareholders decide to maintain the
corporate entity past that time.
16. Integration and Strategy. PBS&J's objective it to utilize JPA as a key
element in its strategy to become a dominant full service firm in the Western
United States. An initial integration plan for JPA will be completed prior to
closing with input from the key managers in both firms. However, integration
planning and general strategic planning will continue subsequent to closing and
future changes in organization and strategy will not be precluded.
17. Costs. Except as provided in Section 5, above, each party will bear its own
costs for all activities relating to this transaction, including participation
in pre-closing integration planning activities. Each party will bear the cost of
its own professional advisors. The professional fees of Xxxxx Xxxxxxxxxxx, a
professional advisor representing JPA, will be paid by JPA. Neither party will
retain outside consultants for assistance with integration services without
mutual consent of both parties.
18. Conduct of JPA Business. Between the Closing Date and the Effective Date,
JPA will operate its business in a normal and customary manner, making no major
commitments or material changes without prior agreement of PBS&J, provided,
however, that JPA shall be free to make distributions of cash to employees
and/or shareholders during this period.
19. Taxes. The parties will each be responsible for taxes incurred during their
respective periods of ownership, including taxes on income earned during those
periods.
20. Representations and Warranties of the Seller. JPA represents and warrants as
follows:
20.1. Organization. JPA is a corporation duly organized, validly existing and in
good standing under the laws of the state of California.
20.2. Legal Authority. JPA is the legal owner of all of the Assets. There are no
claims against the JPA's ownership interest in the Assets. The execution of this
Agreement has been authorized by the Board of Directors of JPA. When executed,
JPA's obligations under this Agreement will be legal, binding and enforceable.
20.3. Information. The information provided to PBS&J by JPA is accurate to the
best of the JPA's knowledge. JPA is not aware of any material information, or
adverse change in financial condition or business prospects that would affect
the value of the Assets, which has not been disclosed to PBS&J.
20.4. Legal Proceedings/Compliance. With respect to the Assets that are being
purchased by PBS&J, there are no actions, suits, proceedings or judgements
pending against JPA other than those disclosed to PBS&J and described on Exhibit
15, attached hereto. To the best of JPA's knowledge, information and belief, it
is materially in compliance with all laws, rules, regulations and requirements
applicable to its business. JPA is not materially in default under any contract
or agreement. JPA will advise its professional liability carrier in writing of
all known claims and potential claims as of the date of closing.
20.5. Normal Operations. Since discussions between the parties were initiated,
JPA has made no significant dispositions of assets, and has made no major or
unusual new commitments that would affect the value of the Assets.
20.6. Survival of Warranties. All of the foregoing representations and
warranties shall survive the closing, and shall be true as of the date of
closing.
20.7. Software. Prior to the Effective Date, JPA will at its expense take any
action necessary to insure that all software in use on JPA's computers is under
licenses in full force and effect.
21. Representations and Warranties of PBS&J. PBS&J represents and warrants as
follows:
21.1. Organization. PBS&J is a corporation duly organized, validly existing and
in good standing under the laws of the state of Florida, and has the authority
to own, lease and operate its business as it does presently and to execute its
obligations under this Agreement.
21.2 Legal Authority. The execution of this Agreement and the issuance of all
shares of PBS&J stock described in this Agreement have been authorized by the
Board of Directors of PBS&J . When executed, PBS&J's obligations under this
Agreement will be legal, binding and enforceable.
21.3. Legal Proceedings. There are no legal actions, suits, proceedings, or
judgements pending against PBS&J that would interfere with its ability to
execute its obligations under this Agreement.
21.4 Undisclosed Information. The officers of PBS&J are not aware of any adverse
information material to JPA's decision to enter into this Agreement which has
not been disclosed to JPA.
22. Waiver. Any waiver by any party of any term or condition of this agreement
shall not be deemed a waiver of any other term or condition, nor shall the
failure of any party to enforce any provision of this Agreement constitute a
waiver of that provision or any other provision.
23. Severability. If any term or condition of this Agreement is to any extent
invalid or unenforceable, all other terms and conditions shall not be affected
and the remainder of the Agreement shall continue to be valid and enforceable.
24. Cost of Disputes. In the event of any dispute concerning this Agreement, or
any default in the performance of any term or condition, the prevailing party in
litigation shall be entitled to recover all costs and expenses associated
therewith, including reasonable attorneys' fees.
25. Entire Agreement. This Agreement and the Exhibits and attachments thereto
contain the entire agreement between the parties relative to this transaction.
No modification of this Agreement will be binding unless that modification is in
writing and signed by the parties.
26. Law. This Agreement is to be construed and enforced in accordance with the
laws of the State of California.
27. Consummation of Transaction.
27.1 JPA Deliveries. Prior to the Effective Date JPA shall deliver to the Escrow
Holder a fully executed Xxxx of Sale for the Assets substantially in the form
attached to this Agreement as Exhibit 16 and a fully executed Assignment of
Client Contracts substantially in the form attached to this Agreement as Exhibit
17.
27.2 Actions of Escrow Holder. On the Effective Date, the Escrow Holder shall
(i) promptly deliver to JPA the full amount of the Downpayment Deposit, plus
accrued interest from and after the Closing Date, and the Promissory Note in
Section 4(ii), and (ii) promptly deliver to PBS&J the Xxxx of Sale and
Assignment of Client Contracts.
IN WITNESS WHEREOF, the parties have executed this Agreement as shown below:
WITNESSES: SELLER
Xxxx Xxxxxx & Associates, Inc.
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---------------------------- By: /s/ Xxxx X. Xxxxxx
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Title: President
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---------------------------- Date: October 17, 2000
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WITNESSES: PURCHASER
Post, Xxxxxxx, Xxxxx & Xxxxxxxx, Inc.
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---------------------------- By: /s/ H. Xxxxxxx Xxx
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Title: Certified Executive Officer
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---------------------------- Date: October 17, 2000
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