Exhibit 10.7
ASSET PURCHASE AGREEMENT
by and among
Blue Rhino Corporation
"Buyer"
and
Georgia Gas Distributors, Inc.
"Seller"
Dated: November 9, 1999
Asset Purchase Agreement
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THIS ASSET PURCHASE AGREEMENT ("Agreement") is made this the 9th day of
November 1999 by and between Blue Rhino Corporation, a Delaware corporation
("Buyer") and Georgia Gas Distributors, Inc., a Georgia corporation ("Seller").
R E C I T A L S:
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The Seller desires to sell to Buyer and the Buyer desires to purchase from
the Seller its 20 pound propane gas cylinder exchange business (the "Business")
and certain operating assets of the Seller, upon the terms and conditions set
forth herein.
NOW, THEREFORE, in consideration of the mutual promises and obligations
herein contained and other good and valuable considerations, the receipt and
sufficiency of which is hereby acknowledged, the Parties hereto agree as
follows:
ARTICLE I
Purchase and Sale of Assets
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1.1 Assets to be Purchased. Subject to the terms and conditions hereof, on
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the date of the Closing (the "Closing"), the Seller agrees to sell to the Buyer
and the Buyer agrees to purchase from the Seller the following assets and the
Business of the Seller (the "Assets"):
(a) All right, title and interest in and to all of Seller's seven hundred
three (703) retail cylinder exchange accounts and locations
("Locations"), as set forth on Exhibit 1.1(a) hereto.
(b) Seven hundred thirty-eight (738) retail exchange racks and displays
("Displays").
(c) Thirteen thousand seven hundred eighty-four (13,784) 20 pound propane
gas cylinders ("Cylinders").
(d) All of the machinery and equipment currently used by Seller in the
Business as set forth on Exhibit 1.1(d) attached hereto.
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(e) All of the motor vehicles of Seller set forth on Exhibit 1.1(e)
attached hereto.
(f) All inventory and supplies of Seller relating to the Business as of
Closing as agreed by the Parties.
(g) Seller's complete Customer List for the Business.
(h) Assignment of all licenses, permits, goodwill, records and all other
intangible rights of the Seller used or useful in the Business of the
Seller and relating to the Assets to the extent legally assignable.
(i) All business records relating to the Assets as agreed by the Parties
including (but not limited to) all sales data, customer lists, records
and files, accounts, contracts, performance data, and all other data
and information applicable to the operation of the Business.
(j) Excluded from this Agreement are the six (6) Industrial Customers
serviced by Gas To Go as set forth on Exhibit 1.1(j) attached hereto.
1.2 Liabilities and Obligations to be Assumed. Subject to the terms and
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conditions of this Agreement, as of the date of Closing, the Seller agrees to
assign and transfer to the Buyer and the Buyer agrees to pay or assume the
unperformed contracts, purchase and sale commitments and other agreements or
instruments relating to the Business to which the Seller is a party, and which
are limited to the list set forth on Exhibit 1.2 hereof.
The liabilities referred to in this Section are herein sometimes
collectively called the "Assumed Obligations."
Notwithstanding anything to the contrary contained herein, the following
liabilities are not to be paid or assumed by the Buyer hereunder:
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(a) any liability for any federal, state or local income taxes of the
Seller or its owners, all of which taxes will be timely paid and borne
entirely by the Seller; Seller shall be solely responsible for paying
whatever federal, state or local income taxes are incurred by it as a
result of this transaction and the Buyer's purchase of the Assets
pursuant to this Agreement;
(b) any litigation, or claims and assessments of Seller not yet in
litigation, whether or not identified on Exhibit 2.12 arising from
events occurring prior to the date of the Closing;
(c) any labor or unfair labor practices or employment discrimination claims
which occur prior to Closing;
(d) any obligations of the Seller under any profit-sharing or any other
employee benefit plans occurring prior to Closing; and
(e) any liability of any kind whatsoever, known or unknown other than the
assumed obligations which arise from events occurring prior to the date
of Closing.
1.3 Purchase Price; Payment. Subject to the terms and conditions of this
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Agreement and in reliance on the representations and warranties of the Seller
contained herein, and in consideration of the sale, conveyance, transfer and
delivery of all of the Assets, the Buyer agrees to pay to the Seller a purchase
price of one million one hundred thousand ($1,100,000) dollars (the "Purchase
Price") (subject to adjustment as set forth in Section 1.4 hereof). The Purchase
Price shall be paid eight hundred thousand ($800,000) dollars in cash at Closing
and three hundred thousand ($300,000) dollars within one hundred eighty (180)
days after Closing.
1.4 Adjustments to Purchase Price. The Purchase Price will be adjusted as
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follows:
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(a) Locations: One hundred eighty (180) days following Closing, a total
count of then customer Locations doing business with Buyer shall be
made. If the total count is greater than 703, the purchase price shall
be increased by an amount equal to $1,000 multiplied by the difference
between 703 and the then total count of Locations. If the total count
is less than 703, the purchase price shall be decreased by an amount
equal to $1,000 multiplied by the difference between 703 and the then
total count of Locations, except a customer Location ceasing to do
business with Buyer during the 180 days following Closing shall, for
purposes of calculating the total count, be included in the total count
as an active customer Location if both of the following conditions are
met:
(i) Any increase in price or any additional fee or charge has been
applied to that customer Location during the 180 days following
Closing other than standard service previously charged by Seller;
and
(ii) The loss of that customer Location would cause the total count to
become less than 703.
(b) Displays: The purchase price will be increased by $300 for each Display
in excess of 738 Displays and decreased by $300 for each Display less
than 738 transferred to Buyer at Closing.
(c) Cylinders: The purchase price will be increased by $16 for each
Cylinder in excess of 13,784 Cylinders and decreased by $16 for each
Cylinder less than 13,784 transferred to Buyer at Closing. Cylinders
must be fit-for-use in accordance with CGA-6 and shall exclude high
collar cylinders. Cylinders shall be palletized and separated by valve
type.
(d) Method of adjustment: Buyer and Seller shall set up acceptable
procedures to verify the count of Locations, Displays and Cylinders.
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Any adjustment resulting from verification by the Parties will be paid
in cash within one hundred eighty (180) days after the Closing.
1.5 Closing. The Closing of this transaction shall occur by United States
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mail or courier service on or before _________________ _____, 1999 or at such
time, date and place as the Parties may agree, provided however, that all
conditions to the Closing have been satisfied or waived in writing. At the
Closing, the Seller will execute and deliver to the Buyer appropriate
instruments of assignment, transfer and conveyance and such other instruments as
the Buyer shall reasonably request or, as specified in this Agreement. In
exchange, the Buyer shall deliver to the Seller the cash down-payment portion of
the Purchase Price and such other documents as the Seller shall reasonably
request or, as specified in this Agreement. The Seller and the Buyer shall
cooperate with and assist each other in the planning and orderly transfer of the
Assets.
1.6 Consulting Agreement. At the Closing, Buyer and Gerald E. Misel, Jr.
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will enter into the Consulting Agreement attached hereto as Exhibit 1.6.
1.7 Proration. Any revenue and cash expenses related to the Locations shall
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be prorated between the Parties as of the Closing Date.
ARTICLE II
Representations, Warranties and Covenants of the Seller
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The Seller hereby makes the following representations, warranties and
covenants, each of which is true and correct on the date hereof and will be true
and correct on the date of the Closing and each of them shall survive the date
of the Closing and the sale contemplated hereby.
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2.1 Corporate Existence and Qualification of Seller. The Seller is a
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corporation duly organized, validly existing and in good standing under the laws
of the State of Georgia. The Seller has the power and authority to own and use
its properties and to transact the Business in which it is engaged, holds all
franchises, licenses and permits necessary and required therefor.
2.2 Approval of Agreement. The execution and delivery of this Agreement has
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been duly authorized and approved by proper corporate action of the Seller.
Pursuant to such authorization and approval, the Seller has full power and
authority to enter into this Agreement and to perform its obligations hereunder.
2.3 Financial Information. Attached hereto as Exhibit 2.3 is the Financial
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Information prepared by the Seller relating to the revenues and cylinder
exchanges for each of the Locations over the twelve (12) months ending July 31,
1999. Such Financial Information is hereinafter referred to as the "Financial
Information." The Financial Information is true, complete and correct in all
material respects and has been prepared by the Seller and presents fairly the
Financial Information as of the dates indicated.
2.4 Events Subsequent to July 31, 1999. Since July 31, 1999, except as set
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forth on Exhibit 2.4 hereto, there has been no material (a) change in the
condition of the Assets or Business (ordinary wear and tear excepted) other than
changes in the ordinary course of business, none of which have been materially
adverse; or (b) damage, destruction or loss, whether covered by insurance or
not, affecting the Assets or the Business of the Seller.
2.5 True and Complete Copies. Copies of the agreements, written contracts
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and documents previously delivered and to be delivered hereunder by the Seller
are and will be true and complete copies of such agreements, contracts and
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documents.
2.6 Personal Property. Except as set forth on Exhibit 2.6 hereto, the
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Seller has good and marketable title to all of the personal property Assets free
and clear of all liens, security interests, leases, covenants, conditions,
agreements, claims, restrictions and other encumbrances of every kind, and there
exists no restriction on the use or transfer of such property.
2.7 Customer List. Set forth on Exhibit 2.7 hereto is a customer list of
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the Business which is true and correct as of the date indicated.
2.8 Use and Condition of Property. All of the Assets to be transferred to
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Buyer are in good operating condition and repair as required for their use in
the Business as presently conducted and will be in good operating condition as
of the Closing.
2.9 Licenses and Permits. Seller has all material licenses and permits
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required for the conduct of the Business and such licenses and permits are valid
and in full force and effect.
2.10 Contracts and Commitments. Except as set forth in Exhibit 2.10 hereto
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and relating only to the Business, the Seller does not have outstanding:
(a) Other than this Agreement, any arrangement or other agreement which
involves (i) a sharing of profits, (ii) future payments to other
persons, or (iii) any joint venture contract or arrangement.
(b) Any contract containing covenants materially limiting the freedom of
the Seller to compete in the Business or with any person or in any
geographic area.
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(c) Any contract or commitment not made in the ordinary course of business
which is material to the Business, financial condition or operations
of the Seller except as otherwise disclosed herein.
(d) Any other material contract or commitment which is not cancelable
without penalty on ten (10) days notice or less and which is not
specifically set forth on any other Exhibit hereto.
2.11 No Breach of Statute, Decree, Order or Contract. To the best of
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Seller's knowledge, as relates to the Assets, Seller is not in default under or
in violation of, any applicable statute, law, ordinance, decree, order, rule, or
regulation of any governmental body, or the provisions of any franchise or
license; or in default under, or in violation of, any provision of its Articles
of Incorporation, by-laws, or any promissory note, indenture or any evidence of
indebtedness or security therefor, lease, contract, purchase or other commitment
or any other agreement to which the Seller is a party or by which it is bound
which may result in an adverse effect on the Business or condition, financial or
otherwise, of the Seller; and the execution of this Agreement and the
consummation of the transactions contemplated hereby has not and will not
constitute or result in any such default, breach or violation or in the creation
of any lien, charge or encumbrance upon any Asset.
2.12 Litigation. To the best of Seller's knowledge, except as set forth on
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Exhibit 2.12 hereto, there is no suit, claim, action or proceeding now pending
or to the best of Seller's knowledge, threatened before any court,
administrative or regulatory body, or any governmental agency, nor, to the best
of Seller's knowledge, are there any grounds therefor, to which the Seller is a
party or which may result in any judgment, order, decree, liability or other
determination which will, or could, have any adverse effect upon any Asset. To
the best of Seller's knowledge, no such judgment, order or decree has been
entered against
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the Seller nor has any such liability been incurred which has, or could have,
such effect. To the best of Seller's knowledge, there is no claim, action or
proceeding now pending or threatened before any court, administrative or
regulatory body, or any governmental agency, which will, or could, prevent or
hamper the consummation of the transactions contemplated by this Agreement.
2.13 Insurance Policies. Set forth on Exhibit 2.13 hereto is a list of all
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insurance policies in force covering the Assets.
2.14 Books and Records. As relates to the Assets, the books of account,
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corporate books and other records of the Seller are in all material respects
complete and correct, have been maintained in accordance with normal business
practices, and the matters contained therein are accurately reflected on the
Financial Information in all material respects.
2.15 Product Liability. To the best of Seller's knowledge, there exist no
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claims against the Seller for injury to person or property of its employees or
any third persons suffered as a result of the sale of any products or services
of the Business sold by the Seller prior to the date of this Agreement,
including, but not limited to, claims arising because of the defective or unsafe
nature of its equipment or service. The Seller has, and on the date of Closing
will have, full and adequate insurance coverage for potential products liability
claims against it relating to the Business as set out on Exhibit 2.13.
2.16 Assumed Obligations. The Assumed Obligations to be assumed by the
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Buyer under the provisions of Section 1.2 hereof are all valid and in full force
and effect and to the best of Seller's knowledge, no party to any such Assumed
Obligation is in default with respect to any term or condition thereof, nor has
any event occurred which, through the passage of time or the giving of notice,
or both, would constitute a default thereunder or would cause the acceleration
of any obligation of any party thereto. Except as specifically set forth on
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Exhibit 2.16 hereto, none of the Assumed Obligations will result in a penalty
upon termination. The Assumed Obligations will be valid and in full force and
effect on the Closing. Each Assumed Obligation will be duly assigned to the
Buyer on the Closing and upon such assignment, the Buyer will acquire all of the
Seller's right, title and interest in and to such Assumed Obligation and will be
substituted for the Seller under the terms of such Assumed Obligation. The
Seller has delivered to the Buyer true, correct and complete copies of the
contracts, agreements or other documents creating or evidencing each Assumed
Obligation.
2.17 Necessary Property, Title and Transfer of Assets. The Assets and
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Assumed Obligations being sold and delivered by the Seller to the Buyer
constitute all of such property now used in and necessary for the conduct of the
Business of the Seller. To the best of Seller's knowledge, except as set forth
on Exhibit 2.17 hereto, no consent is necessary to, and there exists no
restriction on, the transfer of any of the Assets to the Buyer or the assignment
of the Assumed Obligations to the Buyer. There exists no condition, restriction
or reservation affecting the title to or utility of the Assets or Assumed
Obligations which would prevent the Buyer from occupying or utilizing the Assets
or Assumed Obligations, or any part thereof, to the same full extent that the
Seller might continue to do so if the sale and transfer contemplated hereby did
not take place.
2.18 Reasonableness-Validity of Contracts. To the best of Seller's
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knowledge, no purchase commitment for inventory to which the Seller is a party
is in excess of the normal, ordinary, usual and current requirements of its
Business or at a price in excess of the current reasonable market price.
Each of the contracts and agreements relating to the Business to which the
Seller is a party is a valid and binding obligation of the parties thereto in
accordance with its terms and conditions. To the best of Seller's knowledge, no
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party to any such contract or agreement is in default with respect to any
material term or condition thereof, nor has any event occurred which, through
the passage of time or the giving of notice, or both, would constitute a default
thereunder or would cause the acceleration of any obligation of any party
thereto or the creation of a lien or encumbrance upon any Asset.
2.19 No Material Misstatement or Omissions. To the best of Seller's
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knowledge, Sections 2.1 through and including 2.18 of this Article II, including
the material contained in the Exhibits referred to in said Sections, do not
contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein not materially false or misleading.
There is no fact which materially adversely affects, or in the future may (so
far as the Seller reasonably foresees) materially adversely affect, the
Business, properties or financial or business condition of the Seller which has
not been set forth therein. The representations, warranties and covenants made
in this Article will be true and complete on and as of the Closing with the
same force and effect as though made on and as of the Closing.
ARTICLE III
Representations and Warranties of the Buyer
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The Buyer hereby makes the following representations and warranties, each
of which is true and correct on the date hereof and will be true and correct on
the date of Closing, and each of which shall survive the date of Closing and the
sale contemplated hereby.
3.1 Corporate Existence of Buyer. The Buyer is a corporation duly
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organized, validly existing and in good standing under the laws of the State of
Delaware. The Buyer has the corporate power and authority to own and use its
properties and to transact the business in which it is engaged.
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3.2 Approval of Agreement. The execution and delivery of this Agreement
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has been duly authorized and approved by proper corporate action of the Buyer.
Pursuant to such authorization and approval, the Buyer has full power and
authority to enter into this Agreement and to perform its obligations hereunder.
3.3 No Breach of Statute, Decree, Order or Contract. The execution of
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this Agreement and the consummation of the transactions contemplated hereby have
not and will not constitute or result in the breach of any of the provisions of
or constitute a default under, the articles or certificate of incorporation or
by-laws of the Buyer, or any promissory note, indenture, evidence of
indebtedness or security therefor, lease, contract, purchase or other commitment
or any other agreement to which the Buyer is a party or by which it is bound
which would have a material adverse effect on the Buyer, taken as a whole.
ARTICLE IV
Covenants Concerning the Seller
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The Seller covenants and agrees with the Buyer that, from and after the
date of this Agreement and until the Closing, the Seller will conduct the
Business subject to the following provisions and limitations:
4.1 Operation of Business. Unless the prior written consent of the Buyer
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is otherwise obtained as relates to the Business, the Seller will:
(a) not enter into any contract or commitment or engage in any
transaction which is not in the usual and ordinary course of business
or which is inconsistent with past practices;
(b) not sell or dispose of any of the Assets except in the ordinary
course of business;
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(c) not create, assume, incur or guarantee any indebtedness other than
(i) in the usual and ordinary course of business or (ii) that was
previously incurred pursuant to existing contracts disclosed in the
Exhibits delivered pursuant hereto;
(d) not make or institute any unusual or novel method of transacting
business or change any accounting procedures or practices or its
financial structure;
(e) not perform any act, or attempt to do any act, or permit any act or
omission to act, which will cause a breach of any material contract,
commitment or obligation to which the Seller is a party;
(f) maintain its inventories at substantially the same level as on the
date of this Agreement;
(g) operate its Business in the usual, regular and ordinary course;
(h) maintain the Assets and properties in substantially the same state of
repair, order and condition as currently exist, reasonable wear and
tear excepted;
(i) continue to insure the Assets owned or leased by it against all
ordinary and insurable risks for which Seller is currently insured as
set forth in Exhibit 2.13 hereto and will operate, maintain and
repair all its property in a manner consistent with what the Seller
has done in the past;
(j) not take any action which would interfere with the ability of the
Seller to perform this Agreement, which would prevent the performance
of this Agreement, or which would materially impair the value of the
Business or Assets being acquired by the Buyer in this transaction;
and
(k) use its best efforts to preserve its business organization and
relationships intact and keep available to the Buyer, to the extent
desired by the Buyer, the services of its present employees and
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agents, and also use its best efforts to preserve the goodwill of
suppliers, customers, distributors and others having material
business relations with it.
4.2 Full Access. As relates only to the Assets and the Business,
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representatives of the Buyer shall have full access at all reasonable times to
all premises, properties, records and contracts of the Seller, and the Seller
will furnish to the Buyer any information in respect to the 20 pound cylinder
Business as the Buyer may from time to time reasonably request. Such examination
and investigation by the Buyer shall not affect the warranties and
representations of the Seller contained in this Agreement.
ARTICLE V
Conditions to the Buyer's Obligations
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The obligations of the Buyer to consummate the transactions provided for in
this Agreement shall be subject to the satisfaction of each of the following
conditions on or before the date of the Closing, subject to the right of the
Buyer to waive any one or more of such conditions.
5.1 Representations and Warranties of Seller. The representations and
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warranties of the Seller contained in this Agreement and in the certificates and
documents to be delivered to the Buyer pursuant hereto and in connection
herewith shall be true and correct in all material respects on the date hereof
and on the date of the Closing (except for changes specifically permitted
hereunder) as though such representations and warranties were made on the date
of the Closing.
5.2 Performance of this Agreement. The Seller shall have duly performed
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or complied in all material respects with all of the obligations to be performed
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or complied by it under the terms of this Agreement on or prior to the date of
Closing.
5.3 Material Adverse Change. There shall have been no material adverse
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change, casualty or loss actual or threatened, in the Assets, the Business or
condition, financial or otherwise, of the Seller, which has not been previously
remedied by Seller or disclosed herein, whether or not covered by insurance, as
a result of any cause whatsoever.
5.4 No Violations of Law or Litigation. To the best of Seller's
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knowledge, as of the date of Closing there shall exist no violations of any
federal, state or local law or regulations materially affecting the Assets,
goodwill or the Business, and no governmental agency or body shall have made
charges of any such violations or shall have instituted, threatened or intimated
any action which would have a material adverse effect on and/or preclude the
transaction contemplated by this Agreement.
5.5 Receipt of Documents. The Buyer shall have received, in form and
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content satisfactory to it, all documents required to be delivered to it
hereunder, and such other documents (in addition to the foregoing) as may
reasonably be required by the Buyer in connection with this Agreement and the
transaction hereunder.
5.6 Certificate of the Seller. The Buyer shall have received a
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certificate signed by an officer of the Seller dated as of the date of the
Closing, and subject to no qualification, certifying that the conditions set
forth in this Article have been fully satisfied. Such certificate shall be
deemed a representation and warranty of the Seller under this Agreement.
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5.7 Authorization and Good Standing. The Buyer shall have received from
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the Seller:
(a) A certificate that this Agreement has been duly executed and
delivered on behalf of the Seller, is valid, binding and enforceable
against the Seller in accordance with its terms, and has received all
requisite corporate authorization.
(b) A certificate that the Seller is a corporation duly organized and
validly existing under the laws of Georgia. The Seller has full power
and authority to own and use its properties and carry on its business
as being conducted immediately prior to the date of the Closing.
(c) A Certificate of Existence from the State of Georgia.
(d) An attorney's opinion or acceptable UCC reports from the Georgia
State Clerk's Cooperative Authority, Tennessee Secretary of State and
the South Carolina Secretary of State showing that the Assets are not
subject to any liens or encumbrances or a written commitment to
release any such liens or encumbrances from all secured parties.
5.8 Opinion of Counsel. The Buyer shall have received from Hoffman &
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Associates, counsel to the Seller, an opinion of such counsel, dated the Closing
Date, to the effect that:
(a) This Agreement has been duly executed and delivered on behalf of the
Seller, is valid, binding and enforceable against the Seller in
accordance with its terms, and has received all requisite legal
corporate approval.
(b) The Seller is a corporation duly organized, validly existing and in
good standing under the laws of the State of Georgia. The Seller has
full corporate power and authority to own and use its properties and
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carry on its business as being conducted immediately prior to the
Closing Date.
5.9 No Lawsuits. To the best of Seller's knowledge, no suit, action or
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other proceeding or investigation shall be threatened or pending before or by
any court or governmental agency concerning this Agreement or the consummation
of the transactions contemplated hereby, or in connection with any material
claim against the Seller relating to the Business not disclosed on the Exhibits
hereto. To the best of Seller's knowledge, no governmental agency shall have
threatened or directed any request for information concerning this Agreement,
the transaction contemplated hereby or the consequences or implications of such
transaction to the Buyer or the Seller, or any member, officer, director,
employee or agent of either of them.
5.10 No Restrictions. To the best of Seller's knowledge, there shall exist
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no conditions, restrictions or reservations affecting the title to or utility of
the Assets which would prevent the Buyer from occupying and utilizing the Assets
or any part thereof, to the same full extent that the Seller might continue to
do so if the sale and transfer contemplated hereby did not take place.
5.11 Consents. To the best of Seller's knowledge, there are no material
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contracts regarding the Business to be assigned hereunder which requires the
consent of any third party which consent has not be obtained.
5.12 Documents. The Buyer shall receive from the Seller on the date of the
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Closing appropriate documents conveying to the Buyer good and marketable title
to the Assets being transferred.
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5.13 Delivery of Certain Records. All books and records of the Seller
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relating to the Assets being transferred and all other information and records
reasonably requested by the Buyer, shall have been made available to the Buyer
for inspection, and shall be in form and content satisfactory to the Buyer and
its counsel. The Seller shall have delivered the business records promised to
the Buyer pursuant to Section 1.1(i) hereof.
5.14 Approval of Counsel. The validity of the transaction herein
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contemplated and the form and substance of all opinions, instruments and other
documents or certificates to be delivered by the Seller hereunder shall be
reasonably satisfactory to House & Ingersoll, PLLC, counsel for the Buyer.
5.15 Further Assurances. The Buyer shall have received such further
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instruments and documents as may reasonably be required to carry out the
transactions contemplated hereby and to evidence the fulfillment of the
agreements herein contained and the performance of all conditions to the
consummation of such transactions.
ARTICLE VI
Conditions to the Seller's Obligations
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The obligations of the Seller to consummate the transactions provided for
in this Agreement shall be subject to the satisfaction of each of the following
conditions on or before the date of the Closing, subject to the right of the
Seller to waive any one or more of such conditions:
6.1 Representations and Warranties of the Buyer. The representations and
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warranties of the Buyer contained in this Agreement and in the certificates and
documents to be delivered to the Seller pursuant hereto and in connection
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herewith shall be true and correct in all material respects on the date hereof
and on the date of the Closing (except for changes specifically permitted
hereunder) as though such representations and warranties were made on the date
of the Closing.
6.2 Performance of this Agreement. The Buyer shall have duly performed or
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complied in all material respects with all of the obligations to be performed or
complied by it under the terms of this Agreement on or prior to the date of the
Closing.
6.3 Certificate of the Buyer. The Seller shall have received a
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certificate signed by an officer of the Buyer dated as of the date of the
Closing and subject to no qualification certifying that the conditions set forth
in this Article have been fully satisfied. Such certificate shall be deemed a
representation and warranty of the Buyer hereunder.
6.4 Authorization and Good Standing. The Seller shall have received from
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the Buyer:
(a) A certificate that this Agreement has been duly executed and
delivered on behalf of the Buyer and is binding and enforceable
against it in accordance with its terms.
(b) A certificate that Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware. Buyer has full power and authority to own and use its
properties and carry on its business as being conducted immediately
prior to the date of the Closing.
(c) A Certificate of Existence from the State of Delaware.
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6.5 Payment of Purchase Price. The Seller shall receive from the Buyer on
-------------------------
the date of the Closing the cash down-payment portion of the Purchase Price
provided for in this Agreement.
6.6 Opinion of Counsel. The Seller shall have received from House &
------------------
Ingersoll, PLLC, counsel to the Buyer, an opinion of such counsel, dated the
Closing Date, to the effect that:
(a) This Agreement has been duly executed and delivered on behalf of the
Buyer, is valid, binding and enforceable against the Buyer in
accordance with its terms, and has received all requisite legal
corporate approval.
(b) The Buyer is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware. The Buyer has
full corporate power and authority to own and use its properties and
carry on its business as being conducted immediately prior to the
Closing Date.
6.7 Further Assurances. The Seller shall have received such further
------------------
instruments and documents as may reasonably be required to carry out the
transactions contemplated hereby and to evidence the fulfillment of the
agreements herein contained and the performance of all conditions to the
consummation of such transactions.
6.8 No Lawsuits. No suit, action or other proceeding or investigation
-----------
shall be threatened or pending before or by any court or governmental agency
concerning this Agreement or the consummation of the transactions contemplated
hereby, or in connection with any material claim against Buyer not previously
disclosed to the Seller. No governmental agency shall have threatened or
directed any request for information concerning this Agreement, the transaction
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contemplated hereby, or the consequences or implications of such transaction to
Buyer or Seller, or any member, officer, director, employee or agent of either
of them.
6.9 Approval of Counsel. The validity of the transaction herein
-------------------
contemplated and the form and substance of all opinions, instruments and other
documents or certificates to be delivered by Buyer hereunder shall be reasonably
satisfactory to Hoffman & Associates, counsel for Seller.
ARTICLE VII
Indemnification
---------------
7.1 Indemnification of Buyer. For a term of three (3) years after the date
------------------------
of the Closing, the Seller hereby agrees to indemnify and hold the Buyer, any
subsidiary or affiliated corporation of the Buyer or any officer, director,
agent, employee, parent or affiliate of them (an "Indemnified Person") harmless
from and against any and all losses, claims, damages, liabilities, costs,
counsel fees and other expenses of any nature whatsoever incurred or asserted
against them, resulting from or arising out of (i) any breach by the Seller of
any representation, warranty, covenant, agreement or other obligation of the
Seller made or incurred under or pursuant to this Agreement; (ii) any claim
relating to the Assets or the Business occurring prior to or on the date of the
Closing (other than a claim arising out of acts of Buyer's employees, agents, or
representatives), whether or not such claim constitutes a breach of any
representations, warranty, covenant, agreement or other obligation of the
Seller; and (iii) any liability or obligation of the Seller which is not
expressly assumed by the Buyer under this Agreement; [(i) through (iii) herein
collectively referred to as "Indemnifiable Losses"].
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7.2 Indemnification of Seller. For a term of three (3) years after the
-------------------------
date of the Closing, the Buyer hereby agrees to indemnify and hold the Seller,
any subsidiary or affiliated corporation of the Seller or any officer, director,
agent, employee, parent or affiliate of them (an "Indemnified Person") harmless
from and against any and all losses, claims, damages, liabilities, costs,
counsel fees and other expenses of every nature whatsoever incurred or asserted
against them, resulting from or arising out of (i) any breach by the Buyer of
any representation, warranty, covenant, agreement or other obligation of the
Buyer made or incurred under or pursuant to this Agreement; and (ii) any claim
relating to the Assets or the Business occurring after the date of the Closing
(other than a claim arising out of acts of Seller's employees, agents, or
representatives), whether or not such claim constitutes a breach of any
representations, warranty, covenant, agreement or other obligation of the Buyer
[(i) and (ii) herein collectively referred to as "Indemnifiable Losses"].
7.3 Participation in Litigation. In the event any suit or other proceeding
---------------------------
is initiated against an Indemnified Person with respect to which such
Indemnified Person alleges the other party is or may be obligated to indemnify
such Indemnified Person hereunder, the other party shall be entitled to
participate in such suit or proceeding, at its expense and by counsel of its
choosing, provided that (a) such counsel is reasonably satisfactory to the
Indemnified Person, and (b) the Indemnified Person and its counsel shall retain
primary control over such suit or proceeding. If defense is undertaken by an
insurance company of either party, then either Buyer or Seller may participate
at their own expense. Such counsel shall be afforded access to all information
pertinent to the suit or proceeding in question. The Indemnified Person shall
not settle or otherwise compromise any such suit or proceeding without the prior
written consent of the other party, which consent shall not be unreasonably
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withheld, if the effect of such settlement or compromise would be to impose
liability on the other party hereunder.
7.4 Payment of Indemnity. In the event an Indemnified Person suffers an
--------------------
Indemnifiable Loss, then the other party shall pay such Indemnifiable Loss in
cash or make such escrow or other arrangements for the payment of such
Indemnifiable Loss as will absolve the Indemnified Person of any liability
therefor. Acknowledged payment by either party's insurance company shall
constitute acceptable arrangements for payment hereunder.
ARTICLE VIII
Miscellaneous
-------------
8.1 Survival of Warranties and Representations. Notwithstanding any
------------------------------------------
investigation by either the Seller or the Buyer, all representations, and
warranties of the Seller and Buyer made under or pursuant to this Agreement
shall survive the date of the Closing hereunder for a period of three (3) years.
All covenants and agreements of the Parties hereto shall survive until such
covenants and agreements have been fully performed.
8.2 Assignment; Binding Agreement.
-----------------------------
(a) This Agreement and all or any part of the Buyer's rights and
obligations hereunder may be assigned by the Buyer at any time only to
an affiliated entity of Buyer or a Blue Rhino Distributor but such
assignment will not relieve Buyer of any of Buyer's obligations,
duties or liabilities under this Agreement.
(b) Neither this Agreement nor any of the Seller's rights or obligations
hereunder may be assigned by the Seller without the Buyer's prior
written consent which shall not be unreasonably withheld but such
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assignment shall not relieve Seller of any obligations, duties and
liabilities under this Agreement.
(c) This Agreement shall be binding upon and shall inure to the benefit of
the Parties hereto and to their respective successors and permitted
assigns.
8.3 Termination of this Agreement. This Agreement and the transactions
-----------------------------
contemplated hereby may be terminated prior to the date of the Closing only as
follows:
(a) By mutual consent of the Buyer and the Seller.
(b) By the Party not at fault, if any of the conditions precedent to the
Closing are not met or waived on or at the Closing.
8.4 Remedies. Nothing contained herein is intended to or shall be
--------
construed so as to limit the remedies which either party may have against the
other in the event of a breach by either party of any representation, warranty
or agreement made under or pursuant to this Agreement, it being intended that
any remedies shall be cumulative and not exclusive. The Parties agree that if
any party hereto is obligated to, but nevertheless does not, consummate this
transaction, then any other party, in addition to all other rights or remedies,
shall be entitled to the remedy of specific performance mandating that the other
party or parties consummate this transaction. In an action for specific
performance by any party against another party, the other party shall not plead
adequacy of damages at law.
8.5 Entire Agreement and Modification. This Agreement, including the
---------------------------------
Exhibits attached hereto and the documents delivered pursuant hereto,
constitutes the entire agreement between the Parties. No changes of,
modifications of, or additions to this Agreement shall be valid unless the same
shall be in writing
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and signed by all Parties hereto.
8.6 Severability. If any provision of this Agreement shall be determined
------------
to be contrary to law and unenforceable by any court of law, the remaining
provisions shall be severable and enforceable in accordance with their terms.
8.7 Counterparts. This Agreement may be executed in one or more identical
------------
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
8.8 Headings. The table of contents and article and section headings
--------
contained in this Agreement are inserted for convenience only and shall not
affect in any way the meaning or interpretation of the Agreement.
8.9 Governing Law. This Agreement shall be construed and interpreted
-------------
according to the laws of the State of North Carolina.
8.10 Payment of Fees and Expenses. Except as may be otherwise provided
----------------------------
herein, each party hereto shall pay all fees and expenses of such party's
respective counsel, accountants and other experts and all other expenses
incurred by such party incident to the negotiation, preparation and execution of
this Agreement and the consummation of the transaction contemplated hereby. Each
party agrees to indemnify and hold the other party harmless from and against any
claim or liability for any brokerage fees, commissions or finders' fees in
connection with the transactions contemplated herein.
8.11 Further Documents. The Seller and Buyer hereby agree to deliver to
-----------------
the other party such other and further agreements, consents, documents or
instruments of conveyance, assignment or transfer and to do such other things
and
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to take such other actions, supplemental or confirmatory, as may be required for
the purpose of or in connection with the consummation or evidencing of the
transactions contemplated hereunder.
8.12 Exhibits a Part of Agreement. The Exhibits to this Agreement
----------------------------
constitute an integral part of this Agreement.
8.13 No Public Announcement. The Parties hereto agree that they will make
----------------------
no public announcements concerning the sale of the Assets hereunder or which
make reference to said sale (or the sale of the Business represented thereby),
unless each party has previously agreed to the content of such announcement or
unless it is otherwise required by law.
8.14 Notices. 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 or sent by registered or certified
mail, postage prepaid, overnight courier or telecopy and addressed as set forth
below:
(a) If to Buyer: Blue Rhino Corporation
ATTN: Mr. Chris Holden
104 Cambridge Plaza Drive
Winston-Salem, NC 27104
copy to: Don R. House
House & Ingersoll PLLC
3325 Healy Drive
Winston-Salem, NC 27103
(b) If to Seller: Georgia Gas Distributors
ATTN: Mr. Gerald E. Misel, Jr.
6000 Lake Forest Drive, Suite 230
Atlanta, GA 30328
copy to: Michael W. Hoffman
Hoffman & Associates
6075 Lake Forrest Drive, Suite 200
Atlanta, GA 30328
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Any party may change the address to which notices are to be addressed by giving
the other parties notice in the manner herein set forth.
8.15 Arbitration. The Parties hereto agree to submit to arbitration any
-----------
and all matters in dispute or in controversy among them concerning the terms and
provisions of this Agreement. All such disputes and controversies shall be
determined and adjudged by an arbitrator or arbitrators selected in accordance
with the commercial arbitration rules (the "Rules") of the American Arbitration
Association. The arbitration shall be held in Atlanta, Georgia or such other
location as agreed by all of the Parties, and shall be conducted in accordance
with the Rules, and the decision of the arbitrator(s) shall be final and binding
on the Parties. The determination of which party (or combination thereof) shall
bear the costs and expenses incurred in any such arbitration proceedings shall
be determined by the arbitrator(s). Any such decision and satisfaction thereof
may be enforced in any court having jurisdiction over the subject matter or the
Parties. Notwithstanding the foregoing, either party may institute a civil
action in a court for the sole purpose of maintaining the status quo during the
pendency of any arbitration proceeding and the Parties agrees that said court
has personal jurisdiction over the Parties.
8.16 Attorney Fees. In the event an arbitration, suit or action is brought
-------------
by any party under this Agreement to enforce any of its terms, or in any appeal
therefrom, it is agreed that the prevailing party shall be entitled to recover
reasonable attorneys fees from the other party, the amount to be fixed by the
arbitrator, trial court, and/or appellate court.
8.17 Non-Compete. Seller agrees that during the term of three (3) years
-----------
after the Closing, it shall not, without the prior written consent of the Buyer,
directly or indirectly, for its benefit or the benefit of another person, firm
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or corporation either:
(a) engage in the 20 pound propane gas cylinder exchange business within
fifty (50) miles of any of the Locations;
(b) have any material ownership in any corporation, partnership, firm,
association or business (except Buyer) which is primarily engaged in
the exchange or refurbishing of propane gas cylinders within fifty
(50) miles of any of the Locations;
(c) request any customers of Buyer to curtail or cancel their business
with Buyer;
(d) disclose to any person, firm or corporation the name of any customers
of the Seller or Buyer; or
(e) induce or attempt to influence any employee of Buyer to terminate his
employment.
Excluded from this covenant are the six (6) Industrial Customers set forth
on Exhibit 1.1(j) attached hereto.
8.18 Binding Effect. This Agreement and all the provisions hereof shall be
--------------
binding upon and enure to the benefit of the Parties hereto and their respective
successors and allowed assigns.
8.19 Return of Documents. If the transaction contemplated herein fails
-------------------
to close for any reason, then Buyer shall return to Seller all Exhibits,
Financial Information and any other documentation provided to Buyer as soon as
practicable, and Buyer shall not, directly or indirectly, use, benefit or profit
from such information. To the extent any such information inappropriately
benefits Buyer, Buyer shall be liable to Seller for damages at law or in equity,
as may be determined by a court of competent jurisdiction.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement, as of
the day and year first above written.
BUYER:
Blue Rhino Corporation
BY: /s/ Joseph T. Culp, Vice President
-----------------------------------
Officer
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SELLER:
Georgia Gas Distributors, Inc.
By: /s/ Gerald E. Misel, Jr.,
----------------------------------
Gerald E. Misel, Jr.,
Title: Vice President
-------------------------------
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List of Exhibits
----------------
1.1(a) List of Locations
1.1(d) Machinery and Equipment
1.1(e) Motor Vehicles
1.1(j) Excluded Industrial Customers
1.2 Liabilities and Contracts to be Assumed
1.6 Consulting Agreement
1.8 Standard Exchange Agreement and List of Applicable Locations
2.3 Financial Information
2.4 Subsequent Events
2.6 Liens and Encumbrances
2.7 Customer List
2.10 Contracts and Commitments
2.12 Litigation
2.13 Insurance
2.16 Exceptions to Assumed Obligations
2.17 Necessary Consents and Restrictions on Transfer
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