Document:

Exhibit 10.1

 

THIRD AMENDMENT

TO

EMPLOYMENT AGREEMENT

 

This THIRD
AMENDMENT TO EMPLOYMENT AGREEMENT (this “Amendment”) is made as of this 18th
day of December 2007, by and between GeoPetro Resources Company, a
California corporation (“Company”) and J. Chris Steinhauser (“Employee”).

 

RECITALS

 

A.                                    Company
and Employee are parties to that certain Employment Agreement dated June 19,
2000 (the “Original Agreement”), First Amendment to Employment Agreement dated December 12,
2002 and Second Amendment to Employment Agreement dated January 1, 2005,
pursuant to which Employee agreed to provide certain services to Company and
Company agreed to employ Employee as its Chief Financial Officer and Vice
President of Finance.

 

B.                                    The
term of the Original Agreement was for two years, from June 19, 2000
through June 18, 2002 continuing on a month-to-month basis thereafter, the
term of the First Amendment to Employment Agreement was for three years, from June 19,
2002 through June 18, 2005 continuing on a month-to-month basis thereafter
and the term of the Second Amendment to Employment Agreement was for three
years and six months, from January 1, 2005 through June 30, 2008.

 

C.                                    The
parties hereto now wish to amend the Original Agreement, the First Amendment to
Employment Agreement and the Second Amendment to the Employment Agreement to
extend the term thereof for a definite term and to reflect such other changes
as indicated herein.

 

NOW, THEREFORE, Company and Employee hereby agree as follows:

 

1. Effective
Date. The effective date of this Amendment shall be December 18, 2007
(the “Amendment Effective Date”).

 

2. Amendment
of Original Agreement, First Amendment to Employment Agreement and Second
Amendment to Employment Agreement. The parties hereby amend the Original
Agreement, the First Amendment to Employment Agreement and Second Amendment to Employment
Agreement as follows:

 

(a)                                 Term.
Section 2(a) of the Second Amendment to Employment Agreement shall be
deleted and replaced in full with the following:

 

1.1                   Employment Term. The terms of
Employee’s employment under this Agreement shall commence as of December 18,
2007 (the “Effective Date”) and shall continue until December 31, 2010
(the “Termination Date”), unless earlier terminated in accordance with Section 3
hereafter.  The period commencing as of
the Effective Date and ending on the Termination Date is hereinafter referred
to as the “Employment Term”.

 

 

 

(b)                                 Salary.
Section 2(b) of the Second Amendment to Employment Agreement shall be
deleted and replaced in full with the following:

 

1.5.                Base
Salary. For all the services rendered by Employee hereunder, the Company
shall pay Employee a base salary (the “Base Salary”) at the annual rate of
$163,200.  Employee’s Base Salary shall
be payable in installments at such times as the Company customarily pays its
other employees.

 

3.                                      Integration.
To the extent of any inconsistencies between the terms and conditions of the
Original Agreement, the First Amendment to Employment Agreement, the Second
amendment to Employment Agreement and those of this Amendment, this Amendment
shall govern. Except to the extent that the provisions of the Original
Agreement, the First Amendment to Employment Agreement or the Second Amendment
to Employment Agreement are so superseded, they shall remain in full force and
effect.

 

4.                                      Counterparts.
This Amendment may be executed in one or more counterparts, each of   which shall be an original, but all of which
together shall constitute one instrument.

 

 

IN WITNESS WHEREOF, Company and
Employee have executed this Amendment as of the date first above written.

 

GEOPETRO
RESOURCES COMPANY

 

 

 

	
  Stuart
  J. Doshi

  	
   

  	
  J.
  Chris Steinhauser

  	
   

  
	
  By:

  	
  Stuart
  J. Doshi

  	
  J.
  Chris Steinhauser

  
	
  Title:

  	
  President & CEOExhibit 10.1

 

 

 

PURCHASE
AGREEMENT

 

 

by and
among

 

FARM &
HOME OIL COMPANY,

 

RICHARD
A. LONGACRE, AS SELLERS’ REPRESENTATIVE,

 

THE
SHAREHOLDERS OF FARM & HOME OIL COMPANY

 

and

 

BUCKEYE
ENERGY HOLDINGS LLC

 

 

Dated
December 21, 2007

 

 

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I

  	
  THE CLOSING; PURCHASE AND SALE OF MEMBERSHIP
  INTERESTS

  	
  4

  
	
  1.1

  	
  Purchase and Sale of Membership Interests

  	
  4

  
	
  1.2

  	
  Purchase Price

  	
  4

  
	
  1.3

  	
  The Closing

  	
  4

  
	
  1.4

  	
  Payment of the Purchase Price

  	
  5

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
  REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

  	
  6

  
	
  2.1

  	
  Organization; Corporate Power and Authorization

  	
  6

  
	
  2.2

  	
  Binding Effect and Noncontravention.

  	
  6

  
	
  2.3

  	
  Broker Fees

  	
  7

  
	
  2.4

  	
  Financial Ability

  	
  7

  
	
  2.5

  	
  No Litigation

  	
  7

  
	
  2.6

  	
  Investment

  	
  7

  
	
  2.7

  	
  Purchaser’s Due Diligence

  	
  7

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
  REPRESENTATIONS AND WARRANTIES OF THE SELLERS

  	
  8

  
	
  3.1

  	
  Power and Authorization

  	
  8

  
	
  3.2

  	
  Binding Effect and Noncontravention.

  	
  8

  
	
  3.3

  	
  Capital Stock

  	
  8

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

  	
  9

  
	
  4.1

  	
  Organization; Qualification; Corporate Power and Authorization

  	
  9

  
	
  4.2

  	
  Binding Effect and Noncontravention.

  	
  9

  
	
  4.3

  	
  Capitalization; Subsidiaries.

  	
  10

  
	
  4.4

  	
  Financial Statements.

  	
  11

  
	
  4.5

  	
  Events Subsequent to the Latest Balance Sheet

  	
  11

  
	
  4.6

  	
  Tangible Assets; Inventory.

  	
  11

  
	
  4.7

  	
  Compliance with Laws

  	
  12

  
	
  4.8

  	
  Tax Matters

  	
  12

  
	
  4.9

  	
  Environmental Matters

  	
  14

  
	
  4.10

  	
  Intellectual Property.

  	
  14

  
	
  4.11

  	
  Real Estate.

  	
  14

  
	
  4.12

  	
  Litigation

  	
  15

  
	
  4.13

  	
  Labor Relations

  	
  15

  
	
  4.14

  	
  Employee Plans.

  	
  16

  
	
  4.15

  	
  Employees

  	
  17

  
	
  4.16

  	
  Affiliate Transactions

  	
  17

  
	
  4.17

  	
  Insurance

  	
  17

  
	
  4.18

  	
  Contracts

  	
  17

  
	
  4.19

  	
  Customers; Suppliers

  	
  19

  
	
  4.20

  	
  Broker Fees

  	
  19

  
	
  4.21

  	
  Derivative and Hedging Activity

  	
  19

  

 

i

 

	
  4.22

  	
  Disclaimer

  	
  19

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
  COVENANTS AND OTHER AGREEMENTS

  	
  19

  
	
  5.1

  	
  F&H LLC Merger

  	
  19

  
	
  5.2

  	
  General; Operation of Business

  	
  20

  
	
  5.3

  	
  Access to Records

  	
  22

  
	
  5.4

  	
  Supplemental Disclosure; Notice of Developments.

  	
  23

  
	
  5.5

  	
  Public Announcements; Confidentiality.

  	
  24

  
	
  5.6

  	
  Litigation Support

  	
  24

  
	
  5.7

  	
  Regulatory and Other Approvals; Consents.

  	
  24

  
	
  5.8

  	
  Employee Matters.

  	
  25

  
	
  5.9

  	
  Record Retention

  	
  26

  
	
  5.10

  	
  Rights to Indemnification

  	
  26

  
	
  5.11

  	
  Acknowledgement of Personal Property

  	
  27

  
	
  5.12

  	
  Tax Matters.

  	
  27

  
	
  5.13

  	
  Further Assurances

  	
  32

  
	
  5.14

  	
  Survival

  	
  32

  
	
  5.15

  	
  Exclusivity

  	
  32

  
	
  5.16

  	
  Sellers’ Representative.

  	
  33

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
  INDEMNIFICATIONS; SURVIVAL

  	
  34

  
	
  6.1

  	
  Indemnification by the Sellers

  	
  34

  
	
  6.2

  	
  Indemnification by the Purchaser

  	
  34

  
	
  6.3

  	
  Losses Net of Insurance, Etc

  	
  35

  
	
  6.4

  	
  Termination of Indemnification

  	
  37

  
	
  6.5

  	
  Procedures Relating to Indemnification

  	
  37

  
	
  6.6

  	
  Survival of Representations, Warranties, and
  Covenants

  	
  38

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
  CONDITIONS TO THE CLOSING

  	
  38

  
	
  7.1

  	
  Conditions of the Purchaser’s Obligation

  	
  38

  
	
  7.2

  	
  Conditions of the Company’s and the Sellers’
  Obligation

  	
  41

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
  DEFINITIONS

  	
  43

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX

  	
  TERMINATION

  	
  49

  
	
  9.1

  	
  Termination

  	
  49

  
	
  9.2

  	
  Effect of Termination

  	
  50

  
	
  9.3

  	
  Specific Performance

  	
  50

  
	
   

  	
   

  	
   

  
	
  ARTICLE X

  	
  MISCELLANEOUS

  	
  51

  
	
  10.1

  	
  Expenses

  	
  51

  
	
  10.2

  	
  Governing Law

  	
  51

  
	
  10.3

  	
  Jurisdiction; Service of Process

  	
  51

  
	
  10.4

  	
  Waiver of Jury Trial

  	
  51

  
	
  10.5

  	
  Attorneys’ Fees

  	
  52

  
	
  10.6

  	
  Waiver; Remedies Cumulative

  	
  52

  
	
  10.7

  	
  Notices

  	
  52

  
	
  10.8

  	
  Assignment

  	
  54

  
	
  10.9

  	
  No Third-Party Beneficiaries

  	
  54

  
	
  10.10

  	
  Amendments or Supplements

  	
  54

  

 

ii

 

	
  10.11

  	
  Disclosure Schedules

  	
  54

  
	
  10.12

  	
  Construction

  	
  54

  
	
  10.13

  	
  Entire Agreement

  	
  55

  
	
  10.14

  	
  Severability

  	
  55

  
	
  10.15

  	
  Mutual Drafting

  	
  55

  
	
  10.16

  	
  Counterparts; Facsimile

  	
  55

  

 

EXHIBITS

 

	
  Exhibit 1.4(a)-1

  	
  Form of
  Executive Sale Bonus Trust Agreement

  
	
  Exhibit 1.4(a)-2

  	
  Specified
  Long-Term Indebtedness

  
	
  Exhibit 1.4(a)-3

  	
  Specified
  Shareholder Percentages

  
	
  Exhibit 1.5(a)

  	
  Form of
  Escrow Agreement

  
	
  Exhibit 5.3

  	
  Form of
  Derivative Reports

  
	
  Exhibit 5.8

  	
  Severance
  Obligations

  
	
  Exhibit 7.1(d)

  	
  Seller
  Government Entity Approvals

  
	
  Exhibit  7.1(e)

  	
  Specified Seller Consents

  
	
  Exhibit 7.1(i)(ii)

  	
  Form of
  Seller’s Release

  
	
  Exhibit 7.1(i)(ii)

  	
  Form of
  Executive Employment Agreement

  
	
  Exhibit 7.1(i)(iv)

  	
  Form of
  Consulting Agreement

  
	
  Exhibit 7.1(i)(v)

  	
  Form of
  Non-Competition Agreement

  
	
  Exhibit 7.1(i)(xvi)

  	
  Form of
  Opinion of the Company’s and Sellers’ Counsel

  
	
  Exhibit 7.2(d)

  	
  Purchaser
  Government Entity Approvals

  
	
  Exhibit  7.2(e)

  	
  Specified
  Purchaser Consents

  
	
  Exhibit 7.2(h)(ii)

  	
  Form of
  Company Release

  
	
  Exhibit 7.2(h)(ix)

  	
  Form of
  Opinion of Purchaser’s Counsel

  
	
   

  	
   

  
	
  SCHEDULES

  	
   

  
	
   

  	
   

  
	
  Seller Disclosure Schedule

  
	
  Company Disclosure Schedule

  
	
  Schedule 5.2

  	
  Operation
  of Business

  
	
  Schedule 5.2(c)

  	
  Calculation
  of Tax Distributions

  
	
  Schedule 5.3

  	
  Access to Records

  
	
  Schedule 5.7(b)

  	
  Other Authorizations; Consents

  
	
  Schedule 5.11

  	
  List of Seller Personal Property

  
	
  Schedule 5.12(g)

  	
  Purchase Price Allocation Methodology

  

 

iii

 

PURCHASE AGREEMENT

 

This PURCHASE AGREEMENT (the
“Agreement”) is made as of December 21, 2007, by and among BUCKEYE
ENERGY HOLDINGS LLC, a Delaware limited liability company (the “Purchaser”),
FARM & HOME OIL COMPANY, a Pennsylvania corporation (the “Company”),
the Persons set forth on the signature page hereof under the heading “Sellers”
(each individually referred to as a “Seller” and collectively referred
to as the “Sellers”), and RICHARD A. LONGACRE (“Sellers’
Representative”).  The Purchaser, the
Sellers, Sellers’ Representative, and the Company are sometimes referred to
individually as a “Party” and collectively as the “Parties.”  Certain capitalized terms which are used herein
are defined in Article VIII below.

 

WHEREAS, as of the date
hereof, the Sellers collectively own 100% of the Company Stock;

 

WHEREAS, pursuant to this
Agreement, the Parties desire for the Company, no later than one day prior to
Closing, to merge with and into a newly formed Delaware limited liability
company owned 100% by the Sellers (“F&H LLC”);

 

WHEREAS, the Parties desire
to enter into this Agreement pursuant to which the Sellers agree to sell to the
Purchaser, and the Purchaser agrees to purchase from the Sellers, all of the
F&H Membership Interests (as defined in Section 5.1).

 

NOW, THEREFORE,
incorporating the foregoing herein and in consideration of the premises and the
mutual promises made herein, and in consideration of the representations, warranties,
covenants and agreements herein contained, intending to be legally bound, the
Parties hereby agree as follows:

 

ARTICLE I

THE CLOSING; PURCHASE AND SALE OF MEMBERSHIP INTERESTS

 

1.1           Purchase and Sale of Membership Interests.  At the Closing, subject to the terms and
conditions of this Agreement, including but not limited to the conditions
precedent to Closing set forth in Sections 7.1 and 7.2 below, as applicable,
the Purchaser shall purchase and accept from the Sellers, and the Sellers shall
sell, transfer and deliver to the Purchaser, all of the F&H Membership
Interests.

 

1.2           Purchase Price.  The purchase price for the F&H Membership
Interests shall be One Hundred Forty Five Million Five Hundred Thousand Dollars
($145,500,000) (the “Purchase Price”), to be paid by the Purchaser as
described in Section 1.4 below.

 

1.3           The Closing.  The closing of the purchase and sale of the
F&H Membership Interests and the transactions relating thereto
(collectively, the “Closing”) shall take place at the offices of Blank
Rome LLP, One Logan Square, Philadelphia, Pennsylvania 19103, commencing at 9:00 a.m.,
local time, on the day immediately following the date on which the F&H LLC
Merger is consummated pursuant to Section 5.1 of this Agreement.  Subject to Article IX below, failure to
consummate the purchase and sale provided for in this Agreement on the date and
time

 

 

and at the place designated pursuant to this Section 1.3 will not
result in the termination of this Agreement and will not relieve any party of
any obligations under this Agreement. 
The date and time of the closing are referred to as the “Closing Date.”

 

1.4           Payment of the Purchase Price.  At the Closing, subject to the satisfaction
or waiver of each of the conditions specified in Sections 7.1 and 7.2 below:

 

1.5           The Purchaser shall pay the Purchase Price  minus (i) the Escrow Funds
payable in accordance with Section 1.5(a) below; minus (ii) the
portion of the Executive Sale Bonuses due at the Closing pursuant to the
Executive Employment Agreements (the “Closing Date Executive Sale Bonuses”)
plus 1.45% of the employer portion of the social security tax on such amounts
of the Executive Sale Bonuses due at Closing (all of which shall be paid into
F&H LLC’s payroll account to be paid promptly to the respective Specified
Executives in accordance with the percentages provided for in the Executive
Employment Agreements); minus (iii) the amount of the Executive
Sale Bonuses (other than the Closing Date Executive Sale Bonuses) required to
be paid to the Specified Executives under the Executive Employment Agreements
after the Closing Date (all of which shall be deposited by Purchaser into a segregated
“rabbi” trust held by PNC Escrow Services, as trustee (the “Trustee”) (the
“Executive Sale Bonus Trust”), to be disbursed in accordance with a
Trust Agreement in the form of Exhibit 1.4(a)-1 (the “Executive
Sale Bonus Trust Agreement”)); minus (iii) all amounts under
the long term Indebtedness (including any prepayment premiums, fees or
expenses) referenced on Exhibit 1.4(a)-2 outstanding as of the
Closing Date (which shall be paid by Purchaser at Closing to payoff such long
term Indebtedness); and minus (iv) the amount of Seller Transaction
Expenses previously paid by the Company prior to the Closing Date, to the respective
Sellers, pro rata in accordance with the percentage amounts set forth next to
each Seller’s name on Exhibit 1.4(a)-3 attached hereto (the “Specified
Shareholder Percentages”), by wire transfer of immediately available funds
pursuant to written instructions delivered to the Purchaser prior to the
Closing;

 

(a)           The Purchaser shall pay Seven Million Two Hundred
Seventy-Five Thousand Dollars ($7,275,000)  (the
“Escrow Funds”) to the Escrow Agent by wire transfer of immediately
available funds pursuant to written instructions delivered to the Purchaser
prior to the Closing to be held in an escrow account (the “Escrow Account”)
established in accordance with, and subject to the terms and conditions of, the
Escrow Agreement by and among the Purchaser, the Sellers’ Representative and
the Escrow Agent in the form of Exhibit 1.4(b) attached hereto (the “Escrow
Agreement”).

 

(b)           The parties hereto acknowledge and agree that (i) the
proceeds placed in the Executive Sale Bonus Trust and (ii) the Escrow
Funds shall be treated as installment obligations for purposes of Section 453
of the Code, and a Seller shall not be treated as having received any portion
of the Executive Sale Bonus Trust or Escrow Funds until such amounts are
actually released to such Seller, and no party shall take any action or filing
position inconsistent with such characterization.  The parties further agree that, consistent
with Proposed Treasury Regulation Section 1.468B-8, Purchaser shall take
into account and report for Tax purposes all interest or other income earned
from the investment of the Executive Sale Bonus Trust or Escrow Funds or any
portion thereof in any Tax year until the distribution of the Executive Sale
Bonus Trust or Escrow Funds (or portions thereof) is determined and thereafter
to Purchaser and the Sellers in accordance with their respective interests in
the Executive Sale Bonus Trust or

 

 

Escrow Funds consistent with Proposed Treasury Regulation Section 1.468B-8,
who shall take into account and report for Tax purposes all interest or other
income earned from the investment of the Executive Sale Bonus Trust or Escrow
Funds or any portion thereof in any Tax year.

 

(d)           At the Closing, the Sellers shall cause all unpaid Seller
Transaction Expenses as of the Closing Date to be paid out of the proceeds of
the Purchase Price.

 

(e)           The Sellers shall deliver to the Purchaser all of
the membership interest certificates representing the F&H Membership
Interests held by them, endorsed in blank or accompanied by duly executed
assignment documents.

 

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

 

As a material inducement to
the Company and the Sellers to enter into this Agreement and to sell the
F&H Membership Interests, and understanding that the Company and the
Sellers are relying thereon, the Purchaser hereby represents and warrants that
as of the date hereof:

 

2.1           Organization; Corporate Power and Authorization.  The Purchaser is a limited liability company
organized, validly existing and in good standing under the Laws of the state of
its formation.  The Purchaser has the
requisite power and authority and all material Permits necessary to conduct its
business as it has been and is currently being conducted and to enter into,
deliver and carry out its obligations pursuant to each of the Transaction
Documents to which it is a party.  The
Purchaser is duly authorized to conduct business and is in good standing under
the Laws of each jurisdiction where such authorization is required, except
where the failure to be so authorized or in good standing would not to result
in a Purchaser Material Adverse Change. 
The Purchaser’s execution, delivery and performance of each Transaction
Document to which it is a party has been duly authorized by the Purchaser and
no other limited liability company proceeding on the part of the Purchaser is
necessary to authorize the Transaction Documents and the Transactions, and the
Purchaser has duly executed and delivered this Agreement and will have, as of the
Closing Date, duly executed and delivered each other Transaction Document to
which it is a party.

 

2.2           Binding Effect and Noncontravention.

 

(a)           Each Transaction Document to
which the Purchaser is a party constitutes, or when executed will constitute, a
valid and binding obligation of the Purchaser enforceable against the Purchaser
in accordance with its terms, except as such enforceability may be limited by (i) applicable
insolvency, bankruptcy, reorganization, moratorium or other similar laws
affecting creditors’ rights generally, and (ii) applicable equitable
principles (whether considered in a proceeding at law or in equity).

 

(b)           The execution, delivery and performance by the
Purchaser of the Transaction Documents to which the Purchaser is a party and
the consummation of the Transactions do not and shall not (with or without
notice or lapse of time or both): (i) conflict with or result in a breach
of the terms, conditions or provisions of the certificate of formation or
operating agreement of the Purchaser; (ii) result in the imposition of any
material Lien upon any of the properties or assets of the Purchaser, cause the
acceleration or material modification of any

 

 

obligation under, create in any party the right to terminate,
constitute a default or breach of, or violate or conflict with the terms,
conditions or provisions of any Contract to which the Purchaser is a party or
by which the Purchaser is bound, in each case, in any material respect; (iii) result
in a breach or violation by the Purchaser of any of the terms, conditions or
provisions of any material Law or Order to which the Purchaser or any of its
properties or assets is subject; or (iv) except for compliance with and
filings under the HSR Act, require any authorization, consent, approval,
exemption or other action by or declaration or notice to or registration with
any third Person or Government Entity.

 

2.3           Broker Fees.  The Purchaser has no liability or obligation
to pay any fees or commissions to any broker, finder, or agent with respect to
the Transactions for which the Company or Sellers could become liable or
obligated.

 

2.4           Financial Ability.  The Purchaser has immediately available funds
sufficient to consummate the Transactions and acknowledges and affirms that it
is not a condition to Closing or any of its other obligations under this
Agreement that the Purchaser obtain financing for or relating to any of the
Transactions.

 

2.5           No Litigation.  There is no Action or Proceeding pending or,
to the Purchaser’s knowledge, threatened against the Purchaser, its properties,
assets or businesses, or Order to which the Purchaser is subject which would
result in a Purchaser Material Adverse Change or restrict the ability of the
Purchaser to consummate the Transactions and otherwise perform its obligations
hereunder.

 

2.6           Investment.  The Purchaser is acquiring the F&H
Membership Interests for its own account, for investment only, and not with a
view to any resale or public distribution thereof.  The Purchaser shall not offer to sell or
otherwise dispose of the F&H Membership Interests in violation of any Law
applicable to any such offer, sale or other disposition.  The Purchaser acknowledges that: (i) the
F&H Membership Interests have not been (and will not be) registered under
the Securities Act, or any state securities Laws; (ii) there is no (and
will be no) public market for the F&H Membership Interests and there can be
no assurance that a public market will develop; and (iii) the Purchaser
must bear the economic risk of its investment in the F&H Membership
Interests for an indefinite period of time. 
The Purchaser is an “accredited investor” within the meaning of Rule 501
under the Securities Act, as presently in effect, and has knowledge and
experience in financial and business matters such that it is capable of
evaluating the merits and risks of acquiring and holding the F&H Membership
Interests.

 

2.7           Purchaser’s Due Diligence.  The Purchaser acknowledges that, except for
the matters that are expressly covered by the provisions of this Agreement, it
is relying on its own investigation and analysis in entering into the
Transaction Documents and the Transactions. 
The Purchaser is an informed and sophisticated participant in the
Transactions and has undertaken such investigation, and has been provided with
and has evaluated such documents and information, as it has deemed necessary in
connection with the execution, delivery and performance of this Agreement and
the other Transaction Documents.  The
Purchaser has no Knowledge of any facts and/or circumstances that would make
any of the representations and warranties of the Company or the Sellers
contained in Articles III and IV untrue or misleading.

 

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE SELLERS

 

As a material inducement to
the Purchaser to enter into this Agreement and to purchase the F&H
Membership Interests, and understanding that the Purchaser is relying thereon,
except as set forth on the Seller Disclosure Schedule, and subject to the
preceding paragraph, each Seller hereby represents and warrants, severally and
not jointly, that as of the date hereof and as of the Effective Date:

 

3.1           Power and Authorization.  Such Seller that is an individual has the
requisite power, authority, legal right and capacity necessary to enter into,
deliver and perform its obligations pursuant to each of the Transaction
Documents to which he or she is a party. 
Each Seller that is a trust has the requisite power, authority and legal
right to enter into, deliver and perform its obligations pursuant to each of
the Transaction Documents to which it is a party.  Such Seller’s execution, delivery and
performance of each Transaction Document to which it is a party has been duly
authorized by such Seller and, in the case of each Seller that is a trust, no
other proceeding on the part of such Party is necessary to authorize the
Transaction Documents and the Transactions. 
Each Seller has duly executed and delivered this Agreement and will
have, as of the Closing Date, duly executed and delivered each other Transaction
Document to which he, she or it is a party.

 

3.2           Binding Effect and Noncontravention.

 

(a)           Each Transaction Document to which such Seller is a
party constitutes, or when executed will constitute, a valid and binding
obligation of such Seller enforceable against such Seller in accordance with its
terms, except as such enforceability may be limited by (i) applicable
insolvency, bankruptcy, reorganization, moratorium or other similar Laws
affecting creditors’ rights generally, and (ii) applicable equitable
principles (whether considered in a proceeding at law or in equity).

 

(b)           The execution, delivery and performance by such
Seller of the Transaction Documents to which such Seller is a party and the
consummation of Transactions do not and shall not (with or without notice or
lapse of time or both): (i) conflict with or result in a breach, in any
material respect, of the terms, conditions or provisions of any trust documents
applicable to such Seller, (ii) result in the imposition of any Lien upon
any of the properties or assets of such Seller, cause the acceleration or
material modification of any obligation under, create in any party the right to
terminate, constitute a default or breach of, or violate or conflict with the
terms, conditions or provisions of any Contract to which such Seller is a party
or by which such Seller is bound, in each case, in any material respect; (iii) result
in a material breach or material violation by such Seller of any of the terms,
conditions or provisions of any Law or Order to which such Seller or any of his
or her properties or assets is subject; or (iv) except for the Company’s
compliance with and filings under the HSR Act or as otherwise set forth in the
Seller Disclosure Schedule, require any authorization, consent, approval,
exemption or other action by or declaration or notice to or registration with
any third Person or Government Entity.

 

3.3           Capital Stock.  Except as set forth in Section 3.3
of the Seller Disclosure Schedule, such Seller holds of record, owns
beneficially and has good and marketable title to all 

 

 

of Seller’s Company Stock, set forth next to such Seller’s name in Section 4.3(a) of
the Company Disclosure Schedule, free and clear of any and all Liens.  Such Seller is not a party to any voting
trust, proxy or other agreement or understanding with respect to the voting of
any Company Stock that will survive the Closing Date.

 

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF 

THE COMPANY

 

As a material inducement to
the Purchaser to enter into this Agreement and to purchase the F&H
Membership Interests, and understanding that the Purchaser is relying thereon,
except as set forth on the Company Disclosure Schedule, the Company, as of the
date hereof and as of the Effective Date hereby represents and warrants that:

 

4.1           Organization; Qualification; Corporate Power and
Authorization.  The Company
is a corporation duly incorporated and subsisting or in good standing under the
Laws of the jurisdiction of its incorporation. 
The Company has the requisite corporate power and authority and all
material Permits necessary to conduct its business as it has been and is
currently being conducted and to enter into, deliver and carry out its
obligations pursuant to each of the Transaction Documents to which the Company
is a party.  The Company is duly
authorized to conduct business and is in good standing under the Laws of each
jurisdiction where such authorization is required, except where the failure to
be so authorized or in good standing would not result in a Company Material
Adverse Change.  The Company’s execution,
delivery and performance of each Transaction Document to which it is a party
has been duly authorized by the Company and no other corporate proceeding on
the part of the Company is necessary to authorize the Transaction Documents and
the Transactions, and the Company has duly executed and delivered
this Agreement and will have, as of the Closing Date, duly executed and
delivered each other Transaction Document to which it is, or is specified to
be, a party.

 

4.2           Binding Effect and Noncontravention.

 

(a)           Each Transaction Document to
which the Company is a party constitutes a valid and binding obligation of the
Company enforceable against the Company in accordance with its terms, except as
such enforceability may be limited by (i) applicable insolvency, bankruptcy,
reorganization, moratorium or other similar laws affecting creditors’ rights
generally, and (ii) applicable equitable principles (whether considered in
a proceeding at law or in equity).

 

(b)           Except as set forth in Section 4.2(b)(i) of
the Company Disclosure Schedule, the execution, delivery, and performance by
the Company of the Transaction Documents to which the Company is a party and
the consummation of the Transactions contemplated hereby do not and will not
(with or without the giving of notice, the lapse of time or both):  (i) conflict with or result in a breach
of the terms, conditions, or provisions of the certificate of incorporation or
bylaws of the Company; (ii) result in the imposition of any Lien upon any
of the properties or assets of the Company, cause the acceleration or material
modification of any obligation under, create in any party the right to
terminate, constitute a default or breach of, or violate or conflict with the
terms, conditions or provisions of any 

 

 

Contract to which the Company is a party or by which the Company is
bound, in each case, other than to the extent it would not result in a Company
Material Adverse Change; (iii) result in a material breach or material
violation by the Company of any of the terms, conditions or provisions of any
Law or Order to which the Company or the Business is subject; or (iv) except
for compliance with and filings under the HSR Act, require any authorization,
consent, approval, exemption or other action by or declaration or notice to any
third Person or Government Entity.  Section 4.2(b)(ii) of
the Company Disclosure Schedule sets forth all consents, waivers, and other
approvals and actions that are required in connection with the Transactions
under any Material Contract due to the F&H LLC Merger.  Section 4.2(b)(iii) of the
Company Disclosure Schedule sets forth all consents, waivers, and other
approvals and actions that are required in connection with the Transactions
under any Material Contract other than due to the F&H LLC Merger.  The Company is not in breach of its
certificate of incorporation or bylaws.

 

4.3           Capitalization; Subsidiaries.

 

(a)           Section 4.3(a) of the Company
Disclosure Schedule sets forth as of the date hereof, (i) the number of
shares of authorized capital stock of the Company and of each class of the
Company’s capital stock; (ii) the number of issued and outstanding shares
of each class of the Company’s capital stock, the names of the record holders
thereof, and the number of shares held by each such holder; and (iii) the
number of shares of the Company’s capital stock held in treasury.  There are no outstanding or authorized
options, warrants, purchase rights, subscription rights, conversion rights,
exchange rights, or other contracts or commitments that could require the
Company to issue, sell, or otherwise cause to become outstanding any of its
capital stock.

 

(b)           All of the issued and outstanding shares of the
Common Stock have been duly authorized, are validly issued, fully paid, and
non-assessable, have not been issued in violation of, and are not subject to,
any preemptive or subscription rights and are owned of record and beneficially
by the Sellers free and clear of all Liens. 
There are no outstanding or authorized stock appreciation, phantom
stock, profit participation or similar rights with respect to the Company’s
capital stock.  Upon transfer of the
F&H Membership Interests to Purchaser in accordance with the terms of Article I,
Purchaser will receive valid title to the F&H Membership Interests, free
and clear of all Liens.

 

(c)           All of the issued and outstanding shares of the
Common Stock were issued in compliance with applicable Laws, in all material
respects.  None of the issued and
outstanding shares of the Common Stock was issued in violation, in any material
respect, of any Contract to which the Sellers or the Company is a party or is
subject to or in violation, in any material respect, of any preemptive or
similar rights of any Person.

 

(d)           The Company has no subsidiaries.

 

(e)           Except as set forth in Section 4.3(e) of
the Company Disclosure Schedule, neither the Sellers nor the Company is a party
or subject to any stockholder agreement, voting agreement, voting trust or any
other similar arrangement which has the effect of restricting or limiting the
transfer, voting or other rights associated with the issued and outstanding
shares of the Common Stock.  The Company
does not have outstanding any bonds, debentures, notes or 

 

 

other obligations the holders of which have the right to vote (or
convertible into, or exercisable or exchangeable for, securities having the
right to vote) on any matter.

 

4.4           Financial Statements.

 

(a)           Section 4.4(a) of the Company
Disclosure Schedule contains copies of the following financial statements for
the Company (collectively, the “Financial Statements”):

 

(i)            the Company’s audited balance sheets and related
statements of income and cash flows for the fiscal years ended June 30,
2007, 2006 and 2005; and

 

(ii)           the Company’s unaudited balance sheet as of October 31,
2007 (the “Latest Balance Sheet”) and related statements of income and
cash flows as prepared by management for the four month period ended October 31,
2007.

 

(b)           Except as set forth in Section 4.4(b) of
the Company Disclosure Schedule, each Financial Statement (including the notes
thereto) has been prepared in accordance with GAAP applied on a consistent
basis throughout the periods involved and fairly presents, in all material
respects, the financial condition of the Company as of such dates and the
results of the Company’s operations for the periods specified, except as
disclosed in such Financial Statements; provided, however,
that the unaudited financial statements are subject to normal recurring
year-end audit adjustments (which are not expected to be material), and do not
contain all footnotes required under GAAP.

 

(c)           The Company has established and maintains an
effective system of internal policies and controls, including operational,
financial reporting and organizational controls, sufficient to provide reasonable
assurances that all material matters arising in connection with the operation
of its business are reported to the Company’s senior management in a timely
manner.

 

4.5           Events Subsequent to the Latest Balance Sheet.  Except as and to the extent set forth in the
Latest Balance Sheet or incurred in the ordinary course of the Business or
except as set forth in Section 4.5 of the Company Disclosure
Schedule, since the date of the Latest Balance Sheet until the date hereof, (i) the
Company has not incurred any obligations required by GAAP to be reflected or
reserved against on a balance sheet of the Company and (ii) the Company
has operated the Business in the ordinary course and there has been no Company
Material Adverse Change.  Except as
expressly set forth in the Financial Statements or in Section 4.5
of the Company Disclosure Schedule, since the Latest Balance Sheet until the
date hereof, the Company has not declared, set aside or paid any dividends or
distributions (including, but not limited to, (1) repurchase or redemption
of stock or (2) in cash, stock or other property).

 

4.6           Tangible Assets; Inventory.

 

(a)           Except as set forth in Section 4.6(a) of
the Company Disclosure Schedule, the Company has good and valid title to, or a
valid leasehold interest in, the Tangible Assets reflected on the Latest
Balance Sheet or acquired since the date thereof (other than assets disposed of
in the ordinary course of business since the date of the Latest Balance Sheet),
free and clear of any and all Liens other than Permitted Liens.

 

 

(b)           The Tangible Assets described in Section 4.6(a) are
free from material defects, have been maintained in accordance with normal
industry practice, and are in reasonably satisfactory operating condition,
ordinary wear and tear and aging excepted.

 

(c)           Except as set forth in Section 4.6(c) of
the Company Disclosure Schedule, all inventory of the Company reflected on the
Latest Balance Sheet consisted, and all such inventory acquired since the
Latest Balance Sheet consists, of a quality and quantity usable and salable in
the ordinary course of business consistent with past practice, subject to
normal and customary reserves and allowances consistent with past practice.

 

4.7           Compliance with Laws.  Except with regard to the tax matters addressed
in Section 4.8, the environmental matters addressed in Section 4.9,
the real estate matters in Section 4.13, and the employee matters
addressed in Sections 4.13 and 4.14, the Company has complied with all Laws and
Orders relating to the Company or the operation of the Business, other than
those Laws and Orders the violation of which would not result in a Company
Material Adverse Change and other than as set forth in Section 4.7
of the Company Disclosure Schedule. 
Except as set forth in Section 4.7 of the Company Disclosure
Schedule, the Company has not received written notice alleging any violations
of Laws within the last twelve (12) months. 
All material Permits necessary to the conduct by the Company of the Business
are listed in Section 4.7 of the Company Disclosure Schedule, are
in full force and effect, no material violations with respect to any thereof
have occurred and no Action or Proceeding is pending or, to the Knowledge of
the Company, threatened to revoke or materially limit any thereof.

 

4.8           Tax Matters.  Except as set forth in Section 4.8
of the Company Disclosure Schedule:

 

(a)           The Company has prepared in
good faith and duly filed all Tax Returns with respect to the Company required
to be filed with any Tax authority.  All
Taxes owed by the Company (whether or not shown on any Tax Return) have been
paid.  The Company is not currently the
beneficiary of any extension of time within which to file any Tax Return which
has continuing effect.

 

(b)           There is no material dispute or claim concerning any
Tax Liability of the Company either (i) claimed or raised by any Tax
authority in writing or (ii) as to which any of the Sellers or the Company
has Knowledge based upon personal contact with any agent of such Taxing
Authority.

 

(c)           The Sellers have furnished to the Purchaser correct
and complete copies of all Tax Returns, examination reports, and statements of
deficiencies assessed against, or agreed to by the Company since December 31,
2004.

 

(d)           The Company is not a party to any tax allocation or
sharing agreement.  The Company has not
been a member of an Affiliated Group filing a consolidated federal Tax Return.

 

(e)           The Company has been a validly electing S
corporation within the meaning of Sections 1361 and 1362 of the Code at all
times since April 2, 1990 (and under all comparable provisions of state,
local, or foreign law since the dates set forth in Section 4.8(e) of

 

 

the Company Disclosure Schedule) and the Company will be an S
corporation up to and including the day the Company merges with F&H
LLC.  The Company is not currently
subject to, nor will be subject to by virtue of the transactions contemplated
by this Agreement, either the built-in-gains tax under Section 1374 of the
Code or the passive income tax under Section 1375 of the Code.

 

(f)            The Company (i) has not waived any statute of
limitations in respect of Taxes or (ii) agreed to any extension of time
with respect to a Tax assessment or deficiency, in each case which has
continuing effect.

 

(g)           None of the Sellers is a “foreign person” as such
term is defined in Section 1445 of the Code.

 

(h)           The Company has not agreed to make, nor is it
required to make, any adjustment under Section 481(a) of the Code (or
any similar provision of state, local or foreign law) by reason of a change in
accounting method or otherwise, and the IRS has not proposed any such
adjustment or change in accounting method. 
The Company will not be required to include any item of income in, or
exclude any item of deduction from, taxable income for any taxable period (or
portion thereof) ending after the Closing Date as a result of any: (i) “closing
agreement” as described in Section 7121 of the Code (or any corresponding
provision of state, local or foreign income Tax law); (ii) installment
sale or open transaction disposition made on or prior to the Closing Date or (iii) prepaid
amount received on or prior to the Closing Date.

 

(i)            The Company has complied (and until the Closing Date
will comply) in all material respects with the provisions of the Code relating
to the withholding and payment of Taxes, including, without limitation, the
withholding and reporting requirements under Code sections 1441 through 1464,
3401 through 3406, and 6041 through 6049, as well as similar provisions under
any other laws, and have, within the time and in the manner prescribed by law,
withheld from employee wages and paid over to the proper Government Entity all
amounts required.

 

(j)            The Company has not been the “distributing company”
(within the meaning of Section 355(a)(1) of the Code) nor the “controlled
corporation” (within the meaning of Section 355(a)(1) of the Code) (i) within
the two-year period ending as of the date of this Agreement or (ii) in a
distribution that could otherwise constitute part of a “plan” or “series of
transactions” (within the meaning of Section 355(e) of the Code) in
conjunction with this Agreement.

 

(k)           The Company has not entered into any transaction
that is either a “listed transaction” or that the Company believes in good
faith is a “reportable transaction” (both as defined in Treas. Reg. §
1.6011-4).

 

(l)            The amounts set forth on the “Distributions for 2007
Shareholder Income Taxes” spreadsheet (attached to Section 4.8(l) of
the Company Disclosure Schedule) represent the actual month and amount of distributions
made to the Sellers for purposes of making their respective required estimated
tax payments attributed to the Company’s income as required
pursuant to the Code.  The amount of such
distributions were based upon a good faith belief of 

 

 

the Company’s income for the applicable tax period and were consistent
with the Company’s past practices in making such Tax distributions to the
Sellers.

 

4.9           Environmental Matters.  Except as set
forth in Section 4.9 of the Company Disclosure Schedule: (i) 
the Company is in material compliance with all applicable Environmental Laws
and has in place all material permits and approvals required by applicable
Environmental Laws;  (ii) the
Company has not received written notice of any material violations or liabilities
arising under Environmental Laws; (iii) the Company has no Knowledge of
releases or threatened releases of Hazardous Materials at or from its Real
Property or from property to which the Company has transported, or arranged for
transport for the treatment, storage, handling or disposal of, Hazardous
Materials; and (iv) there are no pending or, to the Knowledge of the
Company, threatened claims arising under Environmental Laws that have been or
may be filed by any Person with respect to the Real Property or the conduct of
the Business.  The representations
contained in this Section 4.9 sets forth sole and exclusive
representations and warranties with respect to environmental matters and
Environmental Laws.

 

4.10         Intellectual Property.

 

(a)           Section 4.10 of the Company Disclosure
Schedule identifies each item of material Intellectual Property owned or
licensed by the Company (other than trade secrets and know-how not embodied in any
form or medium).

 

(b)           To the Company’s Knowledge, none of the material
Intellectual Property currently used
in the conduct of the Business (other than ready-to-use, pre-packaged software or software which is commercially
available to the public) infringes upon the Intellectual Property rights
of any other Person.  The Company is not
a party to any Action or Proceeding, or any Order, and, to the Knowledge of the
Company, none is threatened or imminent, alleging any infringement, violation
or misappropriation of Intellectual Property rights of any other Person.

 

(c)           The Company exclusively owns or has a right to use
all material Intellectual Property currently used (in the manner in which it is
being used) in the conduct of the Business.

 

4.11         Real Estate.

 

(a)           Section 4.11(a) of the Company
Disclosure Schedule lists all real property owned by the Company as of the date
hereof (the “Owned Real Property” or “Real Property”). With respect
to each parcel of Owned Real Property (each, a “Parcel”), except as set
forth in Section 4.11(a) of the Company Disclosure Schedule:

 

(i)            the entity owning such Parcel has fee simple title
to such Parcel and all buildings, fixtures and improvements situated thereon,
which, as of the Closing Date, shall be free and clear of all Liens, other than
Permitted Liens;

 

(ii)           each Parcel is in compliance, in all material
respects, with all applicable building, zoning, subdivision, and land use Laws
affecting such Parcel; and

 

 

(iii)          there are no outstanding options or rights of first
refusal to purchase any Parcel or any portion thereof or interest therein.

 

(b)           Except as set forth in Section 4.11(b) of
the Company Disclosure Schedule, the Company does not lease any real property
as a tenant.  Section 4.11(b) of
the Company Disclosure Schedule lists all real property leased by the Company
as a landlord pursuant to a real property lease (each, a “Lease”). With
respect to each Lease, and except as disclosed in Section 4.11(b) of
the Company Disclosure Schedule: (i) neither the Company nor, to the
Knowledge of the Company, any other party to such Lease or any sublease, is in
material breach or default and (ii) each Lease is the legal, valid and
binding obligation of the Company and, to the Knowledge of the Company, each
other party thereunder and enforceable against the Company and, to the
Knowledge of the Company, such other party in accordance with its terms, except
as such enforceability may be limited by (y) applicable insolvency,
bankruptcy, reorganization, moratorium, or other similar laws affecting
creditors’ rights generally and (z) applicable equitable principles
(whether considered in a proceeding at law or in equity).

 

(c)           Except as set forth in Section 4.11(c) of
the Company Disclosure Schedule, the Real Property constitutes all the
interests in real property owned, leased, used or held for use by the Company in
connection with, or that are necessary for, or otherwise material to, the
conduct of the Business as presently conducted.

 

(d)           Except as set forth in Section 4.11(d) of
the Company Disclosure Schedule (i) the Company has not received written
notice of any outstanding, pending, or threatened condemnation proceedings
relating to any Real Property, and (ii) there are no parties (other than
the Company) in possession of any Owned Real Property, other than tenants under
any oral or written leases or subleases who are in possession of space to which
they are entitled.

 

(e)           Prior to the date hereof, Company has delivered, or
caused to be delivered, to Purchaser copies (for review at Company’s offices
and/or for review off site) of all Leases, deeds, mortgages, surveys, licenses,
leases, title insurance policies, if any, and certificates of occupancy or
equivalent documentation with respect to the Real Property in the possession or
control of the Company.

 

4.12         Litigation.  Except as set forth in Section 4.12
of the Company Disclosure Schedule, there is no Action or Proceeding pending
or, to the Knowledge of the Company, threatened against the Company and there
is no Order to which the Company is subject which would result in a Company
Material Adverse Change.

 

4.13         Labor Relations.  The Company has complied in all material
respects with all applicable Laws relating to employment practices.

 

(a)           The Company is not a party to or bound by, and has
never been a party to or bound by, any collective bargaining agreement.  No application or petition for an election of
or for certification of a collective bargaining agent relating to the Company
is pending as of the date of this Agreement.

 

 

(b)           There has not been pending or existing during the
twelve (12) month period preceding the date of this Agreement any strike,
slowdown, work stoppage or lockout involving the Company.

 

(c)           As of the date of this Agreement, there is no unfair
labor practice charge or complaint against the Company pending before the
National Labor Relations Board or similar governmental agency outside of the
United States, and no such charge or complaint has been made against the
Company during the last twelve (12) months prior to the date of this Agreement.

 

(d)           Except as set forth in Section 4.13 of
the Company Disclosure Schedule, the Company is, and has been for the last
twelve (12) months prior to the date of this Agreement, in compliance, in all
material respects, with all Laws relating to employment, including all such
Laws relating to wages, hours, collective bargaining, discrimination, civil
rights, safety and health workers’ compensation and the collection and payment
of withholding and/or Social Security taxes and similar Taxes.

 

4.14         Employee Plans.

 

(a)           Section 4.14(a) of the Company
Disclosure Schedule identifies each of the Employee Plans and Employee Benefit
Arrangements.  Except as set forth in Section 4.14(a) of
the Company Disclosure Schedule, the Company does not have any current
Liability with respect to any Employee Plan or Employee Benefit Arrangment or
any commitment or obligation to establish any other Employee Plan or Employee
Benefit Arrangement.  The Company has
furnished to the Purchaser copies of all Employee Plans that are in writing, Employee Benefit Arrangments that are
in writing and all amendments thereto together with, where applicable, each
Employee Plan’s summary plan description and any summaries of material
modifications thereto.  With respect to
this Section 4.14, the term “Company” includes any ERISA Affiliate.

 

(b)           Except as set forth in Section 4.14(b) of
the Company Disclosure Schedule, each Employee Plan and Employee Benefit
Arrangement (and each related trust, insurance contract or funding
arrangement) has been maintained and operated in accordance with its terms and
complies in all material respects with the applicable requirements of Law, including
ERISA and the Code, and has been operated in compliance with its terms, in all
material respects,  and no condition exists with respect to the maintenance and operation
of any Employee Plan or Employee Benefit Arrangement that has resulted or would
result in any penalty or excise taxes under applicable Law, including ERISA and
the Code.

 

(c)           The Company does not sponsor, maintain or contribute
to, and has never sponsored, maintained or contributed to any employee benefit
plan subject to Part 3 of ERISA, Sections 412 and 430 of the Code or Title
IV of ERISA.  The Company has not
incurred any Liability as a result of the failure to comply with the
continuation of coverage requirements of Section 601 et. seq. of ERISA and
Section 4980B of the Code.

 

(d)           Except as set forth in Section 4.14(d) of
the Company Disclosure Schedule, none of the Employee Plans or Employee Benefit
Arrangements provides for medical or death benefits beyond termination of
service or retirement, other than (i) coverage mandated 

 

 

by Law, or (ii) death or retirement benefits under a benefit plan
qualified under Section 401(a) of the Code.

 

(e)           None of the Employee Plans or Employee Benefit
Arrangements is a multiemployer plan within the meaning of Section 4001(a)(3) of
ERISA (“Multiemployer Plan”), and the Company has never contributed to
or been obligated to contribute to any Multiemployer Plan on behalf of any
employees of the Company.

 

(f)            Any Employee Plan or Employee Benefit Arrangement
listed in Section 4.14(a) of the Company Disclosure Schedule
has been maintained and operated in accordance with the requirements of Section 409A
of the Code, to the extent applicable.

 

4.15         Employees.  Section 4.15 of the Company
Disclosure Schedule contains a true and complete list as of the date hereof of (i) the
employees employed by the Company having an annual base salary in calendar year
2007 of $100,000 or more, and (ii) the rate of all compensation paid by
the Company to each such employee in calendar year 2007 plus any bonus,
contingent or deferred compensation related to fiscal year 2007.  Except as set forth in Section 4.15
of the Company Disclosure Schedule, no employee listed in Section 4.15
of the Company Disclosure Schedule has provided written notice to the Company
of its intention to terminate employment with the Company.

 

4.16         Affiliate Transactions.  Except as set forth in Section 4.16
of the Company Disclosure Schedule, no officer, director, employee, shareholder
or Affiliate of the Company or any individual related by blood, marriage or
adoption to any such individual, or any entity in which any such Person or
individual owns any beneficial interest, is a party to any Contract or
transaction with the Company (other than Contracts set forth in Section 4.18
of the Company Disclosure Schedule) or has any interest in any assets or
property used by the Company (collectively, “Affiliate Transactions”).

 

4.17         Insurance.  Section 4.17 of the Company
Disclosure Schedule sets forth a (i) list of each insurance policy,
self-insurance arrangement and fidelity bond which covers the Company or its
respective properties, assets and business (the “Policies”), and (ii) list
of all pending claims under the Policies. 
Except as set forth in Section 4.17 of the Company
Disclosure Schedule, there are no pending claims under any of the Policies as
to which coverage has been questioned, denied or disputed by the insurer or in
respect of which the insurer has reserved its rights.  The Policies are in full force and effect and
provide insurance in such amounts and against such risks as the Company
reasonably has determined to be prudent in accordance with the conduct of its
respective businesses.

 

4.18         Contracts.  Section 4.18 of the Company
Disclosure Schedule identifies a list, as of the date of this Agreement, of all
of the following Contracts (collectively, the “Material Contracts”):

 

(a)           Contracts for any capital expenditure or future
acquisition or sale by the Company of any assets involving $100,000
individually (or in the aggregate, in the case of any related series of
Contracts) (excluding fixed price customer Contracts);

 

(b)           Contracts relating to joint ventures or partnerships
of the Company;

 

 

(c)           (i) Contracts (other than fixed price customer
contracts) calling for future aggregate purchase prices or payments to or from
the Company in any one year of more than $100,000 in any one case (or in the
aggregate, in the case of any related series of Contracts); and (ii) as of
December 19, 2007, fixed price customer Contracts calling for future
aggregate payments to the Company in any one year of more than $250,000 in any
one case (or in the aggregate, in the case of any related series of such
Contracts);

 

(d)           Contracts containing covenants of the Company
prohibiting or materially limiting the right to compete in any line of business
or prohibiting or restricting its ability to conduct business with any Person
or in any geographical area;

 

(e)           Contracts relating to the acquisition by the Company
of any operating business, the capital stock of any other Person or, except for
inventory and Tangible Assets acquired in the ordinary course of business, any
other assets or property (real or personal) for a purchase price of more than
$100,000 individually (or in the aggregate, in the case of any related series
of Contracts), to the extent such acquisition occurred since December 31, 1997;

 

(f)            Contracts requiring the payment by or to the Company
of a royalty, override or similar commission or fee of more than $100,000 in
any one year;

 

(g)           all collective bargaining agreements and all
Contracts relating to employment, compensation, benefits, termination,
retention, severance (other than standard employee manuals and the like);

 

(h)           Contracts relating to the creation of Liens (other
than the Permitted Liens) or the guarantee of the payment of Liabilities or
performance of obligations of any other Person by the Company;

 

(i)            Contracts and other agreements pursuant to which any
Person has granted to the Company or has been granted by the Company the right
to use or purchase any Tangible Assets or Intellectual Property and involving
the payment of amounts in excess of $100,000 in any one year; and

 

(j)            all notes, debentures, bonds, equipment trusts,
letters of credit, loans or other Contracts for Indebtedness or lending of
money (other than to employees for travel expenses in the ordinary course of
business) or Contracts for a line of credit or guarantee, pledge or undertaking
of the Indebtedness of any other Person.

 

The Company has furnished to
the Purchaser true, correct and complete copies of all of the Material
Contracts.  With respect to each Material
Contract, as of the date of this Agreement (a) such Material Contract is
legal, valid, binding, enforceable, and in full force and effect with respect
to the Company, as applicable, except as such enforceability may be limited by (i) applicable
insolvency, bankruptcy, reorganization, moratorium, or other similar laws
affecting creditors’ rights generally and (ii) applicable equitable
principles (whether considered in a proceeding at Law or in equity), (b) the
Company is not in material breach or default under any Material Contract, and (c) to
the Knowledge of the Company, no other party to any Material Contract is in
material breach or default thereof, other than as set forth in Section 4.18
of the Company Disclosure Schedule.  On December 20,
2007, the Company did not enter into any 

 

 

fixed
price customer Contracts of a type required to be listed in Section 4.18(c)(ii) above
that would be in violation of the covenant set forth in Section 5.2(i)(ii).

 

4.19         Customers; Suppliers.  As of the date hereof, the Company has not
received any notice that any party intends to cancel any Material Contract or
materially reduce the level of business it conducts with the Company.

 

4.20         Broker Fees.  Except as set forth in Schedule 4.20
of the Company Disclosure Schedule, neither the Company nor the Sellers have
any liability or obligation to pay any fees or commissions to any broker,
finder, or agent with respect to the Transactions for which the Purchaser or
the Company (following the Closing) could become liable or obligated.

 

4.21         Derivative and Hedging Activity.  Section 4.21 of the Company
Disclosure Schedule sets forth a list, as of December 19, 2007, of (i) all
outstanding Derivative Transactions to which the Company is a party as of the
date hereof, whether or not the Company continues to have any obligations
thereunder and (ii) all terminated Derivative Transactions to which the
Company was a party prior to the date hereof, if Company has any contingent
liability thereunder.  The Company has
provided Purchaser with true, correct and complete copies of all material
documentation relating to the Derivative Transactions that are required to be
set forth in Section 4.21 of the Company Disclosure Schedule prior
to the date hereof.  The Company has duly
performed all of its obligations, in all material respects, under all
Derivative Transactions to the extent that such obligations to perform have
accrued, and there are no breaches, violations or defaults, in any material
respect, by the Company or allegations or assertions of such by any party
thereunder.  All outstanding Derivative
Transactions are legal, valid and binding obligations of the Company and, to
the Knowledge of the Company, the other parties thereto enforceable against the
Company and such parties in accordance with their terms (except as
enforceability may be limited by applicable bankruptcy, insolvency, moratorium,
reorganization or other similar laws affecting the rights of creditors
generally and applicable general principles of equity (whether considered in a proceeding
at law or in equity)), and are in full force and effect.  On December 20, 2007, the Company did
not enter into any Derivative Transaction of a type required to be listed in Section 4.21(i) above
that would be in violation of the covenant set forth in Section 5.2(l).

 

4.22         Disclaimer.  No representation or warranty is being made
to Purchaser by the Company or Sellers except as specifically set forth in Article III
and Article IV.  Except as otherwise
specifically provided in Article III and Article IV, the F&H
Membership Interests are being acquired AS IS AND WITHOUT ANY OTHER EXPRESS OR
IMPLIED WARRANTY.

 

ARTICLE V

COVENANTS AND OTHER AGREEMENTS

 

5.1           F&H LLC Merger.  No later than the day immediately prior to
the Closing Date, the Sellers shall form F&H LLC and issue membership
interests in F&H LLC (the “F&H Membership Interests”) to each of
the Sellers, such that F&H LLC shall be owned 100% by the Sellers as of the
Closing Date, free and clear of all Liens. 
On the date on which all conditions to the obligations of the Parties to
consummate the Transactions are satisfied or waived (including the delivery
(into escrow) of all documents required to be delivered at the Closing) (the 

 

 

“Effective Date”), the Purchaser shall provide a written notice to
the Sellers’ Representative that all of the conditions of Purchaser’s
obligations to consummate the Closing are satisfied or waived (the “Purchaser
Closing Notice”).  On the Effective
Date, the Company will file an Articles of Merger with the Secretary of State
of the Commonwealth of Pennsylvania and a Certificate of Merger with the
Secretary of State of the State of Delaware causing the Company to merge with
and into F&H LLC, with F&H LLC surviving the merger (the “F&H
LLC Merger”), and, upon consummation of the F&H LLC Merger, F&H LLC
will use its commercially reasonable efforts to qualify F&H LLC to do
business in the jurisdictions in which it is required to be so qualified. Notwithstanding
anything to the contrary in this Agreement, upon the date of the delivery of
the Purchaser Closing Notice, the Purchaser shall be obligated to consummate
the Closing of the Transactions on the Closing Date, without regard to any
condition hereunder, and its failure to do so shall be a breach of this
Agreement, in which case the Sellers, Company and F&H LLC shall have all
rights and remedies, including those provided for in Sections 9.2 and 9.3
hereof.

 

5.2           General; Operation of Business.  Each of the Parties shall use its
commercially reasonable efforts to take all action and to do all things
necessary, proper, or advisable in order to consummate and make effective the
Transactions (including satisfaction, but not waiver, of the closing conditions
set forth in Article VII below). 
From the date of this Agreement through the Closing, except as the
Purchaser may approve otherwise (with such approval not to be unreasonably
withheld or delayed), or as otherwise expressly contemplated or permitted by
the Transaction Documents, the Company shall conduct the Business in the ordinary
course in accordance with past practice and in compliance, in all material
respects, with all Laws, Permits and Contracts and use its commercially
reasonable efforts to preserve and protect the Company’s material assets and
properties and its current relationship with customers, suppliers and others
with which the Company has a business relationship.  Without limiting the generality of the
foregoing and, except as contemplated or permitted by this Agreement or the
Transaction Documents or as set forth on Schedule 5.2, with respect to
the period between the execution of this Agreement and the Closing Date, the
Company shall:

 

(a)           cause all transactions between the Company, on the
one hand, and third Persons, on the other hand, to take place on arm’s length
terms and not enter into any transactions with any Affiliates of the Company
(other than as expressly permitted in this Agreement);

 

(b)           ensure that, except in the ordinary course of
business, no change is made to any written agreement with any key employee or
consultant, including any Contract relating to employment, compensation,
benefits, termination, retention, or severance;

 

(c)           not declare or pay any dividends or distributions
(including, but not limited to, repurchase or redemption of stock) to the
Sellers, except: (i) upon prior written notice to Purchaser, for
dividends and distributions paid to the Sellers in an amount sufficient to pay
their respective Tax liabilities on account of taxable income of the Company
(including distributions made on the Closing Date in amounts reasonably
sufficient to cover income Tax liabilities of the Sellers on account of taxable
income of the Company’s business for the period through the Closing Date (but
excluding Tax liabilities of the Sellers on account of the Transactions));
provided, however, (x) if, for the tax year ended December 31, 2007,
the amount 

 

 

of such tax distributions (which shall be calculated in a manner
consistent with the methodology used to calculate the amount of distributions
made to Sellers during the previous three estimated tax periods in 2007, as
reflected on Schedule 5.2(c)) are in excess of $679,000, the Company
will obtain the consent of Purchaser (which shall not be unreasonably withheld
or delayed) for all tax distributions in excess of $679,000 and (y) for
any portion of the taxable year beginning on January 1, 2008, the Company
shall not make a tax distribution to the Sellers until the Company delivers a
calculation showing the amount of such tax distribution to the Purchaser (which
shall be prepared consistent with the past practices of the Company in
determining prior tax distributions) and the Purchaser consents to the amount
of such tax distribution, which consent shall not be unreasonably withheld or
delayed; and (ii) for the quarterly payments set forth on Schedule 5.2
attached hereto required to repay a shareholder loan in accordance with the
Stock Purchase Agreement, dated as of April 30, 1998, among certain of the
stockholders of the Company;

 

(d)           not (i) issue or authorize for issuance any
shares of capital stock, any options, warrants, purchase rights, subscription
rights, conversion rights or other Contracts that, directly or indirectly,
could require the Company to issue any shares of capital stock, (ii) sell
or otherwise cause to become outstanding shares of capital stock or other
security, or make any change in any such issued and outstanding security, or (iii) redeem,
purchase or otherwise acquire any such security;

 

(e)           maintain its separate corporate existence, pay its
debts and Taxes when due (unless being contested in good faith by appropriate
proceedings and for which adequate reserves have been established), use
commercially reasonable efforts to keep available the services of its present
employees (without the obligation to pay additional bonuses or increase
compensation), maintain its books and records in accordance with past practice,
and use its reasonable best efforts to maintain in full force and effect all
material Permits;

 

(f)            not adopt or propose any amendment to the
certificate of incorporation or bylaws of the Company;

 

(g)           not (i) assume, incur or guarantee any
Indebtedness (other than draw downs under the Credit Agreement in the ordinary
course of business consistent with past practice), (ii) modify the terms
of any existing Indebtedness, (iii) other than sales of inventory in the
ordinary course of business consistent with past practice, sell, lease,
transfer or assign any property or assets of the Company with a value in excess
of $250,000 individually (or in the aggregate, in the case of any related
series of transactions), or (iv) mortgage, pledge or permit to become
subject to Liens (other than Permitted Liens) any properties or assets of the
Company;

 

(h)           not (i) make any loans, advances or capital
contributions to, or investments in, any Person or (ii) cancel any debts
or waive any claims or rights of substantial value;

 

(i)            not (i) amend, modify or terminate, or waive,
release or assign any rights under, any Material Contract without the prior written
consent of Purchaser (which consent shall not be unreasonably withheld or
delayed) or (ii) other than in the ordinary course of business consistent
with past practice, enter into any Contract which, if in effect on the date
hereof, would 

 

 

have been required to be set forth in Section 4.18 of the
Company Disclosure Schedule as a Material Contract; provided,
however, that, even in the ordinary course of business, the Company
shall not, without the prior written consent of Purchaser (which consent shall
not be unreasonably withheld or delayed), make any spot purchases of product in
excess of 25,000 barrels or enter into any fixed price sales agreements in
excess of 25,000 barrels or with a term longer than twelve (12) months;

 

(j)            not make any capital expenditure or acquire any
assets, properties or rights (other than inventory in the ordinary course of
business consistent with past practice) in excess of $250,000 individually (or
in the aggregate, in the case of any related series of capital expenditures);

 

(k)           not (i) make any changes in its accounting
methods, principles or practices or (ii) make any Tax election, change its
method of Tax accounting, amend any Tax Return or settle any claim
relating to Taxes without the prior written consent of the Purchaser (which
consent shall not be unreasonably withheld);

 

(l)            (i) not enter into any Derivative Transactions
other than Derivative Transactions that are bona-fide hedges entered into in
the ordinary course of business consistent with past practice and (ii) hedge,
in Derivative Transactions of a type, amount and tenor consistent with past
practice, the inventory purchased by the Company;

 

(m)          not pay any fee relating to obtaining the consent under
the Credit Agreement in connection with the continuation of the Company’s line
of credit after the Closing, without the prior written consent of
Purchaser (which consent shall not be unreasonably withheld or delayed); and

 

(n)           not agree or otherwise commit, whether in writing or
otherwise, to do any of the foregoing.

 

Notwithstanding anything in this Section 5.2
to the contrary, the Company shall not be prohibited from taking all reasonable
actions necessary to consummate the F&H LLC Merger.

 

5.3           Access to Records.  Subject to the terms of the Confidentiality Agreement,
the Purchaser shall be entitled, through its employees and representatives, to
enter upon and make such reasonable investigation of the assets, properties,
business and operations of the Company, and such examination of the books and
records, financial condition and operations of the Company as the Purchaser may
reasonably request, including, without limitation, the reports and information
set forth on Schedule 5.3 hereto. 
Any such investigation and examination shall be conducted at reasonable
times upon reasonable prior notice to the Company and under reasonable
circumstances; provided, however,
that (i) such investigation shall not unreasonably interfere with the
business operations of the Company; (ii) the Company shall not be required
to provide access to any information or take any other action that would
constitute a waiver of the attorney-client privilege; and (iii) the
Company need not supply the Purchaser with any information which, in the
reasonable judgment of the Company, the Company is under a legal obligation not
to supply.

 

 

5.4           Supplemental Disclosure; Notice of Developments.

 

(a)           During the period prior to the Closing Date, each
party shall, as soon as practicable, notify the other party in writing of:

 

(i)            the discovery by such party of any event, condition,
fact or circumstance that occurred or existed on or prior to the date of this
Agreement and that caused or constitutes an inaccuracy in or breach of any
representation or warranty made by such party in this Agreement;

 

(ii)           any event, condition, fact or circumstance that
occurs, arises or exists after the date of this Agreement and that would cause
or constitute an inaccuracy in or breach of any representation or warranty made
by such party in this Agreement if (A) such representation or warranty had
been made as of the time of the occurrence, existence or discovery of such
event, condition, fact or circumstance, or (B) such event, condition, fact
or circumstance had occurred, arisen or existed on or prior to the date of this
Agreement;

 

(iii)          any breach of any covenant or obligation of such
party; and

 

(iv)          any event, condition, fact or circumstance that
would make the timely satisfaction of any of the conditions set forth in Article VII
impossible or unlikely.

 

(b)           If any event, condition, fact or circumstance that
is required to be disclosed pursuant to Section 5.4(a) requires any
change in the Company Disclosure Schedule, or if any such event, condition,
fact or circumstance would require such a change assuming the Company Disclosure
Schedule were dated as of the date of the occurrence, existence or discovery of
such event, condition, fact or circumstance, then the Company shall promptly
(upon discovery) deliver to Purchaser an update to the Disclosure Schedule
specifying such change.  No such update
shall be deemed to supplement or amend the Company Disclosure Schedule for the
purpose of (i) determining the accuracy of any of the representations and
warranties made by the Company or Sellers in this Agreement, or (ii) determining
whether any of the conditions set forth in Article VII has been satisfied
; provided, however, if (X) the
Company and Sellers’ Representative expressly acknowledge (in any such notice
delivered by the Company and Sellers’ Representative) in good faith that that
Purchaser has the right to terminate this Agreement pursuant to Section 9
by reason of such change (taking into account any prior changes so disclosed)
and (Y) Purchaser fails to exercise such right to terminate this
Agreement, then any right of Purchaser to indemnification (as a result of the
breaches relating to the events, conditions, facts and/or circumstances giving
rise to the change and any such prior changes) shall be deemed waived,
notwithstanding any other provision in this Agreement to the contrary.

 

(c)           Derivative Activity.  Company hereby agrees to prepare and provide
to Purchaser on the Closing Date a list (the “Closing Derivative List”)
of (A) all outstanding Derivative Transactions to which Company is a party
as of the date immediately prior to the Closing Date, whether or not Company
continues to have any obligations thereunder and (B) all terminated
Derivative Transactions to which Company was a party prior to such date, if
Company has any contingent liability thereunder.  The Closing Derivative List shall include the
fair market value of each outstanding Derivative Transaction as of such date,
with a value to 

 

 

Company expressed as a positive number and a value to the counterparty
thereto expressed as a negative number. 
Company shall determine the fair market value of each Derivative
Transaction by obtaining quotations from the counterparty to such Derivative
Transaction.

 

5.5           Public Announcements; Confidentiality.

 

(a)           None of the Company and the Sellers or the Purchaser
shall make, or permit any agent or Affiliate to make, any public statements,
including any press releases, with respect to this Agreement and the
Transactions without the prior written consent of the other (which consent
shall not be unreasonably withheld or delayed), except as may be required by
any Law or Order or pursuant to any listing agreement with any national
securities exchange or stock market, in which case the Party required to make
the release or announcement shall allow the other Party reasonable time to
comment on such release or announcement in advance of such issuance.  The Purchaser, the Sellers and the Company
shall jointly agree on the content and substance of all public announcements
concerning the Transactions.

 

(b)           The Parties acknowledge that the information being
provided to one another in connection with the Transactions (including the
terms and conditions of this Agreement and the other Transaction Documents) are
subject to the term of the Confidentiality Agreement, the terms of which are incorporated
herein by reference.

 

5.6           Litigation Support.  In the event and for so long as any Party
actively is contesting or defending against any third party Action or
Proceeding in connection with (a) the Transactions, or (b) any fact,
situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act, or transaction on or prior
to the Closing Date involving the Sellers or the Company, the Purchaser agrees
to (i) cooperate with the contesting or defending party and its counsel, (ii) make
available the Business Employees then employed by the Purchaser to provide
testimony, to be deposed, to act as witnesses and to assist counsel, and (iii) provide
access to its books and records as shall be necessary in connection with the
defense or contest, all at the sole cost and expense of the contesting or
defending party.

 

5.7           Regulatory and Other Approvals; Consents.

 

(a)           HSR Act.  The Company and the Purchaser will as
promptly as practicable, but in no event later than five (5) Business Days
following the execution and delivery of this Agreement, file with the United
States Federal Trade Commission (the “FTC”) and the United States
Department of Justice (the “DOJ”) the notification and report form, if
any, required for the Transactions and any supplemental information requested
in connection therewith pursuant to the HSR Act.  Any such notification and report form and
supplemental information will be in substantial compliance with the
requirements of the HSR Act.  The Company
and the Purchaser shall furnish to the other such necessary information and
reasonable assistance as the other may request in connection with its
preparation of any filing or submission which is necessary under the HSR
Act.  Each of the Company and Purchaser
will use such Party’s reasonable best efforts to obtain any clearance required
under the HSR Act for the Transactions and to request early termination and a
waiver from the applicable waiting period under the HSR Act and any similar
foreign laws and regulations. 
Notwithstanding the foregoing, (i) Purchaser shall not be required
to (A) consent to the divestiture, license or other disposition or 

 

 

holding separate (through the establishment of a trust or otherwise) of
any of its or its Affiliates’ assets or any assets of the Company or (B) consent
to any other structural or conduct remedy or enter into any settlement or agree
to any Order regarding antitrust matters respecting the Transactions and (ii) Purchaser
and its Affiliates shall have no obligation to contest, administratively or in
court, any ruling, order or other action of any Governmental Entity or any
other Person respecting the Transactions. 
The Company and the Purchaser shall keep each other apprised of the
status of any communications with, and inquiries or requests for additional
information from, the FTC and the DOJ and shall comply promptly with any such
inquiry or request.  In addition to the
foregoing, the Company and the Purchaser shall substantially comply with any
additional requests for information, including requests for production of
documents and production of witnesses for interviews or depositions, by any
antitrust authority.  If necessary, the
Company and the Purchaser shall file with any applicable foreign Government
Entity any required notifications under applicable foreign antitrust or
competition Law.

 

(b)           Other Authorizations and Consents.  As promptly as practicable after the date
hereof, the Company and the Purchaser shall make all other filings with Government
Entities and use commercially reasonable efforts to obtain all Permits required
to consummate the Transaction, the consents of third Persons listed on Schedule
5.7(b) and the Specified Purchaser Consents.  Notwithstanding the foregoing, none of the Company
or the Sellers shall have any obligation to pay any fee to any third Person for
the purpose of obtaining such consent or any costs and expenses of any third
Person resulting from the process of obtaining any such consent.  The Company and the Purchaser shall furnish
promptly to each other all information that is not otherwise available to the
other Party and that such Party may reasonably request in connection with such
authorizations and consents.

 

5.8           Employee Matters.

 

(a)           For a period of ninety (90) days after the Closing
Date, the Purchaser shall not terminate Business Employees in such numbers as
would trigger any Liabilities under the Worker Adjustment and Retraining
Notification Act, 29 U.S.C. § 2101, et seq. (“WARN”) or any state or
local plant closing or severance Law. 
The Purchaser shall comply with any notice or filing requirements under
WARN and any state or local plant closing or severance Law.  The Purchaser is responsible for providing
notice under WARN and any state or local plant closing or severance law of any
plant closing or mass layoff which takes place or is triggered on or after the
Closing Date.

 

(b)           From and after the Closing Date, the Purchaser
shall, and shall cause F&H LLC to, honor (without modification) each
written Contract between the Company and/or F&H LLC and any Business
Employee that (i) existed as of the date hereof, and (ii) is set
forth in Section 4.14 or Section 4.18(g) of the
Company Disclosure Schedule.

 

(c)           Subject to any greater compensation and benefits
provided in an employment agreement with any Business Employee, during the
twelve (12)-month period commencing at the Closing Date, the Purchaser shall
provide, or shall cause F&H LLC to provide, to any Business Employee (as
long as such Business Employee continues to be employed by F&H LLC during
such period) compensation and benefits, including the Employee Plans and
Employee Benefit Arrangements, that are in the aggregate, substantially
comparable to 

 

 

and no less favorable than the compensation and benefits being provided
to Business Employees as of the date of this Agreement; provided,
however, that nothing herein shall prohibit the Purchaser from
replacing any such existing Employee Plan or Employee Benefit Arrangement with
a plan, policy, program or arrangement which provide such Business Employees
with benefits that are in the aggregate substantially comparable to and no less
favorable than the benefits that would have been provided under such existing
Employee Plan or Employee Benefit Arrangement.

 

(d)           The Purchaser shall cause F&H LLC to provide
severance compensation to employees involuntarily terminated during the twelve
(12)-month period commencing at the Closing Date in accordance with a severance
policy reasonably acceptable to the Sellers, the principal terms of which are
set forth on Exhibit 5.8 attached hereto.

 

(e)           Without limiting the generality of Section 5.8(b),
with respect to any employee benefit plan, policy, program or arrangement as
may be maintained for Business Employees from time to time following the
Closing Date by Purchaser and/or F&H LLC (including plans, policies,
programs or arrangements providing severance benefits and vacation
entitlement), service by such Business Employees performed for F&H LLC and/or
the Company prior to Closing shall be treated as service with the Purchaser or F&H
LLC, as the case may be, for purposes of determining eligibility to participate
and vesting.  Such service also shall
apply for purposes of satisfying any waiting periods, evidence of insurability
requirements, or the application of any preexisting condition limitations.  The Purchaser shall also honor, or cause F&H
LLC to honor, all vacation, personal and sick days accrued by the Business
Employees under the Employee Plans and Employee Benefit Arrangements
immediately prior to the Closing Date, to the extent reserved against the
Financial Statements.

 

(f)            Without limiting the generality of Section 5.8(b),
the Purchaser shall cause F&H LLC to honor, in accordance with their terms,
and shall, or shall cause F&H LLC to, make required payments when due
under, all Employee Plans and Employee Benefit Arrangements maintained or
contributed to by F&H LLC or to which F&H LLC is a party (including
employment, incentive and severance agreements and arrangements), that are
applicable with respect to any Business Employee or any director of the Company
or manager of F&H LLC (whether current, former or retired) or their
beneficiaries; provided, however, that the
foregoing shall not preclude the Purchaser or F&H LLC from amending or
terminating any Employee Plan or Employee Benefit Arrangement in accordance
with its terms.

 

5.9           Record Retention.  The Parties agree that for a period of seven (7) years
after the Closing Date, or for a longer period if required by Law, without the
prior written consent of the Sellers (which consent shall not be unreasonably
withheld or delayed), neither the Purchaser nor any of its Affiliates shall
dispose of or destroy any of the books and records purchased hereunder which
may be relevant to any legal, regulatory or Tax audit, investigation, inquiry
or requirement of any of the Sellers without first offering such records to the
Sellers.

 

5.10         Rights to Indemnification.  F&H LLC’s certificate of formation and
operating agreement (at the time of the F&H LLC Merger) shall contain the
same provisions relating to indemnification and exculpation of managers and
officers of F&H LLC (and, with respect to the period prior to the F&H
LLC Merger, directors and officers of the Company) as currently 

 

 

contained in the articles of incorporation and bylaws of the Company (with
respect to officers and directors of the Company) for acts and omissions on or prior
to the Closing Date. The Purchaser shall not amend, alter, modify, or terminate
any provisions in F&H LLC’s certificate of formation or operating agreement
or other equivalent governing documents in a manner which would remove, limit
or impair such provisions providing for such indemnification and
exculpation.  The Purchaser shall cause F&H
LLC to maintain insurance coverage under a director and officers liability
insurance policy for a period of not less than six (6) years from the date
hereof (in amounts no less favorable than those of such policy in effect on the
date hereof and sufficient in scope to insure against F&H LLC’s obligations
in its certificate of formation and operating agreement, including coverage for
the period up to and including Closing Date). 
In lieu of the foregoing, the Purchaser may purchase six-year “tail”
coverage covering acts or omissions prior to the Closing on terms no less
favorable than those contained in the existing policy.  This Section 5.10 is intended for the
irrevocable benefit of, and to grant third party rights to, the directors and
officers of the Company (and the managers and officers of F&H LLC) existing
on or at anytime prior to the Closing (and their respective heirs and personal
representatives), and shall be binding upon all successors and assigns of the
Purchaser, F&H LLC and the Company. 
The directors and officers of the Company (and the managers and officers
of F&H LLC) as of immediately prior to Closing shall be entitled to enforce
the covenants contained in this Section 5.10.  In the event that F&H
LLC (or any of its successors or assigns) shall consolidate or merge with any
other Person and shall not be the continuing or surviving corporation or entity
in such consolidation or merger, or transfers all or substantially all of its
properties and Assets to any other Person, then in each case proper provision
shall be made so that the continuing or surviving corporation or entity (or its
successors or assigns, if applicable), or transferee of such Assets, as the
case may be, shall assume the obligations set forth in this Section 5.10
subject to applicable Law.

 

5.11         Acknowledgement of Personal Property.  The Parties acknowledge and agree that the
personal property set forth in Schedule 5.11 is personal property owned
by the Sellers and that Sellers shall be entitled to remove such personal
property from the premises of the Company.

 

5.12         Tax Matters.

 

(a)           Preparation of Tax Returns.

 

(i)            Tax Periods Ending On or Before the Closing
Date.

 

(A)          Non-Income Tax Returns.  Purchaser
shall prepare or cause to be prepared and file or cause to be filed all Tax Returns
for the Company and F&H LLC for all periods ending on or prior to the
Closing Date (“Pre-Closing Tax Period”) which are filed after the
Closing Date, other than income Tax Returns and the PA Capital Stock Tax Return
for such periods.  Such Tax Returns shall
be prepared consistently with the past practice of the Company, unless
otherwise required by applicable Law. 
Purchaser shall permit the Sellers’ Representative to review and comment
on each such Tax Return described in the preceding sentence prior to filing and
shall accept all comments that are reasonable. 
Purchaser shall cause the Company to pay such Taxes in accordance with
the Company’s normal past practices. 
Sellers shall reimburse Purchaser for such Taxes to the extent not
incurred in the ordinary course 

 

 

of business or incurred in a manner inconsistent with the Company’s
normal past practices within fifteen (15) days of demand by Purchaser or the
Company.

 

(B)           Income Tax Returns.  Sellers’
Representative shall prepare or cause to be prepared all income Tax Returns
(including the PA Capital Stock Tax Return) for the Company and F&H LLC for
all Pre-Closing Tax Periods.  Such income
Tax Returns shall be prepared consistently with past practice of the
Company.  Sellers’ Representative shall
permit Purchaser to review and comment on each such Tax Return described in the
preceding sentence prior to filing and shall accept all comments that are
reasonable.  The Purchaser, the Company
or F&H LLC shall file such Tax Returns at the direction of the Sellers’
Representative on or before the applicable due date (taken into account
extension periods).  With respect to all
income Tax Returns of the Company or F&H LLC that reflect a Company Tax
liability (as compared to a Seller Tax Liability), Sellers shall reimburse
Purchaser for such Taxes of the Company or F&H LLC within fifteen (15) days
of payment by Purchaser, the Company or F&H LLC of such Taxes; provided,
however, that Sellers shall be permitted to utilize any Tax credits generated
by the Company during Pre-Closing Tax Period (including Tax credits that are
generated by the Company’s participation in the Pennsylvania EITC Program) to
offset their portion of the Company’s Tax Liability.

 

(ii)           Tax Periods Beginning Before and Ending After the
Closing Date.  Purchaser
shall prepare or cause to be prepared and file or cause to be filed any Tax
Returns of the Company or F&H LLC for Tax periods which begin on or before
the Closing Date and end after the Closing Date (a “Straddle Tax Period)”.  Such Tax Returns shall be prepared
consistently with the past practice of the Company unless otherwise required by
applicable Law.  Purchaser shall permit
the Sellers’ Representative to review and comment on each such Tax Return
described in the preceding sentence prior to filing and shall accept all
comments that are reasonable.  Sellers
shall reimburse Purchaser solely from the Escrow Funds within five (5) days
of the date on which income Taxes are paid with respect to such periods an
amount equal to the portion of such income Taxes which relates to the portion
of such taxable period ending on the Closing Date.

 

(iii)          Allocation.  For purposes of
this Section 5.12, in the case of any Taxes that are imposed on a periodic
basis and are payable for a Straddle Tax Period, the portion of such Taxes
which relates to the portion of such Straddle Tax Period ending on the Closing
Date shall (x) in the case of any Taxes other than the Taxes based upon or
related to income or receipts, be deemed to be the amount of such Tax for the
entire Straddle Tax Period multiplied by a fraction the numerator of which is
the number of days in the portion of the Straddle Tax Period ending on the
Closing Date and the denominator of which is the number of days in the entire
Straddle Tax Period, and (y) in the case of any Tax based upon or related
to income or receipts be deemed equal to the amount which would be payable if
the Straddle Tax Period ended on the Closing Date.  For purposes of this Section 5.12, in
the case of any Tax credit relating to a Straddle Tax Period, the portion of
such Tax credit which relates to the portion of such Straddle Tax Period ending
on the Closing Date shall be the amount which bears the same relationship to
the total amount of such Tax credit as the amount of Taxes described in (y) above
bears to the total amount of Taxes for such Straddle Tax Period.

 

 

(b)           Cooperation on Tax Matters.

 

(i)            Purchaser and each Seller shall (and Purchaser shall
cause the Company and F&H LLC to) cooperate fully, as and to the extent reasonably
requested by the other party, in connection with the filing of Tax Returns and
any audit, litigation or other proceeding with respect to Taxes.  Such cooperation shall include the retention
and (upon the other party’s request) the provision of records and information
reasonably relevant to any such audit, litigation, or other proceeding and
making employees available on a mutually convenient basis to provide additional
information and explanation of any material provided hereunder.  Each Seller and Purchaser agree to (A) retain
all books and records with respect to Tax matters pertinent to the Company or
F&H LLC relating to any taxable period beginning before the Closing Date
until expiration of the statute of limitations (and any extensions thereof) of
the respective taxable periods, and to abide by all record retention agreements
entered into with any taxing authority, and (B) give all parties
reasonable written notice prior to transferring, destroying or discarding any
such books and records and, if any other party so requests, shall allow such
other party to take possession of such books and records.

 

(ii)           Purchaser and each Seller further agree, upon
request, to use their reasonable best efforts to obtain any certificate or
other document from any governmental authority or any other Person as may be
necessary to mitigate, reduce or eliminate any Tax that could be imposed.

 

(c)           Amended Tax Returns.

 

(i)            Any amended Tax Return of
the Company or F&H LLC or claim for Tax refund on behalf of the Company or
F&H LLC or any period ending on or prior to the Closing Date shall be
filed, or caused to be filed, only by the Sellers’ Representative.  The Sellers’ Representative shall not,
without the prior written consent of the Purchaser (which consent shall not be
unreasonably withheld or delayed), make or cause to be made, any such filing,
to the extent such filing, if accepted, reasonably might change the Tax
Liability of the Purchaser for any period ending after the Closing Date.

 

(ii)           Any amended Tax Return of the Company or F&H LLC
or claim for Tax refund on behalf of the Company or F&H LLC for any period
ending after the Closing Date shall be filed, or caused to be filed, only by
the Purchaser.  The Purchaser shall not,
without the prior written consent of the Sellers’ Representative (which consent
shall not be unreasonably withheld or delayed), make or cause to be made, any
such filing, to the extent such filing, if accepted, reasonably might change
the Tax Liability of the Sellers for (i) any period ending on or prior to
the Closing Date or (ii) any portion of a Straddle Tax Period.

 

(d)           Audits.

 

(i)            Purchaser shall provide Sellers’ Representative with
notice of any written inquiries, audits, examinations or proposed adjustments
by the Internal Revenue Service (“IRS) or any other taxing authority,
which relate to any Pre-Closing Tax Periods within ten (10) days of the
receipt of such notice.  Sellers’
Representative shall have the sole right to represent the interests of the
Company or F&H LLC in any Tax audit or other proceeding relating to any Pre-Closing
Tax Periods, to employ counsel of his choice at his own expense, and to settle
any issues and to take any other actions in connection with such proceedings
relating to such taxable 

 

 

periods; provided, however, that Sellers’ Representative shall inform
Purchaser of the status of any such proceedings, shall provide Purchaser (at
Purchaser’s cost and expense) with copies of any pleadings, correspondence, and
other documents as Purchaser may reasonably request and shall consult with
Purchaser prior to the settlement of any such proceedings and shall obtain the
prior written consent of Purchaser prior to the settlement of any such
proceedings that could reasonably be expected to adversely affect Purchaser in
any taxable period ending after the Closing Date, which consent shall not be
unreasonably withheld or delayed; provided  further, however, that
Purchaser and counsel of its own choosing shall have the right to participate
in, but not direct, the prosecution or defense of such proceedings at Purchaser’s
sole expense.

 

(ii)           Purchaser and Sellers’ Representative shall provide
each other with notice of any written inquiries, audits, examinations or
proposed adjustments by the IRS or any other taxing authority that relate to
any Straddle Tax Period within ten (10) days of the receipt of such
notice.  Purchaser and Sellers’
Representative shall jointly control the conduct of any Tax audits or other
proceedings relating to Taxes for a Straddle Tax Period, and neither party
shall settle any such Tax audit or other proceeding without the written consent
of the other party, which consent shall not be unreasonably withheld or
delayed.

 

(iii)          Purchaser shall have the right to control all other
Tax audits or proceedings of the Company or F&H LLC.  Purchaser shall obtain the prior written
consent of Sellers’ Representative prior to the settlement of any such
proceedings that could reasonably be expected to increase the Sellers’ Tax
liability for a Pre-Closing Tax Period, which consent shall not be unreasonably
withheld or delayed.

 

(iv)          Purchaser, the Company and F&H LLC shall execute
and deliver to Sellers’ Representative such powers of attorney and other
documents as may be necessary or appropriate to give effect to the foregoing.

 

(e)           Certain Taxes.   All transfer, documentary, sales, use,
stamp, registration and other such Taxes and fees (including any penalties and
interest) incurred in connection with this Agreement shall be paid by the
Purchaser when due, and the Purchaser, 
the Company or F&H LLC will, at its own expense, file all necessary
Tax Returns and other documentation with respect to all such transfer,
documentary, sales, use, stamp, registration and other taxes and fees, and, if
required by applicable Law, the Sellers will join in the execution of any such
Tax Returns and other documentation, provided that Sellers are held harmless
from any liability solely by reason of such joinder.

 

(f)            Tax Covenants.

 

(i)            Purchaser covenants that without obtaining the prior
written consent of Sellers’ Representative (which consent shall not be
unreasonably withheld or delayed), and except as required by law, it will not,
and will not cause or permit F&H LLC or any affiliate of Purchaser, to (i) take
any action on the Closing Date other than in the ordinary course of business
that could give rise to any Tax liability of Sellers or any indemnification
obligation of Sellers under Section 6.1, or (ii) make or change any
material Tax election, amend any Tax Return, take any Tax position on any Tax
Return, or compromise or settle any Tax liability, in each case if such action
could have the effect of increasing the Tax liability of Sellers 

 

 

or reducing any Tax asset of the Company or F&H LLC with respect to
any Pre-Closing Tax Period or portion of a Straddle-Tax Period ending on the
Closing Date.

 

(ii)           After the Closing Date, Purchaser, the Company or
F&H LLC will not, without obtaining the written consent of the Sellers’
Representative (which consent shall not be unreasonably withheld or delayed),
agree to the waiver or any extension of the statute of limitations relating to
any Taxes of the Company or F&H LLC for any Pre-Closing Tax Period or any
Straddle Tax Period.

 

(iii)          Sellers shall have the right to any Tax refunds
received by the Company or F&H LLC for any Pre-Closing Tax Period or
portion of any Straddle Tax Period that ends on the Closing Date.  Purchaser shall pay such amounts to Sellers’
Representative no later than ten (10) days after the receipt by the
Company of such Tax refunds.

 

(g)           Tax Treatment of F&H LLC Merger / Asset
Allocation.

 

(i)            Purchaser and
Sellers acknowledge that the F&H LLC Merger, followed by the sale of the
F&H LLC Membership Interests, will be treated as follows for Tax purposes:

 

(A)          first, the transfer
by the Company of all its assets to (and assumption of all its liabilities by)
F&H LLC in exchange for the issuance of the F&H LLC Membership
Interests to the Company;

 

(B)           next, the
liquidation of the Company pursuant to which the Company distributes all its
assets to the Sellers (consisting solely of the F&H LLC Membership
Interests) in a fully taxable transaction; and

 

(C)           finally, on the
day following the F&H LLC Merger, the purchase by Purchaser of the F&H
LLC Membership Interests from the Sellers which shall be in accordance with
Revenue Ruling 99-6, 1991-1 CB 432.

 

(ii)           Purchaser, the
Company, F&H LLC, and the Sellers hereby acknowledge that the agreed fair
market value of the Company’s and F&H’s assets for the purposes of
determining the tax consequences of the liquidation of the Company and the
purchase by Purchaser of the F&H LLC Membership Interests shall be as set
forth in an agreement reached by Purchaser and Sellers’ Representative (the “Purchase
Price Allocation”).  The Purchase
Price Allocation shall be prepared consistent with the principles of Section 1060
of the Code and the Treasury Regulations promulgated thereunder and in
accordance with the methodology set forth on Schedule 5.12(g).

 

(iii)          Sellers’ Representative shall deliver a statement
reflecting the Purchase Price Allocation (the “Allocation Statement”) to
the Purchaser no later than sixty (60) days following the Closing Date.  The Purchaser shall notify Sellers’
Representative of any objections to the Allocation Statement within fifteen
(15) days after the Purchaser receives the Allocation Statement.  If the Company does not notify Sellers’
Representative of any objections to the Allocation Statement, within that
fifteen (15) day period, the Allocation Statement shall be construed as
final.  If the Purchaser notifies Sellers’
Representative of an objection to the 

 

 

Allocation Statement by the end of the fifteen (15) day period, and the
Sellers’ Representative and the Purchaser are unable to resolve their
differences within fifteen (15) days thereafter, then the disputed items on the
Allocation Statement shall be submitted to a mutually acceptable Neutral
Accounting Firm (the “Accounting Arbitrator”) for resolution, with the
costs paid fifty percent (50%) by the Sellers and fifty percent (50%) by the
Purchaser, and the Accounting Arbitrator shall be instructed to deliver a
finalized Allocation Statement as soon as possible.

 

(iv)          Purchaser, Sellers, the Company, F&H LLC, and
their respective Affiliates shall report, act and file all Tax Returns in all
respects and for all purposes consistent with the Allocation Statement and the
tax treatment of the F&H LLC Merger (followed
by the sale of the F&H LLC Membership Interests) described in this Section 5.12(g),
as well as any amendments to such Tax Returns required with respect to
any adjustment to the Purchase Price.  Neither
Purchasers, Sellers or any of their Affiliates shall take any position (whether
in audits, Tax Returns or otherwise) that is inconsistent with the information set
forth on the Allocation Statement or that is inconsistent with this Section 5.12(g),
unless required to do so by applicable Law.

 

(h)           Tax Treatment of Executive Bonuses.  All Tax deductions relating to (i) the
payments under the Executive Retention Agreements (under the 1999 Bonus Plan
and 2002 Bonus Plan) to the extent relating to payments made on or prior to the
Closing Date and (ii) the portion of the Executive Sale Bonuses that are
paid on the Closing Date, shall be for the benefit of the Sellers and shall be
reported on the Tax Return of the Company and/or F&H LLC for the applicable
tax period ending on or immediately prior to the Closing Date.  All Tax deductions relating to the portion of
the Executive Sales Bonuses that are paid after the Closing Date shall be for
the benefit of the Purchasers.

 

5.13         Further Assurances.  From and after the Closing, the Purchaser and
each of the Sellers shall execute and deliver such further instruments of
conveyance and transfer and take such other action as reasonably may be
necessary to further effectuate the Transactions.  The Purchaser shall permit the Sellers and
their authorized representatives, at reasonable times upon reasonable prior
notice under reasonable circumstances, to enter upon and make such reasonable
investigation of the assets, properties, business and operations of the
Purchaser and the Company and such examination of the books and records,
financial condition and operations of the Purchaser and the Company as the
Sellers may reasonably request; provided that
such investigation or examination relates to transactions or events occurring
prior to the Closing or transaction or events occurring subsequent to the
Closing which arise out of or are related to transactions or events occurring
prior to the Closing; provided further,
that such investigation shall not unreasonably interfere with the business
operations of the Purchaser or the Company.

 

5.14         Survival.  The agreements and covenants contained in
this Article V shall survive the Closing Date and be enforceable
thereafter, subject to any time limitations contained in this Agreement.

 

5.15         Exclusivity.  The Sellers and the Company shall not, nor
shall they permit any officer, director, employee, investment banker, attorney
or other adviser or representative of the Sellers, the Company or any of their
respective Affiliates, to, submit, solicit, initiate, or discuss any
Acquisition Proposal (as defined below), enter into any Contract or accept any
offer relating 

 

 

to any Acquisition Proposal, consummate any reorganization,
liquidation, dissolution or initial public offering.  “Acquisition Proposal” means, other
than this Agreement and the Transactions, any proposal or offer relating to the
acquisition, directly or indirectly, of all or any substantial portion of the
capital stock or assets of the Company (including any acquisition structured as
a merger, consolidation or share exchange). 
The obligations of the Parties under this Section 5.15 shall
automatically terminate upon the Closing or the earlier termination of this
Agreement in accordance with Article IX hereof.

 

5.16         Sellers’ Representative.

 

(a)           Each Seller, by virtue of its execution of this
Agreement, hereby makes, constitutes and appoints the Sellers’ Representative,
with full power of substitution and re-substitution, as its true and lawful
attorney-in-fact for him, her or it and in his, her or its name, place, and
stead to sign, execute, deliver and perform any Transaction Documents required
to be executed by such Seller (or any Transaction Documents by which Seller is
otherwise bound), to make and authorize amendments to, or waivers of, this
Agreement or any other Transaction Document, to enforce the obligations of the
Purchaser and the Company under this Agreement or any other Transaction
Document, to give and receive all notices required or permitted by the Sellers’
Representative under this Agreement or any other Transaction Document, and to
defend and/or settle any indemnification claims made by the Purchaser or the
Company or any other Indemnified Person pursuant to the terms of this Agreement
or any other Transaction Document (to the extent such claims are to be
satisfied out of the Escrow Funds), hereby ratifying and confirming that the
Sellers’ Representative may do or cause to be done by virtue hereof and to make
all determinations and elections hereunder and thereunder.  This power of attorney is a special power of
attorney coupled with an interest and is irrevocable, and shall survive the Closing
and death, disability, legal incapacity, bankruptcy, insolvency, dissolution,
or cessation of existence of any Seller. 
This power of attorney may be exercised by the Sellers’ Representative
by listing the Seller executing any Transaction Document with the single
signature of the Sellers’ Representative acting as attorney-in-fact for such
Seller.  Each Seller hereby forever
releases and discharges the Sellers’ Representative from any and all liability
which may arise in connection with the Sellers’ Representative’s performance in
good faith and any acts or omissions which such Sellers’ Representative takes
on behalf of the Sellers and their shareholders in accordance with the terms of
this limited power of attorney, except in the case of gross negligence or
willful misconduct of the Sellers’ Representative.

 

(b)           Each Seller shall indemnify and hold harmless and
reimburse the Sellers’ Representative from and against such Seller’s ratable
share of any and all liabilities, losses, damages, claims, costs or expenses
suffered or incurred by the Sellers’ Representative arising out of or resulting
from any action taken or omitted to be taken by the Sellers’ Representative
under this Agreement or the other Transaction Documents, other than such
liabilities, losses, damages, claims, costs or expenses arising out of or
resulting from the Sellers’ Representative’s gross negligence or willful
misconduct, and in the
event there are any remaining funds in the Escrow Account to be distributed to
the Sellers at the termination of the Escrow Account, such funds shall first
satisfy any such loss, liability, or expense incurred by the Sellers’
Representative and thereafter the Sellers’ Representative shall be entitled to
recover any such losses, liabilities or expenses from the Escrow Account prior
to the distribution of funds to the Sellers.

 

 

(c)           Each Party shall be entitled
to rely exclusively upon any communication given or other action taken by the
Sellers’ Representative on behalf of the Sellers pursuant to this Agreement or
the other Transaction Documents.

 

ARTICLE VI

INDEMNIFICATIONS; SURVIVAL

 

6.1           Indemnification by the Sellers.  Subject to the terms, conditions and
limitations of this Article VI, following the Closing, the Purchaser, each
of its Affiliates, and their respective successors, assigns, officers,
directors, employees and agents shall be indemnified, and held harmless

 

(a)           by each Seller, severally (and not jointly) from and against any Loss
suffered or incurred by any such Indemnified Person arising or resulting from
or based upon any breach of any representation or warranty of such Seller
contained in Article III of this Agreement; and

 

(b)           by the Sellers, jointly and severally, arising or resulting from or
based upon

 

(i)            any breach of any representation or warranty of the Sellers,  Sellers’ Representative or the Company contained
in this Agreement (other than in Article III) or any other Transaction
Document,

 

(ii)           the breach of any covenant of the Sellers, Sellers’ Representative or
the Company contained in this or any other Transaction Document; or

 

(iii)          (1) except
as provided for in Section 5.12(a)(i)(A), any and all Taxes (or the
non-payment thereof) of the Company or F&H LLC for Pre-Closing Tax Periods
and the portion of any income Taxes for Straddle Tax Periods ending on the
Closing Date and (2) any and all Taxes (or the non-payment thereof) of any
other Person imposed on the Company or F&H LLC as a transferee or
successor, by contract or pursuant to any law, rule, or regulation, which Taxes
relate to an event or transaction occurring on or before the Closing Date;

 

provided, however, that (I) there shall be no indemnification Liability under
Sections 6.1(a) or 6.1(b)(i) above unless the aggregate of all Losses
arising thereunder for which indemnification liability would, but for this
proviso, exist exceeds one percent (1%) of the Purchase Price and then only to
the extent of any such excess; (II) there shall be no indemnification
Liability hereunder for any breach if the Purchaser had Knowledge of such
breach at the time of the Closing; and (III) the aggregate Liability under
Sections 6.1(a), 6.1(b)(i) or 6.1(b)(ii) shall in no event exceed the
Escrow Funds; provided further, however, that
the limitations set forth in clauses (I) and (III) above shall not apply to any Loss arising from
a breach of Section 3.1 (Power and Authorization), 3.2(a) (Binding Effect), Section 3.3 (Capital Stock), Section 4.1
(Organization; Qualification; Corporate Power and Authorization), 4.2(a) (Binding
Effect), Section 4.3 (other than 4.3(c)), Section 4.8 (Tax Matters),
or Section 4.20 (Broker Fees).

 

6.2           Indemnification by the Purchaser.  Subject to the terms and conditions of this Article VI,
following the Closing, the Purchaser shall indemnify the Sellers, their assigns
and the 

 

 

Company’s pre-Closing officers, directors,
employees and agents, against, and hold them harmless from, any Loss suffered
or incurred by any such Indemnified Person, arising or resulting from or based
upon (a) any breach of any representation or warranty of the Purchaser
contained in this Agreement or any other Transaction Document which survives
the Closing, (b) the breach of any covenant of the Purchaser contained in
this Agreement or any other Transaction Document, or (c) any post-Closing
operations of the Company and its Affiliates; provided,
however, that (i) there shall be no indemnification Liability
under clause (a) above or, to the extent relating to a breach of any
covenant to be performed prior to the Closing, clause (b) above, unless
the aggregate of all Losses arising thereunder for which the indemnification
Liability would, but for this proviso, exist exceeds one percent (1%) of the
Purchase Price and only to the extent of any such excess and (ii) there
shall be no indemnification Liability under clauses (a) and (b) above
for any breach if the Company or the Sellers had Knowledge of such breach at
the time of the Closing, and; provided further, however, that the limitation
set forth in clause (i) above
shall not apply to any Loss arising from a breach of Section 2.3 (Broker
Fees), Section 5.8 (Employee Matters), or Section 5.10 (Rights to
Indemnification).

 

6.3           Losses Net of Insurance, Etc.  Subject to the terms and conditions of this Article VI,
which terms and conditions shall not be applicable to any Loss arising from a
breach of Sections 5.8 or 5.10, following the Closing:

 

(a)           The amount of any Loss for which indemnification is provided under this
Article VI shall be net of any amounts (i) actually recovered or (ii) which
are covered by, and recoverable, on a commercially reasonable basis, by the
Indemnified Person, in each of (i) and (ii) under insurance policies
in effect and applicable to such Loss.

 

(b)           Any payment or indemnity required to be made pursuant to Sections 6.1
or 6.2 shall be adjusted to take into account any reduction in Taxes actually realized
by the Indemnified Person (which term shall, for purposes of this paragraph,
include the ultimate payer(s) of Taxes in the case of an Indemnified
Person that is a branch or a disregarded entity or other pass-through entity
for any Tax purpose) as a result of the Loss giving rise to the payment or
indemnity.  In determining the amount
necessary to be added to any payment or indemnity in order to accomplish the
foregoing, the parties hereto agree (i) to treat all Taxes required to be
paid by, and all reductions in Tax realized by any Indemnified Person, as if
such Indemnified Person were subject to Tax at the highest marginal Tax rates
(for both federal and state, as determined on a combined basis) applicable to
such Indemnified Person and (ii) to treat any indemnification payments
made to the Purchaser pursuant to this Agreement as an adjustment to the final
Purchase Price, unless a “Final Determination” with respect to the
indemnified party or any of its affiliates causes any such payment not to be treated
as an adjustment to the Purchase Price. 
For purposes of this agreement “Final Determination” means (i) with
respect to federal income Taxes, a “determination” as defined in Section 1313(a) of
the Code or execution of an Internal IRS Form 870-AD and, (ii) with
respect to Taxes other than federal income Taxes, any final determination of
liability in respect of a Tax that, under applicable law, is not subject to
further appeal, review or modification through proceedings or otherwise
(including the expiration of a statute of limitations or a period for the
filing of claims for refunds, amended returns or appeals from adverse
determinations).

 

 

(c)           In connection with an Indemnified Person’s rights under this Article VI,
an Indemnified Person may seek only seek actual damages and may not seek any
other damages, including but not limited to punitive, consequential (including
loss of anticipated profits) and incidental damages, as to any matter under,
relating to or arising out of the Transaction Documents or the Transactions.

 

(d)           Notwithstanding Section 6.1, the Purchaser shall not be entitled
to indemnification under this Article VI with respect to any Loss that is
reflected as a Liability on the Latest Balance Sheet or reflected in the
footnotes to the Financial Statements.

 

(e)           No Person shall be entitled to indemnification under this Article VI
with respect to any Loss that is attributable to any action taken or omitted to
be taken by such Person or any of its Affiliates.  The Indemnified Person shall cooperate with
each Indemnifying Person with respect to resolving any Liabilities with respect
to which such Person is obligated to indemnify the other Person, including by
making commercially reasonable efforts to mitigate or resolve any such
Liabilities.  In the event that the
Indemnified Person shall fail to cooperate and make such efforts to mitigate or
resolve any such Liabilities, then notwithstanding anything else to the
contrary contained herein, each Indemnifying Person shall not be required to
indemnify any Person for any Loss that could reasonably be expected to have
been avoided if the Indemnified Person had made such efforts.

 

(f)            The indemnification provisions contained in this Article VI
(including the provisions of Section 6.1) are intended to provide the sole
and exclusive remedy following the Closing as to all Losses either party may
incur arising from or relating to the Transaction Documents (or the
representations, warranties or covenants contained therein) or the
Transactions, and each Party hereby waives, to the full extent they may do so,
any other rights or remedies that may arise under any applicable statute, rule or
regulation (other than with respect to claims for fraud).  Subject to the provisions of this Section 6.3(f),
the sole source to satisfy any and all indemnification claims of the Purchaser
pursuant to Article VI shall be the Escrow Funds, except for those claims
arising from a breach of Sections 3.1, 3.2(a), 3.3, 4.1, 4.2(a), 4.3 (other
than 4.3(c)), 4.8 or 4.20 and except for claims under Section 6.1(b)(iii).  With respect to claims arising from a breach
of Sections 4.1, 4.2(a), 4.3 (other than 4.3(c)), 4.8 or 4.20, no claim may be
made directly against any Seller unless and until the Escrow Funds are
exhausted.  For any claims arising under Section 6.1(a),
Purchaser shall have the right to (and shall only have the right to) make a
claim against the Seller directly (and not the Escrow Funds or any other
Seller).  If any claims involving a
breach of covenants are made after distribution of the Escrow Funds (in
accordance with and subject to Section 6.6 of this Agreement), the
Purchaser shall have the right to make a claim against the Sellers directly for
such matters, but in no event shall the Sellers, in the aggregate, be liable
for any or all of such claims for more than the amount of Escrow Funds so
distributed to the Sellers. 
Notwithstanding anything herein to the contrary, no Seller in any event
shall be liable, in the aggregate, for more than such Seller’s pro rata portion
of the Purchase Price received by such Seller.

 

(g)           The indemnities herein are intended solely for the benefit of the
Persons expressly identified in Section 5.8 and 5.10 and this Article VI
(and their permitted successors and assigns) and are in no way intended to, nor
shall they, constitute an agreement for the benefit of, or be enforceable by,
any other Person.

 

 

6.4           Termination of Indemnification.  The obligations to indemnify and hold
harmless an Indemnified Person pursuant to Sections 6.1 and 6.2 shall terminate
when the applicable representation, warranty or covenant terminates pursuant to
Section 6.6; provided, however,
that such obligations to indemnify and hold harmless shall not terminate with
respect to any specific matter as to which the person to be indemnified shall
have, before the expiration of the applicable period, previously made a claim
by delivering a written notice thereof (stating in reasonable detail the basis
of such claim) (a “Claim Notice”) to the Indemnifying Person.

 

6.5           Procedures Relating to Indemnification.  In order for an Indemnified Person to be
entitled to any indemnification provided for under this Agreement in respect
of, arising out of or involving a claim or demand made by any Person against
the Indemnified Person (a “Third-Party Claim”), such Indemnified Person
must provide the Indemnifying Person with a Claim Notice regarding the
Third-Party Claim promptly and in any event within ten (10) Business Days
after receipt by such Indemnified Person of written notice of the Third-Party
Claim; provided, however, that
failure to give such notification shall not affect the indemnification provided
hereunder except to the extent the Indemnifying Person shall have been actually
prejudiced as a result of such failure (except that the Indemnifying Person
shall not be liable for any expense incurred during the period in which the
Indemnified Person failed to give such notice). 
Thereafter, the Indemnified Person shall deliver to the Indemnifying
Person, within five (5) Business Days after the Indemnified Person’s
receipt thereof, copies of all notices and documents (including court papers)
received by the Indemnified Person relating to the Third-Party Claim.

 

If a
Third-Party Claim is made against an Indemnified Person, the Indemnifying
Person 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 Person.  If the Third-Party
Claim includes allegations for which the Indemnifying Person both would and
would not be obligated to indemnify the Indemnified Person, the Indemnifying
Person and the Indemnified Person shall in that case jointly assume the defense
thereof.  Should the Indemnifying Person
so elect to assume the defense of a Third-Party Claim, the Indemnifying Person
will not be liable to the Indemnified Person for legal fees and expenses
subsequently incurred by the Indemnified Person in connection with the defense
thereof.  If the Indemnifying Person
assumes such defense, the Indemnified Person shall have the right, at its own
expense, to participate in the defense thereof and, at its own expense, to
employ counsel reasonably acceptable to the Indemnifying Person, separate from
the counsel employed by the Indemnifying Person, it being understood that the
Indemnifying Person shall control such defense. 
The Indemnifying Person shall be liable for the fees and expenses of
counsel employed by the Indemnified Person for any period during which the
Indemnifying Person has not assumed the defense thereof (other than during any
period in which the Indemnified Person shall have failed to give notice of the
Third-Party Claim as provided above).  If
the Indemnifying Person chooses to defend or prosecute any Third-Party Claim,
all the parties hereto shall cooperate in the defense or prosecution
thereof.  Such cooperation shall include
the retention and (upon the Indemnifying Person’s request) the provision to the
Indemnifying Person of records and information which are reasonably relevant to
such Third-Party Claim, and making officers, directors, employees and agents of
the Indemnified Person available on a mutually convenient basis to provide
information, testimony at depositions, hearings or trials, and such other
assistance as may be reasonably requested by the Indemnifying Person.  Whether or not the Indemnifying Person shall
have assumed the defense 

 

 

of a Third-Party Claim, the Indemnified Person shall
not admit any liability with respect to, or settle, compromise or discharge,
such Third-Party Claim without the Indemnifying Person’s prior written consent
(which consent shall not be unreasonably withheld or delayed).  The Indemnifying Person shall not admit any
liability with respect to, or settle, compromise or discharge any Third-Party
Claim without the Indemnified Person’s prior written consent (which consent
shall not be unreasonably withheld or delayed) unless any such admission,
settlement, compromise or discharge also releases the Indemnified Person
completely in connection with such Third-Party Claim.

 

6.6           Survival of Representations,
Warranties, and Covenants.  All representations, warranties and covenants
contained in this Agreement and the other Transaction Documents shall survive
the Closing and remain in full force and effect as follows: (a) for a
period of twelve (12) months following the Closing Date, with respect to all
representations and warranties and any covenant or agreement to be performed
prior to the Closing (other than with respect to Sections 3.1, 3.2(a), 3.3, 4.1,
4.2(a), 4.3 (other than 4.3(c)), 4.8 and 4.20 which shall survive the Closing
and remain in full force and effect until the date that is thirty (30) days
after the applicable statute of limitations), or (b) with respect to each
other covenant or agreement contained in this Agreement or any other
Transaction Document, until the last date on which such covenant or agreement
is to be performed or, if no such date is specified, for a period of three (3) years,
except that any representation, warranty, covenant or agreement that would
otherwise terminate in accordance with clause (a) or (b) will
continue to survive if a written notice of a breach thereof shall have been
timely given to the breaching party by the other party on or prior to such
termination date, until the related claim for indemnification has been
satisfied or otherwise resolved as provided in this Article VI.

 

ARTICLE VII

CONDITIONS TO THE CLOSING

 

7.1           Conditions of the Purchaser’s Obligation.  The Purchaser’s obligation to effect the
Transactions is subject to the satisfaction as of the Closing of the following
conditions precedent:

 

(a)           Representations and
Warranties.  Each
representation and warranty set forth in Articles III and IV above shall have
been true and correct in all respects at and as of the Effective Date as though
then made (provided that any representation and warranty that addresses matters
only as of a certain date shall be so true and correct in all respects as of
that certain date), except to the extent the failure to be so true and correct
has not resulted in a Seller Material Adverse Change or a Company Material
Adverse Change.

 

(b)           Covenants.  The Sellers and the Company shall have
performed and observed in all material respects each covenant or other
obligation required to be performed or observed by it pursuant to the
Transaction Documents prior to the Closing.

 

(c)           Expiration or Termination of
HSR Periods.  All
applicable waiting periods (and extensions thereof) under the HSR Act shall
have expired or otherwise been terminated by the Parties.

 

 

(d)           Government Entity Approvals.  All approvals and actions of or by, and all
notices to, all Government Entities which are set  forth on Exhibit 7.1(d) and, to the extent
not disclosed by the Company in the Company Disclosure Schedule, such other
approvals, actions and notices whose failure to obtain would result in a
Company Material Adverse Change.

 

(e)           Third Party Consents.  Any and all consents, waivers, approvals,
authorizations and notices which are set  forth
on Exhibit 7.1(e) (the “Specified Seller Consents”)
and, to the extent not disclosed by the Company in the Company Disclosure
Schedule, such consents, waivers, approvals, authorizations and notices whose
failure to obtain would result in a Company Material Adverse Change.

 

(f)            Proceedings.  No Action or Proceeding shall be pending or
threatened as of the Effective Date before any Government Entity the result of
which could prevent or prohibit the consummation of the Transactions or cause
any such Transactions to be rescinded following consummation, and no Order
having any such effect shall exist.

 

(g)           Escrow Agreement and
Executive Sale Bonus Trust Agreement.  The Purchaser shall have received (i) the
Escrow Agreement, executed by the Sellers’ representative and the Escrow Agent,
and (ii) the Executive Sale Bonus Trust Agreement executed by Sellers’
Representative and the Trustee.

 

(h)           Material Adverse Change.  Since the date of this Agreement until the
Effective Date, there shall have been no Company Material Adverse Change.

 

(i)            Closing Documents.  The Company and the Sellers shall have
delivered to the Purchaser the following:

 

(i)            the deliveries set forth in Section 1.4(e) hereof;

 

(ii)           releases in the form of Exhibit 7.1(i)(ii),
executed by Sellers (collectively, “Seller’s Releases”);

 

(iii)          employment agreements in the
form of Exhibit 7.1(i)(iii) (“Executive Employment
Agreements”) with the Specified Executives, executed by the Specified
Executives;

 

(iv)          consulting agreements in the
form of Exhibit 7.1(i)(iv) (“Consulting Agreements”) with
Kenneth Longacre, Jr. and Richard A. Longacre, executed by such Persons;

 

(v)           noncompetition agreements in
the form of Exhibit 7.1(i)(v), executed by Sellers (collectively,
the “Non-Competition Agreements”);

 

(vi)          the Escrow Agreement,
executed by the Sellers’ Representative and Executive Sale Bonus Escrow
Agreement, executed by the Sellers’ Representative;

 

(vii)         the Company Disclosure
Schedule and the Seller Disclosure Schedule, if any;

 

 

(viii)        a certificate of an officer
of the Company, dated as of the Effective Date and signed by an executive
officer of the Company, expressly certifying that the conditions set forth in Section 7.1(a) and
Section 7.1(b) required to be satisfied as of such date have been
met; it being understood that for purposes of satisfying this delivery (but not
the condition set forth in Section 7.1(a)), that such certificate may
include supplemental disclosures concerning developments that occurred after
the date hereof and prior to the Effective Date;

 

(ix)           a copy of the resolutions
duly adopted by the board of directors and the shareholders of the Company
authorizing the execution, delivery and performance by the Company of each
Transaction Document to which the Company is a party and the consummation of
the Transactions, as in effect as of the Closing, certified, on behalf of the
Company, by an officer of the Company (which such certification shall include a
representation as to the incumbency and signatures of the officers of the
Company executing the Transaction Documents);

 

(x)            a copy of all trust
agreements governing each Seller that is a trust;

 

(xi)           a certified copy of the
articles of incorporation (and each amendment thereto) of the Company from the
Secretary of State of the Commonwealth of Pennsylvania;

 

(xii)          the minute books, stock
books, stock ledgers and corporate seal of the Company and F&H LLC, as
applicable;

 

(xiii)         the resignations of all of
the directors and officers of the Company, effective as of the Closing;

 

(xiv)        all instruments or documents
necessary to change the names of the individuals who have access to or are
authorized to make withdrawals from or dispositions of all bank accounts, other
accounts, certificates of deposits, marketable securities, other investments,
safe deposit boxes, lock boxes and safes of the Company and each Subsidiary,
and all keys and combinations to all safe deposit boxes, lock boxes and safes
of the Company, if any;

 

(xv)         certificates, dated not more
than ten (10) Business Days prior to the Closing, as to the good standing of
the Company from the Secretary of State of the Commonwealth of Pennsylvania and
the Secretary of State of each other state in which the Company is qualified to
do business;

 

(xvi)        the legal opinion of Blank
Rome LLP substantially in the form of Exhibit 7.1(i)(xvi) attached
hereto;

 

(xvii)       evidence of (i) the
release of all Liens with respect to the property and assets of the Company
relating to the term loan, (ii) the repayment of the term loan, (iii) the
repayment or other cancellation of all accounts between Sellers or any of their
Affiliates and the Company, in each case in form and substance reasonably
satisfactory to Purchaser and (iv) the release of all guarantees by the
Company of any Indebtedness or other obligations of the Sellers or any of their
Affiliates;

 

 

(xviii)      a certificate from each
Seller certifying that such Seller is not a “foreign person” as such term is
defined in Section 1445 of the Code;

 

(xix)         all documents, certificates
and governmental filings relating to the F&H LLC Merger, in each case in
form and substance reasonably satisfactory to Purchaser;

 

(xx)          documents evidencing the
termination of (i) the Stock Pledge Agreement, dated as of April 30,
1998 among certain of the stockholders of the Company and (ii) the Stock
Purchase Agreement, dated as of April 30, 1998 among the Company and
certain of the stockholders of the Company; and (iii) the Shareholders’
Agreement, dated as of April 30, 1998, among certain of the stockholders
of the Company and the Company, in each case in form and substance reasonably
satisfactory to the Purchaser.

 

(xxi)         document evidencing the
termination of employment of Ken Longacre Sr. effective as of the Closing Date,
in form and substance reasonably satisfactory to the Purchaser;

 

(xxii)        a letter from Harris
Williams & Co, dated as of the Closing Date, specifying the total
amount of fees and costs owed to Harris Williams & Co. under that
certain Letter Agreement with the Company dated August 8, 2007 and
confirming that no other fees or costs are required to be paid for its services
thereunder, in form and substance reasonably satisfactory to the Purchaser; and

 

(xxiii)       all other documents,
certificates, instruments or writings required to be delivered by the Company
or the Sellers at or prior to the Closing pursuant to this Agreement.

 

Any condition set forth in
this Section 7.1 may be waived by the Purchaser in writing.

 

7.2           Conditions of the Company’s and the Sellers’
Obligation.  The Company’s
and the Sellers’ obligation to effect the Transactions is subject to the
satisfaction as of the Closing of the following conditions precedent:

 

(a)           Representations and
Warranties.  Each
representation and warranty set forth in Article II above shall be true
and correct in all respects at and as of the Effective Date as though then made
(provided that any representation and warranty that addresses matters only as
of a certain date shall be so true and correct in all respects as of that
certain date), except to the extent the failure to be true and correct has not
resulted in a Purchaser Material Adverse Change.

 

(b)           Covenants.  The Purchaser shall have performed and
observed in all material respects each covenant or other obligation required to
be performed or observed by it pursuant to the Transaction Documents prior to
the Closing.

 

(c)           Expiration or Termination of
HSR Periods.  All
applicable waiting periods (and extensions thereof) under the HSR Act shall
have expired or otherwise been terminated by the Parties.

 

 

(d)           Government Entity Approvals.  All approvals and actions of or by, and all
notices to, all Government Entities which are set  forth on Exhibit 7.2(d) and such other
approvals, actions and notices whose failure to obtain would result in a
Purchaser Material Adverse Change.

 

(e)           Third Party Consents.  Any and all consents, waivers, approvals,
authorizations and notices which are set  forth
on Exhibit 7.2(e) (the “Specified Purchaser Consents”)
and such consents, waivers, approvals, authorizations and notices whose failure
to obtain would result in a Purchaser Material Adverse Change.

 

(f)            Proceedings.  No Action or Proceeding shall be pending or
threatened as of the Effective Date before any Government Entity the result of
which could prevent or prohibit the consummation of any transaction pursuant to
the Transaction Documents or cause any such transaction to be rescinded
following such consummation, and no Order having any such effect shall exist.

 

(g)           Escrow Agreement and
Executive Sale Bonus Trust Agreement.  The Sellers shall have received the Escrow
Agreement and Executive Sale Bonus Trust Agreement, executed by the Purchaser
and the Trustee.

 

(h)           Closing Documents.  The Purchaser shall have delivered to the
Sellers the following:

 

(i)            wire transfers representing
each Seller’s portion of the Purchase Price determined in accordance with Section 1.4
(together with wire transfers to the Escrow Agent in accordance with Section 1.4);

 

(ii)           a release by the Company of
the Sellers in the form of Exhibit 7.2(h)(ii), executed by Company
(“Company Release”);

 

(iii)          the Executive Employment
Agreements, executed by the Company;

 

(iv)          the Consulting Agreements,
executed by the Company;

 

(v)           the Escrow Agreement,
executed by an executive officer of the Purchaser and Executive Sale Bonus Trust
Agreement, executed by an executive officer of the Purchaser;

 

(vi)          a certificate of an officer
of the Purchaser, dated as of the Effective Date and signed by an executive
officer of the Purchaser, expressly certifying that the conditions in Sections 7.2(a) and
7.2(b) required to be satisfied as of such date have been met; it being
understood that for purposes of satisfying this delivery (but not the condition
set forth in Section 7.2(a)), that such certificate may include
supplemental disclosures concerning developments that occurred after the date
hereof and before the Effective Date);

 

(vii)         a copy of the resolutions
duly adopted by the board of managers of the Purchaser and the General Partner
of Buckeye Partners, L.P. (“Buckeye”) authorizing the 

 

 

Purchaser’s and Buckeye’s execution, delivery and performance of each
Transaction Document to which each of Purchaser and Buckeye is a party and the
consummation of the Transactions, as in effect as of the Closing, certified, on
behalf of Purchaser and Buckeye, by an officer of each of Purchaser and Buckeye
(which such certification shall include a representation as to the incumbency
and signatures of the officers of the Purchaser and Buckeye, as applicable, executing
the Transaction Documents);

 

(viii)        certificates, dated not less
than ten (10) Business Days prior to the Closing, from each of its
jurisdiction of incorporation as to the good standing of the Purchaser and
Buckeye;

 

(ix)           the legal opinion of Morgan,
Lewis & Bockius LLP substantially in the form of Exhibit 7.2(h)(ix) attached
hereto; and

 

(x)            all other documents,
certificates, instruments or writings required to be delivered by the Purchaser
at or prior to the Closing pursuant to this Agreement.

 

Any condition set forth in
this Section 7.2 may be waived by the Sellers in writing.

 

ARTICLE
VIII

DEFINITIONS

 

For the purposes of this
Agreement, the following terms have the meanings set forth below:

 

“Action or Proceeding”
means any action, suit, claim, hearing, proceeding, arbitration or mediation by
any Person, or any investigation or audit by any Government Entity.

 

“Affiliate” means
with respect to any Person, any other Person directly or indirectly
controlling, controlled by or under common control with such first Person, as
well as any immediate family members (including parents, parents-in-law,
grandparents, children, siblings, grandchildren and other lineal descendants
and the spouse of each of the foregoing), officers, directors, shareholders and
majority-owned entities of that Person and of its other Affiliates.  “Control” means (including, with
correlative meaning, the terms controlling, controlled by and under common
Control with), with respect to any Person, the possession, directly or
indirectly, of the power to direct or cause the direction of the management,
policies or investment decisions of such Person, whether through the ownership
of voting Securities, by contract or otherwise.

 

“Affiliated Group”
means any affiliated group within the meaning of Section 1504(a) of
the Code, or any similar group defined under a similar provision of state,
local or foreign Law.

 

“Business” means the
business of the Company conducted on the date of this Agreement.

 

“Business Day” means
any day excluding Saturday, Sunday and any day which is a legal holiday under
the laws of the Commonwealth of Pennsylvania or is a day on which banking
institutions located in the Commonwealth are authorized or required by law or
other governmental action to close.

 

 

“Business Employee”
means each individual who works primarily or exclusively for the Business and
who, on the Closing Date, is actively employed by the Company, including any
employee who is on vacation leave or jury duty, or on other authorized leave of
absence (other than long-term disability in cases in which the employee has no
present expectation of continued employment), family or workers’ compensation
leave, or military leave as of the Closing Date, whether paid or unpaid; provided, however, that the term Business Employee shall exclude any other inactive
or former employee, including any individual who (a) is on long-term
disability leave or unauthorized leave of absence, layoff with or without
recall rights at the Closing Date or (b) has been terminated or has
terminated his or her employment or retired before the Closing Date.

 

“Code” means the
Internal Revenue Code of 1986, as amended.

 

“Common Stock” means
the authorized shares of common stock of the Company.

 

“Company Disclosure
Schedule” means the disclosure schedule constituting exceptions to and
applicable disclosures associated with the representations and warranties set
forth in Article IV hereof, prepared and delivered by the Sellers
concurrently with the execution of this Agreement, as the same may be amended
and supplemented from time to time, as required and/or permitted herein.

 

“Company Material Adverse
Change” means any change, circumstance or effect that, individually or in
the aggregate, (a) is or is reasonably likely to be materially adverse to
the Business, assets, properties, results of operations or condition (financial
or otherwise) of the Company taken as a whole or (b) materially impairs or
prevents the ability of the Sellers to consummate the Transactions, in each
case other than any material adverse change arising from or related to the
following (either alone or in combination): (a) any general condition
affecting the industry in which the Business is engaged, which change does not
have a disproportionate adverse impact on the Business (as compared to the
impact on similarly situated companies in the industry), (b) changes in
any Law or applicable accounting regulations or principles, (c) the
announcement or pendency of any of the Transactions, (d) any action taken
by the Sellers or the Company at the Purchaser’s request or pursuant to the
Transaction Documents, (e) acts of war or terrorism or any escalation or
material worsening of any such acts of war or terrorism existing as of the date
hereof, which do not have a disproportionate adverse impact on the Business (as
compared to the impact on similarly situated companies in the industry), (f) general
economic, political and financial market changes, foreign or domestic and (g) any
matters specifically disclosed in the Disclosure Schedules.

 

“Company Stock” means
all of the issued and outstanding Common Stock.

 

“Confidentiality
Agreement” means the Confidentiality Agreement regarding the
confidentiality obligations of the Purchaser, executed by the Purchaser as of October 8,
2007.

 

“Contracts” means all
executory contracts, agreements, subcontracts, indentures, notes, bonds
(including surety bonds), loans, instruments, leases, mortgages, franchises,
licenses, purchase orders, sale orders, proposals, bids, understandings or
commitments, whether written or oral, which are legally binding.

 

 

“Credit Agreement”
means the Amended and Restated Loan and Security Agreement, dated December 16,
2004, among the Company, Univest National Bank and Trust Company, Wachovia
Bank, National Association and Fulton Bank, as amended.

 

“Derivative Transaction”
means any swap transaction, option, warrant, forward purchase or sale
transaction, futures transaction, cap transaction, floor transaction or collar
transaction relating to one or more currencies, commodities, bonds, equity
securities, loans, interest rates, catastrophe events, weather-related events,
credit-related events or conditions or any index or indicies, or any other
similar transaction (including any option with respect to any of these
transactions) or combination of any of these transactions, including
collateralized mortgage obligations or other similar instruments or any debt or
equity instruments evidencing or embedding any such types of transactions, and
any related credit support, collateral or other similar arrangements related to
such transactions.

 

“Employee Benefit
Arrangements” means each and all pension, supplemental pension, deferred
compensation, option or other equity-based program, accidental death and
dismemberment, life and health insurance and benefits (including medical,
dental, vision and hospitalization), short- and long-term disability, fringe
benefit, cafeteria plan, flexible spending account programs, severance and
other employee benefit arrangements, plans, contracts, policies or practices
providing employee or executive compensation or benefits to any employee,
director, consultant or agent or former employee, director of the Company or an
ERISA Affiliate, other than the Employee Plans.

 

“Employee Plans”
means each and all “employee benefit plans,” as defined in Section 3(3) of
ERISA, maintained or contributed to by the Company or an ERISA Affiliate or in
which the Company or an ERISA Affiliate participates or participated and which
provides benefits to employees, directors, consultants or agents or former
employees, directors, consultants or agents of the Company or an ERISA
Affiliate.

 

“Environmental Laws”
means all federal, state, local, civil and criminal laws, statutes,
regulations, orders and ordinances concerning the pollution or protection of
the environment, worker health and safety, and/or governing the handling, use,
generation, treatment storage, transportation, disposal, manufacture,
distribution, labeling, or release of Hazardous Materials, including without
limitation, the Clean Air Act, 42 U.S.C. § 7401 et  seq.; the
Federal Water Pollution Control Act, 33 U.S.C. § 1251 et  seq.;
the Resource Conservation and Recovery Act of 1976, 42 U.S.C. § 6901 et  seq.;
the Comprehensive Environmental Response, Compensation, and Liability Act of
1980, 42 U.S.C. § 9601 et  seq.; the Federal Insecticide, Fungicide
and Rodenticide Act, 7 U.S.C. § 136 et  seq.; the Occupational
Safety and Health Act, 29 U.S.C. § 651 et  seq.; the Toxic
Substances Control Act, 15 U.S.C. § 2601 et  seq.; the Emergency
Planning and Community Right-to-Know Act of 1986, 42 U.S.C. § 11011 et  seq.;
and the Oil Pollution Act, 33 U.S.C. § 2701 et  seq.; and the
state analogies thereto, all as amended or superseded from time to time and all
regulations issued thereunder.

 

“ERISA” means the
Employee Retirement Income Security Act of 1974, as amended.

 

 

“ERISA Affiliate”
means any person, that together with the Company, is or was at any time treated
as a single employer under the Section 414 of the Code or Section 4001
of ERISA and any general partnership of which the Company is or has been a
general partner.

 

“Escrow Agent” means
PNC Escrow Services.

 

“Executive Sale Bonuses
means those bonuses payable to the Specified Executives pursuant to Section 3(d) (Sale
Payment) of the Executive Employment Agreements.

 

“GAAP” means United
States generally accepted accounting principles as in effect from time to time,
consistently applied.

 

“Government Entity”
means any court, tribunal, arbitrator or any government or political
subdivision thereof, whether federal, state, county, local or foreign, or any
agency, authority, official or instrumentality of such governmental or
political subdivision, or any entity exercising executive, legislative,
judicial, regulatory or administrative functions of government.

 

“Hazardous Material”
means any hazardous waste, hazardous or toxic substance, petroleum or petroleum
products with respect to which liability is imposed, or which are regulated,
pursuant to any Environmental Laws.

 

“HSR Act” means the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the
regulations promulgated thereunder.

 

“Indebtedness” means
the aggregate amount (including the current portion thereto), without
duplication, of all of the Company’s: (a) indebtedness for money borrowed
from others (b) any obligations evidenced by bonds, debentures, notes or
other similar instruments, (c) any obligations to pay the deferred
purchase price of property or services, except trade accounts payable and other
current Liabilities arising in the ordinary course of business, (d) any
obligations as lessee under capitalized leases, (e) any indebtedness
created or arising under any conditional sale or other title retention
agreement with respect to acquired property, (f) any obligations,
contingent or otherwise, under acceptance credit, letters of credit or similar
facilities, (g) any guaranty of any of the foregoing and (h) all
accrued but unpaid interest expense and other, fees, and charges that are
payable, in each case with respect to any of the indebtedness described above.

 

“Indemnified Person”
means any Person claiming indemnification under any provision of Article VI.

 

“Indemnifying Person”
means any Person(s) against whom a claim for indemnification is being
asserted under any provision of Article VI.

 

“Intellectual Property”
means: (i) all rights in Software; (ii) all patents, patent
applications, and patent rights; (iii) all trade names, product names,
brand names, trade dress, logos, packaging design, slogans, registered and
unregistered trademarks and service marks and applications; (iv) all
copyrights in both published and unpublished works, including without
limitation databases and computer programs, and all copyright registrations and
applications; (v) all inventions and discoveries and invention disclosures
(whether or not patentable), know how, 

 

 

trade
secrets, and confidential or proprietary information ; and (vi) all
goodwill associated with intellectual property rights and claims of
infringement against third parties related to the intellectual property rights
described in clauses (i) through (v) above.

 

“Knowledge”, when
used with respect to the Company and/or any of the Sellers, means and shall be
limited to the actual knowledge of Richard A. Longacre, James Boyd, Daryl
Hackman, Kenneth Longacre, Jr., Rod Derstine, and Gregory Engelbart.

 

 “Knowledge of the Purchaser” or “Purchaser’s
Knowledge” means and shall be limited to the actual knowledge of Khalid A.
Muslih and William K. Lehner based solely on written information relating to
the Transactions received by such Persons from the Sellers or the Company.

 

“Law” means any law,
statute, rule, regulation, ordinance and other pronouncement having the effect
of law of the United States of America, any foreign country or any domestic or
foreign state, county, city or other political subdivision or of any Government
Entity.

 

“Liability” or “Liabilities”
means any and all debts, liabilities and obligations of any nature whatsoever,
whether accrued or fixed, absolute or contingent, mature or unmatured or
determined or indeterminable.

 

“Lien” means any
mortgage, lien, pledge, charge, security interest, claim, contractual
restriction, easement, right-of-way, option, conditional sale or installment
contract or encumbrance of any kind.

 

“Loss” means any
direct or indirect Liability, indebtedness, claim, loss, damage, Lien,
deficiency, obligation, judgment, penalty, responsibility, costs or expenses
(including reasonable attorneys’ fees and disbursements and the costs of
litigation) of any nature.

 

“Neutral Accounting Firm”
means an independent accounting firm of nationally recognized standing that has
not rendered services to any of the Purchaser, the Company or the Sellers, or
any Affiliate thereof, within twenty-four (24) months prior to the date hereof.

 

“Order” means any
writ, judgment, decree, injunction or similar order of any Governmental Entity,
in each case whether preliminary or final.

 

“Party” or “Parties”
has the meaning set forth in the Preamble to this Agreement.

 

“Permits” means all
licenses, certificates of occupancy and other permits, consents and approvals
required by any Governmental Entity to lawfully operate the Business (including
any pending applications for such licenses, certificates, permits, consents or
approvals).

 

“Permitted Liens”
means (a) liens for Taxes or assessments and similar charges, which either
are (i) not delinquent or (ii) being contested in good faith and by
appropriate proceedings, and adequate reserves (as determined in accordance
with GAAP) have been established on the Company’s books with respect thereto, (b) liens
to secure landlords, sublandlords, licensors or sublicensors under real estate
leases or rental agreements, (c) deposits or pledges made in connection
with, or to secure payment of, workers’ compensation, unemployment insurance, 

 

 

pension
or other social security programs mandated under applicable Laws, (d) mechanics’,
materialmen’s or contractors’ liens or encumbrances or any similar statutory
lien or restriction, (e) zoning, entitlement, building and other similar
restrictions which are not violated by the current conduct of the Business, and
(f) easements, covenants, rights of way or other encumbrances or
restrictions, if any, that are of record or that do not materially impair the
use of the assets to which they relate in the Business, taken as a whole, as
conducted on the date hereof.

 

“Person” means any
individual, partnership, corporation, association, limited liability company,
joint stock company, a trust, joint venture, firm, association, unincorporated
organization, Government Entity or other entity.

 

“Prime Rate” means
the prime rate of interest as from time to time published by The Wall Street Journal (Eastern Edition).

 

“Purchaser Material
Adverse Change” means a material adverse change in the ability of the
Purchaser to perform its obligations under this Agreement and the Transaction
Documents or on the ability of the Purchaser to consummate the Transactions.

 

“Securities Act”
means the Securities Act of 1933, as amended, together with the rules and
regulations promulgated thereunder.

 

“Seller” and “Sellers”
has the meaning set forth in the recitals to this Agreement.

 

“Seller Disclosure
Schedule” means the disclosure schedule constituting exceptions to and
applicable disclosures associated with the Sellers’ representations and
warranties set forth in Article III hereof, prepared and delivered by the
Sellers concurrently with the execution of this Agreement, as the same may be
amended or supplemented from time to time, as required and/or permitted herein.

 

“Seller Material Adverse
Change” means a material adverse change in the ability of the Seller to
perform its obligations under this Agreement and the Transaction Documents or
on the ability of the Seller to consummate the Transactions.

 

“Seller Transaction
Expenses”  means the fees and costs paid
or payable to the legal counsel, accountants and investment bank of the
Company and the Sellers (including the fees and costs owed to Harris
Williams & Co (“HW”) under the Letter Agreement, dated August 8,
2007 by and between the Company and HW) incurred through the Closing Date and
in connection with the Transactions and other costs and expenses (including any
fees paid in connection with obtaining any consents listed in Schedule 5.7(b),
to the extent the Company determines to pay such fees, but excluding
any fees paid or payable in connection with the Company’s line of
credit), incurred through the Closing Date and solely in connection with the
Transactions.  The “Seller Transaction
Expenses” shall also include the Waiver Payment, pursuant to and as defined in
that certain Agreement of the Parties, dated as of October 24, 2007, by
and between Gulf Oil Limited Partnership and the Company.

 

“Software” means any
computer program, operating system, applications system, firmware or software,
including all object code, source code, technical manuals, user manuals, test
scripts and other documentation therefor, whether in machine-readable form,
programming 

 

 

language
or any other language, and whether stored, encoded, or written on disk, tape,
film, memory device, paper or other media, and any databases necessary in the
use of the computer program, operating system, application, firmware or
software.

 

“Specified Executives”
mean Daryl Hackman, James Boyd, Rod Derstine, Gregory Engelbart, and David
Trupe.

 

“Tangible Assets”
means all personal property and assets, furniture, fixtures, equipment
(including motor vehicles), computers, office equipment and apparatus, tools,
machinery and supplies.

 

“Tax” or “Taxes”
means: (a) any foreign, federal, state or local income, earnings, profits,
gross receipts, franchise, capital stock, net worth, sales, use, value added,
occupancy, general property, real property, personal property, intangible
property, transfer, fuel, excise, parking, payroll, withholding, unemployment compensation,
social security, retirement or other tax of any nature; or (b) any
deficiency, interest or penalty imposed with respect to any of the foregoing.

 

“Tax Returns” means
all returns and reports, amended returns, information returns, statements, declarations,
estimates, schedules, notices, notifications, forms, elections, certificates or
other documents required to be filed or submitted to any Government Entity with
respect to the determination, assessment, collection or payment of any Tax or
in connection with the administration, implementation or enforcement of, or
compliance with, any Tax.

 

“Transaction Documents”
means this Agreement and all other agreements, instruments, certificates and
other documents to be entered into or delivered by any party, pursuant to any
of the foregoing.

 

“Transactions” means
the transactions contemplated by the Transaction Documents.

 

ARTICLE IX  

TERMINATION

 

9.1           Termination.  This Agreement may be terminated:

 

(a)           at any time prior to the
Closing by mutual written agreement of the Purchaser, the Company and Sellers’
Representative;

 

(b)           by either the Purchaser or the Company and Sellers’
Representative if a breach of any provision of this Agreement has been
committed (in the case of termination by Purchaser, a breach by the Company,
Sellers’ Representative or Sellers, and in the case of termination by the
Company and the Sellers’ Representative, a breach by Purchaser) and such breach
results in a closing condition becoming incapable of being satisfied on or
prior to the Closing Date and such breach has not been waived in writing; provided, however that a breach described above shall not
give rise to a right to terminate this Agreement under this Section 9.1(b) unless
and until (i) the non-breaching party delivers a written notice to the
breaching party, notifying the breaching party of the breach (including a
reasonable description thereof) and (ii) the breaching party fails to cure
such breach within ten (10) Business Days after delivery of such written
notice (provided, further, however,
that the Party seeking termination pursuant to 

 

 

this
clause (b) is not then in breach of any of its representations,
warranties, covenants or agreements contained in this Agreement);

 

(c)           (i) by Purchaser, if any of the conditions in Section 7.1
has not been satisfied as of the Closing Date or if satisfaction of such a
condition is or becomes incapable of fulfillment (other than through the
failure of the Purchaser to comply with its obligations under this Agreement)
and Purchaser has not waived in writing such condition on or before the Closing
Date; or (ii) by the Company and Sellers’ Representative, if any of the
conditions in Section 7.2 has not been satisfied as of the Closing Date or
if satisfaction of such a condition is or becomes incapable of fulfillment
(other than through the failure of the Company to comply with its obligations
under this Agreement) and the Sellers have not waived in writing such condition
on or before the Closing Date;

 

(d)           by either the Purchaser or
the Company and Sellers’ Representative if (i) the Transactions shall
violate any Order that shall have become final and nonappealable or (ii) there
shall be a Law which makes the Transactions illegal or otherwise prohibited;

 

(e)           by the Purchaser or the
Company and Sellers’ Representative at any time after 120 days following the
date hereof, if the Closing shall not have occurred; provided, however, that the right
to terminate this Agreement under this subsection (e) shall not be
available to any Party whose failure to fulfill any obligation under this
Agreement shall have been the cause of, or resulted in, the failure of the
Closing to occur prior to such date;

 

provided
further, however, that such notice of termination is provided in
writing.

 

9.2           Effect of Termination.  Each Party’s right of termination under Section 9.1
is in addition to any other rights it may have under this Agreement or
otherwise, and the exercise of such right of termination will not be an
election of remedies.  In the event of
termination of this Agreement pursuant to Section 9.1, all obligations of
the parties under this Agreement will terminate, except that the obligations of
the parties in this Section 9.1 and Sections 2.3 and 4.20 (Broker Fees), Section 5.5
(Publicity and Confidentiality) and Article X will survive; provided, however, that, if this Agreement
is terminated because of a breach of this Agreement by the non-terminating
party or because one or more of the conditions to the terminating party’s
obligations under this Agreement is not satisfied as a result of the
non-terminating party’s failure to comply with its obligations under this
Agreement, then the terminating party’s right (including F&H LLC’s right,
as applicable) to pursue all legal remedies hereunder and otherwise in
connection with such breach will survive such termination unimpaired; provided further, however, that the
Purchaser’s right to pursue all such legal remedies hereunder shall be limited
to the Company, and the Purchaser shall have no right to pursue remedies under
this Article IX against the Sellers individually.  In the event of termination of the Agreement,
and regardless of the reason for the termination, the Confidentiality Agreement
and any agreement executed by the Purchaser in connection with the receipt of
the Confidential Offering Memorandum of the Company shall continue in full
force and effect.

 

9.3           Specific Performance.  The Sellers, the Company, F&H LLC, and
Purchaser shall each have the right to specific performance of the obligations
of the other under this Agreement.  The
Sellers, the Company, F&H LLC, and Purchaser each acknowledge that
irreparable damage 

 

 

would result if this Agreement is not specifically enforced.  The Sellers, the Company, F&H LLC, and
Purchaser each hereby agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by the other of the
provisions of this Agreement and each hereby agrees to waive the defense that a
remedy at law may be adequate in any Action or Proceeding for specific
performance hereunder.

 

ARTICLE X

MISCELLANEOUS

 

10.1         Expenses.  Whether or not the Transactions are
consummated, and except as otherwise provided in this Agreement, each Party to
this Agreement will bear its respective fees, costs and expenses incurred in
connection with the preparation, negotiation, execution and performance of this
Agreement or the Transactions (including legal, accounting and other
professional fees).  Without limiting the
foregoing, the Purchaser will pay and be solely responsible for the filing fees
of all parties required to be paid under the HSR Act and any foreign antitrust
or competition law or regulation in connection with the transactions
contemplated hereby.  Each of the Company
and the Sellers, on the one hand, and the Purchaser, on the other hand, agree
to indemnify and hold the other harmless from any claim or demand for
commissions or other compensation by any broker, finder, financial consultant
or similar agent employed by the other Party.

 

10.2         Governing Law.  This Agreement will be governed by and
construed in accordance with the internal Laws of the Commonwealth of
Pennsylvania applicable to agreements made and to be performed entirely within
such Commonwealth, without regard to the conflicts of Law principles that would
require the application of any other law.

 

10.3         Jurisdiction; Service of Process.  Any Action or Proceeding arising out of or
relating to this Agreement or any transaction contemplated hereby may be
brought in the federal and state courts located in the Commonwealth of
Pennsylvania, and each of the Parties irrevocably submits to the exclusive
jurisdiction of such courts in any such Action or Proceeding, waives any
objection he or she may now or hereafter have to venue or to convenience of forum,
agrees that all claims in respect of the Action or Proceeding shall be heard
and determined only in any such court and agrees not to bring any action or
proceeding arising out of or relating to this Agreement or any transaction
contemplated hereby in any other court. 
The Parties agree that any or all of them may file a copy of this
paragraph with any court as written evidence of the knowing, voluntary and
bargained-for agreement among the Parties irrevocably to waive any objections
to venue or to convenience of forum. 
Process in any Action or Proceeding referred to in the first sentence of
this Section 10.3 may be served on any Party anywhere in the world.

 

10.4         Waiver of Jury Trial.  THE PARTIES HEREBY WAIVE ANY RIGHT TO TRIAL
BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY, WHETHER NOW EXISTING OR
HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE.  THE PARTIES AGREE THAT ANY OF THEM MAY FILE
A COPY OF THIS PARAGRAPH WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING,
VOLUNTARY AND BARGAINED-FOR AGREEMENT AMONG THE PARTIES TO IRREVOCABLY WAIVE
TRIAL BY JURY AND THAT ANY 

 

 

ACTION OR PROCEEDING WHATSOEVER BETWEEN THEM RELATING TO THIS AGREEMENT
OR ANY TRANSACTION CONTEMPLATED HEREBY SHALL INSTEAD BE TRIED IN A COURT OF
COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.

 

10.5         Attorneys’ Fees.  If any Action or Proceeding for the
enforcement of this Agreement is brought with respect to or because of an
alleged dispute, breach, default or misrepresentation in connection with any of
the provisions hereof, the successful or prevailing Party shall be entitled to
recover reasonable attorneys’ fees and other costs incurred in that Action or
Proceeding, in addition to any other relief to which it may be entitled.

 

10.6         Waiver; Remedies Cumulative.  The rights and remedies of the Parties to
this Agreement are cumulative and not alternative.  Neither any failure nor any delay by any
Party in exercising any right, power or privilege under this Agreement or any
of the other Transaction Documents will operate as a waiver of such right,
power or privilege, and no single or partial exercise of any such right, power
or privilege will preclude any other or further exercise of such right, power
or privilege or the exercise of any other right, power or privilege.  To the maximum extent permitted by applicable
Law, (a) no claim or right arising out of this Agreement or any of the
other Transaction Documents can be discharged by one Party, in whole or in
part, by a waiver or renunciation of the claim or right unless in writing
signed by the other Parties; (b) no waiver that may be given by a Party will be
applicable except in the specific instance for which it is given; and (c) no
notice to or demand on one Party will be deemed to be a waiver of any
obligation of that Party or of the right of the Party giving such notice or
demand to take further action without notice or demand as provided in this
Agreement or any of the other Transaction Documents.

 

10.7         Notices.  All notices or other communications required
or permitted to be given hereunder shall be in writing and shall be deemed
given to a Party when (a) delivered by hand or by a nationally recognized
overnight courier service (costs prepaid), (b) sent by facsimile or e-mail
with confirmation of transmission by the transmitting equipment, or (c) received
or rejected by the addressee, if sent by certified mail, postage prepaid and
return receipt requested, in each case to the following:

 

if
to the Purchaser, to:

 

Buckeye Energy Holdings LLC

c/o Buckeye Partners, L.P.

Five
TEK Park

9999
Hamilton Boulevard

Breinigsville,
PA 18031

Attention:              William H. Schmidt, Jr., Vice President and General Counsel

Tel:                         (610) 904-4297

Fax:                         (610) 904-4006

E-mail:                    wschmidt@buckeye.com

 

 

with
a copy (which shall not constitute notice) to:

 

Morgan,
Lewis & Bockius LLP

1701
Market Street

Philadelphia,
PA 19103

Attention:              Howard L. Meyers, Esq.

Tel:                         215-963-5536

Fax:                         215-963-5001

E-mail:                    hmeyers@morganlewis.com

 

to
the Company, to:

 

Farm &
Home Oil Company

3115
State Road

P.O. Box
389

Telford,
PA 18969

Attention:
Richard A. Longacre

Tel:
215-257-2208

Fax:
215-257-2088

E-mail:
rlongacre@fhoil.com

 

with
a copy (which shall not constitute notice) to:

 

Blank
Rome LLP

One
Logan Square

Philadelphia,
PA 19103

Attention:  Gary R. Goldenberg

Tel:
(215) 569-5733

Fax:
(215) 832-5733

E-mail:  goldenberg@blankrome.com

 

to the Sellers’ Representative or Sellers to:

 

                Richard A. Longacre, Sellers’ Representative

                2267 Eston Road

Quakertown,
PA 18951

Tel: (215) 538-9407

Email:
richlongacre@hotmail.com

 

with a copy (which shall not constitute notice) to:

 

Blank
Rome LLP

One
Logan Square

Philadelphia,
PA 19103

Attention:  Gary R. Goldenberg

Tel:
(215) 569-5733

 

 

Fax:
(215) 832-5733

E-mail:  goldenberg@blankrome.com

 

Any
Party may change its contact information for notices and other communications
hereunder by notice to the other parties hereto in accordance with this Section 10.7.

 

10.8         Assignment.  This Agreement shall be binding upon, and
shall be enforceable by and inure solely to the benefit of the Parties hereto
and their respective successors and assigns; provided,
however, that this Agreement and the rights and obligations
hereunder shall not be assignable or transferable by any Party without the
prior written consent of the other Parties hereto; provided further however, that without such consent,
Purchaser may transfer or assign, in whole or in part or from time to time, to
one or more of its Affiliates, the right to purchase all or a portion of the
F&H Membership Interests, but no such transfer or assignment will relieve
Purchaser of its obligations hereunder.

 

10.9         No Third-Party Beneficiaries.  Except for contemplated third party
beneficiaries as expressly provided otherwise in this Agreement (including
provisions benefiting directors, officers, employees and the Sellers contained
in Sections 5.8 and 5.10 hereof and Article VI hereof),  this Agreement is for the sole benefit of
the Parties hereto and their permitted successors and assigns and nothing
herein expressed or implied shall give or be construed to give to any Person,
other than the Parties hereto and such successors and assigns (including F&H
LLC), any legal or equitable rights, remedy or claim hereunder.

 

10.10       Amendments or Supplements.  No amendment or supplement to this Agreement
shall be effective unless it shall be in writing and signed by the Company,
Sellers’ Representative and Purchaser.

 

10.11       Disclosure Schedules.  The Seller Disclosure Schedule and the
Company Disclosure Schedule (collectively, the “Disclosure Schedules”)
shall be subject to the following terms and conditions:  (a) any item disclosed in any particular
part of the Disclosure Schedules shall be deemed to be disclosed in all parts of
the Disclosure Schedules, (b) no disclosure of any matter contained in the
Disclosure Schedule shall create an implication that such matter meets any
standard of materiality (matters reflected in the Disclosure Schedule are not
necessarily limited to matters required by this Agreement to be reflected in
the Disclosure Schedule; such additional matters are set forth for
informational purposes only and do not necessarily include other matters of a
similar nature, nor shall the inclusion of any item be construed as implying
that any such item is “material” for any purpose); (c) any disclosures
contained in the Disclosure Schedule which refer to a document are qualified in
their entirety by reference to the text of such document, a true and complete
copy of which was included in the due diligence information supplied to the
Purchaser; and (d) headings and introductory language have been inserted
on the sections of the Disclosure Schedule for convenience of reference only
and shall to no extent have the effect of amending or changing the express
description of the sections as set forth in this Agreement.

 

10.12       Construction.  In construing this Agreement, including the
Exhibits and Schedules and hereto, the following principles shall be followed: (a) the
terms “herein,” “hereof,” “hereby,” “hereunder” and other similar terms refer
to this Agreement as a whole and not only to the 

 

 

particular Article, Section or other subdivision in which any such
terms may be employed; (b) except as otherwise set forth herein, references
to Articles, Sections, Schedules and Exhibits refer to the Articles, Sections,
Schedules and Exhibits of this Agreement, which are incorporated in and made a
part of this Agreement; (c) a reference to any Person shall include such
Person’s predecessors; (d) all accounting terms not otherwise defined
herein have the meanings assigned to them in accordance with GAAP; (e) no
consideration shall be given to the headings of the Articles, Sections,
Schedules, Exhibits, subdivisions, subsections or clauses, which are inserted
for convenience in locating the provisions of this Agreement and not as an aid
in its construction; (f) the word “includes” and “including” and their
syntactical variants mean “includes, but is not limited to” and “including,
without limitation,” and corresponding syntactical variant expressions; (g) a
defined term has its defined meaning throughout this Agreement, regardless of
whether it appears before or after the place in this Agreement where it is
defined, including in any Schedule or Exhibit; (h) the word “dollar” and
the symbol “$” refer to the lawful currency of the United States of America; (i) the
plural shall be deemed to include the singular and vice versa; and (j) the
phrase “local time” shall refer to Eastern Standard Time.

 

10.13       Entire Agreement.  This Agreement (including any Exhibit or
Schedule attached hereto) and the Transaction Documents contain the entire
agreement and understanding among the Parties hereto with respect to the
subject matter hereof and, except as explicitly set forth herein, supersede all
prior and contemporaneous oral and written agreements and understandings
relating to such subject matter.

 

10.14       Severability.  If any provision of this Agreement or the
application of any such provision to any Person or circumstance shall be held
invalid, illegal or unenforceable in any respect by a court of competent
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision hereof.

 

10.15       Mutual Drafting.  The Parties hereto are sophisticated and have
been represented by counsel who have carefully negotiated the provisions
hereof.  As a consequence, the Parties do
not intend that the presumptions of any Laws or other rules relating to
the interpretation of contracts against the drafter of any particular clause
should be applied to this Agreement and therefore waive their effects.

 

10.16       Counterparts; Facsimile.  This Agreement may be executed in one or more
counterparts, including by facsimile, all of which shall be considered one and
the same agreement, and shall become effective when one or more such
counterparts have been signed by each of the Parties and delivered to the other
Party.

 

[Signatures on Next Page]

 

 

IN WITNESS WHEREOF, the Parties
have executed this Agreement as of the date first written above.

 

 

	
   

  	
  FARM &
  HOME OIL COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Richard A. Longacre

  
	
   

  	
   

  	
  Name:

  	
  Richard
  A. Longacre

  
	
   

  	
   

  	
  Title:

  	
  Chief
  Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BUCKEYE
  ENERGY HOLDINGS LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Stephen C. Muther

  
	
   

  	
   

  	
  Name:

  	
  Stephen
  C. Muther

  
	
   

  	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SELLERS’
  REPRESENTATIVE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Richard A. Longacre

  
	
   

  	
   

  	
  Name:

  	
  Richard
  A. Longacre

  

 

 

[Signature Page to Purchase Agreement]

 

 

IN WITNESS WHEREOF, the Parties
have executed this Agreement as of the date first written above.

 

 

SELLERS

 

	
  /s/
  Kenneth A. Longacre, Sr.

  	
   

  	
  /s/
  Kenneth A. Longacre, Jr.

  	
   

  
	
  Name:
  Kenneth A. Longacre, Sr.

  	
   

  	
  Name:
  Kenneth A. Longacre, Jr.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/
  Richard A. Longacre

  	
   

  	
  /s/
  Cynthia Longacre

  	
   

  
	
  Name:
  Richard A. Longacre

  	
   

  	
  Name:
  Cynthia Longacre

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/
  Rose Longacre

  	
   

  	
  /s/
  Donna Weaver

  	
   

  
	
  Name:
  Rose Longacre

  	
   

  	
  Name:
  Donna Weaver

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/
  Duane Weaver

  	
   

  	
  /s/
  Elizabeth Longacre Anders

  	
   

  
	
  Name:
  Duane Weaver

  	
   

  	
  Name:
  Elizabeth Longacre Anders

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/
  Dave Anders

  	
   

  	
   

  
	
  Name:
  Dave Anders

  	
   

  	
   

  

 

 

[Signature Page to Purchase Agreement]

 

 

IN WITNESS WHEREOF, the Parties
have executed this Agreement as of the date first written above.

 

 

SELLERS

 

 

	
  1996
  IRREVOCABLE TRUST F/B/O RICHARD

  A. LONGACRE

  	
   

  	
  1996
  IRREVOCABLE TRUST F/B/O

  KENNETH A. LONGACRE, JR.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Ken Clemmer

  	
   

  	
   

  	
  By:

  	
  /s/
  Ken Clemmer

  	
   

  
	
  Name:
  Ken Clemmer

  	
   

  	
  Name:
  Ken Clemmer

  
	
  Title:
  Trustee

  	
   

  	
  Title:
  Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Richard A. Longacre

  	
   

  	
   

  	
  By

  	
  /s/
  Kenneth A. Longacre, Jr.

  	
   

  
	
  Name:
  Richard A. Longacre

  	
   

  	
  Name:
  Kenneth A. Longacre, Jr.

  
	
  Title:
  Trustee

  	
   

  	
  Title:
  Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1996
  IRREVOCABLE TRUST F/B/O DONNA

  LONGACRE WEAVER

  	
   

  	
  1996
  IRREVOCABLE TRUST F/B/O

  ELIZABETH LONGACRE ANDERS

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Ken Clemmer

  	
   

  	
   

  	
  By:

  	
  /s/
  Ken Clemmer

  	
   

  
	
  Name:
  Ken Clemmer

  	
   

  	
  Name:
  Ken Clemmer

  
	
  Title:
  Trustee

  	
   

  	
  Title:
  Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Donna Longacre Weaver

  	
   

  	
   

  	
  By:

  	
  /s/
  Elizabeth Longacre Anders

  	
   

  
	
  Name:
  Donna Longacre Weaver

  	
   

  	
  Name:
  Elizabeth Longacre Anders

  
	
  Title:
  Trustee

  	
   

  	
  Title:
  Trustee

  
											

 

 

[Signature Page to Purchase Agreement]

 

 

IN WITNESS WHEREOF, the Parties
have executed this Agreement as of the date first written above.

 

 

SELLERS

 

	
  1998
  IRREVOCABLE TRUST F/B/O

  RICHARD A. LONGACRE

  	
   

  	
  1998
  IRREVOCABLE TRUST F/B/O

  KENNETH A. LONGACRE, JR.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Ken Clemmer

  	
   

  	
   

  	
  By:

  	
  /s/
  Ken Clemmer

  	
   

  
	
  Name:
  Ken Clemmer

  	
   

  	
  Name:
  Ken Clemmer

  
	
  Title:
  Trustee

  	
   

  	
  Title:
  Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Richard A. Longacre

  	
   

  	
   

  	
  By

  	
  /s/
  Kenneth A. Longacre, Jr.

  	
   

  
	
  Name:
  Richard A. Longacre

  	
   

  	
  Name:
  Kenneth A. Longacre, Jr.

  
	
  Title:
  Trustee

  	
   

  	
  Title:
  Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1998
  IRREVOCABLE TRUST F/B/O

  DONNA LONGACRE WEAVER

  	
   

  	
  1998
  IRREVOCABLE TRUST F/B/O

  ELIZABETH LONGACRE ANDERS

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Ken Clemmer

  	
   

  	
   

  	
  By:

  	
  /s/
  Ken Clemmer

  	
   

  
	
  Name:
  Ken Clemmer

  	
   

  	
  Name:
  Ken Clemmer

  
	
  Title:
  Trustee

  	
   

  	
  Title:
  Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Donna Longacre Weaver

  	
   

  	
   

  	
  By:

  	
  /s/
  Elizabeth Longacre Anders

  	
   

  
	
  Name:
  Donna Longacre Weaver

  	
   

  	
  Name:
  Elizabeth Longacre Anders

  
	
  Title:
  Trustee

  	
   

  	
  Title:
  Trustee

  
											

 

 

[Signature Page to Purchase Agreement]

 

 

GUARANTY OF BUCKEYE PARTNERS, L.P.

 

                Buckeye Partners, L.P., a
Delaware limited partnership (“Buckeye”) and the ultimate parent of Buckeye
Energy Holdings LLC, a Delaware limited liability company (the “Purchaser”),
hereby guarantees the prompt payment and performance by the Purchaser of all of
Purchaser’s obligations under the foregoing Purchase Agreement and the other
Transaction Documents (as defined in the Purchase Agreement) to which Purchaser
is a party.  Buckeye’s guaranty
obligations are as surety, and the Sellers and the Company shall not have to
look to the Purchaser first for payment and/or performance under the Purchase
Agreement and/or the Transaction Documents to which Purchaser is a party in
connection with any rights and remedies that they may have thereunder and/or
under law or equity.

 

	
   

  	
  GUARANTOR:

  
	
   

  	
   

  
	
   

  	
  BUCKEYE
  PARTNERS, L.P.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:
  BUCKEYE GP LLC, as its General Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Stephen C. Muther

  	
   

  
	
   

  	
  Name:

  	
  Stephen
  C. Muther

  
	
   

  	
  Title:

  	
  President

  
					

 

 

INDEX
OF OTHER DEFINED TERMS

 

	
  Term/Section #

  	
   

  	
  Page

  
	
  Accounting Arbitrator 5.12(a)(i)(B)(g)(iii)

  	
   

  	
  31

  
	
  Acquisition Proposal 5.15

  	
   

  	
  32

  
	
  Affiliate Transactions 4.16

  	
   

  	
  17

  
	
  Agreement - Preamble

  	
   

  	
  4

  
	
  Allocation Statement 5.12(a)(i)(B)(g)(iii)

  	
   

  	
  31

  
	
  Buckeye 7.2(h)(vii)

  	
   

  	
  42

  
	
  Claim Notice 6.4

  	
   

  	
  37

  
	
  Closing 1.3

  	
   

  	
  4

  
	
  Closing Date 1.3

  	
   

  	
  5

  
	
  Closing Date Executive Sale Bonuses 1.4(c)

  	
   

  	
  5

  
	
  Closing Derivative List 5.4(c)

  	
   

  	
  23

  
	
  Company - Preamble

  	
   

  	
  4

  
	
  Company Disclosure Schedule 10.11

  	
   

  	
  54

  
	
  Company Release 7.2(h)(ii)

  	
   

  	
  42

  
	
  Consulting Agreements 7.1(i)(iv)

  	
   

  	
  39

  
	
  Control Article VIII

  	
   

  	
  43

  
	
  Disclosure Schedules 10.11

  	
   

  	
  54

  
	
  DOJ 5.7(a)

  	
   

  	
  24

  
	
  Effective Date 5.1

  	
   

  	
  19

  
	
  Employment Agreement 7.1(i)(iii)

  	
   

  	
  39

  
	
  Escrow Account 1.4(b)

  	
   

  	
  5

  
	
  Escrow Agreement 1.4(b)

  	
   

  	
  5

  
	
  Escrow Funds 1.4(b)

  	
   

  	
  5

  
	
  Executive Employment Agreements 7.1(i)(iii)

  	
   

  	
  39

  
	
  Executive Sale Bonus Trust 1.4(a)

  	
   

  	
  5

  
	
  Executive Sale Bonus Trust Agreement 1.4(a)

  	
   

  	
  5

  
	
  Exhibit 1.4(a)-1

  	
   

  	
  5

  
	
  Exhibit 1.4(a)-2

  	
   

  	
  5

  
	
  Exhibit 1.4(a)-3

  	
   

  	
  5

  
	
  Exhibit 1.4(b)

  	
   

  	
  5

  
	
  Exhibit 7.1(i)(iv)

  	
   

  	
  39

  
	
  Exhibit 7.2(d)

  	
   

  	
  41

  
	
  Exhibit 7.2(e)

  	
   

  	
  41

  
	
  F&H LLC - Preamble

  	
   

  	
  4

  
	
  F&H LLC Merger 5.1

  	
   

  	
  20

  
	
  F&H Membership Interests 5.1

  	
   

  	
  19

  
	
  Final Determination 6.3(b)

  	
   

  	
  35

  
	
  Financial Statements 4.4(a)

  	
   

  	
  11

  
	
  FTC 5.7(a)

  	
   

  	
  24

  
	
  IRS 5.12(d)(i)

  	
   

  	
  29

  
	
  Latest Balance Sheet 4.4(a)(ii)

  	
   

  	
  11

  
	
  Lease 4.11(b)

  	
   

  	
  15

  
	
  Material Contracts 4.18

  	
   

  	
  17

  

 

 

	
  Multiemployer Plan 4.14(e)

  	
   

  	
  17

  
	
  Non-Competition Agreements 7.1(i)(v)

  	
   

  	
  39

  
	
  Owned Real Property 4.11

  	
   

  	
  14

  
	
  Parcel 4.11

  	
   

  	
  14

  
	
  Parties -  Preamble

  	
   

  	
  4

  
	
  Party or Parties - Preamble

  	
   

  	
  4

  
	
  Policies 4.17

  	
   

  	
  17

  
	
  Pre-Closing Tax Period 5.12(a)(i)(A)

  	
   

  	
  27

  
	
  Purchase Price 1.2

  	
   

  	
  4

  
	
  Purchase Price Allocation 5.12(a)(i)(B)(g)(ii)

  	
   

  	
  31

  
	
  Purchaser - Preamble

  	
   

  	
  4

  
	
  Purchaser Closing Notice 5.1

  	
   

  	
  19

  
	
  Real Property 4.11

  	
   

  	
  14

  
	
  Section 7.1(a)

  	
   

  	
  39

  
	
  Section 7.1(b)

  	
   

  	
  39

  
	
  Seller Disclosure Schedule 10.11

  	
   

  	
  54

  
	
  Seller or Sellers - Preamble

  	
   

  	
  4

  
	
  Seller’s Releases 7.1(i)(ii)

  	
   

  	
  39

  
	
  Sellers - Preamble

  	
   

  	
  4

  
	
  Sellers’ Representative - Preamble

  	
   

  	
  4

  
	
  Specified Purchaser Consents 7.2(e)

  	
   

  	
  41

  
	
  Specified Seller Consents 7.1(e)

  	
   

  	
  38

  
	
  Specified Shareholder Percentages

  	
   

  	
  5

  
	
  Straddle Tax Period 5.12(a)(ii)

  	
   

  	
  28

  
	
  Third-Party Claim 6.5

  	
   

  	
  37

  
	
  Trustee 1.4(a)

  	
   

  	
  5

  
	
  WARN 5.8(a)

  	
   

  	
  25

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00134-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00134-of-00352.parquet"}]]