ASSET PURCHASE AGREEMENT
BY AND AMONG
I-PAC PRECISION MACHINING, INC.
(dba National Manufacturing Technologies Precision Machining
and dba NMT Precision Sheet Metal),
I-PAC MANUFACTURING, INC.,
(dba National Manufacturing Technologies Electronics),
▇▇▇▇▇ DIVERSIFIED TECHNOLOGIES, INC.
AND
NATIONAL MANUFACTURING TECHNOLOGIES, INC.
Dated as of _______________, 2001
ASSET PURCHASE AGREEMENT
(Precision)
This ASSET PURCHASE AGREEMENT (this "Agreement") is made as of
_______________, 2001, by and between ▇▇▇▇▇ DIVERSIFIED TECHNOLOGIES, INC., a
California corporation ("Purchaser"), I-PAC PRECISION MACHINING, INC. (dba
National Manufacturing Technologies Precision Machining and dba NMT Precision
Sheet Metal), a California corporation ("Seller"), I-PAC MANUFACTURING, INC.
(dba National Manufacturing Technologies Electronics), a California corporation
("Parent"), and NATIONAL MANUFACTURING TECHNOLOGIES, INC., a California
corporation ("Owner").
In consideration of the mutual covenants and agreements contained herein,
the parties covenant and agree as follows:
1. DEFINITIONS.
1.1 General Definitions.
Unless otherwise stated in this Agreement, the following terms shall have
the following meanings:
"Affiliate": Any Person that, directly or indirectly, controls, or is
controlled by, or under common control with, another Person. For the purposes
of this definition, "control" (including the terms "controlled by" and "under
common control with"), as used with respect to any Person, means the power to
direct or cause the direction of the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities or by
contract or otherwise.
"Applicable Law": All applicable provisions (domestic or foreign) of all
(i) constitutions, treaties, statutes, laws (including the common law), rules,
regulations, ordinances, codes and Orders of or with any Governmental Body and
(ii) Governmental Approvals.
"Assets": As defined in Section 2.1 hereof.
"Assumed Obligations": As defined in Section 2.5(a) hereof.
"Assumption Agreement": The Assumption Agreement substantially in the form
of Exhibit B attached hereto.
"▇▇▇▇ of Sale": The ▇▇▇▇ of Sale substantially in the form of Exhibit C
attached hereto.
"Business": All of the business operations acquired or to be acquired by
Purchaser pursuant to the Operative Documents, consisting of the Assets and the
Assumed Obligations (but not including the Excluded Assets), involving generally
the fabrication and machining of precision metal parts currently being conducted
by Seller at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Vista
Facility"), and as listed in Schedule 2.1(b) the machining equipment currently
located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Oceanside
Facility").
"Carlsbad Facility": The assets and operations of the manufacturing
facility of I-PAC Manufacturing, Inc. located at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and acquired by Purchaser on the date of this Agreement.
"Celtic Assignment": That certain Assignment of Notes, Security Agreement
and Landlord Agreements of even date herewith, by and among I-PAC Manufacturing,
Inc., I-PAC Precision Machining, Inc. and Celtic Capital Corporation, and
consented to by Purchaser, wherein Seller assigns the Inventory Note, the
Equipment Note and the Security Agreement to Celtic Capital Corporation.
"Closing Date": As defined in Section 6.1 hereof.
"Code": The Internal Revenue Code of 1986, as amended.
"Consent": Any consent, approval, authorization, action, waiver, permit,
grant, franchise, concession, agreement, license, exemption or Order of,
registration, certificate, declaration or filing with, or report or notice to,
any Person (including foreign Persons), including any Governmental Body.
"Continuing Employees": Those employees of Seller listed on Schedule
1.1(a) hereto who are reasonably expected by Seller to desire to stay in the
employ of Purchaser following the Closing.
"Customer Data": All of Seller's customer lists, lists of potential
customers, sales records (including pricing information and customer contractual
status), other records, telephone and fax numbers, email addresses and other
customer data (including credit data) relating to the Business.
"Damages": Any and all damages, claims, obligations, demands, assessments,
penalties, liabilities (joint or several), costs, losses, diminution in value,
defenses, judgments, suits, proceedings, disbursements and expenses (including
disbursements, expenses and reasonable fees of attorneys, accountants and other
professional advisors and of expert witnesses, costs of investigation and
preparation, and costs of settlement) of any kind whatsoever, whether fixed or
contingent, suffered or incurred by a Person, without regard to the timing of
any payment or performance.
"Disclosure Schedules": The schedules to this Agreement delivered by
Seller and Owner to Purchaser on the date hereof and incorporated by reference
into this Agreement.
"EBITDA Note": The EBITDA Note Agreement to be entered into by Purchaser
and Owner in the form attached as Exhibit P hereto.
"Employee Benefit Plan" or "Plan": Means (A) all employee benefit plans
within the meaning of ERISA Section 3(3), including multiple employer welfare
arrangements (within the meaning of ERISA Section 3(40)), plans to which more
than one unaffiliated employer contributes and employee benefit plans (such as
foreign or excess benefit plans) which are not subject to ERISA; and (B) all
stock or membership interest option plans, bonus or incentive award plans,
severance pay policies or agreements, deferred compensation agreements,
supplemental income arrangements, vacation plans and all other employee benefit
plans, agreements and arrangements not described in (A) above.
"Employment Agreement": The form of Consulting Agreement to be entered into
with ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, the form of which is attached hereto as Exhibit D and the
form of Employment Agreement to be entered into with ▇▇▇▇▇▇▇ ▇▇▇▇▇, the form of
which is attached hereto as Exhibit E.
"Environmental Laws": All Applicable Laws and any judicial or
administrative interpretations thereof relating to the protection of the
environment, to human health and safety, or relating to the emission, discharge,
generation, processing, storage, holding, abatement, existence, release,
threatened release or transportation of any Hazardous Materials or waste,
including (i) the Comprehensive Environmental Response, Compensation and
Liability Act, the Resource Conservation and Recovery Act, the Clean Air Act,
the Toxic Substances Control Act, the Federal Water Pollution Control Act, the
Endangered Species Act and the Occupational Safety and Health Act, (ii) all
other requirements pertaining to the reporting, licensing, permitting,
investigation or remediation of emissions, discharges, releases or threatened
releases of Hazardous Materials or Solid Waste into the air, surface water,
ground water or land, or relating to the manufacture, processing, distribution,
use, sale, treatment, receipt, storage, disposal, transport or handling of
Hazardous Materials or Solid Waste, and (iii) all other requirements pertaining
to the protection of the health and safety of employees or the public.
"Equipment": As defined in Section 2.1(d) hereof.
"Equipment Note": The Equipment Note given by Purchaser, as maker, to
Seller, as payee, in the form of Exhibit F hereto.
"ERISA": Employee Retirement Income Security Act of 1974, as amended.
"ERISA Affiliate": An Affiliate of Seller that was or may be considered a
single employer with Seller under ERISA Section 4001(b) or part of the same
"controlled group" as Seller for purposes of ERISA Section 302(d)(8)(C).
"Excluded Liabilities": As defined in Section 2.6 hereof.
"GAAP": Generally accepted accounting principles in the United States of
America from time to time in effect.
"Governmental Approval": Any Consent of, from or with any Governmental
Body.
"Governmental Body": Any court or any federal, state, municipal or other
governmental department, commission, board, bureau, agency, authority or
instrumentality, domestic or foreign.
"Hazardous Materials": Any waste, substance, material, smoke, gas or
particulate matter that: (i) is or contains asbestos, urea formaldehyde foam
insulation, polychlorinated biphenyls, petroleum or petroleum-derived substances
or wastes, radon gas or related materials, (ii) requires investigation, removal,
regulation or remediation under any Environmental Law, or is defined, listed or
identified as a "hazardous waste" or "hazardous substance" thereunder, or (iii)
is toxic, explosive, corrosive, flammable, infectious, radioactive,
carcinogenic, mutagenic, or otherwise hazardous or dangerous or is regulated by
any Governmental Body or Environmental Law.
"Including" or "Includes": Means including without limitation or includes
without limitation.
"Indemnified Person" or "Indemnifying Person": As defined in Section 7.4
hereof.
"Inventory": As defined in Section 2.1(a) hereof.
"Inventory Note": The Inventory Note given by Purchaser, as maker, to Seller,
as payee, in the form of Exhibit G hereto.
"Knowledge": The terms "knowledge," "awareness" and "belief" and any
similar term or words of like import shall mean the knowledge, awareness or
belief, as the case may be, of the officers of Seller, Parent or Owner following
due inquiry with respect to the subject matter of the representation and/or
warranty being given by Seller, Parent or Owner in Article 3 hereof.
"Leased Real Property": All interests leased pursuant to the Real Property
Leases.
"Liability": Any commitments, debts, liabilities, obligations (including
contract and capitalization lease obligations), indebtedness, accounts payable
and accrued expenses of any nature whatsoever (whether any of the foregoing are
known or unknown, secured or unsecured, asserted or unasserted, absolute or
contingent, direct or indirect, accrued or unaccrued, liquidated or unliquidated
and/or due or to become due), including any liability or obligation for Taxes.
"Lien": All mortgages, deeds of trust, claims, liens, security interests,
pledges, leases, conditional sale contracts, rights of first refusal, options,
charges, liabilities, obligations, agreements, easements, rights-of-way, powers
of attorney, limitations, reservations, restrictions and other encumbrances of
any kind.
"Material Adverse Effect": Any effect (individually or in the aggregate)
that is, or could be reasonably expected to be materially adverse to the
Business or Assets of the Seller (other than a change in national economic
conditions generally) whether or not the result thereof would be covered by
insurance that will or could reasonably be expected to result in Damages of
$10,000 or greater.
"Multiemployer Plan": An employee benefit plan as defined in ERISA Section
3(37).
"Operative Documents": This Agreement, the Assumption Agreement, the ▇▇▇▇
of Sale, the Consulting Agreement, the Employment Agreement, the Inventory Note,
the Equipment Note, the Security Agreement, the Celtic Assignment, the EBITDA
Note and all other agreements, instruments, documents, exhibits, schedules and
certificates executed and delivered by or on behalf of Seller or Purchaser
pursuant to this Agreement.
"Order": Any order, writ, injunction, decree, judgment, award, decision or
determination of, or agreement with, any Governmental Body.
"Owner": National Manufacturing Technologies, Inc., a California
corporation.
"Parent": I-PAC Manufacturing, Inc., a California corporation.
"Permits": All permits, authorizations, certificates, approvals,
registrations, variances, exemptions, rights-of-way, franchises, privileges,
immunities, grants, ordinances, licenses and other rights of every kind and
character (a) under any (i) Applicable Law, (ii) Order or (iii) contract with
any Governmental Body or (b) granted by any Governmental Body.
"Permitted Encumbrances": (i) Liens for Taxes and assessments not yet due
and payable; (ii) liens of equipment lessors for the equipment listed on
Schedule 2.5(a)(iii); (iii) landlord's liens created by statute and not by
affirmative action of any landlord; and (iv) the lien of the Security Agreement.
"Person": An individual, partnership, joint venture, corporation, company,
limited liability company, bank, trust, unincorporated organization,
Governmental Body or other entity or group.
"Premises": Business location of Seller including the Leased Real Property
at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, as well as ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, where specific equipment listed in Schedule 2.1(b)
is located.
"Proceeding": Any action, claim, suit, proceeding, litigation,
arbitration, mediation, investigation, inquiry grievance, review or notice.
"Products": Means all products manufactured, assembled, tested,
fabricated, produced, licensed, marketed, or distributed as part of the
Business.
"Properties": As defined in Section 3.14 hereof.
"Purchase Price": As defined in Section 2.3 hereof.
"Real Property Leases": the real property leases, subleases, licenses and
occupancy agreements pursuant to which Seller is the lessee, sublessee, licensee
or occupant, which relate to or are being used in the Business.
"Scheduled Contracts": As defined in Section 2.1(d) hereof.
"Security Agreement": The Security Agreement given by Purchaser, as
Grantor, to Seller, as secured party, in the form of Exhibit H hereto.
"Solid Waste": Any garbage, refuse, sludge from a waste treatment plant,
water supply treatment plant, or air pollution control facility, including air
emissions discharged into the environment whether pursuant to a permit or
exemption from a Governmental Body or pursuant to any Environmental Law, and
other discarded material, including solid, liquid, semi-solid, or contained or
fugitive gaseous material resulting from industrial, commercial, mining and
agricultural operations, and from community activities.
"Supplier Data": All of Seller's supplier and vendor lists, records,
telephone and fax numbers, email addresses and publications and marketing
material relating to the purchase of goods or the provision of services to
Seller in connection with the Business.
"Tax Obligations": Any Taxes which are attributable or related to the
Assets or the Business for any time on or before the Closing Date or which may
be applicable because of the Transactions.
"Taxes": Any federal, state, local or foreign income, franchise, sales,
excise, real or personal property, ad valorem or other Taxes, assessments, fees,
levies, imposts, duties, deductions or other charges of any nature whatsoever
(including interest and penalties) imposed by any Applicable Law.
"Threatened": Any matter or thing will be deemed to have been Threatened
when used herein with respect to any party if that party has received notice
from the Person to whom the threat is attributable or such Person's agents,
which notice makes specific reference to and clearly identifies the matter or
thing being threatened.
"Transaction" or "Transactions": The acquisition of the Assets and the
performance of the other covenants and the consummation of the transactions
described in this Agreement.
"Transaction Expenses": The expenses incurred in connection with the
preparation, negotiation, execution and performance of this Agreement and the
consummation of the Transactions, including all fees and expenses of counsel and
representatives.
"Vista Facility": See "Business."
Other terms shall have the meanings ascribed to elsewhere herein.
2. SALE OF ASSETS; ASSUMPTION OF CERTAIN LIABILITIES.
2.1 Agreement to Purchase and Sell.
Subject to the applicable terms and conditions of this Agreement, Seller
shall sell, transfer, assign, convey and deliver to Purchaser, and Purchaser
shall purchase, the assets of Seller used in the Business described below (the
"Assets"), free and clear of all Liens, other than the Permitted Encumbrances:
(a) Inventory. The inventory of finished goods, work-in-progress, raw
materials, supply inventory, goods, replacements, components, devices, equipment
and other similar items owned or held by Seller for use in connection with the
manufacture or sale of Products or the repair, replacement, modification,
customization or installation of Products, and office and other supplies
(collectively, the "Inventory") listed in Schedule 2.1(a) hereto.
(b) Equipment. All office furniture, space dividers and work cubicles,
manufacturing, fabricating, demonstration and other equipment, machinery,
apparatus, tools, appliances, printing presses and related parts, samples,
implements, spare parts and supplies (collectively, the "Equipment") listed in
Schedule 2.1(b) hereto.
(c) Computer Equipment/Software. All computer equipment and hardware used
in the Business, including all central processing units, terminals, disk drives,
tape drives, electronic memory units, printers, keyboards, servers, screens,
peripherals (and other input/output devices), modems and other communication
controllers, embedded devices and any and all parts and appurtenances thereto
(collectively, the "Computer Equipment/Software"), together with all right,
title and interest of Seller in, to and under all intellectual property used by
Seller in the Business in the operation of such Computer Equipment/Software,
including all software, all data files, all licenses related to Seller's use of
such Computer Equipment/Software and all leases pursuant to which Seller leases
any Computer Equipment/Software. The Computer Equipment/Software is listed in
Schedule 2.1(c) hereto.
(d) Scheduled Contracts. Except for the right to collect and retain
accounts receivable accrued by Seller on or before the Closing Date, all right,
title and interest of Seller in, to and under all contracts, arrangements,
licenses, leases (including capital leases), purchase orders and agreements
(whether written or oral) related to or arising out of the Business and listed
on Schedule 2.1(d) hereto (collectively, the "Scheduled Contracts") plus the
Backlog Orders listed on Schedule 2.1(e) hereto, and all rights (including
rights of adjustment, refund and offset relating thereto), privileges, deposits,
claims, causes of action and options relating or pertaining to the Scheduled
Contracts or any thereof insofar as any of the foregoing relates to the
Business. Seller has delivered to Purchaser true, correct and complete copies
of all Scheduled Contracts.
(e) Backlog Orders. All of Seller's backlog of orders for Products
manufactured, fabricated or sold by Seller in the Business, which are listed in
Schedule 2.1(e) hereto (collectively, the "Backlog Orders"). Copies of all
Backlog Orders are included in the Scheduled Contracts delivered to Purchaser
pursuant to Section 2.1(d) hereof.
(f) Customer Data and Supplier Data. All of the Customer Data and Supplier
Data.
(g) Left intentionally blank.
(h) Leased Real Property. The leasehold interest in the real property
subject to the Real Property Leases (the "Leased Real Property").
(i) Permits. To the extent transferable, all of Seller's Permits relating
to the Business or all or any part of the Assets. The Permits include the
Permits listed on Schedule 2.1(i).
(j) Books and Records. Subject to Section 5.8 hereof, all of Seller's
books, records, papers, files and instruments of whatever nature and wherever
located that relate to the Business or the Assets or which are required or
necessary in order for Purchaser to conduct the Business, including graphic
materials, specifications, surveys, building and machinery diagrams, warranties,
maintenance and production records, media, personnel and labor relations
records, environmental records and reports, sales and marketing literature,
brochures or other sales aids, catalogs, price lists, mailing lists, sales and
property Tax records and returns.
2.2 Excluded Assets.
The foregoing definition of Assets specifically excludes accounts
receivable of Seller as of the date hereof and all other assets of Seller not
listed in Section 2.1 hereof.
2.3 Purchase Price.
Subject to the terms and conditions of this Agreement, the aggregate
purchase price (the "Purchase Price") to be paid by Purchaser to Seller shall be
the following:
(a) $520,745.96 in the form of the Inventory Note; and
(b) $1,546,900 in the form of the Equipment Note which Equipment Note is
secured by the Security Agreement.
2.4 Allocation of Purchase Price.
(a) The Purchase Price for the Assets shall be allocated on the Closing
Date (or as soon as practical thereafter) among the Assets in accordance with an
allocation schedule to be prepared by Purchaser and consented to by Seller,
which consent shall not be unreasonably withheld. Such allocation schedule
shall be prepared in accordance with Section 1060 of the Code.
(b) In connection with a determination of the allocation schedule
contemplated in Section 2.4(a) above, the parties shall cooperate with each
other and provide such information as any of them shall reasonably request. The
parties shall each report the federal, state and local and other Tax
consequences of the purchase and sale contemplated hereby (including the filing
of IRS Forms 8594) in a manner consistent with such allocation schedule and
shall not make any inconsistent written statement or take any inconsistent
position on any Tax returns during the course of any IRS or other Tax audit, for
any financial or regulatory purpose, in any litigation or investigation or
otherwise.
(c) Each party shall promptly notify the other party if it receives notice
that the IRS proposes any allocation different from the allocation agreed upon
in accordance with this Section 2.4.
2.5 Assumption of Liabilities.
(a) Subject to and upon all of the terms and conditions of this
Agreement, as of the date after the Closing Date, Purchaser shall assume and
agree to pay, perform and discharge only the following specified obligations and
liabilities of Seller and no others (the "Assumed Obligations"):
(i) the rights, liabilities, obligations and commitments of Seller to
perform the Scheduled Contracts specifically set forth on Schedule 2.1(d) to the
extent that the Scheduled Contracts have not been performed at the time of the
Closing and are not in default, but not including any obligation or liability
for any amount owed with respect to or arising as a result of a breach thereof
or delay in performance occurring prior to the Closing Date;
(ii) the assumption of Sellers' obligations which arise after the
Closing Date under the Real Property Leases;
(iii) the assumption of Seller's current obligations, as well as those which
arise after the Closing Date, under the equipment leases listed on Schedule
2.5(a)(iii) hereto;
(iv) sales taxes attributable or relating to the sale of the Assets; and
(v) Seller's obligations for vacation pay for the employees of Seller which
Purchaser elects to hire.
(b) EXCEPT AS PROVIDED IN SECTION 2.5(A), PURCHASER DOES NOT ASSUME OR
AGREE TO PAY, PERFORM OR DISCHARGE, AND SHALL NOT BE RESPONSIBLE FOR, ANY OTHER
LIABILITIES OF SELLER OF ANY KIND WHATSOEVER, including Liabilities based on,
arising out of, or in connection with:
(i) the Transaction Expenses incurred by Seller;
(ii) any claims which relate to Products sold or services rendered by
Seller on or prior to the Closing Date;
(iii) defective performance or default or alleged defective performance or
default under any Scheduled Contract by Seller or of any express or implied
warranty with respect to such performance on or prior to the Closing Date or any
Liability as a result in the delay in performance or delivery under any
Scheduled Contract;
(iv) breach or alleged breach of any Scheduled Contract by Seller on or
prior to the Closing Date;
(v) any Taxes (other than sales taxes) attributable or relating to the
Assets or the Business of Seller relating to any time on or before the Closing
Date, or which may be applicable because of Seller's sale of any of the Assets
to Purchaser;
(vi) except for the Real Property Leases and the equipment leases listed on
Schedule 2.5(a)(iii), any lease obligations or indebtedness of Seller;
(vii) except for accrued vacation pay for Seller's employees who are hired
by Purchaser, any claims by any of Seller's directors, officers, employees,
agents, consultants, Affiliates, personnel or shareholders relating to this
Agreement or its performance or consummation, or any claims by any of them
relating to or arising out of (A) their employment (including any modification
or termination thereof or any tort or discrimination claims arising therefrom)
by Seller, (B) any employment contract, consulting agreement or similar
arrangement relating to or arising out of the retention of such person, and any
collective bargaining agreements and similar contracts to which any such persons
are a party, (C) any pensions or other benefit liabilities of Seller, (D) any
accrued payroll, bonus or other employment related liability or obligation, or
(E) any Applicable Law relating to the employment relationship, including wages,
hours, concerted activity, discrimination or nondiscrimination, occupational,
health and safety, or payment and/or withholding of Taxes;
(viii) any severance pay or obligations due or afforded Seller's employees
not offered employment by or substantially on the same terms of such employee's
present employment with Seller or offered employment on different terms;
(ix) any obligations for contributions to any Employee Benefit Plan or
Multiemployer Plan, and any claims based on any Employee Benefit Plan or
Multiemployer Plan or any other benefit liabilities of Seller of whatsoever
nature (including all liabilities to any Person under ERISA and the Code and all
liabilities to any Governmental Body);
(x) any claims or conditions arising on or prior to the Closing Date under
or relating to noncompliance or alleged noncompliance with any Applicable Law
including any Environmental Law, attributable or relating to the Assets
(including the ownership, use or operation thereof) or the Business of Seller;
(xi) any unlicensed or other unauthorized use or alleged use by Seller of
any patented or unpatented invention, or registered or unregistered trade
secret, copyright, trademark, trade name, service ▇▇▇▇ or other intellectual
property rights, including the Intangible Assets;
(xii) any dividend or other distribution declared or otherwise payable by
Seller;
(xiii) any accounts payable of Seller; or
(xiv) any Liability to any Person, including any accrual thereof.
(c) Purchaser shall have no Liability with respect to Taxes payable by
Seller or related to the Assets or the Business prior to the Closing whether or
not payable prior to the Closing.
(d) Purchaser shall assume and agree to discharge the Assumed
Obligations relating to the Business, by executing and delivering to Seller an
assumption agreement substantially in the form of Exhibit B attached hereto.
2.6 Excluded Liabilities.
Notwithstanding the provisions of Section 2.5 or any other provision hereof
or any Operative Document and regardless of any disclosure to Purchaser, neither
Purchaser nor any of its Affiliates shall assume or have any liability for any
Liabilities (collectively, the "Excluded Liabilities") of Seller or any of its
Affiliates, or which in any manner relates to or arises out of the operation of
the Business or the ownership of the Assets during any period prior to the
Closing Date or which are owed by Seller to any of Seller's Affiliates other
than those obligations and commitments comprising the Assumed Obligations.
2.7 Further Assurances.
At all times after the date hereof as may be reasonably necessary, Seller,
Parent and Owner shall execute and deliver to Purchaser (i) such instruments of
transfer as shall be reasonably necessary or appropriate to vest in Purchaser
good and indefeasible title to the Assets and to otherwise comply with the
terms, purposes and intent of this Agreement, and (ii) such other instruments as
shall be reasonably necessary or appropriate to evidence the assignment by
Seller of the Scheduled Contracts and the Real Property Leases.
3. REPRESENTATIONS AND WARRANTIES OF SELLER.
Seller, Parent and Owner, jointly and severally, hereby represent and
warrant to Purchaser that the following is true, correct and complete as of the
date of this Agreement, regardless of what investigations, if any, Purchaser
shall have made prior hereto:
3.1 Organization; Qualification.
Seller is a corporation duly organized, validly existing and in good
standing under the laws of the State of California. Seller has full corporate
power and authority to own and lease all of the properties and assets it now
owns and leases and to carry on its business as now being conducted.
3.2 Authority Relative to this Agreement.
Seller, Parent and Owner each has full corporate power and authority to
execute, deliver and perform this Agreement (including execution, delivery and
performance of the Operative Documents to which each of them is a party) and to
consummate the Transactions. The execution and delivery by Seller, Parent and
Owner of this Agreement and the Operative Documents, and the consummation of the
Transactions, have been duly and validly authorized by the Board of Directors of
Seller and the shareholders of the Seller in accordance with Applicable Law and
no other corporate proceedings on the part of Seller are necessary with respect
thereto. This Agreement has been duly and validly executed and delivered by
Seller, Parent and Owner, and constitutes the legal, valid and binding
obligation of Seller, Parent and Owner, enforceable against each of them in
accordance with its terms. Seller, Parent and Owner will each take, and cause
to be taken, all corporate action that is necessary for Seller to complete the
Transactions to be completed by Seller, Purchaser or Owner pursuant to this
Agreement.
3.3 Consents and Approvals.
Except as set forth in Schedule 3.3, the execution, delivery and
performance by Seller, Parent and Owner of this Agreement and the Operative
Documents and the consummation of the Transactions by each of them requires no
Consent or Order by, from or with any Governmental Body or other Person, all of
which Consents have been obtained.
3.4 Authority; Licenses.
Seller possesses all of the Permits required by Applicable Law and the
Permits set forth on Schedule 2.1(i), which constitute all of the Permits
necessary for Seller to own, use, operate and lease the properties and Assets
and to carry on the Business as it is now being conducted on the Premise
3.5 No Violations.
Neither the execution, delivery or performance of this Agreement or the
Operative Documents by Seller, Parent and Owner, nor the consummation by Seller,
Parent and Owner of the Transactions will (a) conflict with or result in any
breach or violation of any provision of the Articles of Incorporation or Bylaws
of Seller, (b) result in a default, or give rise to any right of termination,
cancellation or acceleration or loss of any material benefit under any Scheduled
Contract, (c) result in the creation or imposition of any Lien on any of the
Assets other than that imposed by the Security Agreement, (d) violate any Order,
Applicable Law or Permit applicable to Seller, Parent, Owner, the Business or
the Assets or (e) violate any territorial restriction on the business of Seller,
Parent or Owner or any noncompetition or similar arrangement.
3.6 Compliance with Law.
(a) Neither Seller, the Assets nor the Business is in violation in any
material respect of any Applicable Law. Neither Seller nor Owner is aware of,
nor prior to the date hereof, have either of them received actual notice of, any
past, present or future conditions, events, practices or incidents which could
be reasonably expect to interfere in any material manner with or prevent
compliance or continued compliance in all material respects with Applicable Law.
To Seller's, Parent's or Owner's knowledge, no such Applicable Law with a future
compliance date could reasonably be expected to have a Material Adverse Effect.
(b) Schedule 3.3 sets forth all Governmental Approvals and other Consents
necessary for, or otherwise material to, the conduct of the Business or the
ownership, use or operation of the Assets. All such Governmental Approvals and
Consents have been duly obtained and are in full force and effect, and Seller is
in compliance with each of such Governmental Approvals and Consents held by it
relating to the conduct or operation of the Business or the ownership, use or
operation of the Assets.
(c) Seller has filed with the proper authorities all statements and reports
required by the Applicable Laws to which it or any of its employees (because of
his or her activities on behalf of his or her employer) is subject relating to
the conduct or operation of the Business or the ownership, use or operation of
the Assets.
3.7 Title to and Condition of Assets and Property.
(a) Seller has good and indefeasible title to all Assets and such
Assets are free and clear of all Liens, except for the Permitted Encumbrances.
The Assets constitute all assets and properties that are currently being
utilized in the Business and that are necessary in the conduct of the Business
as presently being conducted. Seller has not sold, transferred, leased,
distributed or otherwise disposed of any of the Assets, or agreed to do so,
except for sales of inventory in the ordinary course of business consistent with
past practices. Upon consummation of the Transactions, Purchaser will own the
Assets free and clear of all Liens except for Permitted Encumbrances.
(b) The Assets which are equipment described in Schedule 2.1(b) (i) are in
good operating condition and repair, subject to ordinary wear and tear, (ii) are
fit in all material respects for the purposes for which they are being used and
are capable of being used in the Business as presently being conducted without
present need for any material repair or replacement except in the ordinary
course of the Business, (iii) conform in all material respects with all
Applicable Laws, (iv) have been fitted and equipped with all necessary or proper
guards, ▇▇▇▇▇▇▇, cutoffs and other safety devices and such devices are in good
operating condition and repair, subject ordinary wear and tear, and (v) in the
aggregate provide capacity that is consistent with prior capacity needs and can
enable Purchaser to engage in commercial operation of the Business on a
continuous basis (subject to normal maintenance and repair outages in the
ordinary course). Except as set forth on Schedule 3.7(b)hereto, no material
item of maintenance, replacement or repair has been deferred or neglected. All
of the Assets (subject to normal maintenance, replacement or repair outages in
the ordinary course of Business) have been and are now producing merchantable
Products and are adequate and sufficient for all material operations conducted
by the Business in substantially the same manner as currently conducted prior to
Closing.
(c) Except as set forth in Schedule 3.7(c), no Hazardous Material exists in
any structure located on, or existing on or under the surface of, any real
property owned, leased or otherwise used by the Seller, any predecessor or
successor to the Seller or Affiliate of the Seller in the Business. To Seller's
Knowledge, Seller has not ever been in material violation of any Environmental
Law. Except as set fort in Schedule 3.7(c), there has not been any
environmental assessments or audits of the Seller or any of its Assets. There
is no Proceeding pending or Threatened against Seller relating to the
environment nor is there a basis for the assertion against Seller of any such
Proceeding. Except as set forth in the Schedule 3.7(c), neither Seller nor
Owner has received notice of, nor does either of them know of, any past, present
or future events, conditions, facts, circumstances, activities, practices,
incidents, actions or plans which relate to the ownership, use, operation, lease
or occupancy of any Asset or the operation of the Business, that may interfere
with or prevent compliance or continued compliance or that might constitute a
violation of any Environmental Law.
(d) None of Seller's Excluded Assets will be needed in the continuing
operation of the Business following the Closing Date.
3.8 Investigation or Litigation.
There is no Proceeding pending or Threatened against, relating to or
affecting the Seller, the Owner, the Assets or the Business. Neither Seller,
Owner, the Business nor the Assets is subject to any currently existing
Proceeding by any Governmental Body or other Person that would affect, or create
a lien on, the Assets being purchased. To Seller's and Owner's knowledge, there
is no reasonable basis for the assertion of any Proceeding by any Governmental
Body or any Person regarding any violation of any Environmental Law or any other
Applicable Law.
3.9 Employee Benefits.
Neither Seller, Parent nor Owner is in default or in violation of
Applicable Law under any Employee Benefit Plan maintained by Seller for
employees in the Business at the Premises. All such Employee Benefit Plans are
fully funded. Neither Seller nor any ERISA Affiliate has ever maintained a
Multiemployer Plan. None of the Plans has ever provided health care or any
other non-pension benefits to any employees after their employment was
terminated (other than coverage mandated by Applicable Law) or has ever promised
to provide such post-termination benefits. As a result of this Agreement,
Purchaser shall have no liability or responsibility of any notice for, or in
connection with, any Employee Benefit Plans of Seller to any Person.
3.10 Labor and Employee Matters.
No employees of the Seller are represented by a union or other labor
organization. Neither Seller nor Owner is aware of any union organizing
activities or Proceedings involving, or any pending petitions for recognition
of, a labor union or association. There are no labor disputes currently subject
to any Proceeding, there is no Proceeding pending or Threatened or, to Seller's
and Owner's Knowledge, contemplated with respect to any employee employed in the
operation of the Business, and no basis exists for asserting any of the
foregoing. There has been no labor strike, dispute, slowdown or stoppage
pending or Threatened against or affecting the Seller. Seller has no
obligations, contingent or otherwise, under any employment or consulting
agreement, or collective bargaining agreement or other contract with a labor
union or other labor or employee group. Seller is not engaged in any unfair
labor practice and has complied with all provisions of Applicable Law pertaining
to the employment of employees employed in the operation of the Business,
including all such Applicable Laws relating to labor relations, equal
employment, employment practices, terms and conditions of employment, wages and
hours, entitlement, prohibited discrimination or other similar employment
practices or acts. No agreement which is binding on the Seller restricts it
from relocating or closing any of its operations. Seller has terminated all of
its employees at the Vista Facility and those who work with the equipment being
purchased by Purchaser located at the Oceanside Facility. Seller has no
liability under the Workers Adjustment and Retraining Notification ("WARN") Act
of 1988.
3.11 Taxes.
There are no Tax Liens or assessments upon any of the Assets of Seller nor,
except for a late payment of payroll taxes notice, has notice been given of any
event which could lead to any such Lien. No IRS, state or local audit,
investigation or Proceeding of Seller, Parent or Owner is pending or Threatened
which might impose a lien on the Assets. Neither Seller nor the Owner have
granted any extension to any taxing authority of the limitation period during
which any Tax liability which might impose a lien on the Assets may be asserted.
Except as described in the first sentence of this Section 3.11, all monies
required to be withheld by Seller from Continuing Employees, social security and
unemployment insurance Taxes for Continuing Employees, which taxes are to be
paid by Seller to any Governmental Body, have been paid to the applicable
Governmental Body. Consummation of the Transactions will not result in any
obligations for Tax on the Assets.
3.12 Inventories.
Schedule 3.12 contains a complete and correct list of all Seller's
inventory of raw materials, work in process and finished goods which is valued
on Schedule 3.12 at the lower of cost or market. Schedule 3.12 also sets forth
the estimated value of inventory which is specifically identified as being
required to complete orders for Seller's customers on the Closing Date.
3.13 Real Property Leases.
Schedule 3.13 contains a complete and correct list of all Real Property
Leases, setting forth the address, landlord and tenant for each Real Property
Lease, along with the address to which rental payments are made and the name and
phone number of a contact person at such address. Seller has delivered to
Purchaser true, correct and complete copies of the Real Property Leases. Each
Real Property Lease is legal, valid, binding, enforceable, and in full force and
effect. Neither Seller, nor any other party is in default, violation or breach
under any Real Property Lease, and no event has occurred and is continuing that
constitutes or, with notice or the lapse of time or both, would constitute a
default, violation or breach in any respect under any Real Property Lease.
Seller's rights under the Real Property Leases are not subordinate to, or
defeasible by, any security interest on the Leased Real Property, or any prior
lease thereon. Seller enjoys peaceful and undisturbed possession of the Leased
Real Property under the Real Property Leases to which it is a party.
3.14 Environmental Matters.
(a) Seller holds all Permits, regulatory plans and compliance
schedules, including any permit or exemption regulating the discharge of air
emissions, necessary under Environmental Laws for conducting the Business.
Seller has duly complied with, and its business, operations, assets, equipment,
leaseholds and other facilities are in compliance with, the provisions of all
Environmental Laws.
(b) Seller has utilized, handled, stored, delivered for disposal, disposed
of and transported all wastes, whether hazardous or not, in compliance with all
Environmental Laws and other Applicable Laws has not contaminated any of the
Leased Real Property or the Assets (collectively, the "Properties") or any other
properties so as not to give rise to any reporting, remediation or clean-up
obligation or any other Liability of any kind on the part of Seller or any
subsequent owner, occupant or operator of the Properties under any Environmental
Law. No past or present disposal, discharge, spill or other release of, or
treatment, transportation or other handling of Hazardous Materials or Solid
Waste on, in, under or offsite from any of the Properties, or adjacent property,
will subject Seller or any subsequent owner, occupant or operator of the
Properties to corrective or compliance action or any other Liability of any
kind. Seller has kept all records and made all filings required by Applicable
Laws with respect to emissions or potential emissions into the environment of
solids, liquids, gases, heat, light, noise, radiation and other forms of matter
or energy and the proper disposal of materials. Schedule 3.14 lists all waste
haulers, waste disposal sites, dump sites and other areas at which wastes
generated by Seller have been disposed of by Seller or such waste haulers (in
each case identifying such wastes), and will specifically identify each such
site or area which is or has been included in any published federal, state,
local or foreign "superfund" or other list of hazardous, toxic or other waste
sites or areas identified for remedial clean-up or investigatory actions.
(c) The Properties, the other assets of Seller and Seller's other
properties, including its buildings, fixtures, machinery, equipment and
inventory (whether now or previously owned, leased or used by Seller), have not
been contaminated, tainted or polluted, nor will such properties or assets
become contaminated, tainted or polluted, as a result of activities conducted by
Seller or the migration of contaminants from any adjacent property. None of the
Properties appears on the National Priority List or any federal, state, local or
foreign listing which identifies sites for remedial clean-up or investigatory
actions. No asbestos, PCB's, urea-formaldehyde, underground storage tanks or
plating operations are or were located on the Properties, and none of the
Properties has been used to handle, treat, store or dispose of or has been
contaminated (including contamination of soils, subsurface groundwater and
surface waters located on, in, under or adjacent to such premises) with or by
pollutants, wastes or any other substances, which contamination may give rise to
a reporting, remediation or clean-up obligation with respect to such Properties
or the property of others under any Environmental Law.
(d) There is no Proceeding pending or Threatened against Seller (or against
any other Person for whose acts or omissions Seller may be responsible), or to
the knowledge of Seller, Parent and Owner contemplated, relating to the
environment nor is there a basis for the assertion against Seller (or against
any other Person for whose acts or omissions Seller may be responsible) of any
such Proceeding. Seller, Parent and Owner have not received notice of, and
Seller, Parent and Owner are not aware of, any past, present or future events,
conditions, facts, circumstances, activities, practices, incidents, actions or
plans that may interfere with or prevent compliance or continued compliance or
that might constitute a violation of any Environmental Laws, which relate to the
use, ownership or occupancy of the Properties or the operation of the Business.
Seller has never been in violation of any Environmental Laws, and there are not
any environmental assessments or audits of Seller or any of their respective
assets. To the Knowledge of Seller, Parent and Owner, there are no existing or
pending Environmental Laws with a future compliance date that will require
operational change, business practice modification or capital expenditures with
respect to Seller or any of the Real Property or any property formerly owned or
controlled by Seller.
3.15 Left intentionally blank.
3.16 Product and Service Warranties.
There is no claim against Seller on account of Product or service
warranties or with respect to the manufacture, fabrication, sale or lease of
Products or performance of services, including any amount due to any customer by
reason of any understanding or agreement between Seller and any customer, and
there is no basis for any such claim on account of Products heretofore
manufactured, fabricated, sold or leased or services performed that affects the
Assets.
3.17 Contracts.
(a) Seller has delivered to Purchaser true, correct and complete copies
of all Scheduled Contracts, together with all amendments thereto and accurate
descriptions of all material terms of all oral contracts (including all oral
contracts with suppliers), that are Scheduled Contracts.
(b) All Scheduled Contracts are and following the Closing Date will be in
full force and effect and enforceable against each party thereto. Seller has
not received notice of any plan or intention of any party to any Scheduled
Contract to exercise any right to cancel, terminate or modify any Scheduled
Contract. There does not exist under any Scheduled Contract any event of
default or event or condition that, after notice or lapse of time or both, would
constitute a violation, breach or event of default thereunder on the part of
Seller or, to Seller's or Owner's Knowledge, any other party thereto. Except as
set forth in Schedule 3.17(b), no Consent is required under any Scheduled
Contract as a result of or in connection with, and the enforceability of any
Scheduled Contract will not be affected in any manner by, the execution,
delivery and performance of this Agreement or any other agreement executed and
delivered hereunder or pursuant hereto or the consummation of the Transactions
contemplated hereby or thereby.
(c) Seller has not granted any outstanding power of attorney with respect to
the Business or the Assets.
(d) Except as disclosed on Schedule 2.5(a)(iii), all equipment leases are in
full force and effect, and no events of default exist with regard to such
equipment leases.
3.18 Left intentionally blank.
3.19 Customers and Suppliers.
(a) Seller has previously supplied Purchaser with a list of its
principal customers and suppliers. Seller's relationships with suppliers are
currently adequate to support the Business. Neither Seller nor Owner is aware
of any fact or reason which would prohibit the continuance or otherwise impair
in any material respect the relationship of Purchaser with Seller's customers or
suppliers after the Closing Date.
(b) Schedule 2.1(e) lists all open Backlog Orders from customers, copies of
all written instruments evidencing the items listed in Schedule 2.1(e) and
copies of the forms of written sales orders used by the Seller have been
delivered to Purchaser, or are being delivered by Seller to Purchaser, at the
Closing. The aggregate Backlog Orders from customers outstanding at the date
hereof does not exceed $1,206,845.40. Such purchase orders may be canceled at
any time without penalty except as described on Schedule 2.1(e). As of the date
hereof there are no purchase orders for equipment unless previously approved in
writing by Purchaser.
(c) To the extent requested by Purchaser, Seller has either cancelled or
assigned to Purchaser the purchase orders with its suppliers effective as of
this date.
3.20 No Brokers.
Seller has not employed any broker, agent or finder or incurred any
liability for any brokerage fees, commissions or finders' fees in connection
with the Transactions.
3.21 Bulk Sales Notice.
Seller has complied with the notice provisions of the California Bulk Sales
Law (Division 6 of the California Commercial Code). Schedule 3.21 is a list of
all claims received by Seller based on the published Bulk Sales Notice.
3.22 Disclosure.
(a) Each of Seller, Parent and Owner has delivered or made available to
Purchaser complete and accurate copies of all documents listed on the Disclosure
Schedules delivered as a part hereof and all other information requested for
deciding whether to consummate the Transactions hereby. No representation or
warranty of Seller, Parent or Owner contained in this Agreement or statement in
the Disclosure Schedules hereto contains any untrue statement. No
representation or warranty of Seller, Parent and Owner contained in this
Agreement or statement in the Disclosure Schedules hereto omits to state a
material fact necessary in order to make the statements herein or therein, in
light of the circumstances under which they were made, not misleading.
(b) There has been no event, transaction or information which has come to
the attention of the Seller, Parent and Owner which, as it relates to the
Business, could, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect on the Business or the Assets. There is no fact
known to Seller, Parent and Owner which has specific application to Purchaser
and which could have a Material Adverse Effect on the Assets, the Business or
Purchaser but which has not been set forth in this Agreement or the Disclosure
Schedules hereto.
(c) In the event of any inconsistency between the statements in the body of
this Agreement and those in the Disclosure Schedules hereto (other than an
exception expressly set forth as such in the Disclosure Schedules in relation to
a specifically identified representation or warranty), those in this Agreement
shall control.
4. REPRESENTATIONS AND WARRANTIES OF PURCHASER.
Purchaser hereby represents and warrants to Seller that the following are
true, correct and complete as of the date of this Agreement regardless of what
investigations, if any, Seller shall have made prior hereto:
4.1 Organization.
Purchaser is a corporation duly organized, validly existing and in good
standing under the laws of the State of California. Purchaser has the full
corporate power and authority to own and lease all of the properties and assets
it now owns and leases and to carry on its business as now being conducted.
Purchaser is duly qualified or licensed as a foreign corporation and is in good
standing to do business in each jurisdiction in which the property owned, leased
or operated by it or the nature of the business conducted by it makes such
qualification necessary.
4.2 Authority Relative to this Agreement.
Purchaser has full power and authority (corporate and otherwise) to
execute, deliver and perform this Agreement (including execution, delivery and
performance of the Operative Documents) and to consummate the Transactions. The
execution and delivery by Purchaser of this Agreement, and the consummation of
the Transactions, have been duly and validly authorized by the Board of
Directors of Purchaser and no other corporate proceedings on the part of
Purchaser are necessary with respect thereto. This Agreement has been duly and
validly executed and delivered by Purchaser and constitutes the legal, valid and
binding obligation of Purchaser enforceable against Purchaser in accordance with
its terms.
4.3 Consents and Approvals.
Except as set forth in or otherwise required by this Agreement or the
Operative Documents, the execution, delivery and performance by Purchaser of
this Agreement and the consummation of the Transactions by it requires no
Consent or Order of, by or in respect of, any Governmental Body or other Person
except as has been received by Purchaser on or prior to the Closing Date.
4.4 No Brokers.
Purchaser has not employed any broker, agent or finder or incurred any
liability for any brokerage fees, commissions or finders' fees in connection
with the Transactions.
5. ADDITIONAL AGREEMENTS.
5.1 Further Assurances.
Subject to the terms and conditions herein provided, each of the parties
hereto agrees to use all commercially reasonable efforts to do all things
necessary, proper or advisable under Applicable Laws and regulations to
consummate and make effective the Transactions contemplated by the Operative
Documents. At any time after the Closing Date, if any further action is
necessary, proper or advisable to carry out the purposes of this Agreement,
then, as soon as is reasonably practicable, each party to this Agreement shall
take, or cause its proper officers to take, such action. Each party hereto
further agrees to cooperate fully with the other party after the consummation of
the Transactions for the purpose of providing Purchaser with the information and
access to information necessary to ensure Purchaser with a reasonably smooth
transition into the ownership of the Business.
5.2 Public Announcements.
The parties agree to consult with each other prior to making any public
announcement or other public disclosure concerning the Transactions contemplated
by this Agreement, including any of terms and conditions of such. Except as
otherwise required by Applicable Law (including Applicable Laws and regulations
promulgated by or for the Securities and Exchange Commission), neither party
shall and shall not permit any of its respective Affiliates, agents or
representatives, to make directly or indirectly a public announcement regarding
the Transactions contemplated by this Agreement without the prior written
consent of the other party, which consent shall not be unreasonably withheld.
If a party is required by law to make any such disclosure, it must provide
notice of such requirement, as soon as practicable, to the other party.
5.3 Post Closing Information.
Purchaser, Seller and Owner shall cooperate with one another after the
Closing by providing the requesting party, without any additional consideration
but at the expense of the requesting party, promptly upon request, such records
and other information regarding the Assets and the Business as may reasonably be
requested from time to time by the requesting party in connection with the
preparation or audit of its federal, state and local income and other Tax
returns, if any, and any audits, disputes, refund claims or third Person
litigation relating thereto or any other third Person litigation or
investigation, if any. In such connection, each party will afford the
Purchaser's representatives including independent tax advisers and others
reasonable access to books and records relating to the Business or the Assets.
5.4 Left intentionally blank.
5.5 Employees.
Purchaser shall use commercially reasonable efforts to employ those of the
Continuing Employees it elects to hire as of the day after the Closing Date upon
such terms and with such benefits as Purchaser elects. Each individual offered
employment by Purchaser shall be considered "newly hired" and, except for
accrued vacation pay, Purchaser shall have no liability whatsoever with respect
to any matter relating to the employment of such persons by Seller prior to the
Closing Date. The provisions of this Section 5.5 shall inure solely to the
benefit of Seller and no third Person (including any employee of Seller) shall
be permitted to rely hereon as a third party beneficiary or otherwise.
Purchaser shall take all actions necessary or appropriate to permit those of
the Continuing Employees it elects to hire to participate as soon as practical
after the Closing Date in the standard employee benefit programs of Purchaser
for which they are otherwise eligible.
5.6 Mail, Etc.
Purchaser, on the one hand, and Seller and Owner, on the other hand, each
agree to promptly deliver to the other the original of any mail or other
communication received by such party after the Closing Date which should
properly be the property of the other. Purchaser, on the one hand, and Seller
and Owner, on the other hand, each further agree from and after the Closing Date
to promptly deliver to the other, or their respective designees, any monies,
checks or other instruments of payment to which the other party is entitled
hereunder, together with a reasonable accounting therefor.
5.7 Covenant Not To Compete.
(a) Covenant of Seller and Parent. For a period of five years from and
after the date hereof, each of Seller and Parent hereby covenants and agrees
that it shall not engage or participate, directly or indirectly, in a business
in competition with the business conducted by Seller at the Premises immediately
prior to the Closing Date within the cities or counties of the States of
California and all other states west of the Mississippi River, as well as
Mexico, in which places Seller conducted business.
(b) Public Policy and Law. The parties to this Agreement expressly agree
that it is not their intention to violate any public policy or statutory or
common law. The parties intend that the covenant set forth above shall be
construed as a series of separate covenants, one for each city, county, state,
or nation within the specified geographic area, each of which covenants shall be
deemed to be identical. If, in any judicial proceedings, a court shall refuse
to enforce any of the separate covenants deemed included in this Section 5.7,
then such unenforceable covenant shall be deemed to be eliminated therefrom or
modified to the extent necessary to permit it and the remaining separate
covenants to be enforceable. Without limiting the generality of the foregoing,
if any court of competent jurisdiction determines that the foregoing covenant
not to compete is invalid because of its length of time or geographic scope,
then the parties hereto agree that such covenant shall be reduced either or both
in length of time or geographic scope to the extent necessary to make such
covenant enforceable against Seller, Parent and Owner.
(c) Remedy. The parties acknowledge and agree that the remedy at law for
any breach of the foregoing covenant not to compete will be inadequate and that
Purchaser shall be entitled, in addition to any remedy at law, to injunctive
relief.
(d) Consideration. The consideration for the foregoing covenant not to
compete, which is hereby agreed to be a material element of this Agreement, is
Purchaser's agreement to purchase the Assets and pay the Purchase Price provided
herein, and Seller and Parent each acknowledge the adequacy of such
consideration.
5.8 Cooperation.
After consummation of the Transactions, the Seller, Parent and the Owner
each agree to cooperate with Purchaser (to the extent reasonably requested by
Purchaser) in the transition of employees, customers, vendors, suppliers and
other Persons currently having a business relationship with the Seller. Without
limiting the generality of the foregoing, at Purchaser's request, Seller, Parent
and Owner shall cooperate with Purchaser in making any internal or external
notice, announcement or other communication related to the consummation of the
Transactions and such other matters as Purchaser shall reasonably require.
Purchaser shall make the books and records described in Section 2.1(j) hereof
available to Seller, Parent or Owner, or their agents, on reasonable notice and
during normal business hours, to complete audits, tax returns and other
reporting requirements.
5.9 Prorations of Property Taxes.
Ad valorem real property taxes and assessments imposed by the Real Property
Leases and personal property Taxes and assessments on the Assets shall be
prorated between Purchaser and Seller as of the Closing Date. All such
prorations shall be allocated so that items relating to time periods ending on
or prior to the Closing Date shall be allocated to Seller and items relating to
time periods beginning after the Closing Date shall be allocated to Purchaser.
To the extent possible, all of such prorations shall be settled on the Closing
Date or within 30 days thereafter.
5.10 Product Repairs and Reworks.
If Products which were sold and delivered to customers prior to the Closing
Date are returned to Purchaser for warranty repairs or rework to meet required
customer specifications, Purchaser agrees to perform the necessary work on
behalf of Seller and Owner to obtain customer satisfaction at a cost to Seller
or Owner of $35 per hour plus materials at cost. Prior to starting such repairs
or rework, Purchaser will provide Seller and Owner with a written cost estimate
which Seller or Owner must agree to prior to Purchaser initiating the rework or
repair. Seller and/or Owner agree to reimburse Purchaser in cash or by check
for such work immediately upon receipt of an invoice from Purchaser. The
parties hereto agree that any amount due from Seller or Owner to Purchaser
pursuant to this Section 5.10 shall not be included in the $25,000
indemnification threshold set forth in Section 7.2 hereof.
6. CLOSING AND TERMINATION.
6.1 Closing and Closing Date.
The date of this Agreement is the "Closing Date." The closing of the
Transactions contemplated by this Agreement (the "Closing") shall, unless
another date or place is agreed to in writing by Seller, Owner and Purchaser,
take place at the offices of ▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, at 10:00 a.m. on the Closing Date or such other place
and date as the parties may agree upon in writing.
6.2 Seller's Deliveries at Closing.
At the Closing, Seller shall deliver to Purchaser all documents,
certificates and agreements necessary to transfer to Purchaser good and
indefeasible title to the Assets, free and clear of any and all Liens thereon,
other than Permitted Encumbrances, including, without limitation, the following
signed documents:
(a) ▇▇▇▇ of Sale;
(b) Assignment of the Scheduled Contracts, assigning to Purchaser all
of Seller's right, title and interest therein and thereto with, at Purchaser's
election, any required Consent endorsed thereon in the form of Exhibit I
attached hereto;
(c) Left intentionally blank;
(d) Left intentionally blank;
(e) Employment Agreement with ▇▇▇▇▇▇▇ ▇▇▇▇▇ signed by ▇▇. ▇▇▇▇▇;
(f) Employment Agreement with ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ signed by ▇▇. ▇▇▇▇▇▇;
(g) The Celtic Assignment;
(h) Left intentionally blank;
(i) The Receivables Sideletter in the form attached as Exhibit L
hereto;
(j) Good standing certificates for Seller, Parent and Owner from the
Secretary of State of the State of California bearing a date within 20 calendar
days of the Closing Date;
(k) Good Standing certificate from the California Franchise Tax Board
for Seller, bearing the date within 20 calendar days of the Closing Date;
(l) Good standing certificate from the California Franchise Tax Board
Owner, bearing the date within 20 calendar days of the Closing Date;
(m) FIRPTA Certificate in the form attached as Exhibit M hereto;
(n) Proof of proper publication of Bulk Sales Notice;
(o) UCC releases for inventory and equipment being sold;
(p) Secretary's and Incumbency Certificate of I-PAC Precision
Machining, Inc. attaching (i) Board of Directors resolutions of Seller approving
the Asset Purchase Agreement and all agreements or instruments referred to
therein; and (ii) Board of Directors resolutions of Parent and Owner approving
the transaction;
(q) Copy of notice of termination of employees pursuant to California
Unemployment Insurance Code Section 1089;
(r) An opinion of counsel to Seller, Parent and Owner, dated the
Closing Date, substantially in the form of Exhibit N hereto; and
(s) The EBITDA Note.
6.3 Purchaser's Deliveries at Closing.
At the Closing, Purchaser shall deliver to Seller the following signed
documents:
(a) The Inventory Note;
(b) The Equipment Note;
(c) The Security Agreement;
(d) The Assumption Agreement;
(e) The Celtic Assignment;
(f) Assignment of Scheduled Contacts;
(g) Left intentionally blank;
(h) Landlord's Consent and Waiver;
(i) Left intentionally blank;
(j) Receivables Sideletter;
(k) Employment Agreement for ▇▇▇▇▇▇▇ ▇▇▇▇▇;
(l) Employment Agreement for ▇▇▇▇▇▇▇ ▇▇▇▇▇▇;
(m) Good standing certificate issued within 20 days of the Closing Date
by the Secretary of State of the State of California;
(n) Opinion of counsel for Purchaser, dated the Closing Date,
substantially in the form of Exhibit O hereto;
(o) Secretary's and Incumbency Certificate of Purchaser attaching Board
of Directors resolutions of Purchaser approving the transaction; and
(p) The EBITDA Note.
7. SURVIVAL AND INDEMNIFICATION.
7.1 Survival.
(a) The representations and warranties of Seller, Parent and Owner set
forth herein and in the Operative Documents shall survive the Closing and the
consummation of the Transactions and shall continue in full force and effect for
the periods specified below ("Survival Period"):
(i) the representations and warranties of the Seller, Parent and Owner
contained in Sections 3.2, 3.3, 3.5 and 3.7(a) first sentence, shall survive
indefinitely;
(ii) representations and warranties contained in Sections 3.9, 3.12 and
3.14 shall survive until the expiration of any applicable statute or period of
limitations, and any extensions thereof; and
(iii) all other representations and warranties shall survive for two years.
(b) The covenants of Seller, Parent and Owner set forth herein and in
the Operative Documents shall survive the Closing and consummation of the
Transactions for stated term of the respective covenant or, if no term is
stated, four years.
(c) Anything to the contrary notwithstanding, the Survival Period shall
be extended automatically to include any time period necessary to resolve a
claim for indemnification which was made before the expiration of the Survival
Period but not resolved prior to its expiration, and any such extension shall
apply only as to the claims asserted and not so resolved within the Survival
Period. Liability for any such item shall continue until such claim shall have
been finally settled, decided or adjudicated.
7.2 Indemnity by Seller.
Seller, Parent and Owner shall indemnify and hold Purchaser and its
Affiliates (the "Purchaser Indemnitees"), harmless from and against:
(a) any Damages suffered or incurred arising out or as a result of any
Liability of Seller, Parent and Owner, or any Affiliate of Seller, Parent and
Owner, arising on or prior to the Closing Date (except for the Assumed
Obligations);
(b) any Damages suffered or incurred because of the breach or inaccuracy of
any representation or warranty made by Seller or the Owner in this Agreement or
the Operative Documents;
(c) any Damages based on, arising out of, or resulting from the breach or
failure or alleged breach or failure by Seller, Parent or Owner to perform any
agreement, covenant or other obligation contained in this Agreement or in any
Operative Document;
(d) any Damages based on, arising out of, or resulting from any employment
relationship, or for any salary or other compensation or benefits attributable
to service or employment with Seller or any of its Affiliates (including any
Employee Benefit Plan, all Liabilities to any Person under the Occupational
Safety and Health Act ("OSHA"), all Liabilities under ERISA or the Code, and all
Liabilities to any Governmental Body), attributable in each case arising or
resulting from facts or circumstances existing on or prior to the Closing Date;
(e) any Damages based on, arising out of, or resulting from the failure or
alleged failure of Seller, Parent and Owner, or any Affiliate of Seller, Parent
and Owner, to comply with Applicable Law, including any failure or alleged
failure to comply with, or failure or alleged failure to take any remedial
action arising under, any Environmental Law, in each case relating to the
ownership, use and/or operation of the Assets and the operation of the Business
on or prior to the date of Closing;
(f) any Damages based on, arising out of, or resulting from the failure or
alleged failure of Seller, Parent and Owner or any Affiliate of Seller, Parent
and Owner, to pay or withhold any Tax or for failing or allegedly failing to
accurately complete any return due with regard thereto, in each case relating to
the ownership, use and/or operation of the Assets and the conduct of the
Business on or prior to the Closing;
(g) any Damages based on, arising out of, or resulting from the failure of
Seller, Parent and Owner to pay when due any Tax triggered by, based on, arising
out of, or attributable to the Transactions contemplated or effected hereunder;
(h) any Damages based on, arising out of, or resulting from the Excluded
Assets; and
(i) the Transaction Expenses incurred by Seller, Parent and Owner.
Notwithstanding anything to the contrary in this Section 7.2, Seller, Parent and
Owner shall have no Liability to the Purchaser Indemnitees for breaches of
representations or warranties unless and solely to the extent that the aggregate
amount of Purchaser Indemnitee Damages resulting therefrom exceeds $25,000 and,
after such $25,000 threshold is met, Seller, Parent and Owner shall have
Liability to the Purchaser Indemnitees for all Purchaser Indemnitee Damages
resulting from such breaches; provided, further, that such limitation shall not
apply to Purchaser Indemnitee Damages for breaches of the representations and
warranties contained in Sections 3.2, 3.3, 3.5, 3.7(a), 3.7(b), 3.11 and 3.14;
or breaches of representations and warranties constituting fraud or intentional
misrepresentation; and provided, further, such limitations shall not be
interpreted to expand the amount or categories of Assumed Obligations.
7.3 Indemnity by Purchaser.
Purchaser shall indemnify and hold Seller, Parent or Owner and their
respective Affiliates and the officers, directors, agents, attorneys and
accountants of each of them (the "Seller Indemnitees"), harmless from and
against:
(a) any Damages suffered or incurred arising out or as a result of any
Liability of Purchaser, or any Affiliate of Purchaser, arising after the Closing
Date;
(b) any Damages suffered or incurred because of the breach or inaccuracy of
any representation or warranty made by Purchaser in this Agreement or the
Operative Documents; and
(c) any Damages based on, arising out of, or resulting from the breach or
failure or alleged breach of failure by Purchaser to perform any agreement,
covenant or other obligation contained in Agreement or in any Operative
Document, including the Assumed Obligations.
7.4 Defense of Claims.
If a claim for indemnity is to be made by a Purchaser Indemnitee or Seller
Indemnitee (an "Indemnified Person") against Seller or Purchaser, as the case
may be (the "Indemnifying Person"), the Indemnified Person shall give written
notice to the Indemnifying Person as soon as practical after the Indemnified
Person becomes aware of any fact, condition or event which may give rise to a
claim for which indemnification may be sought under this Article 7. If any
lawsuit or enforcement action is filed against an Indemnified Person, written
notice thereof shall be given to the Indemnifying Person as promptly as
practicable (and in any event within 15 days after the service of the citation
or summons). After such notice, if the Indemnifying Person acknowledges in
writing to the Indemnified Person that the Indemnifying Person shall be
obligated under the terms of its indemnity hereunder in connection with such
lawsuit or action, then the Indemnifying Person shall be entitled, if it so
elects to take control of the defense and investigation of such lawsuit or
action and to employ and engage attorneys of its own choice to handle and defend
the same, at the Indemnifying Person's cost, risk and expense, provided that the
Indemnifying Person and its counsel shall proceed with diligence and in good
faith with respect thereto. The Indemnified Person shall cooperate in all
reasonable respects with the Indemnifying Person and such attorneys in the
investigation, trial and defenses of such lawsuit or action and any appeal
arising therefrom; provided, however, that the Indemnified Person may, at its
own cost, participate in the investigation, trial and defense of such lawsuit or
action or any appeal arising therefrom. If the Indemnifying Person has
acknowledged to the Indemnified Person its obligation to indemnify hereunder,
the Indemnified Person shall not settle such lawsuit or enforcement action
without the prior written consent of the Indemnifying Person, which consent
shall not be unreasonably withheld, and, if the Indemnifying Person has not so
acknowledged its obligation, the Indemnified Person shall not settle such
lawsuit or enforcement action without 20 days prior notice to the Indemnifying
Person. Notwithstanding anything to the contrary contained in this Section 7.4,
if the Indemnifying Person fails to respond to any service of citation or notice
contemplated herein, or to prosecute the defense of such action or lawsuit in a
diligent manner, the Indemnified Person shall be entitled to notify the
Indemnifying Person in writing and take over the defense in such matter and to
settle the action or lawsuit following 20 days prior notice to the Indemnifying
Person both at the expense of the Indemnifying Person.
7.5 No Third Party Beneficiaries.
The foregoing indemnification is given solely for the purpose of protecting
the Purchaser Indemnitees and Seller Indemnitees and lenders of the Purchaser to
whom Purchaser assigns its rights hereunder, and shall not be deemed extended
to, or interpreted in a manner to confer any benefit, right or cause of action
upon, any other Person.
8. GENERAL PROVISIONS AND OTHER AGREEMENTS.
8.1 Notices.
All notices and other communications hereunder shall be in writing and
shall be deemed given if and when delivered personally or transmitted by telex,
facsimile (receipt confirmed) or telegram, mailed by registered or certified
mail (return receipt requested) or sent by a recognized next business day
courier to the following persons at the following addresses (or at such other
address for a party as shall be specified by like notice):
If to Purchaser: ▇▇▇▇▇ DIVERSIFIED TECHNOLOGIES, INC.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
If to Seller or Parent: I-PAC Precision Machining, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
If to Owner: National Manufacturing Technologies, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Scripps
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
8.2 Fees and Expenses.
Seller, Parent, Owner and Purchaser shall each pay all of their respective
fees, costs and expenses (including those of accountants, appraisers and
attorneys) incurred in connection with or related to the preparation,
negotiation, execution, delivery, satisfaction, compliance and consummation of
this Agreement and the Transactions contemplated hereby.
8.3 Interpretation.
The headings contained in this Agreement are for reference purposes only
and shall not affect the meaning or interpretation of this Agreement. Terms
such as "herein," "hereof," "hereinafter" refer to this Agreement as a whole and
not to the particular sentence or paragraph where they appear, unless the
context otherwise requires. Terms used in the plural include the singular, and
vice versa, unless the context otherwise requires. This Agreement and the
Operative Documents have been drafted by all of the parties to this Agreement
and should not be construed against any of the parties hereto.
8.4 Parties in Interest.
Nothing in this Agreement, whether express or implied, is intended to
confer any rights or remedies under or by reason of this Agreement on any
Persons other than Purchaser, Seller and Owner and their respective permitted
successors and assigns, nor is anything in this Agreement intended to relieve or
discharge the obligation or liability of any third Person to any party to this
Agreement, nor shall any provisions give any third Person any right or
subrogation against any party to this Agreement.
8.5 Governing Law; Venue.
This Agreement shall be construed and enforced in accordance with the
substantive laws of the State of California without reference to the conflict of
law provisions. Venue for any action shall lie solely in San Diego County,
California.
8.6 Incorporation by Reference.
The Disclosure Schedules and Exhibits hereto shall be deemed incorporated
by reference in this Agreement.
8.7 Entire Agreement; Amendment; Waiver.
This Agreement, the Disclosure Schedules and the Operative Documents
constitute the entire Agreement between Seller, Owner and Purchaser pertaining
to the subject matter contained herein and therein and supersedes all prior
agreements, representations, and all understandings of the parties. No
supplement, modification or amendment of this Agreement or any such other
instruments shall be binding unless expressed as such and executed in writing by
Purchaser, Seller and Owner. No waiver of any of the provisions of this
Agreement or any such other instruments shall be deemed to be or shall
constitute a waiver of any other provisions hereof or thereof, whether or not
similar, nor shall any such waiver constitute a continuing waiver. No waiver
shall be binding unless expressed as such in a document executed by the party
making the waiver.
8.8 Assignment; Binding Effect.
This Agreement may not be assigned by operation of law or otherwise, except
that the rights of the Purchaser hereunder may be assigned to lenders of
Purchaser, if any. This Agreement shall be binding on and shall inure to the
benefit of the successors and assigns of the parties hereto, but nothing
contained in this paragraph shall be construed as a consent to any assignment of
this Agreement by either Purchaser, Seller or Owner unless otherwise set out
herein.
8.9 Severability.
If any provision of this Agreement, including any phrase, sentence, clause,
section or subsection, is legally inoperative or unenforceable for any reason,
such circumstances shall not have the effect of rendering any other provision or
provisions herein contained invalid, inoperative, or unenforceable to any extent
whatsoever.
8.10 Counterparts.
This Agreement may be executed by facsimile in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
8.11 Dispute Resolution.
(a) Negotiation. The parties will attempt in good faith to resolve
through negotiation any dispute, claim or controversy arising out of or relating
to this Agreement. Either party may initiate negotiations by providing written
notice in letter form to the other party, setting forth the subject of the
dispute and the relief requested. The recipient of such notice shall respond
within five days with a written statement of its position on, and recommend
solution to, the dispute. If the dispute is not resolved by this exchange of
correspondence, then representatives of each party with full settlement
authority will meet at a mutually agreeable time and place within ten days of
the date of the initial notice in order to exchange relevant information and
perspectives, and to attempt to resolve the dispute. If the dispute is not
resolved by these negotiations, the parties will consider and decide whether the
dispute should be submitted to the American Arbitration Association ("AAA"), or
its successor, for mediation or arbitration.
(b) Arbitration. The parties agree that any and all disputes, claims or
controversies arising out of or relating to this Agreement that are not resolved
by their mutual agreement shall be submitted to final and binding arbitration
before the AAA, or its successor, pursuant to the United States Arbitration Act,
9 U.S.C. Sec. 1 et seq. Either party may commence the arbitration process
called for in this agreement by filing a written demand for arbitration with the
AAA, with a copy to the other party. The arbitration will be conducted in
accordance with the provisions of the AAA Commercial Arbitration Rules in effect
at the time of filing of the demand for arbitration. The parties will cooperate
with the AAA and with one another in selecting an arbitrator from the AAA's
panel of neutrals, and in scheduling the arbitration proceedings. The parties
covenant that they will participate in the arbitration in good faith, and that
they will share equally in its costs. The provisions of this section, and any
award made pursuant to this section, may be enforced by any court of competent
jurisdiction, and the party seeking enforcement shall be entitled to an award of
all costs, fees and expenses, including attorneys' fees, to be paid by the party
against whom enforcement is ordered.
(c) Waiver of Right to Litigation in Court. NOTICE: By initialing in the
space below you are agreeing to have all disputes, claims or controversies
arising out of or relating to this Agreement decided by neutral arbitration, and
you are giving up any rights you might possess to have those matters litigated
in a court or jury trial. By initialing in the space below you are giving up
your judicial rights to discovery and appeal except to the extent that they are
specifically provided for under this Agreement. If you refuse to submit to
arbitration after agreeing to this provision, you may be compelled to arbitrate
under federal or state law. Your agreement to this arbitration provision is
voluntary.
We have read and understand the foregoing and agree to submission of all
disputes, claims or controversies arising out of or relating to this Agreement
to neutral arbitration in accordance with this Agreement.
Purchaser Seller
Owner Parent
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers.
SELLER: OWNER:
I-PAC PRECISION MACHINING, INC. NATIONAL MANUFACTURING TECHNOLOGIES, INC.
By By
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Chief Executive Officer Title: Chief Executive Officer
PARENT: PURCHASER:
I-PAC MANUFACTURING, INC. ▇▇▇▇▇ DIVERSIFIED TECHNOLOGIES, INC.
By By
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Chief Executive Officer Title: Chief Executive Officer
463089.10
76087/10777
LIST OF EXHIBITS
Exhibit A - Left Intentionally Blank
Exhibit B - Form of Assumption Agreement
Exhibit C - Form of ▇▇▇▇ of Sale
Exhibit D - Employment Agreement of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Exhibit E - Employment Agreement of ▇▇▇▇▇▇▇ ▇▇▇▇▇
Exhibit F - Form of Equipment Note
Exhibit G - Form of Inventory Note
Exhibit H - Form of Security Agreement
Exhibit I - Form of Assignment of the Scheduled Contracts
Exhibit J - Left Intentionally Blank
Exhibit K - Left intentionally blank
Exhibit L - Form of Receivables Sideletter
Exhibit M - Form of FIRPTA Certificate
Exhibit N - Form of Opinion of counsel to Seller, Parent and Owner
Exhibit O - Form of Opinion of counsel for Purchaser
Exhibit P - Form of EBITDA Note
LIST OF DISCLOSURE SCHEDULES
Schedule 1.1(a) - Continuing Employees
Schedule 2.1(a) - Inventory
Schedule 2.1(b) - Equipment
Schedule 2.1(c) - Computer Equipment/Software
Schedule 2.1(d) - Scheduled Contracts
Schedule 2.1(e) - Backlog Orders
Schedule 2.1(i) - Permits
Schedule 2.5(a)(iii)- Equipment Leases Assumed
Schedule 3.3 - Consents and Approvals
Schedule 3.7(b) - Deferred Maintenance
Schedule 3.7(c) - Hazardous Materials
Schedule 3.13 - Real Property Leases
Schedule 3.14 - Waste Haulers, Waste Disposal Sites and Dump Sites
Schedule 3.17(b) - Contracts
Schedule 3.21 - Bulk Sale Claims
TABLE OF CONTENTS
Page
ARTICLE 1. DEFINITIONS
Section 1.1 General Definitions
ARTICLE 2. SALE OF ASSETS; ASSUMPTION OF CERTAIN LIABILITIES
Section 2.1 Agreement to Purchase and Sell
Section 2.2 Excluded Assets
Section 2.3 Purchase Price
Section 2.4 Allocation of Purchase Price
Section 2.5 Assumption of Liabilities
Section 2.6 Excluded Liabilities
Section 2.7 Further Assurances
ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF SELLER
Section 3.1 Organization; Qualification
Section 3.2 Authority Relative to this Agreement
Section 3.3 Consents and Approvals
Section 3.4 Authority; Licenses
Section 3.5 No Violations
Section 3.6 Compliance with Law
Section 3.7 Title to and Condition of Assets and Property
Section 3.8 Investigation or Litigation
Section 3.9 Employee Benefits
Section 3.10 Labor and Employee Matters
Section 3.11 Taxes
Section 3.12 Inventories
Section 3.13 Real Property Leases
Section 3.14 Environmental Matters
Section 3.15 Left intentionally blank
Section 3.16 Product and Service Warranties
Section 3.17 Contracts
Section 3.18 Left intentionally blank
Section 3.19 Customers and Suppliers
Section 3.20 No Brokers
Section 3.21 Bulk Sales Notice
Section 3.22 Disclosure
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF PURCHASER
Section 4.1 Organization
Section 4.2 Authority Relative to this Agreement
Section 4.3 Consents and Approvals
Section 4.4 No Brokers
ARTICLE 5. ADDITIONAL AGREEMENTS
Section 5.1 Further Assurances
Section 5.2 Public Announcements
Section 5.3 Post Closing Information
Section 5.4 Left intentionally blank
Section 5.5 Employees
Section 5.6 Mail, Etc
Section 5.7 Covenant Not To Compete
Section 5.8 Cooperation
Section 5.9 Prorations of Property Taxes
Section 5.10 Product Repairs and Reworks
ARTICLE 6. CLOSING AND TERMINATION
Section 6.1 Closing and Closing Date
Section 6.2 Seller's Deliveries at Closing
Section 6.3 Purchaser's Deliveries at Closing
ARTICLE 7. SURVIVAL AND INDEMNIFICATION
Section 7.1 Survival
Section 7.2 Indemnity by Seller
Section 7.3 Indemnity by Purchaser
Section 7.4 Defense of Claims
Section 7.5 No Third Party Beneficiaries
ARTICLE 8. GENERAL PROVISIONS AND OTHER AGREEMENTS
Section 8.1 Notices
Section 8.2 Fees and Expenses
Section 8.3 Interpretation
Section 8.4 Parties in Interest
Section 8.5 Governing Law; Venue
Section 8.6 Incorporation by Reference
Section 8.7 Entire Agreement; Amendment; Waiver
Section 8.8 Assignment; Binding Effect
Section 8.9 Severability
Section 8.10 Counterparts
Section 8.11 Dispute Resolution