Exhibit 2.5
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ASSETS FOR CASH
PURCHASE AGREEMENT
ACQUISITION OF THE ASSETS OF
PACIFIC FOAM TECHNOLOGIES, INC.
BY UFP TECHNOLOGIES, INC.
DATED: November 30, 1998
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ASSETS FOR CASH PURCHASE AGREEMENT
TABLE OF CONTENTS
PAGE
ARTICLE 1. PURCHASE AND SALE OF ASSETS............................................................................1
1.1 Sale of Assets.............................................................................................1
1.2 Assumption of Liabilities..................................................................................3
1.3 Purchase Price and Payment................................................................................4
[1.4 INTENTIONALLY OMITTED]....................................................................................5
1.5 Time and Place of Closing..................................................................................5
1.6 Transfer of Subject Assets.................................................................................5
1.7 Change of Name.............................................................................................5
1.8 Further Assurances.........................................................................................5
1.9 Allocation of Purchase Price...............................................................................6
1.10 Right to Hire Employees...................................................................................6
ARTICLE 2. REPRESENTATIONS AND WARRANTIES OF SELLER AND STOCKHOLDER...............................................6
2.1 Organization and Qualification of Seller...................................................................6
2.2 Capitalization of Seller...................................................................................6
2.3 Subsidiaries...............................................................................................6
2.4 Authorization of Transaction...............................................................................7
2.5 Present Compliance with Obligations and Laws...............................................................7
2.6 No Conflict of Transaction With Obligations and Laws.......................................................7
2.7 Financial Statements.......................................................................................7
2.8 Absence of Undisclosed Liabilities.........................................................................8
2.9 Absence of Certain Changes.................................................................................8
2.10 Conduct of Business......................................................................................10
2.11 Payment of Taxes.........................................................................................10
2.12 Title to Properties; Liens; Condition of Properties......................................................10
2.13 Collectibility of Receivables............................................................................11
2.14 Inventories..............................................................................................11
2.15 Intellectual Property Rights.............................................................................12
2.16 Contracts and Commitments................................................................................13
2.17 Labor and Employee Relations.............................................................................14
2.18 ERISA and Employee ERISA Benefits........................................................................15
2.19 Environmental Matters....................................................................................17
2.20 Governmental Authorizations..............................................................................19
2.21 Warranty or Other Claims.................................................................................20
2.22 Litigation...............................................................................................20
2.23 Insurance................................................................................................20
2.24 Finder's Fee.............................................................................................21
2.25 Transactions with Interested Persons.....................................................................21
2.26 Absence of Sensitive Payments............................................................................21
2.27 Copies of Documents......................................................................................22
2.28 Disclosure of Material Information.......................................................................22
ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF BUYER...............................................................22
3.1 Organization of Buyer.....................................................................................22
3.2 Authorization of Transaction..............................................................................22
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3.3 No Conflict of Transaction with Obligations and Laws......................................................22
3.4 Finder's Fee..............................................................................................22
ARTICLE 4. CONDITIONS TO OBLIGATIONS OF BUYER....................................................................23
4.1 Net Worth.................................................................................................23
4.2 FIRPTA Certificate........................................................................................23
4.3 Escrow Agreement..........................................................................................23
4.4 Release of Liens, Security Interests and Other Encumbrances..............................................23
4.5 Third Party Consents......................................................................................23
4.6 Opinion of Seller's Counsel...............................................................................23
4.7 Noncompetition Agreement..................................................................................23
ARTICLE 5. CONDITIONS TO OBLIGATION OF SELLER....................................................................24
5.1 Purchase Price............................................................................................24
5.2 Escrow Agreement..........................................................................................24
5.3 Consent of Landlord.......................................................................................24
ARTICLE 6. INDEMNIFICATION......................................................................................24
6.1 Definitions...............................................................................................24
6.2 Indemnification by Seller.................................................................................25
6.3 Indemnification by Buyer..................................................................................26
6.4 Defense of Third Party Actions............................................................................28
6.5 Miscellaneous.............................................................................................28
6.6 Payment of Indemnification................................................................................29
6.7 Exclusive Remedy..........................................................................................29
ARTICLE 7. MISCELLANEOUS.........................................................................................29
7.1 Fees and Expenses.........................................................................................29
7.2 Bulk Sales Law............................................................................................29
7.3 Notices...................................................................................................30
7.4 Confidentiality...........................................................................................31
7.5 Entire Agreement..........................................................................................31
7.6 Severability..............................................................................................31
7.7 Assignability.............................................................................................31
7.8 Amendment.................................................................................................31
7.9 Governing Law.............................................................................................31
7.10 Counterparts.............................................................................................31
7.11 Effect of Table of Contents and Headings.................................................................31
SIGNATURES.......................................................................................................32
ASSETS FOR CASH PURCHASE AGREEMENT...............................................................................33
LIST OF SCHEDULES AND EXHIBITS................................................................................33
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ASSETS FOR CASH PURCHASE AGREEMENT
AGREEMENT entered into as of the 30th day of November, 1998, among UFP
Technologies, Inc., a Delaware corporation, with its principal place of business
in Georgetown, Massachusetts ("Buyer"), and Pacific Foam Technologies, Inc., a
California corporation, with its principal place of business in Ventura,
California ("Seller") and ▇▇▇▇▇ ▇▇▇▇▇, the sole stockholder of Seller
("Stockholder").
RECITALS:
WHEREAS, Buyer wishes to acquire substantially all of the properties
and assets of Seller, and Seller wishes to convey such assets to Buyer, subject
to the terms and conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual agreements contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, in order to consummate said sale,
the parties hereto agree as follows:
ARTICLE 1. PURCHASE AND SALE OF ASSETS.
1.1 SALE OF ASSETS.
(a) Subject to the provisions of this Agreement and except as
expressly excluded in paragraph (b) below, Seller agrees to sell and Buyer
agrees to purchase, at the Closing (as defined in Section 1.5 hereof), all of
the properties, assets and business of Seller, of every kind and description,
tangible and intangible, real, personal or mixed, and wherever located,
including without limitation:
(i) all assets shown or reflected on the Base Balance Sheet (as
defined in Section 2.7 hereof);
(ii) all cash and cash equivalents;
(iii) all accounts receivable, notes receivable, trade
accounts, unbilled invoices, contract receivables and other receivables
(collectively, "Receivables");
(iv) all prepaid expenses and deposits;
(v) all inventory, including all raw materials, finished goods,
and all work in process;
(vi) all open customer orders ("Customer Orders");
(vii) all furniture, fixtures, equipment, whether owned or
leased, including, by way of description and not limitation, the machinery and
equipment set forth on SCHEDULE 2.11(a) hereto;
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(viii) all business records and files;
(ix) all good will including, without limitation, all general
intangibles, patents, patent rights, patent licenses, other licenses,
trademarks, service marks, trade names, other intellectual property, customer
lists, brochures and marketing literature;
(x) the exclusive right to use the name of Seller and any
derivations thereof (including the name "Pacific Foam Technologies") as all or
part of a trade or corporate name;
(xi) all documents, instruments and chattel paper;
(xii) all claims and causes of action; and
(xiii) all unexpired contracts and contract rights.
The assets, property and business of Seller to be sold to and purchased by Buyer
under this Agreement are hereinafter sometimes referred to as the "Subject
Assets."
(b) Notwithstanding the foregoing, the following assets shall be
excluded from the Subject Assets:
(i) assets and property disposed of since the date of the Base
Balance Sheet in the ordinary course of business and such other assets as have
been disposed of pursuant to this Agreement;
(ii) Seller's corporate franchise, stock record books,
corporate record books containing minutes of meetings of directors and
stockholders, original tax returns and financial statements, and such other
records as have to do exclusively with Seller's organization or stock
capitalization;
(iii) the Ford Explorer and the Ford Ranger automobiles
reflected on the books of Seller, subject to any corresponding debt or lease
obligation;
(iv) product development costs net of depreciation and other
assets which include incorporation costs, non-competition agreements and PFT
Ranch, categorized on the Base Balance Sheet as "Other Assets", which shall not
in the aggregate exceed $178,946;
(v) the savings account maintained by Seller at City National
Bank with a balance not to exceed $1,336.23 as reflected on the Base Balance
Sheet, plus accruing interest thereon;
(vi) the City National Bank C.D. valued at $100,000 on
September 30, 1998, plus accruing interest thereon;
(vii) the account maintained by Seller at Schwab #6870-8562,
valued at $103,600, as of November 9, 1998, plus accruing interest thereon;
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(viii) the loan to shareholder reflected on the Base Balance
Sheet in an amount not to exceed $388,392 together with any accruing interest
thereon; and
(ix) all employee benefit plans and the assets held by Seller
thereunder.
1.2 ASSUMPTION OF LIABILITIES.
(a) Except as otherwise provided herein, Buyer agrees to assume and
perform all of Seller's liabilities reflected on the Base Balance Sheet, as such
liabilities may fluctuate up or down in the ordinary course of Seller's business
prior to the Closing and liabilities clearly disclosed on the Schedules hereto,
provided that Seller does not assume, and Seller shall retain, any income tax
liabilities of Seller whether or not reflected on the Base Balance Sheet. Buyer
further agrees to assume and perform the future obligations of Seller (i) to
fulfill the Customer Orders and (ii) under any contracts assigned to Buyer
hereunder (each an "Assigned Contract"); provided, however, that Buyer assumes
no liability under any Customer Order or Assigned Contract arising out of or
relating to acts or omission of Seller, the conduct of the business or
operations of Seller prior to the Closing, or the failure to obtain any consent
necessary to transfer any Customer Order or Assigned Contract to Buyer in
accordance herewith. The liabilities assumed by Buyer under this paragraph (a)
are hereinafter referred to as the "Assumed Liabilities."
(b) Except to the extent expressly assumed pursuant to paragraph
(a) above, Buyer does not assume and shall not be liable for any debt,
obligation, responsibility or liability of the Seller or any Affiliate (as
defined below) of the Seller, or any claim against any of the foregoing, whether
known or unknown, contingent or absolute, or otherwise, all of which shall be
retained by Seller (the "Retained Liabilities"). Without limiting the foregoing
sentence, Buyer shall have NO responsibility with respect to the following,
whether or not disclosed in the Base Balance Sheet or a Schedule thereto:
(i) liabilities and obligations related to or arising from
transactions with any officer, director or stockholder of Seller or any person
or organization controlled by, controlling, or under common control with any of
them (an "Affiliate");
(ii) liabilities and obligations for taxes of any kind,
including taxes related to or arising from the transfers contemplated by the
Agreement or hereby (except for (a) taxes which have not yet accrued or
otherwise become due and (b) to the extent provided in Section 7.1 hereof);
(iii) liabilities and obligations for damage or injury to
person or property or resulting from or arising out of environmental claims
based upon events occurring prior to the date hereof;
(iv) liabilities and obligations to employees of Seller,
whether for accident, disability, or workers compensation insurance or benefits,
benefits under employee benefit plans, including without limitation, under
COBRA, back pay, accrued vacation, or obligations related to or resulting from
severance of employment by Seller;
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(v) worker's liens on any of the Subject Assets;
(vi) liabilities incurred by Seller in connection with this
Agreement and the transactions provided for herein, including counsel and
accountant's fees, transfer and other taxes (except to the extent provided in
Section 7.1 hereof), and expenses pertaining to its liquidation or the
performance by Seller of its obligations thereunder;
(vii) liabilities and obligations to creditors not appearing on
the Base Balance Sheet except liabilities and obligations arising after the date
of the Base Balance Sheet incurred in the ordinary course of business;
(viii) liabilities arising out of the sale to or use by
customers or others of any product manufactured, distributed or sold by Seller;
(ix) liabilities of Seller to its dissenting stockholders, if
any; and
(x) liabilities of Seller with respect to any options,
warrants, agreements or convertible or other rights to acquire any shares of its
capital stock of any class; and
(c) The assumption of Assumed Liabilities by Buyer hereunder shall
be treated as independent of Buyer's existing business and shall not enlarge any
rights of third parties under contracts or arrangements with Buyer or Seller or
any of their respective subsidiaries. Nothing herein shall prevent Buyer from
contesting in good faith any of the Assumed Liabilities.
1.3 PURCHASE PRICE AND PAYMENT. In consideration of the sale by Seller
to Buyer of the Subject Assets, Buyer agrees that it will pay to Seller Two
Million Two Hundred Fifty Thousand Dollars ($2,250,000) (the "Purchase Price").
The Purchase Price shall be paid by wire transfer of immediately available funds
in accordance with wire transfer instructions provided to Buyer at least five
(5) business days prior to the Closing Date, the following amounts on the
Closing Date as follows:
(i) $2,150,000 to Seller; and
(ii) $100,000 (the "Escrow Fund") to State Street Bank and
Trust Company, N.A., or such other mutually agreeable institution, as escrow
agent (the "Escrow Agent") under and subject to the terms of the escrow
agreement to be entered into pursuant to Section 4.3 hereof.
1.4 [INTENTIONALLY OMITTED]
1.5 TIME AND PLACE OF CLOSING. The closing of the purchase and sale
contemplated by this Agreement (herein called the "Closing") shall occur on
November 30, 1998. The date on which the Closing occurs is herein referred to as
the "Closing Date".
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1.6 TRANSFER OF SUBJECT ASSETS. At the Closing, Seller shall deliver or
cause to be delivered to Buyer good and sufficient instruments of transfer,
including bills of sale, assignments and other instruments, in form and
substance satisfactory to counsel to Buyer transferring to Buyer good title to
all the Subject Assets free and clear of all Encumbrances (as defined in Section
2.6 hereof) other than Encumbrances disclosed on a Schedule hereto which Buyer
agrees may remain in place at the Closing and shall deliver possession of the
Subject Assets free and clear of all adverse claims to possession. Seller shall
also deliver or cause to be delivered to Buyer all of the Assigned Contracts
with such assignments thereof and consents to assignments as are necessary to
assure Buyer the full benefit of the same and all of Seller's business records,
copies of tax returns for all years prior to the Closing, books and other data
relating to the Subject Assets, and the business and operations represented
thereby (except corporate records excluded under Section 1.1(b)) and Seller
shall take all requisite steps to put Buyer in actual possession and operating
control of the assets and business of Seller.
1.7 CHANGE OF NAME. Immediately following the Closing, Seller shall
file with the California Secretary of State an amendment to its Charter (as
defined in Section 2.1 hereof) changing its name to a name which does not
include the words "Pacific", "Foam" or "Technologies" or any derivation or
permutation thereof or any name which is confusingly similar. In connection with
the Closing, Seller shall deliver to the Buyer a consent in form satisfactory to
the Secretary of State of the State of California consenting to the use of the
name "Pacific Foam Technologies" by Buyer or any affiliate thereof. Immediately
following the Closing, Seller shall make such other filings as may be necessary
to reflect a change of its name with any other state or local filing agencies
and shall immediately cease use of such name.
1.8 FURTHER ASSURANCES. Seller from time to time after the Closing at
the request of Buyer and without further consideration shall execute and deliver
further instruments of transfer and assignment (in addition to those delivered
under Section 1.7) and take such other action as Buyer may reasonably require to
more effectively transfer and assign to, and vest in, Buyer each of the Subject
Assets. Seller shall cooperate with Buyer to permit Buyer to enjoy Seller's
rating and benefits under the ▇▇▇▇▇▇▇'▇ compensation laws and unemployment
compensation laws of applicable jurisdictions, to the extent permitted by such
laws.
1.9 ALLOCATION OF PURCHASE PRICE. The Purchase Price payable by Buyer
for the Subject Assets pursuant to Sections 1.3 and 1.4 and the face amount of
the Assumed Liabilities assumed pursuant to Section 1.2 shall represent payment
for the Subject Assets at the prices shown on a memorandum to be prepared by
Buyer, subject to the reasonable approval of Seller, initialed by the parties
and delivered by Buyer at the Closing or as soon thereafter as required
information is made available. The prices reflected in said memorandum shall
represent the fair market values of the Subject Assets at the Closing, to the
knowledge and belief of Buyer, and the parties agree that they will not take a
position inconsistent with such allocation for Federal income tax purposes.
1.10 RIGHT TO HIRE EMPLOYEES. Seller shall make available to Buyer all
of Seller's employees for hire at or after the Closing. Although Buyer shall
have no obligation to hire any of such employees, it is currently the intention
of Buyer to offer employment to such employees.
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ARTICLE 2. REPRESENTATIONS AND WARRANTIES OF SELLER AND STOCKHOLDER.
Each of Seller and stockholder, jointly and severally, hereby
represents and warrants to Buyer as follows:
2.1 ORGANIZATION AND QUALIFICATION OF SELLER. Seller is a corporation
duly organized, validly existing and in good standing under the laws of the
State of California, with full power and authority to own or lease its
properties and to conduct its business in the manner and in the places where
such properties are owned or leased or such business is conducted by it. The
copies of Seller's Certificate of Incorporation, as amended to date ("Charter"),
certified by the Secretary of State of the State of California, and of Seller's
bylaws as amended to date, certified by Seller's Secretary, are attached as
SCHEDULE 2.1 hereto and are complete and correct. Seller is duly qualified to do
business as a foreign corporation in each of the jurisdictions listed on said
SCHEDULE 2.1 and is not required to be qualified in any other jurisdiction.
2.2 CAPITALIZATION OF SELLER. The authorized capital stock of Seller
consists of ______ shares of Common Stock, no par value, of which ______ are
validly issued and outstanding, fully paid and nonassessable, and were issued in
compliance with Federal and applicable state securities laws, all of which is
owned beneficially and of record by the Stockholder.
2.3 SUBSIDIARIES. Seller does not own, directly or indirectly, any
capital stock of any corporation and has no subsidiaries. Except as set forth on
SCHEDULE 2.3, the Seller does not own any securities issued by any other
business organization or governmental authority. Seller is not a partner or
participant in any joint venture or partnership of any kind.
2.4 AUTHORIZATION OF TRANSACTION. Seller has the full power and
authority to execute, deliver and perform this Agreement and the Escrow
Agreement and to carry out the transactions contemplated hereby and thereby. All
necessary action, corporate or otherwise, has been taken by Seller to authorize
the execution, delivery and performance of this Agreement and the Escrow
Agreement, and the transactions contemplated hereby and thereby, and the
Agreement is, and the Escrow Agreement will be when executed, duly executed and
delivered and the legal, valid and binding obligation of each of Seller and
stockholder, enforceable against Seller and Stockholder in accordance with its
terms.
2.5 PRESENT COMPLIANCE WITH OBLIGATIONS AND LAWS. Except as set forth
on SCHEDULE 2.5, Seller is not: (a) in violation of its Charter or bylaws; (b)
in default in the performance of or breach of (with or without the passage of
time or the giving of notice) any obligation, agreement or contract to which it
is a party or by which it or any of its assets are bound; or (d) in violation of
any court order, judgment, administrative or judicial order, writ, decree,
stipulation, arbitration, award or injunction (collectively, "Court Orders") or
any license, permit, order, franchise agreement, concession, grant,
authorization, consent or approval (collectively, "Government Authorizations")
that is held by Seller applicable to it or its business or assets, or any
statute, law, ordinance, rule or regulation applicable to its business or assets
(collectively, "Laws").
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2.6 NO CONFLICT OF TRANSACTION WITH OBLIGATIONS AND LAWS. Except as set
forth on SCHEDULE 2.6, neither the execution, delivery and performance of this
Agreement, nor the performance of the transactions contemplated hereby, will:
(i) constitute a breach or violation of any provision of the Charter or bylaws
of Seller; (ii) require any consent, approval or authorization of or
declaration, filing or registration with any person; (iii) constitute (with or
without the passage of time or giving of notice) a default under or breach of
any agreement, instrument or obligation to which Seller is a party or by which
it or any of its assets are bound; (iv) result in the creation of any lien,
option (including right of first refusal or first offer), encumbrance, charge,
restriction, mortgage, pledge, security interest, title exception, conditional
sale agreement, restriction, claim or charge of any kind or character (each an
"Encumbrance") upon any of the properties or assets of Seller; (v) contravene,
conflict with, or result in the violation of any Court Order or Law, or give any
governmental authority, whether foreign, federal, state, local or other
political subdivision or agency of any of the foregoing (each a "Government
Authority"), or any other person, the right to exercise any remedy or obtain any
relief under any Court Order or Law, to which Seller is subject or by which the
properties or assets of Seller are bound; or (vi) contravene, conflict with or
result in the violation of any of the terms and requirements of, or give any
Governmental Authority the right to revoke, withdraw, suspend, cancel, terminate
or modify, any Government Authorization.
2.7 FINANCIAL STATEMENTS.
(a) Attached as SCHEDULE 2.7(A) hereto are the following financial
statements (the "Financial Statements") of Seller, audited or unaudited as
indicated, all of which statements are complete and correct and fairly present
the financial position of Seller on the date of such statements and the results
of its operations on the applicable basis for the periods covered thereby, and
such Financial Statements have been prepared in accordance with GAAP
consistently applied throughout the periods involved and prior periods:
- Balance sheets, income statements, statements of changes in
stockholders equity and statements of cash flow at and as of
the twelve (12) months ended December 31, 1997, 1996 and 1995.
- Balance sheets, income statements, statements of changes in
stockholders equity and statements of cash flow at and as of
the seven (7) months ended July 31, 1998.
The balance sheet dated July 31, 1998 (the "Base Balance Sheet Date")
in the above-referenced financial statements is hereinafter referred to as the
"Base Balance Sheet".
(b) The books of account of Seller for all years fairly reflect the
financial position of Seller in all respects, and have been maintained on a
consistent basis. All auditor's letters to management of Seller for all years
and other significant correspondence from or to such auditors during such
period, if any, are attached as SCHEDULE 2.7(b) hereto.
2.8 ABSENCE OF UNDISCLOSED LIABILITIES. Seller has no liabilities of
any nature, whether accrued, absolute, contingent or otherwise (including
without limitation liabilities as
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guarantor or otherwise with respect to obligations of others, or liabilities for
taxes due or then accrued or to become due), except: (a) liabilities stated or
adequately reserved against on the Base Balance Sheet; (b) liabilities incurred
since the Base Balance Sheet Date in the ordinary course of business consistent
with past practices and liabilities; and (c) liabilities disclosed in SCHEDULE
2.8 hereto.
2.9 ABSENCE OF CERTAIN CHANGES. Except as set forth on SCHEDULE 2.9
hereto, since the Base Balance Sheet Date there has not been:
(a) any change in the financial condition, including working
capital, earnings, reserves, properties, assets, liabilities, business or
operations, of the Seller which change, by itself or in conjunction with all
other such changes, whether or not arising in the ordinary course of business,
has been materially adverse with respect to Seller;
(b) any contingent liability incurred by Seller as guarantor or
otherwise with respect to the obligations of others or any other contingent or
fixed obligations or liabilities incurred by Seller;
(c) any Encumbrance placed on any of the properties of Seller which
remains in existence at the time of Closing;
(d) any sale or other disposition, or any agreement or other
arrangements for the sale or other disposition, of any of the properties or
assets of Seller other than the sale of inventory in the ordinary course of
business;
(e) any capital expenditure, lease or commitment or agreement to
lease in excess of $5,000 with respect to any individual item or $10,000 with
respect to all such items;
(f) any write-downs of the value of any inventory (including
write-downs by reason of shrinkage or ▇▇▇▇-down or write-off) as uncollectible
or any notes or accounts receivable, except for write-downs or write-offs that
are in the aggregate less than $10,000 in the ordinary course of business;
(g) any damage, destruction or loss, whether or not covered by
insurance, affecting the properties, assets or business of Seller;
(h) any declaration, setting aside or payment of any dividend on,
or the making of any other distribution in respect of, the capital stock of
Seller, including distributions on account of any income tax liabilities except
for normal and ordinary base salary payments to Stockholder; any direct or
indirect redemption, purchase or other acquisition by Seller of its capital
stock, or any issuance of any securities of Seller or any payment made to or for
the personal account or benefit of the Stockholder;
(i) any entrance into any employment contract, or consulting
agreement; or any change in the compensation payable or to become payable by
Seller to any of its officers,
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employees or agents or in any bonus, pension or profit sharing payment,
enhancement or arrangement made to or with any such officers, employees or
agents;
(j) any change with respect to the business organization,
management, or supervisory personnel of Seller;
(k) any payment or discharge of a material lien, claim, obligation
or liability of Seller which was not shown on the Base Balance Sheet or incurred
in the ordinary course of business thereafter;
(l) any obligation or liability incurred by Seller to any of its
officers, directors or shareholders, or any loans or advances made by Seller to
any of its officers, directors or shareholders, except normal compensation,
benefits and expense allowances payable to officers;
(m) any change in any method of accounting or accounting practice,
whether or not such change was permitted by GAAP;
(n) any payment of any Federal, state or local income taxes on
behalf of itself or Stockholder; or
(o) any agreement, whether in writing or otherwise, to take any
action described in this Section 2.9.
2.10 CONDUCT OF BUSINESS. Since the Base Balance Sheet Date, Seller has
conducted its business only in the ordinary course, in substantially the same
manner as operated prior to such date and in accordance with the plans and
ongoing business disclosed by Seller to Buyer prior to such date, and has not
changed any current or disclosed method or introduced any new method of
management or operations.
2.11 PAYMENT OF TAXES. Seller has duly and timely filed all federal,
state, local, and foreign government income, excise, gross receipts or franchise
tax returns, real estate and personal property tax returns, sales and use tax
returns, employee tax and contribution returns, and all other tax returns,
reports and declarations, including valid extensions therefor, or estimated
taxes required to be filed by it, with respect to all applicable taxes ("Tax
Returns") of every kind, character or description, and imposed by any government
or quasi-governmental authority (domestic or foreign), and any interest or
fines, and any and all penalties or additions relating to such taxes, charges,
fees, levies or other assessments ("Taxes"). All of the Tax Returns are complete
and correct. Copies of Seller's Federal and state Tax Returns for the past five
(5) years are attached to SCHEDULE 2.11. All Taxes shown to be due on each Tax
Return have been paid or are being contested in good faith by Seller (which
contest is being diligently pursued and is described on SCHEDULE 2.11). With
respect to all other Taxes for which no return is required, or which have not
yet accrued or otherwise become due, adequate provision has been made in the
pertinent Financial Statements. All Taxes and other assessments and levies which
Seller is required to withhold or collect have been withheld or collected and
paid over or will be paid over to proper governmental authorities as required.
The income tax returns of Seller have never been audited by the Internal Revenue
Service or the California Tax Board. Seller is not
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aware of any intention on the part of any governmental agency, to examine any of
the Tax Returns. No deficiencies have been asserted or assessments made against
Seller, nor is the Internal Revenue Service or any other taxing authority now
asserting or, to the knowledge of Seller or Stockholder without inquiry,
threatening to assert against Seller any deficiency or claim for additional
taxes or interest thereon or penalties in connection therewith. Seller has not
extended the time for the filing of any Tax Return or the assessment of
deficiencies or waived any statute of limitations for any year, which extension
or waiver is still in effect. The provisions for taxes reflected in the
Financial Statements are adequate to cover any tax liabilities of Seller in
respect of its businesses, properties and operations during the periods covered
by said Financial Statements and all prior periods.
2.12 TITLE TO PROPERTIES; LIENS; CONDITION OF PROPERTIES.
(a) Seller owns no real property. Set forth on SCHEDULE 2.12(a)
hereto is a listing of (i) all leases under which Seller leases real property,
(ii) a complete list of the machinery, equipment and other personal property
with an original cost in excess of $1,000 used or owned by Seller as of the date
hereof, and (iii) all leases under which Seller leases any equipment, machinery
or other personal property, including the Leased Equipment. Seller has delivered
to Buyer true, correct and complete copies of all leases, subleases, rental
agreements, contracts of sale, tenancies or licenses related to any of the real
or personal property identified on SCHEDULE 2.12(a). Also set forth on SCHEDULE
2.12(a) is a list of all locations where any of the personal property or
Seller's inventory (other than goods in transit in the ordinary course of
business) are located. The real and personal property identified on such
Schedule includes all properties and assets (whether real, personal or mixed,
tangible or intangible) reflected in the Base Balance Sheet or purchased by
Seller since the Base Balance Sheet Date (except for such properties or assets
sold since the Base Balance Sheet Date in the ordinary course of business), and
includes all property and assets used or required for use in Seller's business,
except for property not required to be disclosed on such Schedule.
(b) Except as specifically disclosed in SCHEDULE 2.12(b) or in the
Base Balance Sheet, Seller has good and marketable title to all its owned
personal property, including property described in SCHEDULE 2.12(b), free and
clear of all Encumbrances and each of its leases is valid, binding and
enforceable in accordance with its terms against the parties thereto is
subsisting and (subject to obtaining required consents, all of which are listed
on SCHEDULE 2.6) fully assignable by Seller, and no default by Seller exists
thereunder, or to the knowledge of Seller and the Stockholders, by any other
party and Seller is in full compliance with all terms and conditions of such
agreements.
(c) Except as otherwise specified in SCHEDULE 2.12(d) hereto, all
machinery and equipment used by Seller are in good condition, working order and
repair, age and reasonable wear and tear excepted, are adequate for the uses to
which they are put, have been well maintained, and substantially conform with
all applicable ordinances, regulations and safety or other laws.
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2.13 COLLECTIBILITY OF RECEIVABLES. All of the Receivables of Seller
shown or reflected on the Base Balance Sheet, less a reserve for bad debts in
the amount shown on the Base Balance Sheet are, and those outstanding at the
Closing will be (a) valid and enforceable claims, (b) which arose out of
transactions with unaffiliated parties, (c) fully collectible within ninety (90)
days of invoice date through normal means of collection, and (d) subject to no
set-off, defense or counterclaim. The reserves for doubtful accounts and the
values at which Receivables are accrued on the Base Balance Sheet are in
accordance with GAAP applied on a basis consistent with prior financial
statements of Seller. A complete and accurate list of each Receivable accrued on
Seller's books on July 31, 1998, which lists the name, age and amount thereof,
is attached as SCHEDULE 2.13. Since December 31, 1996, there has not been a
material change in Seller's receivables' aging practice.
2.14 INVENTORIES.
(a) All inventories of finished goods and raw materials of Seller
reflected on the Base Balance Sheet are and those existing on the Closing Date
will be, of a quantity and quality normally salable in the ordinary course of
business at commercially reasonable prices consistent with Seller's prior
experience. All such inventories are valued on a lower of cost (weighted
average) or market basis and in accordance with Seller's normal valuation
methods and policies, consistently applied. Purchase commitments for raw
materials and parts are not in excess of normal requirements and none are at
prices in excess of current market prices. Except as shown on SCHEDULE 2.14,
since the Base Balance Sheet Date, no inventory items have been sold or disposed
of except through sales in the ordinary course of business at prices no less
than prevailing market prices.
(b) The value of the finished goods inventory on Base Balance
Sheet Date and on the Closing Date, when added to the cost of the variable
expenses of freight, commissions and discounts, shall not exceed the market
price. The inventories of finished goods existing on the Closing Date shall
thereafter be salable at prices equal to or in excess of the amount necessary,
after variable expenses, to sell such inventory at a price equal to no less than
cost. Except for the items listed on SCHEDULE 2.14, all inventories of finished
goods existing on the Base Balance Sheet Date, and on the Closing Date will be
salable on or before May 31, 1999, through Seller's normal and ordinary course
of business and consistent with the past practices of Seller.
2.15 INTELLECTUAL PROPERTY RIGHTS.
(a) For purposes of this Section 2.15, "Intellectual Property"
means all patents, patent applications, trade marks (whether registered or
unregistered) or service marks, trade ▇▇▇▇ or service ▇▇▇▇ applications, trade
names, copyrights, licenses and computer software, owned or used by Seller.
(b) All rights of ownership of, or material licenses to use,
Intellectual Property held by Seller are listed on SCHEDULE 2.15. There are no
Intellectual Property rights other than those set forth on SCHEDULE 2.15,
necessary to or regularly used in, the conduct of the business of Seller as
presently conducted or presently in the process of development.
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(c) Except as set forth on SCHEDULE 2.15, all rights to
Intellectual Property required to be listed in SCHEDULE 2.15:
(i) have been duly registered, filed in, or issued by, the
United States Patent Office, United States Register of Copyrights, or the
corresponding offices of other countries identified on said schedule;
(ii) have been properly maintained and renewed in accordance
with all applicable laws and regulations in the United States and such foreign
countries; and
(iii) in the case of patents or patent applications, have been
duly assigned to Seller and such assignment(s) have been recorded in the
appropriate government offices.
(d) No proceedings to which Seller is a party have been commenced
which (i) challenge the rights of Seller in respect of the Intellectual Property
listed on SCHEDULE 2.15, or (ii) charge Seller with infringement of any other
person's rights in Intellectual Property and, to the knowledge of Seller, no
such proceeding is threatened to be filed. None of the rights in Intellectual
Property listed on SCHEDULE 2.15 is being infringed by any other person.
(e) Except as set forth on SCHEDULE 2.15, no director, officer or
employee of Seller owns, directly or indirectly, in whole or in part, any
Intellectual Property right which Seller has used, is presently using, or the
use of which is reasonably necessary to its business as now conducted or
presently contemplated to be conducted.
(f) In addition to the Intellectual Property described above,
Seller has the right to use, free and clear of any claims or rights of others,
except claims or rights described in SCHEDULE 2.15, all trade secrets, customer
lists, and manufacturing and other secret processes and technologies
(collectively "Trade Secrets") required for or used in the manufacture or
marketing of all products formerly or presently produced by Seller, including
products licensed from others. Seller has disclosedto Buyer all written
documentation relating to its Trade Secrets and has adopted measures adequate to
protect its Trade Secrets. Seller is not using or in any way making use of any
Trade Secrets of any third party, including without limitation, a former
employer of any present or past employee of Seller.
2.16 CONTRACTS AND COMMITMENTS.
(a) Except for contracts, commitments, plans, agreements and
licenses described in SCHEDULE 2.16(a) hereto, Seller is not a party to or
subject to any contract, agreement or commitment (written or oral):
(i) for the purchase of any commodity, material, equipment or
asset (except for purchase orders in the ordinary course of business or
contracts involving payments of less than $1,000 each);
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(ii) creating any obligations of Seller after the Base Balance
Sheet Date which call for payments of more than $5,000 during any month for
agreements without a fixed term or more than $20,000 over the term of the
agreement for agreements with a fixed term;
(iii) providing for the purchase of all or substantially all
of its requirements of a particular product from a supplier;
(iv) which by its terms does not terminate or is not
terminable without premium or penalty by Seller (or its successor or assign)
upon ninety (90) days notice;
(v) for the sale or lease of its products not made in the
ordinary course of business;
(vi) with any sales agent or distributor of products of
Seller;
(vii) containing covenants limiting the freedom of Seller to
compete in any line of business or with any person or entity;
(viii) for a license or franchise (as licensor or licensee or
franchisor or franchisee);
(ix) involving any arrangement or obligation with respect to
the return of inventory or merchandise other than on account of a defect in
condition, or failure to conform to the applicable contract;
(x) with the United States government;
(xi) which contains covenants as to noncompetition,
nondisclosure, nonsolicitation or confidentiality restricting or for the benefit
of Seller; or
(xii) which is material to the assets or business of Seller.
(b) Each of the contracts, commitments, plans, agreements and
licenses to which Seller is a party, including those listed on SCHEDULE 2.16(a)
(each a "Contract") is valid, binding and enforceable against Seller and, to the
knowledge of Seller, against the other parties thereto; Seller is in full
compliance with all terms and conditions of each Contract; and, Seller has
neither given nor received notice of any alleged violation of or default under
any such Contract.
(c) Since January 1, 1997, Seller has not experienced any
termination, cancellation, limitation or modification or change in any business
relationship with any material supplier or customer, nor has Seller received
notice or otherwise have knowledge that any customer or supplier intends to
cease, or materially reduce or change the terms of, doing business with Seller
or to terminate any agreement with Seller where such action has had or would
have a material adverse effect on the business of Seller. SCHEDULE 2.16(d) lists
every material customer or supplier of Seller and the amount of business with
that customer. For purposes hereof, a
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supplier is material if during fiscal 1995, 1996 and 1997, it accounted for more
than five percent (5%) by value of the orders of Seller for purchase of all its
raw materials and other products essential to its manufacturing processes for
such year. A customer is material if it accounted for more than three percent
(3%) by value of the orders of Seller in either fiscal 1995, 1996 or 1997.
(d) The total backlog of Seller (including all accepted and
unfulfilled sales orders) is not materially less than the backlog amount set
forth on SCHEDULE 2.16(e), and the aggregate of all outstanding purchase orders
issued by Seller (including all contracts or commitments for the purchase by
Seller of materials or other supplies) is not materially more than the purchase
order amount set forth on such SCHEDULE 2.16(e). All such sales and purchase
commitments were made in the ordinary course of business. All open customer
orders are listed on SCHEDULE 2.16(e).
2.17 LABOR AND EMPLOYEE RELATIONS.
(a) Except as shown on SCHEDULE 2.17 hereto, there are no
currently effective consulting or employment agreements or other material
agreements with individual consultants or employees to which Seller is a party.
Complete and accurate copies of all such written agreements have been delivered
to Buyer and are attached to SCHEDULE 2.17. Also shown on SCHEDULE 2.16 are the
name and rate of compensation (including all bonus compensation) of each
officer, employee or agent of Seller.
(b) None of the employees of Seller is covered by any collective
bargaining agreement with any trade or labor union, employees' association or
similar association. There are no representation elections, arbitration
proceedings, labor strikes, slowdowns or stoppages, or claims of discrimination
or unfair labor practices pending, or, to the knowledge of Seller, threatened,
with respect to the employees of Seller nor has Seller experienced any work
stoppage or other material labor difficulty during the five (5) years
immediately preceding the date of this Agreement.
(c) Seller has complied in all respects with applicable laws,
rules and regulations relating to the employment of labor, including without
limitation those relating to wages, hours, unfair labor practices,
discrimination, and payment of social security and similar taxes. There are no
complaints against Seller pending or, to the knowledge of Seller, threatened
before the National Labor Relations Board or any similar state or local labor
agencies, or before the Equal Employment Opportunity Commission or any similar
state or local agency, by or on behalf of any employee or former employee of
Seller.
(d) The execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby will not trigger any
severance pay obligation under any contract or at law or any notice requirement
under any federal or state plant closing law.
(e) Seller has provided to Buyer a complete description of all
employment policies under which Seller has operated or which have been
communicated to its employees.
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(f) Seller has paid in full (or made provisions for payment in
full) to its employees, agents and contractors all wages, salaries, commissions,
bonuses and other direct compensation for all services performed by them. Seller
does not have and will not have on the Closing Date, any contingent liability
for sick leave, vacation time, holiday pay, severance pay or similar items not
set forth on the Base Balance Sheet.
(g) There has not been any citation, fine or penalty imposed or
asserted against Seller under any law or regulation relating to employment,
immigration or occupational safety matters.
2.18 ERISA AND EMPLOYEE BENEFITS
(a) SCHEDULE 2.18 sets forth a brief description of every plan,
arrangement or policy, written or oral, relating to employees of Seller or of
any member of a controlled group or affiliated service group (as defined in
Internal Revenue Code Section 414(b), (c), (m) and (o)) which includes Seller
(an "Affiliate"), which is:
(i) an employee benefit plan within the meaning of Section 3
of the Employment Retirement Income Security Act of 1977, as amended ("ERISA");
or
(ii) a multiemployer plan within the meaning of Section 3(37)
or 4001(a)(3) of ERISA; or
(iii) a compensation, stock purchase, stock option, stock
bonus, stock appreciation, severance, health, welfare, life, disability or other
benefit plan, fund, program, arrangement or practice which is not covered by
clause (i) or (ii) above (including policies related to vacation pay, holiday
time, moving expense reimbursement programs, sick leave and salary reduction
agreements, charge-in-control agreements, and severance agreements).
(Hereinafter, "ERISA Benefit Plan" refers to plans or arrangements under clauses
(i) and (ii) above and "Benefit Plan" refers to plans or arrangements under
clauses (i) - (iii) above.)
(b) There are no agreements or commitments of Seller or any
Affiliate, whether or not legally binding, to create any additional Benefit Plan
not listed on SCHEDULE 2.18. Except as set forth on SCHEDULE 2.18, there have
been no multiemployer plans or defined benefit pension plans covering employees
of Seller or an Affiliate within the last ten (10) years.
(c) With respect to each Benefit Plan, Seller has furnished to
Buyer complete and accurate copies of each Benefit Plan described in SCHEDULE
2.18, including all amendments thereto. With respect to each ERISA Benefit Plan,
Seller has also furnished the three most recent Form 5500s and the most recent
Internal Revenue Service determination letter (if any), plan actuarial report,
summary plan description, summary annual report and employee manual, as well as
summaries of material modifications, material employee communications, and all
reports of the Benefit Plan required by ERISA and the regulations thereunder.
Seller has also furnished Buyer copies of any insurance contracts or trust
agreements through which any ERISA Benefit Plan is funded, any custodial or
investment contracts relating to assets or benefits under the
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Benefit Plan, any contracts relating to record keeping or administration for the
Benefit Plan, and notice of any material adverse change occurring with respect
to any Benefit Plan since the date of the most recently completed and filed
annual report.
(d) Seller has no ERISA Benefit Plan which constitutes a pension
plan within the meaning of Section 3(2) of ERISA. (e) Except as set forth on
SCHEDULE 2.18, with respect to each Benefit Plan:
(i) each Benefit Plan complies currently and has complied in
the past, as to form and operation, with the provisions of all applicable
Federal and state laws, such as ERISA and the Internal Revenue Code, including
without limitation all requirements regarding discrimination, disclosure, and
continuation coverage (under Section 4980B of the Code); and no nonexempt
"prohibited transaction" (as defined in Section 4975 of the Code or enumerated
in Section 406(a) or (b) of ERISA) has occurred;
(ii) all required government filings, reports, and notices
have been properly and timely made, and all such filings and employee
disclosures required to be made within thirty (30) days after Closing that are
based in whole or in part upon the period prior to the Closing shall have been
prepared and delivered to Buyer on or before the Closing;
(iii) no such Benefit Plan is currently under audit or
investigation by any governmental agency or body;
(iv) there are no actions, suits or claims (other than routine
claims for benefits) pending or threatened against any of the Benefit Plans or
against the assets of any Benefit Plan;
(v) all premiums due in connection with the Benefit Plan,
including without limitation premiums due the PBGC and premiums for life and
health insurance and annuity contracts, have been paid in full when due and,
except as specifically disclosed on SCHEDULE 2.18, there are no such premiums
that are attributable to any period of time before the Closing that will not
have been paid on or before the Closing;
(vi) all reports and filings made pursuant to ERISA, including
without limitation all form 5500 and attachments, summary annual reports, and
participant reports, and any other documents reasonably necessary to enable
Buyer to perform its responsibilities with respect to any employee program
subsequent to the Closing, are and shall be available at the offices of Seller
on and immediately after the Closing;
(vii) except as required by COBRA (Section 4980B of the
Internal Revenue Code) or the Family Medical Leave Act, no Benefit Plan provides
health or other welfare benefits to retirees, former employees, or their
dependents.
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(f) Except as required by COBRA or the Family Medical Leave Act,
neither Seller nor any Affiliate has made any promises or incurred any
obligation to provide any health or other welfare benefits to any retirees,
former employees, or their dependents.
(g) The execution and delivery of this
Agreement by the Seller and the consummation of the transactions contemplated
hereunder:
(i) do not constitute a prohibited transaction within the
meaning of Section 406 of ERISA or Section 4975 of the Internal Revenue Code;
(ii) will not result in any obligation or liability of the
Buyer or Seller to any employee of Seller or any Affiliate or to the PBGC in
respect of any Benefit Plan.
2.19 ENVIRONMENTAL MATTERS.
(a) Except as disclosed in SCHEDULE 2.19 hereto, any and all oil,
petroleum products, chemicals, waste oil, hazardous waste, hazardous substances,
toxic substances or hazardous materials (hereafter, "Hazardous Materials") used
or generated by Seller have always been and are being generated, used, stored,
treated and disposed on and at any of the properties or facilities owned or
leased by Seller, the former parent corporation of Seller or, to the best
knowledge of Seller, and any predecessors-in-interest of the Seller (for the
purposes of this Section, a "Site") in compliance with all applicable Laws,
Court Orders, Government Authorizations, including those related to the
protection of public health, worker safety, the environment or the management of
pollution or Hazardous Materials (collectively "Environmental Laws") and Seller
is in compliance with all Environmental Laws. For purposes of this Agreement,
"Environmental Laws" include the Comprehensive Environmental Response,
Compensation and Liability Act ("CERCLA"), the Resource Conservation and
Recovery Act ("RCRA"), the Clean Air Act, the Clean Water Act, the Toxic
Substances Control Act, the Emergency Planning and Community Right-to-Know Act
of 1986, the Hazardous Materials Transportation Act, the Federal Water Pollution
Control Act, the corresponding state and local statutes, ordinances and
amendments or successor legislation to such acts, the common law and any similar
laws, rules, or regulations.
(b) Except as set forth on SCHEDULE 2.19 hereto, Seller has not
received or become subject to any claim, notice, complaint, Court Order,
administrative order or request for information from any Government Authority or
private party (i) alleging violation of, or asserting any exceedence or
noncompliance with any Environmental Law, by it, (ii) asserting potential
liability, (iii) requesting information, or (iv) requesting investigation or
clean-up of any Site under any Environmental Law.
(c) Except as disclosed in SCHEDULE 2.19, no Hazardous Materials
used or generated by Seller, or, to the best knowledge of Seller, any
predecessors-in-interest to Seller, have ever been, are being, or are intended
to be or are threatened with being spilled, released, discharged, disposed,
placed, leaked, or otherwise caused to become located in the air, soil or water
in, under or upon a Site or any land adjacent thereto. Seller has provided Buyer
with copies of all notices filed pursuant to any Environmental Law.
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(d) Except as disclosed in SCHEDULE 2.19, no Hazardous
Materials have ever been shipped by or for Seller, or, to the best knowledge of
Seller, any predecessor-in-interest to the Seller, to other sites or facilities
for treatment, storage or disposal, and Seller has not received any notice that
any sites or facilities to which any such wastes have been shipped or sent to
are subject to or threatened to become subject to any governmental response
action or clean up order. Seller has provided Buyer with copies of all
manifests, bills of lading and other receipts or evidence documenting disposal
or recycling of Hazardous Materials and sales receipts of the process
by-products relating to operations of Seller.
(e) Except as set forth on SCHEDULE 2.19 neither Seller, nor, to
the best knowledge of Seller, any predecessor-in-interest to Seller has treated,
stored for more than ninety (90) days, disposed of or recycled any Hazardous
Materials on any Site nor has anyone else, treated, stored for more than ninety
(90) days, disposed of or recycled any of the foregoing on any Site.
(f) Except as disclosed in SCHEDULE 2.19 hereto, Hazardous
Materials have been collected, managed, recycled, shipped and disposed by Seller
in accordance with all Environmental Laws.
(g) All underground tanks and other storage facilities for
Hazardous Materials located at any Site are disclosed in SCHEDULE 2.19 hereto
and, to the best knowledge of Seller, no other underground tanks or other
storage facilities for Hazardous Materials have been located on a Site and
copies of all notifications made to Federal, state or local authorities pursuant
to Environmental Laws relating to underground storage tanks have been provided
to Buyer. As of the date hereof, none of such tanks and other underground
storage facilities are in violation of any Environmental Law, in any respect.
(h) Except as disclosed in SCHEDULE 2.19 hereto, all ▇▇▇▇▇,
water discharges and other water diversions and all air emission sources on
any Site are properly registered and/or permitted under, and copies of such
permits have been provided to Buyer and do not violate any applicable law.
(i) Except as set forth on SCHEDULE 2.19, there are no
asbestos-containing materials, capacitors, transformers or other equipment or
fixtures containing PCBs located at any Site.
(j) Seller does not produce, purchase or use in its products, or
purchase or use any material, part, component or subassembly incorporated into
its products, containing any chemical or other material to which state packaging
and/or disclosure laws apply except as set forth on SCHEDULE 2.19.
(k) There are no Encumbrances under Environmental Laws on any Site
or any assets of the Seller and no government actions have been taken or are in
process which could subject any Site or any such assets to such encumbrances,
and Seller would not be required to place any notice or restriction relating to
Hazardous Materials at any Site in any deed to such property except as set forth
on SCHEDULE 2.19.
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(l) Seller has made available to Buyer all environmental audits,
assessments or studies within the possession of Seller with respect to Seller's
facilities or any Site and the results of sampling and analysis of any asbestos,
air, soil, or water, including ground and surface water, undertaken with respect
to its facilities or any Site.
(m) Except as disclosed on SCHEDULE 2.19 hereto, Seller is in
compliance with all Federal and state worker safety laws and requirements,
including, but not limited to requirements under the Occupational Safety and
Health Act.
2.20 GOVERNMENTAL AUTHORIZATIONS. Seller holds all Government
Authorizations which are required to permit it to conduct its business as
presently conducted. All such Government Authorizations are listed on SCHEDULE
2.20 hereto, together with the applicable expiration date, and are now, and will
be after the Closing, valid and in full force and effect, and Buyer shall have
full benefit of the same. Seller has not received any notification of any
present failure (or past and unremedied failure) by it to obtain any such
Authorization, approval or franchise, and no proceeding is pending, or to the
knowledge of Seller, threatened, seeking the revocation or limitation of any
Government Authorization.
2.21 WARRANTY OR OTHER CLAIMS.
(a) Except as set forth on SCHEDULE 2.21, Seller does not know of,
or have reason to know of, any existing or threatened claims, or any facts upon
which a claim could be based, against Seller for services or merchandise that
are defective or fail to meet any product warranties. No claim has been asserted
against Seller for renegotiation or price redetermination of any business
transaction, and Seller has no knowledge of any facts upon which any such claim
could be based.
(b) All products that were designed, manufactured or sold by
Seller complied with applicable contracts, agreed product specifications, Laws
and standards (whether Seller, government or industry) and there are no defects
in such products. SCHEDULE 2.21 sets forth Seller's experience with returns of
products sold by Seller for fiscal years 1995, 1996 and 1997 and for the portion
of the current fiscal year (including claims or notices that products may or
will be returned, whether by reason of alleged overshipments, defective
merchandise or otherwise).
2.22 LITIGATION. Except for matters described in SCHEDULE 2.22 hereto,
there is no action, suit, claim, proceeding, investigation or arbitration
proceeding pending (or, to the knowledge of Seller or any Seller, threatened)
against or otherwise involving Seller or any of Seller shares or any of the
officers, directors, former officers or directors, employees, shareholders or
agents of Seller (in their capacities as such) and there are no outstanding
Court Orders to which Seller is a party or by which any of its assets are.
Neither Seller nor any Seller has any reason to believe that any such action,
suit, proceeding, investigation or arbitration proceeding may be brought against
Seller.
2.23 INSURANCE.
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(a) Seller maintains (i) insurance on all of its property
(including leased or owned) real or personal property that insures against loss
or damage by fire or other casualty (including extended coverage) and (ii)
insurance against liabilities, claims and risks of a nature and in such amounts
that are normal and customary in this industry. SCHEDULE 2.23 contains a
complete and correct list of all policies of insurance maintained by Seller
(including insurance providing benefits for employees) in effect on the date
hereof, together with complete and correct information with respect to the
premiums, coverages, insurers, expiration dates, and deductibles in respect of
such policies. Such policies are (1) sufficient to enable Seller to comply with
all requirements of Law and all agreements to which any of them are subject, (2)
will remain in full force and effect through the respective expiration dates of
such policies without the payment of additional premiums, and (3) will not be
adversely affected by, or terminate or lapse by reason of, the transactions
contemplated by this Agreement.
(b) Except for amounts deductible under the policies of insurance
described on SCHEDULE 2.23 or with respect to risks assumed as a self-insurer
and described on such Schedule, Seller is not, nor has Seller at any time been
subject to any liability as a self-insurer of the business or assets of Seller
that is reasonably likely to have a material adverse effect.
(c) Except as set forth on SCHEDULE 2.23, there are no claims
pending under any of said policies, or disputes with insurers, and all premiums
due and payable thereunder have been paid, and all such policies are in full
force and effect in accordance with their respective terms. No notice of
cancellation or termination has been received with respect to any such policy.
(d) Except as forth on SCHEDULE 2.23, the Seller has no current or
prior insurance policy which remains subject to retrospective adjustment of the
premiums payable thereunder.
2.24 FINDER'S FEE. Seller has not incurred or become liable for any
broker's commission or finder's fee relating to or in connection with the
transactions contemplated by this Agreement.
2.25 TRANSACTIONS WITH INTERESTED PERSONS. No officer, supervisory
employee, director or stockholder of Seller or their respective spouses or
children, (a) owns, directly or indirectly, on an individual or joint basis, any
interest in, or serves as an officer or director of, any customer, competitor or
supplier of Seller or any entity involved in the environmental engineering or
testing services industries, or any organization which has a material contract
or arrangement with Seller, or (b) has any contract or agreement with Seller.
2.26 ABSENCE OF SENSITIVE PAYMENTS. Neither Seller nor any of Seller's
directors, officers, agents, stockholders or employees, on behalf of any of
them:
(a) has made or has agreed to make any contributions, payments or
gifts of funds or property to any governmental official, employee or agent where
either the payment or the purpose of such contribution, payment or gift was or
is illegal under the laws of the United States, any state thereof, or any other
jurisdiction (foreign or domestic);
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(b) has established or maintained any unrecorded fund or asset for
any purpose, or has made any false or artificial entries on any of its books or
records for any reason; or
(c) has made or has agreed to make any contribution or
expenditure, or has reimbursed any political gift or contribution or expenditure
made by any other person to candidates for public office, whether federal, state
or local (foreign or domestic) where such contributions were or would be a
violation of applicable law.
2.27 COPIES OF DOCUMENTS. Complete and correct copies of any underlying
documents listed or described in this Article 2 or any Schedules delivered
pursuant to this Article, together with all amendments, renewals and
modifications related thereto have been delivered to Buyer.
2.28 DISCLOSURE OF MATERIAL INFORMATION. Neither this Agreement nor any
exhibit hereto or certificate issued pursuant hereto contains any untrue
statement of a material fact, or omits to state a material fact necessary to
make the statements herein or therein not misleading, relating to the business
or affairs of Seller. There is no fact which adversely affects, or may in the
future (so far as now can be reasonably foreseen) materially adversely affect,
the business, condition (financial or otherwise) or prospects of Seller which
has not been specifically disclosed herein.
ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF BUYER.
Buyer hereby represents and warrants to Seller as follows:
3.1 ORGANIZATION OF BUYER. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
with full power to own or lease its properties and to conduct its business in
the manner and in the places where such properties are owned or leased or such
business is conducted by it.
3.2 AUTHORIZATION OF TRANSACTION. Buyer has the full power and
authority to execute, deliver and perform this Agreement and to carry out the
transactions contemplated hereby. All necessary action, corporate or otherwise,
has been taken by Buyer to authorize the execution, delivery and performance of
this Agreement and the agreements contemplated hereby and the same is the valid
and binding obligation of Buyer enforceable in accordance with its terms.
3.3 NO CONFLICT OF TRANSACTION WITH OBLIGATIONS AND LAWS. Neither the
execution, delivery and performance of this Agreement or any of the agreements
contemplated hereby, nor the performance of the transactions contemplated
hereby, will: (i) constitute a breach or violation of the Buyer's Charter or
bylaws; (ii) conflict with or constitute (with or without the passage of time or
the giving of notice) a breach of, or default under any material agreement,
instrument or obligation to which Buyer is a party or by which it or its assets
are bound which would materially affect the performance by Buyer of its
obligations under this Agreement; (iii) result in a violation of any Law or
Court Order applicable to Buyer.
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3.4 FINDER'S FEE. Buyer has not incurred or become liable for any
broker's commission or finder's fee relating to or in connection with the
transactions contemplated by this Agreement.
ARTICLE 4. CONDITIONS TO OBLIGATIONS OF BUYER.
The obligation of Buyer to consummate this Agreement and the
transactions contemplated hereby are subject to the condition that on or before
the Closing the actions required by this Article 4 will have been accomplished:
4.1 NET WORTH. The net worth of Seller as at September 30, 1998, as
determined by Buyer, shall not be less than $572,000.
4.2 FIRPTA CERTIFICATE. At the Closing, Seller shall have delivered
to Buyer a certificate which satisfies the requirements of the regulations
under Section 1445 of the Internal Revenue Code of 1986, as amended.
4.3 ESCROW AGREEMENT. There shall have been executed and delivered
to Buyer an Escrow Agreement in substantially the form of EXHIBIT A hereto
(the "Escrow Agreement") pursuant to which $100,000 of the Purchase Price
shall be deposited in escrow subject to the provisions thereof.
4.4 RELEASE OF LIENS, SECURITY INTERESTS AND OTHER ENCUMBRANCES. Seller
shall have delivered to Buyer evidence satisfactory to Buyer and its counsel
that Seller is able to deliver good title to the Subject Assets free and clear
of all Encumbrances of any nature whatsoever (after application of a portion of
the Purchase Price to satisfy and discharge any such Encumbrances, if necessary,
except Encumbrances permitted by Buyer to remain at the Closing) at or prior to
Closing.
4.5 THIRD PARTY CONSENTS. Seller shall have delivered to Buyer all
consents of third parties necessary to effectuate the transactions contemplated
hereby including under any contracts and leases.
4.6 OPINION OF SELLER'S COUNSEL. ▇▇▇▇▇▇▇▇, Case, ▇▇▇, ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇▇▇, LLP, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, counsel to
Seller, shall have delivered to Buyer an opinion in the form of EXHIBIT B
hereto.
4.7 NONCOMPETITION AGREEMENT. Stockholder shall have executed and
delivered a noncompetition agreement in substantially the form of EXHIBIT C
hereto.
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ARTICLE 5. CONDITIONS TO OBLIGATION OF SELLER.
The obligation of Seller to consummate this Agreement and the
transactions contemplated hereby are subject to the condition that on or before
the Closing, the actions referred by this Article 6 will have been accomplished:
5.1 PURCHASE PRICE. The Initial Purchase Price shall have been paid in
accordance with the provisions of Section 1.3.
5.2 ESCROW AGREEMENT. Buyer shall have executed and delivered to
Seller, the Escrow Agreement and shall have deposited $100,000 in escrow.
5.3 CONSENT OF LANDLORD. Seller shall have received the consent of the
Landlord for the real property upon which Seller's business operates to the
assignment of the lease to Buyer.
ARTICLE 6. INDEMNIFICATION.
6.1 DEFINITIONS For purposes of this Article 6:
"Losses" means all losses, damages (including, without limitation,
punitive and consequential damages), fines, penalties, liabilities, payments and
obligations, and all expenses related thereto. Losses shall include any
reasonable legal fees and costs incurred by any of the Indemnified Persons
subsequent to the Closing in defense of or in connection with any alleged or
asserted liability, payment or obligation, whether or not any liability or
payment, obligation or judgment is ultimately imposed against the Indemnified
Persons and whether or not the Indemnified Persons are made or become parties to
any such action.
"Buyer's Indemnified Persons" means the Buyer, its parent, subsidiary
and affiliated corporations, their respective directors, officers, employees,
stockholders and agents, the Company after the Closing, and any person serving
as a director, officer, employee or agent of the Company at Buyer's request
after the Closing.
"Indemnified Person" means any person entitled to be indemnified under
this Article 6.
"Indemnifying Person" means any person obligated to indemnify another
person under this Article 6.
"Sellers' Indemnified Persons" means Seller, its officers, directors,
employees, Stockholder, and agents either before or after the Closing.
"Third Party Action" means any written assertion of a claim, or the
commencement of any action, suit, or proceeding, by a third party as to which
any person believes it may be an Indemnified Person hereunder.
6.2 INDEMNIFICATION BY SELLER.
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(a) Subject to the limitations in paragraph (b) below, Seller and,
solely to the extent the Purchase Price (including the Escrow Fund and any
income received thereon) is distributed by Seller to Stockholder , Stockholder,
jointly and severally agree to defend, indemnify and hold harmless Buyer's
Indemnified Persons from and against all Losses directly or indirectly incurred
by or sought to be imposed upon any of them:
(i) resulting from or arising out of any breach of any of the
representations or warranties (other than those in Sections 2.1, 2.2, 2.10 and
2.11) made by the Seller or Stockholder in or pursuant to this Agreement or in
any agreement, document or instrument executed and delivered pursuant hereto or
in connection with the Closing;
(ii) resulting from or arising out of any breach of any of the
representations or warranties made by Seller or Stockholder pursuant to Sections
2.1, 2.2, 2.10 and 2.11;
(iii) resulting from or arising out of any breach of any
covenant or agreement made by Seller or Stockholder in or pursuant to this
Agreement;
(iv) in respect of any liability or obligation of Seller which
Buyer has not expressly assumed hereunder, including the Retained Liabilities;
(v) resulting from or arising out of any liability, payment or
obligation arising out of any litigation or similar matter required to be
described on SCHEDULE 2.22;
(vi) resulting from or arising out of the intentional
misrepresentation or breach of warranty of Seller or Stockholder or any
intentional failure of the Company or any Seller to perform or comply with any
covenant or agreement of the Company or any Seller, respectively;
(vii) resulting from or arising out of any liability, payment
or obligation in respect of any taxes owing by Seller or Stockholder of any kind
or description (including interest and penalties with respect thereto) for all
periods, or portions thereof, up to and including the Closing Date with respect
thereto on the Base Balance Sheet and except as otherwise contemplated by
Section 1.7 hereof;
(viii) resulting from or arising out of any third party
action, whether by a governmental authority or other third party for damages,
including fines or penalties, or clean-up costs or other compliance costs under
any Environmental Law or from the violation of any Environmental Law arising out
of the operations of the Company on or before the Closing Date;
(ix) resulting from or arising out of any Benefit Plan;
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(x) resulting from or arising out of the failure to comply
with the so-called "bulk sales" act applicable in the State of California in
connection with this Agreement and the transactions contemplated hereby; or
(xi) resulting from or arising out of any Third Party Action
(including a binding arbitration or an audit by any taxing authority), that it
is instituted or threatened against any of Buyer's Indemnified Persons.
(b) The right to indemnification under paragraph (a) is subject to
the following limitations:
(i) Seller and Stockholder shall have no liability under
paragraph (a) unless one or more of the Buyer's Indemnified Persons gives
written notice to the Sellers asserting a claim for Losses, including reasonably
detailed facts and circumstances pertaining thereto, before the expiration of
the period set forth below:
(A)for claims under clauses (i), (v), (ix) and (xi)
(insofar as a claim under clause (xi) relates to any matter included under
clause (i), (v) or (ix)) of paragraph (a) above, a period of two (2) years from
the Closing Date;
(B)for claims under clauses (iii), (vii), (viii), (ix) and
(xi) (insofar as a claim under clause (xi) relates to any matter included under
clause (iii), (vii), (viii) or (x)) of paragraph (a) above, for so long as any
claim may be made in respect of such matters under any applicable statute of
limitations, as it may be extended; and
(C)for claims under clauses (ii), (iv) and (vi) of
paragraph (a) above, without limitation as to time;
except that, for any claim based upon a covenant or undertaking which by its
terms is to be performed after the Closing, then the period above shall commence
on the date when such covenant or agreement should have been performed.
6.3 INDEMNIFICATION BY BUYER.
(a) Subject to the limitations in paragraph (b) below, from and
after the Closing Date, Buyer shall defend, indemnify and hold harmless Sellers'
Indemnified Persons from any and all Losses directly or indirectly incurred by
or sought to be imposed upon them:
(i) resulting from or arising out of any breach of any of the
representations or warranties made by Buyer in or pursuant to this Agreement or
in any agreement, document or instrument executed and delivered pursuant hereto
or in connection with the Closing;
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(ii) resulting from or arising out of any breach of any
covenant or agreement made by Buyer in or pursuant to this Agreement;
(iii) arising out of, resulting from, or in any way related to
Buyer's conduct or operation of the business sold by Seller to Buyer hereunder
after the Closing;
(iv) resulting from or arising out of any Third party Action
(including a binding arbitration or an audit by any taxing authority), that is
instituted or threatened against any of Seller's Indemnified Persons.
(b) Buyer shall have no liability under paragraph (a) above unless
a Sellers' Indemnified Person gives written notice to Buyer asserting a claim
for Losses, including reasonably detailed facts and circumstances pertaining
thereto, before the expiration of the period set forth below:
(i) for claims under clause (i) of paragraph (a) above, two
(2) years from the Closing Date; and
(ii) for claims under clauses (ii), (iii) and (iv) of
paragraph (a) above, for so long as any claim may be made in respect of such
matters under any applicable statute of limitations as it may be extended.
6.4 DEFENSE OF THIRD PARTY ACTIONS.
(a) Promptly after receipt of notice of any Third Party Action, any
person who believes he, she or it may be an Indemnified Person will give notice
to the potential Indemnifying Person of such action. The omission to give such
notice to the Indemnifying Person will not relieve the Indemnifying Person of
any liability hereunder unless it was prejudiced thereby, nor will it relieve it
of any liability which it may have other than under this Article 6.
(b) Upon receipt of a notice of a Third Party Action, the
Indemnifying Person shall have the right, at its option and at its own expense,
to participate in and be present at the defense of such Third Party Action, but
not to control the defense, negotiation or settlement thereof, which control
shall remain with the Indemnified Person, unless the Indemnifying Person makes
the election provided in paragraph (c) below.
(c) By written notice within forty-five (45) days after receipt of
a notice of a Third Party Action, an Indemnifying Person may elect to assume
control of the defense, negotiation and settlement thereof, with counsel
reasonably satisfactory to the Indemnified Person; provided, however, that the
Indemnifying Person agrees (i) to promptly indemnify the Indemnified Person for
its expenses to date, and (ii) to hold the Indemnified Person harmless from and
against any and all Losses caused by or arising out of any settlement of the
Third Party Action approved by the Indemnifying Person or any judgment in
connection with that Third Party Action. The Indemnifying Persons shall not in
the defense of the Third Party Action enter
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into any settlement or consent to entry of any judgment except with the consent
of the Indemnified Person, which consent shall not be unreasonably withheld.
(d) Upon assumption of control of the defense of a Third Party
Action under paragraph (c) above, the Indemnifying Person will not be liable to
the Indemnified Person hereunder for any legal or other expenses subsequently
incurred in connection with the defense of the Third Party Action, other than
reasonable expenses of investigation.
(e) If the Indemnifying Person does not elect to control the
defense of a Third Party Action under paragraph (c), the Indemnifying Person
shall promptly reimburse the Indemnified Person for expenses incurred by the
Indemnified Person in connection with defense of such Third Party Action, as and
when the same shall be incurred by the Indemnified Person.
(f) Any person who has not assumed control of the defense of any
Third Party Action shall have the duty to cooperate with the party which assumed
such defense.
6.5 MISCELLANEOUS.
(a) Buyer's Indemnified Persons shall be entitled to
indemnification under Section 6.2(a) and Sellers' Indemnified Persons shall be
entitled to indemnification under Section 6.3(a), regardless of whether the
matter giving rise to the applicable liability, payment, obligation or expense
may have been previously disclosed to any such person unless expressly disclosed
in this Agreement on each particular Schedule requiring such disclosure.
(b) If any Loss is recoverable under more than one provision
hereof, the Indemnified Person shall be entitled to assert a claim for such Loss
until the expiration of the longest period of time within which to assert a
claim for Loss under any of the provisions which are applicable.
(c) Buyer may, at its options, recover any amount owing by the
Sellers for indemnification hereunder by setoff against any amounts that may
otherwise be due from the Buyer or the Company to the Sellers, or any of them,
whether hereunder or otherwise; provided that Buyer shall not be required to
recover such claims in such manner and may proceed against the Indemnified Party
at any time or times for recovery of indemnification claims.
6.6 PAYMENT OF INDEMNIFICATION. Claims for indemnification under this
Article 6 shall be paid or otherwise satisfied by Indemnifying Persons within
thirty (30) days after notice thereof is given by the Indemnified Person. Any
amount which may become due and payable to any of the Buyer's Indemnified
Persons under Section 6.2(a) shall first be paid or otherwise satisfied out of
the Escrow Fund until the same has been exhausted. Any claims in excess of the
Escrow Fund may be satisfied by whatever remedy is available at law or equity.
6.7 EXCLUSIVE REMEDY. The indemnification provisions of this Article 6
shall constitute the sole and exclusive remedy of Buyer for any breach of any
representation or warranty or for any failure to perform any covenant or
agreement or for any other claim for
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Losses or otherwise arising out of the transactions contemplated hereby, and the
Buyer waives any other remedy which it or any other person entitled to
indemnification hereunder may have at law or in equity with respect thereto.
ARTICLE 7. MISCELLANEOUS.
7.1 FEES AND EXPENSES. Each of the parties will bear its own expenses
in connection with the negotiation and the consummation of the transactions
contemplated by this Agreement and no expenses of Seller or stockholder relating
in any way to the purchase and sale of the Subject Assets hereunder shall be
charged to or paid by Buyer. Buyer and Seller shall share equally the California
state, county and local bulk transfer tax payable in connection with the
transactions contemplated by this Agreement.
7.2 BULK SALES LAW. Buyer waives compliance with the provisions of the
California Commercial Code relating to bulk transfers in connection with this
sale of assets, subject to the indemnities of Seller contained in this
Agreement. Nothing in this section will estop or prevent either Buyer or Seller
from asserting as a bar or defense to any action or proceeding brought under
that law that it does not apply to the sale contemplated under this Agreement..
7.3 NOTICES. Any notice or other communication in connection with this
Agreement shall be deemed to be delivered if in writing addressed as provided
below and if either (a) actually delivered electronically or physically at said
address (provided that if said address is a business, delivery is made during
normal business hours), or (b) in the case of a letter, three business days
shall have elapsed after the same shall have been deposited in the United States
mail, postage prepaid and registered or certified, return receipt requested, or
(c) forty eight (48) hours shall have elapsed after the same shall have been
sent by nationally recognized overnight receipted courier:
If to Seller, to:
Pacific Foam Technologies, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇ ▇▇▇-▇▇▇▇
Facsimile: ▇▇▇ ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇, Case, ▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇, Esquire
Telephone: ▇▇▇ ▇▇▇-▇▇▇▇
Facsimile: ▇▇▇ ▇▇▇-▇▇▇▇
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If to the Buyer, to:
UFP Technologies, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Tel: ▇▇▇ ▇▇▇-▇▇▇▇
Fax: ▇▇▇ ▇▇▇-▇▇▇▇
with a copy to:
Brown, Rudnick, Freed & Gesmer, P.C.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esquire
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
and in any case at such other address as the addressee shall have specified by
written notice. All periods of notice shall be measured from the date of
delivery thereof.
7.4 CONFIDENTIALITY. The parties agree that they will keep confidential
and not disclose or divulge any confidential, proprietary or secret information
which they may obtain from Seller or the Buyer in connection with the
transactions contemplated herein, or pursuant to inspection rights granted
hereunder, or any terms hereof, unless such information is or hereafter becomes
public information and except as otherwise required by law. This provision shall
survive the Closing of the transactions contemplated hereby.
7.5 ENTIRE AGREEMENT. This Agreement (including all exhibits or
schedules appended to this Agreement and all documents delivered pursuant to or
referred to in this Agreement, all of which are hereby incorporated herein by
reference) constitutes the entire agreement between the parties, and all
promises, representations, understandings, warranties and agreements with
reference to the subject matter hereof and inducements to the making of this
Agreement relied upon by any party hereto, have been expressed herein or in the
documents incorporated herein by reference.
7.6 SEVERABILITY. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision hereof.
7.7 ASSIGNABILITY. Neither this Agreement nor any right to the payment
of money or other obligations hereunder may be assigned by Seller without the
prior written consent of the Buyer. This Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective successors and
permitted assigns.
7.8 AMENDMENT. This Agreement may be amended only by a written
agreement executed by Buyer and Seller.
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7.9 GOVERNING LAW . This Agreement shall be governed by and construed
in accordance with the laws of the State of California (other than the choice of
law principles thereof), except that any representations and warranties with
respect to real and tangible property shall be governed by and construed in
accordance with the laws of the jurisdiction where such property is situated.
7.10 COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument, and all signatures need
not appear on any one counterpart.
7.11 EFFECT OF TABLE OF CONTENTS AND HEADINGS. Any table of contents,
title of an article or section heading herein contained is for convenience of
reference only and shall not affect the meaning or construction of any or the
provisions hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement or
caused this Agreement to be executed by their duly authorized representatives in
multiple counterparts as of the date set forth above.
BUYER:
UFP TECHNOLOGIES, INC.
By:
--------------------------------------
Name: R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: President
By:
--------------------------------------
Name:
Title: Assistant Secretary
SELLER:
PACIFIC FOAM TECHNOLOGIES, INC.
By:
--------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: President
By:
--------------------------------------
Name:
Title:
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STOCKHOLDER:
-----------------------------------------
▇▇▇▇▇ ▇▇▇▇▇
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ASSETS FOR CASH PURCHASE AGREEMENT
LIST OF SCHEDULES AND EXHIBITS
ITEM DESCRIPTION
Schedule 2.1 Charter Documents of Seller
Schedule 2.2 Capitalization of Seller
Schedule 2.3 Subsidiaries
Schedule 2.5 Present Defaults and Violations
Schedule 2.6 Conflicts; Third Party Consents
Schedule 2.7(a) Financial Statements
Schedule 2.7(b) Auditor's Letters
Schedule 2.8 Undisclosed Liabilities
Schedule 2.9 Changes Since Base Balance Sheet Date
Schedule 2.10 Taxes
Schedule 2.11(a) Property, Leases and Equipment
Schedule 2.11(d) Machinery and Equipment
Schedule 2.13 Receivable
Schedule 2.14 Inventory
Schedule 2.15 Intellectual Property Rights
Schedule 2.16(a) Contracts
Schedule 2.16(b) Contract Defaults
Schedule 2.16(c) Burdensome Agreements
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Schedule 2.16(d) Customers and Suppliers
Schedule 2.16(e) Backlog
Schedule 2.17 Labor and Employee Relations
Schedule 2.18 Benefit Plans
Schedule 2.19 Environmental Matters
Schedule 2.20 Government Authorizations
Schedule 2.21 Warranty Claims; Returns
Schedule 2.22 Litigation
Schedule 2.23 Insurance
Exhibit A Escrow Agreement
Exhibit B Legal Opinion of Seller's Counsel
Exhibit C Noncompetition Agreement
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