EXHIBIT 2.6
ASSET PURCHASE AGREEMENT
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This Asset Purchase Agreement ("Agreement") made this date by and between
NORTH TEXAS PC DYNAMICS INC., a Texas corporation ("SELLER"), and LSC ASSET
ACQUISITION CORP., a Texas corporation and/or Assigns, ("Purchaser").
SELLER desires to sell and Purchaser desires to purchase all of the
assets of SELLER ("The Assets").
In consideration of the mutual promises of the parties; in reliance on
the representations, warranties, covenants, and conditions contained in this
Agreement; and for other good and valuable consideration, the parties agree
as follows:
ARTICLE 1: SALE
1.01 Sale. On the terms and subject to the conditions set forth in this
Agreement, at the Closing, Purchaser will purchase from SELLER, and
SELLER will sell, transfer, assign, convey and deliver to Purchaser
all of the following assets:
(a) all the machinery, equipment, and furniture owned by SELLER on
the Closing date (collectively, the "Equipment"), such equipment
being carried on SELLER'S books for a zero value at August 31, 2004;
(b) all the raw materials and supplies, work and goods in process
and finished goods inventories owned by SELLER on the Closing Date,
(collectively, the "Inventory"), having a book value of approximately
$460,000 at August 31, 2004;
(c) all accounts receivable due to SELLER on the Closing Date
(collectively, the "Accounts Receivable"), having a book value
of approximately $724,000 at August 31, 2004;
(d) all deposits of SELLER (collectively, the "Deposits");
(e) all contracts, agreements, purchase or sale orders to which SELLER
is a party (collectively, the "Contracts");
(f) to the extent legally assignable, all licenses, approvals, permits
and certificates obtained from governmental agencies and held by SELLER
as of the Closing Date;
(g) all telephone numbers currently assigned to SELLER;
(h) the name of SELLER and any related or derivative name;
(i) trade marks, trade names and patents owned by SELLER;
(j) SELLER'S customer lists:
(k) the business of SELLER as a going concern and all goodwill of, in,
related to or associated with such business;
(l) the cash and bank accounts of SELLER;
(m) any claims asserted by SELLER in any litigation involving SELLER;
(n) SELLER minute books, tax returns and other corporate documents;
(o) leasehold rights to property located at ▇▇▇▇▇ ▇▇ ▇▇▇ ▇ ▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ (the "Facility");
1.02 SELLER Retention. Notwithstanding anything contained in Article 1.01
to the contrary, SELLER is not selling, and Purchaser is not purchasing,
pursuant to this Agreement, any of the following, all of which shall be
retained by SELLER:
(a) the consideration delivered or to be delivered to SELLER pursuant
to this Agreement;
(b) the right of SELLER to enforce the obligations of Purchaser under
the this Agreement;
1.03 Condition. Purchaser acknowledges and agrees that SELLER makes no
warranties with respect to the Assets and the Assets are being sold "AS IS"
and "WHERE IS" and all warranties, express or implied, of merchantability or
fitness for purpose or otherwise with respect to the condition, quality or
suitability of the Assets, are hereby expressly disclaimed
1.04 Consideration. The purchase price for the Assets shall be paid by
Purchaser as follows:
(a) At Closing, Purchaser shall assume SELLER'S secured debt to U.S.A.
Funding Ltd., having an approximate principal balance of $519,000
at August 31, 2004.
(b) At Closing, Purchaser shall assume SELLER'S secured debt to
▇▇▇▇▇ Investments Inc., having an approximate principal balance
of $2,335,000 at August 31, 2004.
(c) At Closing, Purchaser shall assume SELLER'S debt to Lone Star
Circuits Inc., having an approximate principal balance of $200,000.
(d) At closing, Purchaser shall assume the Accounts Payable and
accrued liabilities of SELLER up to an amount which is equal
to the Accounts Receivable which are aged less than 90 days.
Purchaser shall provide a list of the accepted Accounts Payable
to SELLER at Closing.
1.05 Due Diligence Period. Purchaser shall have a period of thirty days
from execution of this Agreement ("Due Diligence Period") to perform Due
Diligence with respect to SELLER, and Purchaser may terminate this Agreement
if the Due Diligence results are not satisfactory to Purchaser, as its sole
discretion. During this Due Diligence Period SELLER shall cooperate with
Purchaser and Purchaser's auditors to provide information requested. If
Purchaser terminates this Agreement, Purchaser shall agree not to do
business with customers of SELLER for two years after the termination
of this Agreement except for customers where Purchaser or any company
subsequently acquired by Purchaser, has a history of doing business.
1.06 Closing. Closing shall occur within thirty (30) days after the end
of the Due Diligence Period. However, Purchaser may close earlier at its
option.
1.07 No Third Party Beneficiaries. The assumption by Purchaser of
liabilities of SELLER pursuant to this Agreement shall in no way expand
the rights or remedies of any third party against SELLER or Purchaser as
compared to the rights and remedies which such third party would have had
beneficially against SELLER had Purchaser not assumed such liabilities.
Without limiting the generality of the foregoing, the assumption by
Purchaser of liabilities of SELLER pursuant to this Agreement shall not
create any third party beneficiary rights.
ARTICLE 2: SELLER'S REPRESENTATIONS AND WARRANTIES
SELLER hereby represents and warrants to Purchaser that the following
facts and circumstances are true and correct as of the date of this
Agreement:
2.01 Organization. SELLER is a corporation duly organized, validly
existing, and in good standing under the laws of Texas. SELLER is qualified
to do business in all jurisdictions in which it does business and has all
requisite power and authority (corporate and, when applicable, government)
to own, operate, and carry on its business as now being conducted.
2.02 Authority. SELLER has full power and authority to execute, deliver,
and consummate this Agreement, subject to the conditions to Closing set
forth in this Agreement.
2.03 Full Disclosure. No representation, warranty, or covenant made to
Purchaser in this Agreement nor any document, certificate, exhibit, or
other information given or delivered to Purchaser pursuant to this Agreement
contains or will contain any untrue statement of a material fact, or omits
or will omit a material fact necessary to make the statements contained in
this Agreement or the matters disclosed in the related documents,
certificates, information, or exhibits not misleading.
2.04 Broker. Neither the SELLER, nor any of its officers, directors,
employees, or stockholders, has retained, consented to, or authorized any
broker, investment banker, or third party to act on its behalf, directly
or indirectly, as a broker or finder in connection with the transactions
contemplated by this Agreement.
2.05 Liens. SELLER represents and warrants that there are no liens on the
Assets except for liens to secure debts listed in Article 1.04 (a) and 1.04
(b).
2.06 Operations Prior to Closing. SELLER warrants that it will use its
best efforts to operate the business of SELLER prior to Closing. SELLER
shall not enter into any transactions outside of the normal course of
business without prior notice to Purchaser.
2.07 Environmental Matters. Except as may be otherwise expressly disclosed
to Purchaser in writing during the Due Diligence Period, SELLER hereby
represents, covenants and warrants to Purchaser as follows:
(a) To the best of its knowledge, neither the Facility nor it are
the subject of any pending or threatened investigation or inquiry by
any federal, state, local or other governmental authority ("Governmental
Authority") of are subject to any remedial obligations under any applicable
zoning ordinances and building codes, flood disaster laws and health and
environmental laws, rules and regulations pertaining to health or the
Environment ("Applicable Laws"), including without limitation, the
Comprehensive Environmental Response, Compensation, and Liability Act of
1980, as amended ("CERCLA"), the Resource Conservation and Recovery Act
of 1987, as amended ("RCRA"), the Texas Water Code and the Texas Solid
Waste Disposal Act.
(b) To the best of its knowledge, it has obtained any required permits,
licenses or authorizations to construct, occupy, operate or use any portion
of its facility by reason of any Applicable Laws.
(c) It has not received notice from any Governmental Authority that (i)
hazardous substances, solid wastes, asbestos or other substances known or
suspected to pose a threat to health or the environment ("Hazards") have
been disposed of or otherwise released on or to the Facility or exist on
or within any portion of the Facility, (ii) prior use by them or the prior
owners of the Facility, has occurred which violates any Applicable Laws, or
(iii) the use which they make or intend to make of the Facility will result
in the disposal or release of any hazardous substance, solid waste or hazard
on, in or to the Facility. The terms "hazardous substance" and "release"
shall each have the meanings specified in CERCLA, and the terms "solid
waste" and "disposal" (or "disposed") shall each have the meanings specified
in RCRA; provided, however, that in the event either CERCLA or RCRA is
amended so as to broaden the meaning of any term defined thereby, such
broader meaning shall apply subsequent to the effective date of such
amendment; and provided further that, to the extent that the laws of the
State of Texas establish a meaning for "hazardous substance," "release,"
"solid waste," or "disposal" which is broader than that specified in either
CERCLA, RCRA or other federal law, such broader definition shall apply.
(d) To the best of its knowledge, there are no on-site or off-site
locations where hazardous substances, solid wastes or hazards from the
Facility have been improperly stored, treated, recycled, or disposed of.
(e) To the best of its knowledge, there has been no litigation brought
or threatened nor any settlement reached by or with any parties alleging
the presence, disposal, release or threatened release, of any hazardous
substance, solid wastes, or hazard from the use or operation of the
Facility.
(f) It has not received notice from any Governmental Authority that
the Facility is on any federal or state "Superfund" list, or subject to
any environmentally related liens.
(g) Neither it nor, to its knowledge, any tenant of any portion of
its Facility, has received any notice from any Governmental Authority with
respect to any violation of any Applicable Laws.
(h) It has not caused any violation of any Applicable Laws nor
permitted any environmental liens to be placed on any portion of the
Facility.
ARTICLE 3: PURCHASER'S REPRESENTATIONS AND WARRANTIES
Purchaser represents and warrants to SELLER that:
3.01 Authority. Purchaser has full power and authority to execute, deliver,
and consummate this Agreement subject to the conditions to Closing set forth
in this Agreement. All corporate acts, reports, and returns required to be
filed by Purchaser with any government or regulatory agency with respect to
this transaction have been or will be properly filed prior to the date of
this Agreement. No provisions exist in any contract, document, or other
instrument to which Purchaser is a party or by which Purchaser is bound that
would be violated by consummation of the transactions contemplated by this
Agreement.
3.02 Organization and Standing of Purchaser. Purchaser is a corporation
duly organized, validly existing, and in good standing under the laws of
the state of Texas, with corporate power to own property and carry on its
business as it is now being conducted.
ARTICLE 4: CONDITIONS TO PURCHASER'S OBLIGATION TO CLOSE
The obligation of Purchaser to Close under this Agreement is subject
to each of the following conditions (any one of which may, at the option of
Purchaser, be waived in writing by Purchaser) existing on the date of this
Agreement, or such earlier date as the context may require.
4.01 Representations and Warranties. Each of the representations and
warranties of SELLER in this Agreement and all other information delivered
under this Agreement including but not limited to financial statements shall
be true in all material respects as of the date of this Closing.
4.02 Compliance With Conditions. SELLER shall have complied with and
performed all agreements, covenants, and conditions in this Agreement
required to be performed and complied with. All requisite action (corporate
and other) in order to consummate this Agreement shall have been properly
taken by SELLER.
4.03 Suit or Proceeding. No suit or proceeding, legal or administrative,
relating to any of the transactions contemplated by this Agreement shall
have been overtly threatened or commenced that, in the sole discretion of
Purchaser and its counsel, would make it inadvisable for Purchaser to Close
this transaction.
4.04 Government Approvals and Filings. All necessary government approvals
and filings regarding this transaction, if any, shall have been received or
made prior to the date of this Agreement in substantially the form applied
for to the reasonable satisfaction of Purchaser and its counsel. Any
applicable waiting period for the approvals and filings shall have expired.
4.05 Corporate and Stockholder Action. All corporate and stockholder action
necessary to consummate the transactions contemplated in this Agreement
shall have been properly taken by SELLER.
ARTICLE 5: CONDITIONS TO SELLER'S OBLIGATION TO CLOSE
The obligation of SELLER to Close under this Agreement is subject to
each of the following conditions (any one of which at the option of SELLER
may be waived in writing by SELLER.
5.01 Corporate Action. Purchaser shall have taken appropriate corporate
action regarding this transaction, which shall be evidenced by resolutions
of its board of directors and certified by Purchaser's corporate secretary,
authorizing Purchaser to enter into and complete this transaction.
ARTICLE 6: PARTIES' OBLIGATIONS AT THE CLOSING
6.01 SELLER'S Obligations at the Closing. At the Closing, SELLER shall
deliver or cause to be delivered to Purchaser instruments of assignment and
transfer of all of the Assets of SELLER in form and substance satisfactory
to Purchaser. Simultaneously with the consummation of the transfer, SELLER
shall put Purchaser in full possession and enjoyment of all Assets
transferred to Purchaser.
SELLER, at any time after the Closing, shall execute, acknowledge,
and deliver to Purchaser any further deeds, assignments, conveyances, other
assurances, documents, and instruments of transfer reasonably requested by
Purchaser. SELLER shall also take any other action consistent with the
terms of this Agreement that may be reasonably requested by Purchaser for
the purpose of assigning, transferring, granting, conveying, and confirming
to Purchaser or reducing to possession any or all property and assets to be
conveyed and transferred by this Agreement.
6.02 Purchaser's Obligation at Closing. At the Closing, Purchaser shall pay
the purchase price, as described in Article 1.05, against delivery of the
items specified in Paragraph 6.01, above.
ARTICLE 7: EMPLOYEES
Purchaser shall deliver an offer of employment at least five days prior
to the closing date to the employees of SELLER selected for employment by
Purchaser. Purchaser's offer shall be contingent upon the occurrence of the
Closing and shall provide that all accrued but unused vacation earned by
such employees while in the employ of SELLER shall be carried over and
honored by Purchaser upon acceptance of Purchaser's offer of employment.
All employees who accept Purchaser's offer of employment shall become
employees effective upon the closing (such employees hereinafter referred to
as the ("Continuing Employees"). Purchaser shall provide to SELLER at the
Closing a list of all Continuing Employees and SELLER shall deliver a
termination notice to each of the Continuing Employees of Purchaser.
ARTICLE 8: GENERAL PROVISIONS
8.01 Survival of Representations, Warranties, and Covenants. The
representations, warranties, covenants, and agreements of the parties
contained in this Agreement or contained in any writing delivered pursuant
to this Agreement shall survive the date of this Agreement for the period
of time set forth in this Agreement.
8.02 Notices. All notices or other communications hereunder must be given
in writing and either (i) delivered in person, (ii) transmitted by facsimile
telecommunication, provided that any notice so given is also mailed as
provided for herein, (iii) delivered by Federal Express or similar
commercial delivery service, or (iv) mailed by certified mail, postage
prepaid, return receipt requested, as follows:
If to Purchaser: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Facsimile number (▇▇▇) ▇▇▇-▇▇▇▇
If to SELLER: ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇;
Facsimile number (▇▇▇) ▇▇▇-▇▇▇▇.
or to such other address or facsimile number as the SELLER, or the Purchaser
shall have designated to the other by like notice. Each such notice
or other communication shall be effective (i) if given by facsimile
telecommunication, when transmitted, (ii) if given by mail, five (5)
business days after such communication is deposited in the mail and
addressed as aforesaid, (iii) if given by Federal Express or similar
commercial delivery service, one (1) business day after such communication
is deposited with such service and addressed as aforesaid, and (iv) if
given by any other means, when actually delivered at such address.
8.03 Assignment of Agreement. This Agreement shall be binding on and
inure to the benefit of the parties to this Agreement and their respective
successors and permitted assigns. This Agreement may not be assigned by any
other party without the written consent of all parties and any attempt to
make an assignment without consent is void, except that Purchaser may assign
the Agreement to another subsidiary of Lone Star Circuits Inc.
8.04 Governing Law; Venue. This Agreement shall be made and entered into
in Dallas, Dallas County, Texas, and shall be governed by and construed and
enforced in accordance with the Laws of the State of Texas without giving
effect to any conflict of law, rule or principle of that state. Venue for
any actions in construction or enforcement of this Agreement shall be in
Dallas County, Texas.
8.05 Amendments; Waiver. This Agreement may be amended only in writing by
the mutual consent of all of the parties, evidenced by all necessary and
proper corporate authority. No waiver of any provision of this Agreement
shall arise from any action or inaction of any party, except an instrument
in writing expressly waiving the provision executed by the party entitled
to the benefit of the provision.
8.06 Entire Agreement. This Agreement, together with any documents and
exhibits given or delivered pursuant to this Agreement, constitutes the
entire agreement between the parties to this Agreement on the subject matter
of this Agreement. No party shall be bound by any communications between
them on the subject matter of this Agreement unless the communication is (a)
in writing, (b) bears a date contemporaneous with or subsequent to the date
of this Agreement, and (c) is agreed to by all parties to this Agreement.
On execution of this Agreement, all prior agreements or understandings
between the parties on the subject matter of this Agreement shall be null
and void.
8.07 Counterpart Execution. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, and each of which
alone, and all of which together, shall constitute one and the same
instrument. When each party has executed and delivered a counterpart of
this Agreement, the Agreement shall be fully binding on and enforceable by
the parties. In making proof of the Agreement it shall not be necessary to
produce or account for any counterpart other than the counterpart signed by
a party against whom this Agreement is to be enforced.
8.08 Headings. The headings in this Agreement are inserted for convenience
and identification only and are in no way intended to describe, interpret,
define or limit the scope, extent or intent of this Agreement or any
provision hereof.
8.09 Severability. If any part, article, paragraph, sentence or clause
of this Agreement shall be held to be indefinite, invalid or otherwise
unenforceable by a court of competent jurisdiction or by an arbitration
panel, the entire Agreement shall not fail on account thereof and the
balance of the Agreement shall continue in full force and effect.
Signed as of October 22, 2004.
LSC Asset Acquisition Corp.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇ ▇▇▇▇▇▇, President
North Texas PC Dynamics, Inc.
By: /s/ D. ▇▇▇▇▇▇ ▇▇▇▇▇
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D. ▇▇▇▇▇▇ ▇▇▇▇▇, President