ASSET PURCHASE AGREEMENT
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THIS AGREEMENT is made by and between CAR-BON, INC., a Massachusetts
corporation, d/b/a Whaling City Iron Co., having an office at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ (hereinafter referred to as "Seller"), ▇.▇. ▇▇▇▇ CO.,
INC., a New Jersey corporation having an office at The ▇▇▇▇▇, ▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ (hereinafter referred to as the
"Buyer"), and ▇▇▇▇▇▇ ▇. ▇▇▇▇ of ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇,
("▇▇▇▇").
WITNESSETH
WHEREAS, Seller is the owner and operator of a metal product business
located at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ (the "Business");
WHEREAS, Seller desires to sell to Buyer and Buyer desires to purchase
from Seller substantially all of the assets of the Business, including, the
equipment, fixtures, inventory, accounts receivable, goodwill and other assets
of the Business pursuant to the terms of this Agreement;
WHEREAS, in the event the Buyer purchases those assets of the Seller
referred to above, ▇▇▇▇ shall execute an Agreement Not To Compete with the
Seller, for a period of five (5) years and not within a one hundred (100) mile
radius of the City of New Bedford, Massachusetts.
NOW THEREFORE, in consideration of the mutual covenants and agreements
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of all of which are hereby acknowledged, the parties hereto agree as
follows:
1. Assets. Subject to the terms and conditions set forth in this
Agreement, the Seller agrees to and does hereby sell, convey, transfer, assign
and deliver to the Buyer, and the Buyer agrees to and does hereby purchase from
the Seller, all of the assets of the Seller used in the conduct and operation of
its Business (hereinafter referred to as the "Assets"), which Assets shall
include, but not limited to, the following items:
1.1 The vehicles, machinery, equipment, tools, office
furniture, fixtures and other personal property owned by Seller and used by
Seller in connection with the operation of Seller's business as set forth in
Exhibit "A" attached hereto (hereinafter collectively referred to as the
"Equipment") for One Hundred Thirty-four Thousand Nine Hundred ($134,900.00)
Dollars, as provided in said Exhibit "A";
1.2 All inventories of raw materials, work in process,
finished goods and other goods and supplies held for sale to customers in its
ordinary course of business as exist on the date of the Closing (hereinafter
collectively referred to as the "Inventory"); Inventory will be valued at
current market prices at the time of Closing. Any Inventory for which there is,
based on historical usage, more than a one (1) year supply on hand, will be paid
for by Buyer as used;
1.3 All licenses and permits owned by the Seller and used in
the Business as and to the extent the same may be transferred by the Seller to
the Buyer (the "Permits");
1.4 All telephone numbers, all names, trademarks, tradenames,
logos and service marks now or formerly used by the Seller in connection with
the Business, or any aspect thereof, including without limitation, "Whaling City
Iron" and "Car-Bon", all web pages and web addresses, domain names, logo designs
and the goodwill of the Business (collectively, the "Intangible Property").
1.5 All customer and vendor lists of Seller's Business.
1.6 All supplies including shipping and packing and all office
stationary, forms and related supplies (the "Supplies"). Additionally, Buyer
will obtain all outstanding customer quotations and proposals, unfilled and open
customer orders, accounting and computer files, and general business records.
Buyer will assume responsibility for all outstanding customer quotations and
proposals and all unfilled and open customer orders.
1.7 Accounts receivable with collectability guaranteed by
Seller. Accounts receivable in litigation, in dispute, or where there is a low
probability of collection will not be purchased. Accounts receivable will be
based on their book value at Closing calculated in accordance with generally
accepted accounting principals (GAAP), and will increase or decrease over the
amount allocated to accounts receivable as set forth in Exhibit "B" attached
hereto. Ninety (90) day plus day receivables, plus retainage, will be paid by
Buyer as monies are collected from customers.
The Assets do not include (i) any cash, cash equivalents, bank accounts
and deposits, prepaid expenses, and (ii) accounts receivable of Seller in
litigation, in dispute, or where there is a low probability of collection.
2. Purchase Price: The purchase price (the "Purchase Price") to be paid
by the Buyer to the Seller for the Assets shall be the sum of Seven Hundred
Eighty-nine Thousand Nine Hundred ($789,900.00) Dollars, and the purchase price
to be paid by the Buyer to ▇▇▇▇▇▇ ▇. ▇▇▇▇ for his Agreement Not To Compete shall
be the sum of Fifteen Thousand ($15,000.00) Dollars, to be paid as follows:
2.1 Upon the execution of this Agreement, Buyer shall make a
deposit of Seventy-five Thousand ($75,000.00) Dollars, to the Seller, toward the
purchase price to be held by Seller's attorney who shall account for the same at
the time of Closing. The deposit shall be held by Seller's attorney in his
attorney escrow account and shall only be disbursed upon the joint written
instructions of Seller and Buyer delivered to Seller's attorney. The amount of
Two Hundred Thousand ($200,000.00) Dollars is to be paid to the Seller by the
delivery of Buyer's subordinated promissory note (the "Note"). The principal
shall be payable in five (5) equal annual installments commencing on the first
anniversary of the Closing. The Note will bear interest on the unpaid principal
balance outstanding thereunder at the rate of five (5%) percent per annum, with
interest paid semiannually. Principal and interest, if not sooner paid, shall be
due and payable on the first day of the sixtieth (60) month next following the
date of Closing. The Note may be prepaid at any time, in whole or in part,
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without penalty. The Note will be guaranteed by Moro Corporation, a Pennsylvania
corporation, doing business at The ▇▇▇▇▇, ▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, the sole shareholder of Buyer, as well as by JAD
Associates, LLC, a Pennsylvania limited liability corporation, doing business at
The ▇▇▇▇▇, ▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, purchaser
of ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇;
2.2 An amount equal to the Inventory for which there is based
on historical usage, more than one (1) year supply on hand, shall be credited
towards the Purchase Price.
2.3 An amount equal to all accounts receivable that are more
than ninety (90) days old and all retainage and the deposit held in escrow shall
be credited towards the Purchase Price.
2.4 The balance of the Purchase Price to the Seller shall be
paid in cash or by certified, cashiers, treasurers or bank check drawn at a
Pennsylvania financial institution which is insured by the Federal Deposit
Insurance Corporation at the Closing (as that term is hereinafter defined) or by
wire transfer to Seller's bank account;
2.5 The payment to ▇▇▇▇ for his covenant not to compete shall
be paid in three (3) annual installments commencing on the first anniversary of
the Closing, in cash or by check drawn at a Pennsylvania or Massachusetts
financial institution which is insured by the Federal Deposit Insurance
Corporation;
2.6 The allocation of the Purchase Price of the Assets being
purchased from the Seller shall be as set forth on Exhibit "B" attached hereto
and incorporated herein by reference:
2.7 The Purchase Price shall be adjusted on the date of
Closing to reflect any increase or decrease in the Seller's accounts receivable
and inventory from the value allocated to accounts receivable and Inventory set
forth on Exhibit "B" attached hereto.
2.8 The purchase price shall be further adjusted on the day of
Closing in the form of a credit to Buyer for the accounts payable and other
accrued liabilities to be assumed by the Buyer. Accounts payable will be based
on their book value at Closing calculated in accordance with generally accepted
accounting principals (GAAP) and will increase or decrease over the amount
allocated to accounts payable as set forth in Exhibit "B" attached hereto.
2.9 Within sixty (60) days after the Closing, Seller shall
cause its Accountants to deliver a balance sheet of Seller as of the Closing
date and a computation of the Purchase Price as of such date for review by
Buyer's Accountants. It is understood and agreed that the adjustments may be up
or down. The parties will, within thirty (30) days, agree on the calculations of
the final Purchase Price and adjust the difference between the Final Purchase
Price and the Estimated Purchase Price as follows: a. If the Final Purchase
Price is higher than the Estimated Purchase Price, the Buyer shall forthwith pay
said difference in cash or by check to the Seller, drawn at a Pennsylvania or
Massachusetts financial institution which is insured by the Federal Deposit
Insurance Corporation; or b. If the Final Purchase Price is lower than the
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Estimated Purchase Price, the Seller shall forthwith credit the Buyer with the
difference as a payment by Buyer on the 90-day plus receivables and retainage to
be collected by Buyer from customers, and if such shall be insufficient, then
the further difference shall be deducted as a partial payment on the promissory
note (the "Note") referred to in Section 2.1. and shall deduct said partial
payment from the then payment of principal due on the Note.
3. Closing: The sale and transfer of the Assets by the Seller to the
Buyer will take place at the offices of Lurio & Associates, P.C., ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ at 10:00 a.m. on April 1, 2004, or at such
other time and place as the parties may agree to in writing (the "Closing"). If
the Closing takes place at a location other than New Bedford or Dartmouth,
Massachusetts, the Buyer and Seller agree that all executed documents necessary
to carry out the terms of this Agreement and which are due at the Closing, will
be executed and delivered to the Attorney representing the other party who shall
hold the same in escrow pending the Closing via telephone, facsimile, etc. as
agreed upon by the parties Attorneys. At the Closing the Seller shall deliver to
the Buyer the documents, instruments, certificates and agreements set forth in
Paragraph 8 hereof including, but not limited to, such bills of sale and other
sufficient instruments of transfer and conveyance as shall be effective to vest
in the Buyer a good marketable title to the Assets and business to be sold as
provided in this Agreement. It is agreed that time is of the essence of this
Agreement. At the Closing, the Assets shall be conveyed and delivered to Buyer
free and clear of all liens, security interests, claims, pledges, charges,
agreements, or any other adverse claims whatsoever.
4. Representations and Warranties of the Seller: In order to induce the
Buyer to enter into this Agreement and in consideration of the agreement by the
Buyer to pay the Purchase Price, Seller and ▇▇▇▇, jointly and severally,
warrants and represents that:
4.1 Seller is a corporation duly organized, validly existing
and in good standing under the laws of Massachusetts with full corporate power
and authority to own its properties and to carry on its business as now owned
and carried on by it.
4.2 Seller has all requisite power and authority to enter into
this Agreement and perform the obligations to be performed by the Seller
hereunder. This Agreement has been duly authorized, executed and delivered and
constitutes the valid and binding obligation of the Seller.
4.3 Seller has filed all federal, state and local tax returns
required by law and has paid all taxes, assessments, and penalties due any
payable.
4.4(a) Seller has good and marketable title to the Assets. All
of the Assets are free and clear of restrictions on or conditions to transfer or
assignment, and free and clear of mortgages, liens, pledges, charges,
encumbrances or claims.
(b) To enable Seller to make conveyance as herein provided,
the Seller may, on the date of Closing, use the purchase money or any potion
thereof to clear the title to the Assets of any or all encumbrances or
interests.
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4.5 The Seller shall deliver at the Closing such instruments
and documents as are necessary to satisfy the conditions precedent to the
obligations of the Buyer set forth in Paragraph 6 hereof.
4.6 There is no suit, action, proceeding, claim or
investigation pending before any court or any governmental or administrative
agency or department, or to the knowledge of Seller threatened against or
affecting the Seller which, if adversely determined, might materially and
adversely affect the Assets; nor is there any judgment, decree, injunction, or
order of any court, governmental or administrative department, commission,
agency, instrumentality, or arbitrator outstanding against the Seller having any
such effect, or which insofar as can be foreseen, may have such effect.
4.7 The Seller has complied with, and is not in violation of,
applicable foreign, federal, state, or local statutes, laws and regulations
(including without limitation, any applicable building, zoning, or other law,
ordinance, of regulation or any occupational safety and health laws) affecting
the Seller's Assets or the operation of the Seller's business.
4.8 From and after the date of the execution of this
Agreement, Seller shall provide to Buyer and Buyer's accountants, attorneys and
other representatives copies of agreed upon financial and tax records of the
Seller for the purpose of assisting in Buyer's pre-Closing due diligence.
4.9 Conflicts with Instruments. Neither the execution or
delivery of this Agreement by Seller or ▇▇▇▇, or the consummation of the
transactions contemplated by this Agreement by Seller or ▇▇▇▇, nor the
compliance with the terms of this Agreement by Seller or ▇▇▇▇ will except for
consents or waivers required under certain agreements, leases, or other
instruments or documents which are specifically set forth in Schedule 4.9
attached hereto, violate, conflict with or result in a breach of any provision
of, or constitute a default (or an event which, with notice or lapse of time or
both, would constitute a default) under or result in the termination, give
others a right of termination, acceleration or cancellation of, or accelerate
the performance required by, or result in the creation of any lien, security
interest, charge or encumbrance upon any of the properties of Seller, or result
in being declared void, voidable or without further binding effect any of the
terms, conditions or provisions of any material lease, material agreement or
other material instrument or commitment or obligation to which Seller 'is a
party, or by which its properties may be bound or affected.
4.10. Financial Statements. Seller has delivered to Buyer its
compiled financial statements as of and for the years ended September 30, 2001,
September 30, 2002, and September 30, 2003, and the internally prepared
financial statements for the three months ended December 31, 2003, all of which
are attached hereto as Schedule 4.10 (the "Financial Statements"). The Financial
Statements have been prepared from and are in accordance with the books and
records of Seller and present fairly the financial position of Seller as of the
dates indicated, and the results of operations for the periods indicated, and
are true and correct in all material respects. The Financial Statements have
been prepared in conformity with generally accepted accounting principles,
consistently applied. Except as set forth in Schedule 4.10 or in the Financial
Statements, since December 31, 2003, Seller has not incurred any cost, expense,
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obligation or liability, whether accrued, absolute, contingent or otherwise,
except obligations incurred in the ordinary course of business. Except as
reflected on the Financial Statements or the Schedules hereto and except as
incurred in the ordinary course of business, Seller has no liabilities or
obligations of any kind, known or unknown, whether accrued, absolute, contingent
or otherwise.
4.11 Licenses and Trademarks. Seller (i) has all permits,
approvals, authorizations, consents, licenses, certificates and registrations
which are material to the conduct of its business, all of which are valid and in
full force and effect in accordance with their terms and all of which are set
forth in Schedule 4.11, and (ii) owns or possesses adequate rights to use all
trade names, trademarks, and copyrights and all technology, processes, computer
programs, know-how and formulae which are material to the conduct of its
business and the use thereof does not violate or infringe upon the rights of any
other party.
4.12 Accounts Receivables. Seller's accounts receivables
reflected on the December 31, 2003 balance sheet and all accounts receivables
generated thereafter are bona fide receivables, and were generated in the
ordinary course of business, are accurately dated and are collectible in full in
accordance with their terms. On or prior to the date hereof, Seller has
delivered to Buyer an accurate and complete aging schedule of Seller's accounts
receivables as of January 1, 2004, which is attached hereto as Schedule 4.12.,
and shall further provide Buyer with a subsequent list of accurate and complete
schedule of accounts receivable as of Monday, March 29, 2004.
4.13. Taxes and Tax Returns. Seller has withheld proper and
accurate amounts from its employees, compensation in substantial compliance with
all withholding and similar provisions of the Internal Revenue Code of 1986, as
amended (the "Code"), and any and all other applicable laws, statutes, codes,
ordinances, rules and regulations. Seller has not received any notice of
assessment or proposed assessment by the Internal Revenue Service or any other
taxing authority in connection with any tax returns and there are no pending tax
examinations of or tax claims asserted against Seller. Complete copies of the
income tax returns of Seller for the three years ending September 30, 2003, as
filed with the Internal Revenue Service ("IRS"), are attached hereto as Schedule
4.13.
4.14. Agreements. Except for this Agreement and the
transactions, instruments, agreements, and documents contemplated under this
Agreement, and as listed in Schedule 4.14 or any other Schedule attached hereto,
Seller is not a party to any material written or oral: (a) contract with any
labor union; (b) contract for the future purchase of fixed assets other than in
the ordinary course of business; (c) contracts for the future purchase of
materials, supplies or equipment other than in the ordinary course of business;
(d) contract for the employment of any officer, individual employee or other
person on a full-time basis or any contract with any person on a consulting
basis; (e) bonus, pension, profit-sharing, retirement, stock purchase, stock
option, hospitalization, medical insurance or similar plan, contract or
understanding in effect with respect to employees or any of them or the
employees of others; (f) agreement or indenture relating to the borrowing of
money or to the mortgaging, pledging or otherwise placing of a lien on any
Assets; (g) guaranty of any obligation for borrowed money or otherwise; (h)
lease or agreement under which Seller is lessee of or holds or operates any
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property, real or personal, owned by any other party; (i) lease, license or
other agreement under which Seller is lessor of, or permits any third party to
hold or operate any property, real or personal, owned or controlled by it; or
(j) agreement or other commitment for capital expenditures in excess of normal
operating requirements; (each of the foregoing being referred to collectively
herein as "Contracts"). All Contracts are valid and in full force and effect on
the date hereof, and Seller has not breached any material. provision of, or is
in default under any material provisions of, any Contract.
4.15. Absence of Changes. Except as bet forth in Schedule 4.15
and the transactions contemplated by this Agreement, since December 31, 2003,
there has not been: (a) any material adverse change in the financial condition,
results of operations, assets, liabilities or business of Seller; (b) any
material liability or obligation of any nature whatsoever (contingent or
otherwise) incurred by Seller, other than current liabilities or obligations
incurred in the ordinary course of business; (c) any Asset made subject to a
lien of any kind; (d) any waiver of any valuable and material right of Seller,
or the cancellation of any material debt or claim held by Seller; (e) any
mortgage, pledge, sale, assignment or transfer of Assets except in the ordinary
course of business; (f) any damage, destruction or loss (whether or not covered
by insurance) which materially adversely affects or may materially adversely
affect the Assets; or (g) any change in the accounting methods or practices
followed by Seller.
4.16 Employee Benefit Plans.
(i) Except as set forth on Schedule 4.16, Seller does
not sponsor, maintain, administer or contribute to: (i) any employee pension
benefit plan (as defined in Section 3(2) of the Employee Retirement Income
Security Act of 1974 ("ERISA")) (a "Retirement Plan") , (ii) any plan or
arrangement providing health (medical, dental or vision), disability, life,
accident, legal. aid, dependent care, supplemental unemployment or education
benefits; any plan or contract providing for benefits on severance or
termination of employment, reduction of hours, change in employment category or
similar event; any program providing for paid time off (including holiday pay,
sick leave, vacation, leave of absence, disability); any fringe benefit
(including company cars) ; or any employee welfare benefit plan (as defined in
Section 3(1) of ERISA) not included in the foregoing categories (a "Welfare
Plan"), and (iii) any contract, policy or practice relating to employment; any
contract, policy or practice providing payments or benefits upon a change in
control, management or ownership; any stock option, stock purchase, stock
appreciation or stock ownership plan; any bonus, performance or incentive
compensation plan; or any contract, policy or practice providing compensation or
benefits not included in the foregoing categories or in subsections (i) or (ii)
above (a "Benefit Arrangement"). All Retirement Plans, Welfare Plans and Benefit
Arrangements sponsored, maintained, administered or, contributed to by the
Seller are hereinafter collectively referred to as "Employee Benefit Plans."
(ii) Seller has delivered or made available to Buyer
true, correct and complete copies, including any and all amendments thereto, of
the following (to the extent applicable) : (i) the Plan document and amendments
of the Plan document (or, if no written plan document exists, a description
thereof), (ii) the current and all prior Summary Plan Descriptions and any
employee communications describing the terms or operations of the Plan, (iii)
the three most recently filed Form 5500s including all schedules thereto and any
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related accountant's reports, (iv) the determination letters issued by the IRS,
(v) the three most recent actuarial valuations (in the case of a defined benefit
plan) or most recent allocation reports (in the case of a defined contribution
plan), (vi) any current or prior collective bargaining agreements or other
contracts requiring contributions to such Plan, and (vii) any current or prior
employee handbooks or policy manuals which refer to such Plan.
(iii) Each Employee Benefit Plan is, and has at all
times been, administered, maintained and operated in compliance with its terms
and in compliance with the applicable provisions of the Internal Revenue Code,
ERISA and all other federal, state and local laws (and all rules and regulations
promulgated or proposed thereunder).
(iv) Seller has performed all material obligations
required to be performed by it by the terms of each Employee Benefit Plan
(including, but not limited to, filing all governmental returns or reports on a
timely basis), and all contributions or payments deducted by Seller for tax
purposes were properly deductible in the year for which such deductions were
claimed. Seller has made no non-deductible contributions (within the meaning of
Code Section 4972) to any Employee Benefit Plan.
(v) Each Retirement Plan that is or was intended to
constitute a qualified plan under Section 401(a) of the Code is, and has at all.
times been, qualified, in form and operation, under Section 401(a) of the Code
and is the subject of a favorable determination letter from the IRS.
4.17. Compensation Arrangements. Schedule 4.17 contains a
correct list setting forth the names of all persons who are employed by Seller,
together with (i) a statement of the current rate of pay (to the extent
ascertainable) to or in respect of each such person for services rendered or to
be rendered in the current year and the basis therefor, (ii) an indication of
the method by which each is compensated (e.g. salary plus commission, straight
commission, draw against commission), (iii) their job descriptions, union
affiliation, and a list of any employment or other agreements pursuant to which
such compensation was or is to be paid (copies of which have been made available
to Seller), and (iv) the names and titles of all directors and officers of
Seller.
4.18 Consents, etc. Except as described in Schedule 4.18, no
consent, authorization, order or approval of, or filing or registration with,
any governmental commission, board or other regulatory body or any other person
or entity is required for or in connection with the execution or delivery of
this Agreement by Seller or the consummation by Seller of the transactions
contemplated hereby.
4.19 Environmental Laws. Any and all permits, licenses and
other authorizations which are required under federal, state, local, or other
laws relating to pollution or protection of the environment, including laws
relating to emissions, discharges, releases, or threatened releases of
pollutants, contaminants, or hazardous or toxic materials or wastes into ambient
air, surface water, ground water, or land, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling of pollutants, contaminants or hazardous or toxic
materials or wastes ("Environmental Laws") have been obtained by Seller in
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respect of the business currently conducted by it. Seller is in compliance with
all terms and conditions of the required permits, licenses and authorizations in
connection with the business conducted by it, and is also complying, with all
other limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules and timetables contained in those laws or
contained in any regulation, code, plan, order, decree, judgment, notice or
demand letter issued, entered, promulgated or approved thereunder. There have
been no past or present events, conditions, circumstances, activities,
practices, incidents, actions or plans of Seller which would interfere with or
prevent continued compliance, or which may give rise to any common law or
statutory legal liability or obligation, or otherwise form the basis of any
claim, action, suit, proceeding, hearing or investigation, based on or related
to the manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling, or the emission, discharge, release or threatened
release into the environment, of any pollutant, contaminant, or hazardous or
toxic material or waste material.
4.20 Insurance. Schedule 4.20 contains a true, complete and
correct list of all insurance policies in force in which Seller is named as an
insured, and for which Seller has paid any premium, and which insure any of the
Assets or the Premises, or cover any liabilities of the business, and states for
each such policy the name of the insurer, type and amount of coverage,
deductible amounts, if any, expiration date and the annual premium amount. Such
policies are in full force and effect and all premiums with respect to such
policies are currently paid.
4.21 Related Party Obligations.Except as set forth on Schedule
4.21, Seller has no obligation, liability or commitment (contingent or
otherwise) to or from any past or present officer, director, or shareholder or
any party related to, controlling, controlled by or under common control with
any of the foregoing.
5. Representations and Warranties of Buyer: In order to induce the
Seller to enter into this Agreement and in consideration of the agreement by the
Seller to sell the Assets, the Buyer represents and warrants to the Seller that:
5.1 The Buyer has the power and authority to execute, deliver
and perform this Agreement and the other documents and instruments contemplated
hereby. The execution, delivery and performance of this Agreement and the
documents contemplated hereby and the consummation of the transactions
contemplated hereby and thereby have been duly authorized and approved by Buyer.
This Agreement, and each of the other agreements, documents and instruments to
be executed and delivered by Buyer have been duly executed and delivered by and
constitute the valid and binding obligation of Buyer enforceable against Buyer
in accordance with their terms.
5.2 Neither the execution and delivery of this Agreement and
the other documents and instruments contemplated hereby, the consummation of the
transactions contemplated hereby or thereby, nor the performance of this
Agreement and such other agreements in compliance with the terms and conditions
hereof and thereof will (i) conflict with or result in any breach of any trust
agreement, certificate of incorporation, bylaw, judgment, decree, order, statute
or regulation applicable to Buyer, (ii) require any consent, approval,
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authorization or permit of, or filing with or notification to, any governmental
or regulatory authority, (iii) result in a breach of or default (or give rise to
any right of termination, cancellation or acceleration) under any law, rule or
regulation or any judgment, decree, order, governmental permit, license or order
or any of the terms, conditions or provisions of any mortgage, indenture, note,
license, agreement or other instrument to which Buyer is a party, or (iv)
violate any order, writ, injunction, decree, statute, rule or regulation
applicable to Buyer.
5.3 Neither the execution and performance of this Agreement or
the other agreements executed by the Buyer in accordance with the terms hereof,
nor the consummation of the transactions contemplated hereby and thereby, will
violate any provisions of law, any order of any court or other agency or
government, or any ordinance, indenture or agreement to which the Buyer is a
party which would materially impair the Buyer's ability to consummate the
transactions contemplated hereby.
6. Conditions Precedent to Obligations of the Buyer: The obligation of
the Buyer to purchase and pay for the Assets and to consummate the other
transactions contemplated hereby is subject to the satisfaction, or the waiver
of any or all thereof by the Buyer at the Closing, of the following.
6.1 The representations, warranties and covenants of the
Seller and ▇▇▇▇ contained in this Agreement or otherwise made in writing in
connection with the transactions contemplated by this Agreement shall be true
and correct in all material respects on and as of the date of Closing with the
same force and effect as though such representations, warranties and covenants
have been made on and as presentations, warranties and covenants have been made
on and as of such date.
6.2 Receipt of ▇▇▇▇ of Sale of all the assets enumerated in
Paragraph 1, which said ▇▇▇▇ of Sale shall contain the usual covenants and
warranties of title and which shall transfer title to such assets to the Buyer
free of encumbrances.
6.3 The Seller shall have delivered all of the resolutions,
certificates, documents and instruments required by this Agreement.
6.4 At the time of the execution of this Agreement, ▇▇▇▇ and
JAD Associates, LLC, a Pennsylvania limited liability corporation ("JAD"), and
an affiliate of Buyer, shall enter into an agreement of sale for the real
property owned by ▇▇▇▇ located at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇
("Premises"). The Purchase Price for the Premises shall be Four Hundred
Twenty-five Thousand ($425,000.00) Dollars cash, and the Closing shall take
place on April 1, 2004 at 10:00 a.m., and at the same time of the Closing for
this Agreement with Car-Bon, Inc. The agreement of sale shall, among other
things, contain a financing contingency, require a minimal deposit of Five
Thousand ($5,000.00) Dollars, and shall set forth agreed upon representations
and warranties.
6.5 Seller and ▇▇▇▇ shall have performed all covenants and
agreements to be performed by each of them on or before Closing pursuant to the
terms of this Agreement.
10
6.6 The Buyer shall be satisfied in all respects with the
results of its pre-Closing due diligence of the business and the premises
conducted in accordance with Paragraph 4.8 of this Agreement, including the
Phase I Report referred to in Paragraph 7.3 herewith.
6.7 Closing of the Purchase and Sale of the Premises shall
have concurrently occurred under the Agreement of Sale for the Premises.
7. Conditions Precedent to Obligations of the Seller: The obligation of
the Seller to transfer the Assets and to consummate the other transactions
contemplated hereby is subject to the satisfaction, or the waiver of any or all
thereof by the Buyer at the Closing, of the following:
7.1 The representations, warranties and covenants of the Buyer
contained in this Agreement or otherwise made in writing in connection with the
transactions contemplated by this Agreement shall be true and correct in all
material respects on and as of the date of Closing with the same force and
effect as though such representations, warranties and covenants have been made
on and as of such date.
7.2 The Buyer shall have performed and complied with, all
agreements contained herein required to be performed or complied with by it
prior to or at the date of Closing, and the Buyer shall have delivered a
certificate to the Seller, in form and substance satisfactory to the Seller to
such effect.
7.3 Seller shall have ordered and has selected an
environmental engineering firm to conduct a Phase I Environmental Site
Assessment, which assessment is satisfactory to Buyer. The Buyer and Seller
shall spilt the cost of the assessment.
7.4 Moro Corporation shall have executed the guaranty.
7.5 The Buyer shall have delivered the Purchase Price, the
Note, and all of the resolutions, certificates, documents and instruments
required by this Agreement.
8. Closing Documents.
8.1 At the Closing, the Seller will deliver to the Buyer the
following, all documents in form and substance reasonably satisfactory to the
Buyer:
(a) A ▇▇▇▇ of Sale duly executed by Seller transferring
to the Buyer the Seller's title to the Assets consistent with the
representations and warranties contained in Paragraph 3; and
(b) A Certificate of the Clerk or Assistant Clerk of
Seller with respect to the incumbency of officers and votes to the elect that
Seller was duly and validly authorized to enter into this Agreement and execute,
and deliver any and all documents, instruments or agreements and to do and
perform any and all other things in furtherance of the transactions contemplated
hereby; and
11
(c) Letters of Good Standing issued by the Secretary of
the Commonwealth of Massachusetts and a letter from Seller's Accountants
verifying that all Tax Returns and payments, due prior to Closing, have been
filed and paid.
8.2 At the Closing, the Buyer will deliver to the Seller the
following, all documents in form and substance reasonably satisfactory to the
Seller and Seller's counsel:
(a) The Purchase Price as provided in Paragraph 2;
(b) The Note duly executed by Buyer; and
(c) The Guaranty executed by Moro Corporation.
8.3 At the Closing, ▇▇▇▇ shall deliver to the Buyer his
Agreement Not To Compete with the Buyer for a period of five (5) years following
the Closing and within a one hundred (100) mile radius of the City of New
Bedford. The Non-Compete Agreement shall provide that Buyer shall pay to ▇▇▇▇
the aggregate sum of Fifteen Thousand ($15,000.00) Dollars, to be paid to ▇▇▇▇
by the delivery of Buyer's Promissory Note (the "Note"). The principal shall be
payable in three (3) equal annual installments commencing on the first
anniversary of the Closing. The Agreement Not To Compete shall also be executed
and delivered by Seller. The Note will bear interest on the unpaid principal
balance outstanding thereunder at the rate of five (5%) percent per annum, with
interest paid semiannually. Principal and interest, if not sooner paid, shall be
due and payable on the first day of the thirty-sixth (36) month next following
the date of Closing. The Note may be prepaid at any time, in whole or in part,
without penalty. The Note will be guaranteed by Moro Corporation, the sole
stockholder of Buyer. ▇▇▇▇ shall also execute and deliver to Buyer a Consulting
Agreement providing that he shall act as a consultant to Buyer for a three (3)
month period following Closing at the rate of Sixty ($60.00) Dollars per hour.
During month one of the agreement, ▇▇▇▇ shall provide up to seventy-five (75)
hours of consulting services, and during months two and three, he shall provide
up to thirty (30) hours of consulting services. The consulting services shall be
performed at Seller's place of business unless the parties agree that ▇▇▇▇'▇
duties can be performed at time other location.
9. Conduct of Business: Seller agrees that throughout the period from
and including the execution of this Agreement through and including the date of
Closing, it will:
9.1 Use its best efforts to conduct the Business substantially
in the manner in which the Business has previously been conducted.
9.2 Not take any action which is not in the ordinary course of
its business, except insofar as that action is taken to satisfy the express
condition of this Agreement.
9.3 Use its best efforts to preserve its business organization
intact, to preserve the Seller's present relationships with suppliers, customer
and others having business relationships with the Seller.
12
9.4 Not take any action or fail to take any action, as the
case may be, the result of which would be to prevent Seller from selling the
Assets to Buyer or otherwise prevent Seller from performing its obligations
under this Agreement or any of the other documents and agreements, which may be
necessary to effectuate the purposes of this Agreement.
9.5 ▇▇▇▇ shall not transfer, assign, encumber, hypothecate,
sell, or transfer any interest whatsoever in any of the capital stock of Seller,
or in or to the Premises.
10. Adjustments: All costs for personal property taxes, etc. to the
date of the Closing which may constitute a lien upon the Assets, as applicable,
or any other accruals assumed by Buyer, including, but not limited to vacation
pay and profit sharing contributions, shall be apportioned as of the date of the
Closing. All personal property taxes shall be apportioned, the Seller paying pro
rata from July 1, 2003 to the date of Closing with the Buyer paying or assuming
the balance of said taxes.
11. Risk of Loss: Seller shall bear the risk of all loss or damage to
the Assets from all causes until the Closing. Seller shall keep and maintain the
Assets insured, at its expense, against fire or other casualty in the same
amount as they are presently insured.
12. Termination: Anything herein or elsewhere to the contrary
notwithstanding, this Agreement may be terminated (i) by Buyer if the conditions
set forth in Section 6 hereof shall not have been complied with or performed in
all material respects and such noncompliance or nonperformance shall not have
been cured or eliminated (or by its nature cannot be cured or eliminated) by
Seller or ▇▇▇▇ on or before 5:00 p.m. on April 6, 2004, provided, however, that
such date shall in no event be earlier than five (5) days after Buyer's receipt
of the Phase I Report referred to in Section 7.3.; or (ii) by Seller if the
conditions set forth in Section 7 hereof shall not have been cured or eliminated
(or by its nature cannot be cured or eliminated) by Buyer on or before April 6,
2004; or (iii) by Buyer if any time prior to the consummation of Closing if it
is not reasonably satisfied with its due diligence investigation of the Assets,
or the business of Seller, or the Assets, or to the Premises, at any time after
the date hereof. It is understood and agreed that (i) any such termination shall
not in and of itself be a breach of this Agreement, and (ii) any such
termination shall not limit, extinguish or modify any claim or cause of action
which may otherwise exist for a breach of any covenant, warranty, representation
or obligation contained herein.
13. Use of Name: After the Closing, except for purposes of wrapping-up
business affairs, the Seller shall not use the name "Whaling City Iron" or any
name containing "Whaling".
14. Brokerage: Neither party to this Agreement has had any contact or
any communication in connection with the subject matter of this transaction
through any broker or other person who can claim a right to a commission or a
finder's fee as a procuring cause of the sale contemplated herein. In the event
that any broker or finder perfects a claim for a commission or finder's fee
based upon such contract, dealings or communication, the party against whom the
broker or finder makes his claim shall be responsible for such commission or fee
and all cost and expenses (including reasonable attorneys fees) incurred by the
other party in defending against the same.
13
15. Buyer's Default: In the event that all Conditions Precedent shall
have been satisfied or waived and the Agreement shall not have been terminated,
and Buyer shall default in its obligation to purchase the Assets hereunder, the
Seller shall have the right to retain the Deposit, such right to be without
prejudice to the right of Seller to require specific performance and payment of
other or further damages, or to pursue any remedy, legal or equitable, which
shall accrue by reason of such default.
16. Seller's Default: In the event that all Condition Precedent shall
have been satisfied or waived and the Agreement shall not have been terminated,
and Seller shall default in the performance of this Agreement, the Deposit shall
be promptly returned to Buyer, and Buyer may pursue any and all remedies
available to it at law or in equity, including but not limited to specific
performance.
17. Further Assurances: Seller agrees that it shall, at any time and
from time to time after the date hereof, upon request of Buyer, do, execute,
acknowledge and deliver to Buyer all such further acts, assignments, transfers,
conveyances, powers of attorney and assurances as may be required for the better
assigning, transferring, granting, conveying, assuring and confirming to Buyer,
and its successors and assigns, title to the Assets, or for the aiding and
assisting in collection or reducing to possession any or all of the Assets.
18. Notices: All notices, requests, consents and other communications
hereunder shall be in writing, shall be addressed to the receiving party's
addresses set forth below or to such other address as a party may designate by
notice hereunder, and shall be either (i) delivered by hand, (ii) made by telex,
telecopy or facsimile transmission, (iii) sent by recognized overnight courier,
or (iv) sent by registered or certified mail, return receipt requested, postage
prepaid.
If to Buyer: ▇.▇. ▇▇▇▇ Co., Inc.
The ▇▇▇▇▇
▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
With a copy to: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esquire
Suite 2340, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
If to Seller: Car-Bon, Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
With a copy to: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., Esquire
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
If to ▇▇▇▇▇▇ ▇. ▇▇▇▇: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
14
With a copy to: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., Esquire
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
All notices, requests, consents and other communications hereunder
shall be deemed to have been received (i) if by hand, at the time of the
delivery thereof to the receiving party at the address of such party set forth
above, (ii) if made by telex, telecopy or facsimile transmission, at the time
that receipt thereof has been acknowledged by electronic confirmation or
otherwise, (iii) if sent by overnight courier, on the next business day
following the day such notice is delivered to the courier service, or (iv) if
sent by registered or certified mail, on the fifth business day following the
day such mailing is made.
19. Construction of Agreement: This Agreement has been executed in one
or more counterparts, each of which shall be deemed to be original. This
Agreement shall he binding upon and inure to the benefit of the parties hereto
and their respective heirs, administrators, executors, successors, and assigns,
provided, however, no party to this Agreement may assign any of its rights under
this Agreement without the prior written consent of all other parties hereto.
This Agreement may not be amended or modified except pursuant to a written
instrument executed by both Buyer and Seller. This Agreement contains the entire
agreement between the parties with respect to the subject matter hereof and is
subject to no other understandings, conditions or agreements other than those
expressly stated herein. The parties further agree that this Agreement shall be
governed by and construed in accordance with the laws of the Commonwealth of
Massachusetts.
20. Indemnification.
A. From and after the date hereof, Seller and ▇▇▇▇, jointly
and severally, agrees to indemnify against, and to protect, save and keep Buyer
and its officers, directors, shareholders, agents, employees, and affiliates and
their successors and assigns (jointly and severally, an "Seller Indemnified
Party") harmless from, and to assume liability for, payment of all liabilities,
obligations, losses, damages, penalties, interest, claims, actions, suits,
judgments, settlements, charges, out-of-pocket costs, expenses and disbursements
(including reasonable costs of investigation, and reasonable fees of attorneys,
accountants and expert witnesses) of whatsoever kind and nature that may be
imposed on or incurred by a Seller Indemnified Party as a consequence of or in
connection with any claims, suits, demands, threats, causes of actions,
obligations, debts, liability, or damages whatsoever, (i) arising or incurred by
Seller prior to or after the Closing unless Buyer has assumed such obligation or
liability in this Agreement, or (ii) arising in whole or in part by reason of
the performance or non-performance of the terms of this Agreement or any breach
of any representation, warranty, or covenant in this Agreement or any
certificate or document furnished pursuant hereto by Seller or ▇▇▇▇, or (iii) by
reason of or the result of the operation by any person or entity of the business
of Seller prior to the Closing unless assumed by Buyer, or (iv) by reason of or
the result of any asserted or actual violation by Seller of any Environmental
Law with respect to facts or circumstances existing as of Closing in connection
with the business of Seller or the Assets, or in connection with the Premises.
15
B. From and after the date hereof, Buyer agrees to indemnify
against, and to protect, save and keep Seller, ▇▇▇▇, and their officers,
directors, shareholders, agents, employees, and affiliates and their successors
and assigns(jointly and severally, a "Buyer Indemnified Party") harmless from,
and to assume liability for, payment of all liabilities, obligations, losses,
damages, penalties, interest, claims, actions, suits, judgments, settlements,
charges, out-of-pocket costs, expenses and disbursements (including reasonable
costs of investigation, and reasonable fees of attorneys, accountants and expert
witnesses) of whatsoever kind and nature that may be imposed on or incurred by a
Seller Indemnified Party as a consequence of or in connection with any claims,
suits, demands, threats, causes of actions, obligations, debts, liability, or
damages whatsoever, (i) arising or incurred by a Buyer indemnified Party prior
to or after the Closing solely to the extent, if any, that Buyer has expressly
assumed such obligation or liability in this Agreement, or (ii) arising in whole
or in part by reason of the performance or non-performance of the terms of this
Agreement or any breach of any representation, warranty, or covenant in this
Agreement or any certificate or document furnished pursuant hereto by Buyer, or
(iii) any liability arising from events or circumstances relating to the Assets
arising from and after the date of Closing or the conduct of the Business by
Buyer from and after the date of Closing.
21. Buyer's Acknowledgement: Notwithstanding anything contained in this
Agreement to the contrary or which might be construed to the contrary, Buyer
acknowledges and agrees that (i) the Assets shall be sold to Buyer "AS IS", (ii)
Buyer has been and is being given full and ample opportunity to inspect the
Assets, including without limitation, the inventories and accounts receivable,
as well as accounts payable of the Seller and is, or prior to the Closing will
be, satisfied with the condition of the Assets and the Business, (iii) Seller
shall have no responsibility whatsoever for any failure by Buyer to have taken
full advantage of such opportunity, (iv) Buyer has not been influenced to enter
into this transaction nor is Buyer relying upon any representations, warranties
or other statements, whether verbal or in writing, and whether made by Seller or
any person acting or purporting to act on Seller's behalf, in connection with
the Assets and/or the Business and the transactions contemplated hereunder,
except as provided in this Agreement, and (v) Buyer further acknowledges and
agrees that Buyer is relying solely upon its own independent inspection and
examination of the Assets, valuation and condition of the inventories, and other
related economic matters. Notwithstanding anything set forth in this Section to
the contrary, nothing in this Section should affect, limit or modify any of the
representations or warranties of Seller or ▇▇▇▇ set forth in this Agreement, or
any indemnification obligations set forth in Section 20.A. hereof.
22. Seller's Liabilities: Except for the agreed upon accounts payable,
assumed by Buyer and reflected as part of the Purchase Price, Buyer shall not,
by reason of this Agreement or for any other reason, be liable or assume
liability for any of Seller's indebtedness, obligations or liabilities whether
secured or unsecured, known or unknown, direct or indirect, liquidated or
unliquidated, ▇▇▇▇▇▇ or inchoate of whatever kind or nature, including without
limitation, any indebtedness, obligations or liabilities (i) relating to federal
and state income taxes, including those resulting from this transaction, (ii)
liability for allowances to customers, vendors or suppliers, (iii) relating to
any other accounts payable of Seller and (iv) to its employees; provided,
however, Seller shall have no responsibility for (i) vacation, or other paid
days off of its employees which are taken after the Closing, provided, that any
16
liability for accrued vacation pay as of the date of Closing shall be accrued as
a credit against the purchase price, or (ii) any claims for health plan or other
fringe benefits arising subsequent to the Closing.
23. Expenses: Each of the parties hereto shall pay its own fees and
expenses (including the fees of any attorneys, accountants, appraisers or others
engaged by such party) in connection with this Agreement and the transactions
contemplated hereby whether or not the transactions contemplated hereby are
consummated.
24. Survival of Representations and Warranties, and Remedies: All
representations and warranties contained in this Agreement shall (a) survive the
Closing and any investigation at any time made by or on behalf of any party and
(b) shall expire on the date two (2) years following the Closing. If an
indemnified party delivers to an indemnifying party before expiration or a
representation or warranty, either a claim notice based upon a breach of such
representation or warranty, or a notice that, as a result of a legal proceeding
instituted by or written claim made by a third party, the party reasonably
expects to incur Damages as a result of a breach of such representation or
warranty, then such representation or warranty shall continue to survive, but
only for the purposes of the matter(s) specified in such notice, beyond the date
which is two (2) years following the Closing until the resolution of the
matter(s) covered by such notice, provided that such notice specifies in
reasonable detail each alleged breach of representation or warranty.
25. Health Insurance Arrangement: ▇▇▇▇▇▇ ▇. ▇▇▇▇, at his option and
cost, will be included in the Group Health Insurance Plan for "New Whaling",
provided his inclusion is allowed by the insurance carrier.
26. Publicity: At any time prior to the Closing, no party shall issue
any press release or otherwise make any public statement with respect to the
execution of, or the transactions contemplated by this Agreement without the
prior consent of the other party, except as may be required by law or in
connection with Buyer's obtaining financing.
27. Confidentiality: Each party acknowledges and agrees that any
information or data it has acquired from the other party, not otherwise properly
in the public domain, was received in confidence. Each party hereto agrees not
to divulge, communicate or disclose except as may be required by law or for the
performance of this Agreement (including obtaining financing and conducting due
diligence), or use to the detriment of the disclosing party or for the benefit
of any other person or persons, or misuse in any way, any confidential
information of the disclosing party concerning the subject matter hereof,
including any trade or business secrets of the disclosing party and any
technical or business materials that are treated, by the disclosing party as
confidential or proprietary, including without limitation information (whether
in written, oral or machine-readable form) concerning: general business
operations; methods of doing business, servicing clients, client relations, and
of pricing and charges for services and products; financial information,
including costs, profits and sales; marketing strategies; business forms
developed by or for the disclosing party, names of suppliers, personnel,
customers, clients and potential clients; negotiations or other business
contacts with suppliers, personnel, customers, clients and potential clients;
form and content of bids, proposals and contracts: the disclosing party's
internal reporting methods; technical and business data, documentation and
drawings; software programs, however embodied; manufacturing processes;
inventions; diagnostic techniques; and information obtained by or given to the
17
disclosing party about or belonging to third parties. If the transaction
contemplated by this Agreement is not consummated, then each party will promptly
return all information or data received from the other party including, without
limitation, all memoranda, notes, records, reports, schedules and other
documents (and all copies thereof) relating to that party's business and
finances which were obtained by the other party during the course of said
party's review and due diligence. If Closing occurs, the provisions of this
Section shall not apply to Buyer but shall nevertheless continue to apply to
Seller and ▇▇▇▇.
28. Noninterference: For a period of two (2) years after the date of
Closing, neither Seller nor ▇▇▇▇▇▇ ▇. ▇▇▇▇ shall, directly or indirectly,
without the express written consent of Buyer (i) solicit or encourage any former
employee of Seller to leave the employment of Buyer, or hire any employee of
Buyer or (ii) encourage any consultant or independent contractor to cease to
work for Buyer.
IN WITNESS WHEREOF, this Agreement has been executed as a sealed
instrument on the 23 day of March, 2004.
Witnessed By: CAR-BON, INC.
/S/ Illegible By /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇, President
------------------------------ -----------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇, President
/S/ Illegible /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------ ------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇
▇.▇. ▇▇▇▇ CO., INC.
/S/ Illegible By:/S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------ -------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chairman
18
Exhibit "A"
Item # and Description OLV Agreed Value
---------------------- --- ------------
1. 110 steel bar racks and 8 steel sheet racks 5,000.00 6,500.00
2. Magnetic drill (2) 1,500.00 2,200.00
3. Gensco Alligator Shear, m/n 5241 4,000.00 5,000.00
4. HEM vertical saw, m/n ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ 7,500.00 9,000.00
(purchased 1997)
5. Gensco straight line ▇▇▇▇▇▇, m/n 555 1,500.00 3,000.00
(purchased 1999)
6. Paddington ▇▇▇▇▇▇ #11 3,500.00 4,000.00
7. Steel racks 10,000.00 25,000.00
350 - FAB bar racks with keyway
6 - 10 tier sheet racks
6 - 4 tier
structural racks
8. 1996 Nissan 4 - ton forklift, m/n BGF03-AYOU, 9,500.00 12,000.00
920453
9. 1982 4 - ton forklift, m/n P8000, 261 4,500.00 6,000.00
10. 1996 Ford diesel with bed, m/n LN8000, 11,500.00 14,000.00
320,000 miles
11. 1995 Ford diesel with bed, m/n CF7000, 10,000.00 12,000.00
120,200 miles
12. 1999 Sterling diesel with bed, m/n L7501, 28,500.00 28,500.00
143,514 miles
13. Straight line burning machine 500.00 2,200.00
14. Friction saws (2) 300.00 500.00
15. Office equipment including: computer, fax machine, 3,500.00 5,000.00
copy machine, desks, file cabinets, drafting table
19
Exhibit "B"
-----------
ALLOCATION OF PURCHASE PRICE
----------------------------
1. The purchase price of the property to be conveyed as described in the Purchase and
Sale Agreement is Seven Hundred Eighty-nine Thousand Nine Hundred ($789,900.00) Dollars.
2. The allocation of the purchase price is as follows:
a. Accounts Receivable (as of 1/23/04) To be adjusted and $ 270,000.00
estimated as of the Closing and to be finalized pursuant
to the Closing Balance Sheet.
b. The Inventory and supplies (as of 1/23/04) To be adjusted and 175,000.00
estimated as of the Closing and to be finalized pursuant
to the Closing Balance Sheet.
c. The Machinery and Equipment and Office Equipment listed in
Schedule "A" of the Asset Purchase Agreement (fixed assets) 134,900.00
d. Goodwill and other intangibles, the telephone number, logos and 210,000.00
service marks, use of name "Whaling City Iron" and the customer
and vendor lists
TOTAL: $ 789,900.00
-----
e. Accounts Payable (as of 1/23/04) Accounts payable shall reflect any (173,000.00)
and all liabilities to be assumed by Buyer and all such liabilities
shall be pro-rated as of the date of Closing
▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇'▇ Covenant Not to Compete 15,000.00
20
Schedule 4.9
------------
None
21
Schedule 4.10
-------------
Previously submitted to Buyer.
22
Schedule 4.11
-------------
None
23
Schedule 4.12
-------------
Buyer acknowledges receipt of the complete aging schedule of Seller's
accounts receivable as of December 31, 2003. Seller will further
provide Buyer an updated list of the same as of Monday, March 29, 2004
24
Schedule 4.13
-------------
Previously submitted to Buyer.
25
Schedule 4.14
-------------
Profit-sharing Plan has been submitted to Buyer.
Medical and Hospitalization Plan has been submitted to Buyer.
26
Schedule 4.15
-------------
None
27
Schedule 4.16
-------------
See schedule 4.14.
28
Schedule 4.17
-------------
Name Rate of Pay Method Job Description .
-------------------------------------------------------------------------------
▇▇▇▇ ▇▇▇▇, ▇▇. $110,000.00+ Salary President
▇▇▇▇ ▇▇▇▇, ▇▇. $50,000.00+ Salary Vice President Sales
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ $48,000.00+ Salary General Manager
▇▇▇▇▇▇ ▇▇▇▇ $16.00/hour Hourly Warehouse ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ $31,700.00 Salary Office Manager
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ $31,900.00 Salary Inside Sales and Purchasing
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ $10.00/hour Hourly Warehouse Person
▇▇▇▇▇▇ ▇▇▇▇▇ $11.50/hour Hourly Driver
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ $10.00/hour Hourly Warehouse Person
Names and titles of of all directors and officers of Car-Bon, Inc. d/b/a Whaling City Iron
------------------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇ President and Director
▇▇▇ ▇. ▇▇▇▇▇▇▇ Treasurer
▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇. Clerk
29
Schedule 4.18
-------------
None
30
Schedule 4.19
-------------
None
31
Schedule 4.20
-------------
All existing insurance policies in which the Seller is named as an
insured have been submitted to Buyer.
32
Schedule 4.21
-------------
None
33
