EXHIBIT 2.4
ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT made this 5th day of March 1998;
Between: Cadapult Graphic Systems, Inc., a New Jersey corporation
with offices located at 000 Xxxxxxxx Xxxxx, Xxxxxxxxx,
Xxx Xxxxxx 00000, hereinafter referred to alternatively as
"Cadapult" or "Purchaser";
And: BBG Technologies, Inc., a Massachusetts corporation with
offices located at 00 Xxxxxxxx Xxxxxx, Xxxxxxxx,
Xxxxxxxxxxxxx 00000, hereinafter referred to alternatively
as "BBG" or "Seller".
Whereas, both Purchaser and Seller are engaged in the sale and servicing of
Tektronix printers. and,
Whereas, Purchaser is desirous of purchasing the Assets of Seller, and Seller
is desirous of selling said Assets, for the consideration and upon the terms
and conditions set forth hereinafter.
Now Therefore, in consideration of the mutual covenants, promises and
conditions set forth herein, the parties hereto do hereby agree as follows:
1. Purchase and Sale. Seller agrees to sell to Purchaser and Purchaser
agrees to purchase from Seller all of the Assets owned and used by Seller in
the operation of its business, including but not limited to the following:
A. Accounts Receivable
B. Inventory of supplies and printers
C. Customer lists and all files relating thereto
D. Use of the name "BBG Technologies" for a period of eighteen (18)
months from date of Closing
E. Sales, service and Vendor contracts
F. Existing telephone numbers (000)-000-0000 and (000)-000-0000
G. Databases
H. BBG Electronic art, and Tektronix Co-op.
The Assets of the business, including those set forth hereinabove, shall
hereinafter be collectively referred to as "Assets".
2. Purchase Price and Terms of Sale.
A. Determination of Purchase Price. The Purchase Price shall be
determined by adding the sum of $400,000,the total amount, as of the Closing,
of Account Receivables less than 180 days old, the Tektronix rebate and the
book value of inventory and supplies and then subtracting therefrom the total
amount of the Tektronix account payable as of said Closing date. A graphic
of said formula would be as follows:
Base Purchase Price: $400,000
+ Accounts Receivable as of Closing
+ Amount of Tektronix Rebate
+ Book value of inventory and supplies
- Tektronix account payable
- Agreed upon trade payables _______________
Purchase Price
The trade payables to be assumed by Purchaser will not exceed fifteen (15%)
percent of the total purchase price and will be set forth by Vendor and
amount owed in Exhibit D to be executed at closing and annexed to the closing
statement.
By way of example and illustration, based upon Seller's statement of assets
and liabilities as of December 31, 1997, as previously furnished to
Purchaser, if the closing had occurred on that date, the Purchase Price due
at closing would have been $539,123,15. Seller shall retain the cash shown
on the balance sheet dated December 31, 1997, and Seller shall be responsible
for paying the payables which are not characterized as accounts payable.
The Purchase Price shall be paid at Closing in full by bank, certified or
attorneys trust account check, subject to the following:
B. Escrow. At Closing, the sum of One Hundred Thousand ($100,000)
Dollars shall be segregated from the Purchase Price and paid over to
Purchaser's and Seller's Attorneys, as Joint Escrow Agents, which monies
shall be held in escrow thereby ("Escrowed Funds") to secure collection by
Purchaser of the Account Receivables conveyed at Closing pursuant to the
within Agreement.
Purchaser shall use its best efforts to collect all of said Account
Receivables, provided however, that any Account Receivables which remain
uncollected after 180 days from the date of Closing shall be considered to be
"uncollectable". After 180 days from the date of Closing, all such
"uncollectable" Account Receivables shall revert to the Seller, who shall
then have the right to attempt to collect same for its own account, and an
amount equivalent to the total of such "uncollectable" Account Receivables
shall be paid from the Escrowed Funds to the Purchaser. Alternatively, the
difference between $100,000 and the amount paid to the Purchaser to reimburse
it for uncollected Account Receivables shall be paid to the Seller.
In the event that, prior to the expiration of 180 days from the date of
Closing, payments are made against outstanding Account Receivables so as to
reduce the total amount thereof below $100,000, the difference between the
amount of the Escrowed Funds, or $100,000, and the total of the remaining
uncollected Account Receivables shall be paid to the Seller at that time.
For example, if, after four months, the total of outstanding Account
Receivables is $85,000, then $15,000 shall at that time be paid from the
Escrowed Funds to the Seller. If at the end of five months, this amount is
further reduced to $60,000, then an additional $25,000 shall be paid to
Seller.
The Escrowed Funds shall be held in an interest bearing account, with the
interest allocated, after deducting a fee of $500.00 to be paid to the Escrow
Agent for his services in relation thereto, among the Purchaser and Seller in
proportion to the amount of Escrowed Funds distributed to each.
For example, if the total interest earned on the Escrowed Funds is $2,500,
and $20,000 is paid to the Purchaser and $80,000 is paid to the Seller, then
$400 of the interest earned shall be paid to the Purchaser, $1,600 shall be
paid to the Seller and $500 shall be paid to the Escrow Agent. An Escrow
Agreement, in the form annexed hereto as Exhibit A, shall be executed at
Closing memorializing the aforesaid Escrow.
C. Deposit. Simultaneously upon the execution of the within
Agreement, Purchaser shall forward a check to Xxxxxx Xxxxx, Esq., Attorney
Trust Account in the sum of $25,000.00 constituting an xxxxxxx money deposit,
which monies shall be held In escrow by the aforesaid. At Closing, the
xxxxxxx money deposit shall be paid over to Seller and set off against the
balance of the Purchase Price due thereto. In the event a Closing does not
occur as a consequence of the failure of any conditions precedent to the
Contract or Seller's breach, the within xxxxxxx money deposit shall be
refunded to the Purchaser, without any deduction or set off whatsoever within
forty-eight (48) hours of demand therefore.
3. Allocation of Purchase Price.
A. The base purchase price of Four Hundred Thousand ($400,000) shall
be allocated as follows:
Goodwill $200,000
Customer Lists $100,000
Name and Telephone Numbers $ 50,000
Covenants Not to Compete $ 50,000
B. The balance of the Purchase Price shall be allocated among the
various assets referenced in Paragraph 2A hereinabove, at their book value as
of the date of closing as reasonably determined by Seller's accountants,
applying standard accounting principals.
4. Covenant Not to Compete. At Closing, Seller and Sellers shareholders,
Xxxxxx XxXxxxxxx and Xxxxxx Xxxxxxxxx shall each execute and deliver to
Purchaser a Covenant Not to Compete in the form annexed and made a part
hereof as Exhibit B. Xxxxx Xxxxxx shall also be required to execute a
Covenant Not to Compete at the time of Closing but in a somewhat modified
form as annexed to and made a part hereof as Exhibit C. Execution of said
Covenants Not to Compete constitute a material part of the consideration for
Purchaser acquiring the Assets of the Seller pursuant to the within
Agreement.
5. Closing. The Closing shall occur on or about March 13, 1998 at
Seller's offices or Purchaser's lender, should same be required thereby
(hereinafter "Closing"). All monies due and payable at Closing shall be paid
in the form of a bank, certified or attorneys trust account check.
6. Financing Contingency. Purchasers obligation to purchase the Assets
pursuant to the within Agreement is expressly conditioned upon Purchaser
obtaining a loan commitment from Summit Bank in a sum equivalent to the
Purchase Price, as determined pursuant to Paragraph 2A hereinabove. In the
event Purchaser is unable to secure a loan commitment from Summit Bank in the
aforesaid amount upon terms satisfactory to Purchaser within 10 days of the
date hereof, either Purchaser or Seller shall have the right to terminate the
within Agreement upon service of written notice of said election upon the
other in which event this Agreement shall be deemed null, void and of no
further effect and neither party shall have any further obligation or
liability to the other. Further, If for any reason, Summit Bank withdraws
said commitment prior to Closing, again, the within Financing Contingency
shall be deemed to be an unsatisfied condition precedent in which event the
within Agreement shall be deemed terminated as a consequence of a failure of
a material condition precedent and neither party shall have any further
obligation or liability to the other.
7. Seller's Payables Not Assumed By Purchaser. Except for the Tektronix
trade payable and agreed upon trade payables, as referenced in Paragraph 2A
hereinabove, payment of which will be assumed by the Purchaser as provided in
Paragraph 2A hereinabove, all other liabilities of Seller, including, but not
limited to federal, state and local taxes, payroll taxes, transfer fees, and
any other taxes, if any, unpaid salaries or accrued vacation or sick pay,
shall be paid prior to or at the Closing so that all of the Assets which are
the subject of the within sale shall remain the responsibility of Seller and
shall be conveyed free and clear of any and all liens or encumbrances,
statutory or otherwise, except as otherwise provided in Paragraph 2A
hereinabove. At Closing, from the Closing Proceeds, Seller shall cause the
outstanding balance due to Medford Savings Bank to be paid thereby enabling
Seller to obtain Termination Statements for the UCC Filings on record at the
office of the Secretary of State and the office of the Stoneham Town Hall.
At or prior to Closing, Seller shall provide Purchaser with a payoff
statement issued by Medford Savings Bank setting forth the balance due
thereto. At Closing, Purchaser shall cause a check to be issued to Medford
Savings Bank in the amount set forth in the pay off statement, which funds
shall be either forwarded by overnight mail or delivered to Medford Savings
by Purchaser's attorney. The remaining funds shall be paid to Seller, or on
its behalf pursuant to the within Asset Purchase Agreement. All checks,
including the check made payable to Medford Savings Bank, shall be in the
form as set forth in Paragraph 5 hereinabove.
8. Seller's Representations. Seller represents and warrants to Purchaser
as follows:
A. Title to Assets. Seller shall, as of the date of Closing, hold
good and marketable title to the Assets, free and clear of restrictions on or
conditions to transfer or assignment as well as any and all liens, pledges,
charges, or encumbrances. At Closing, Seller shall convey all such Assets,
with the exception of the Tektronix payable and other trade payables, as
referenced in Paragraph 2A hereinabove (said conveyance evidenced by Xxxx of
Sale exchanged at Closing), free and clear of any liens or encumbrances.
B. Indemnification. Seller, and Sellers shareholders, do hereby
jointly and severally agree to protect, indemnify, and hold the Purchaser
harmless from and against any loss, damage or expense, as well as reasonable
counsel fees and costs, if incurred, resulting from any breach of the
warranties set forth In Subparagraph A of this Paragraph 8. Specifically, the
within Indemnification shall include any claim made against Purchaser for any
unpaid liability of Seller. Should any claim for indemnification arise
during the pendency of the Escrow as referenced in Paragraph 2B hereinabove,
the Purchaser shall have the right to request that any funds being held on
behalf of the Seller continue to be held pending resolution of such claim
and, further to pay the amount of such claim from said Escrowed Funds, should
same remain unsatisfied.
C. Transfer Not Subject to Encumbrances or Third-Party Approval. The
execution and delivery of this Agreement by Seller, and the consummation of
the within contemplated transaction, will not result in the creation or
imposition of any valid lien, charge, or encumbrance on any of the Assets,
and will not require the authorization, consent, or approval of any third
party, including any lender or governmental or regulatory agency.
D. Corporate Existence. Seller is now, and on the Closing Date will
be, a corporation duly organized and validly existing and In good standing
under the laws of the State of Massachusetts. At Closing, Seller shall
provide a copy of a Certificate of Good Standing issued by the Commonwealth
of Massachusetts.
E. Authorization. The execution, delivery, and performance of this
Agreement has been duly authorized and approved by the Board of Directors and
shareholders of Seller having a majority of the issued and outstanding Common
Stock thereof, and this Agreement constitutes a valid and binding Agreement
of Seller in accordance with its terms.
F. Noncancelable Contracts. At the time of Closing, there will be no
leases, employment contracts, contracts for services or maintenance, or other
similar contracts existing or relating to or connected with the operation of
Seller's business not cancelable at Closing or within 30 days thereof.
G. Continued Operations. Seller will continue to conduct its business
up to the date of Closing in essentially the same manner as it has been
conducted in the past, and in accordance with all applicable laws and
regulations. Until Closing, Seller shall maintain all of its Assets in their
present condition. Seller shall use its best efforts to preserve, for
Purchaser, the goodwill of vendors, suppliers, customers and others having
business relations with ft. Prior to Closing, Seller will not sell or
transfer any of the Assets which are the subject of this Agreement. Seller
has no knowledge of a business termination of a material customer, vendor or
supplier.
H. Withholding Taxes. Seller has paid in full, or will arrange for
the payment in full, in a timely manner, of all federal and Commonwealth of
Massachusetts taxes incurred by Seller, including, but not limited to income,
withholding, social security, unemployment insurance, and sales taxes due
through the Date of Closing, and shall hold Purchaser harmless therefrom.
I. Financial Records. Seller makes no warranties or representations
regarding future sales or profits in connection with the Assets purchased by
Purchaser pursuant to this Agreement, such sales and profits being dependent
on Purchaser's efforts, skill, and conduct of its business. Financial
records and other documents delivered by Seller to Purchaser in connection
with the within transaction, including profit and lose statements and balance
sheets, contracts, and other books and records, accurately reflect the
financial condition of Seller. To the best of Seller's knowledge, Seller is
in compliance with all laws and regulations affecting its business.
J. Employee Benefits. Seller does not maintain any retirement or
deferred compensation plan, savings, incentive, stock option or stock
purchase plan, unemployment compensation plan, vacation pay, severance pay,
bonus or benefit arrangement, insurance or hospitalization program or any
other fringe benefit arrangement for any employee, consultant or agent of the
Seller, whether pursuant to contract, arrangement, custom or informal
understanding, which constitute an "Employee Benefit Plan" (as defined in
Section 3(3) of ERISA), for which the Seller may have any ongoing material
liability after Closing. The Seller does not maintain, nor has it ever
contributed to, any Multi-employer Plan as defined by Section 3(37) of ERISA.
The Seller does not currently maintain any Employee Pension Benefit Plan
subject to Title IV of ERISA. There have been no "prohibited transactions"
(as described in Section 406 of ERISA or Section 4975 of the Code) with
respect to an Employee Pension Benefit Plan or Employee Welfare Benefit
party. Seller has no employee benefits plans or written contracts with
employees. Seller shall be responsible for paying, prior to Closing, all
accrued vacation or sick pay entitlements.
K.. Accuracy of Representations and Warranties. None of the
representations or warranties of Seller contain or will contain any untrue
statement of a material fact or omit or will omit or misstate a material fact
necessary in order to make statements in this Agreement not misleading.
Seller knows of no fact or circumstance that has resulted, or that in the
reasonable judgment of Seller will result, in a material change in the
business, operations, or assets of Seller that has not been previously
disclosed or set forth in this Agreement.
9 Indemnification. Purchaser and Seller agree to protect, indemnify, and
hold the other harmless against, and with respect to, any loss, damage or
expense occasioned by any breach or alleged breach, falsity, or failure of
any of the representations, covenants, warranties or agreements of any such
party contained herein or contained in any document exchanged between
Purchaser and Seller in connection with this transaction. This
Indemnification shall survive the Closing.
10. Miscellaneous.
A. Amendment and Modification. Subject to applicable law, this
Agreement may be amended, modified, or supplemented only by a written
agreement signed by all of the parties hereto.
B. Notices. All notices, requests, consents, approvals or other
communications under this Agreement shall be in writing and mailed by
certified mail, return receipt requested, postage prepaid, or delivered by a
nationally recognized overnight courier service which obtains delivery
receipts (e.g., Federal Express), addressed:
Xxxxxx XxXxxxxxx
00 Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxxxx 00000
Xxxxxx Xxxxx, Esq.
Suite 200
000 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Purchaser:
Cadapult Graphics Systems, Inc.
000 Xxxxxxxx Xxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Xxxxx X. Xxxxxx, Esq.
000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Either party may, by notice given as aforesaid, change its address for all
subsequent notices. All notices hereunder shall be effective upon receipt of
same.
C. No Broker The Seller and Purchaser represent and warrant, each to
the other, that neither has engaged or in any way dealt with a broker,
finder, agent, or anyone in a similar capacity, in relation to the
transaction contemplated by the within Agreement. To this extent, Seller and
Purchaser do each hereby agree to indemnify, defend and hold the s from and
against any and all loss, expense, Including but not limited to reasonable
counsel fees and costs, damage or liability resulting from any claim or
claims arising from an alleged rendering of any services to the indemnifying
party in breach of the within warranty.
D. Titles and Captions. All section titles or captions contained in
this Agreement are for convenience only and shall not be deemed part of the
context nor affect the interpretation of this Agreement. All pronouns and
any variation thereof shall be deemed to refer to the masculine, feminine,
neuter, singular or plural as the identity of the person or persons may
require.
E. Entire Agreement. This Agreement contains the entire understanding
between and among the parties and supersedes any prior understanding and
agreements among them respecting the subject matter of this Agreement. Any
amendments to this Agreement must be in writing and signed by the party
against whom enforcement of that amendment is sought.
F. Presumption. This Agreement, or any Section thereof, shall not be
construed against any part due to the fact that said Agreement or any Section
thereof was drafted by said party.
G. Further Action. The parties hereto shall execute and deliver all
documents, provide all information and take or forebear from all such action
as may be necessary or appropriate to achieve the purpose of the Agreement.
H. Counterparts. This Agreement may be executed in several
counterparts and all so executed shall constitute one Agreement, binding on
all the parties hereto even though all the parties are not signatories to the
original or the same counterpart.
I. Savings Clause. If any provision of this Agreement, or the
application of such provision to any person or circumstance, shall be held
invalid. The remainder of this Agreement, or the application of such
provision to persons or circumstances other than those as to which it is held
invalid, shall not be affected thereby.
Executed as of the dates set forth below, in several counterparts, each of
which shall be deemed an original, but all constituting only one agreement.
Purchaser:
Cadapult Grapic Systems, Inc.
Date: 3/4/98 By: /s/ Xxxxxxx X. Xxxxx, President
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Seller
BBG Technologies, Inc.
Date: By: /s/ Xxxxxx XxXxxxxxx
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Xxxxxx XxXxxxxxx, Pres.
As to the provisions of Paragraphs As to the provisions of Paragraph
4 and BB: 4 as same pertains to the
undersigned.
Seller's Shareholders: /s/Xxxxxxxxx X. Xxxxxx
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XXXXX XXXXXX
/s/ Xxxxxx XxXxxxxxx
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Xxxxxx XxXxxxxxx
/s/ Xxxxxx Xxxxxxxxx
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Xxxxxx Xxxxxxxxx
