EXHIBIT 2.3
ASSET PURCHASE AGREEMENT
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THIS ASSET PURCHASE AGREEMENT ("Agreement") is entered into as of May 4,
2001 by and between Skagit Engineering & Manufacturing, Inc., a Washington
corporation, also know as Pacific Aerospace & Electronics, Inc. - U.S. Aerospace
Group - Engineering & Fabrication Division ("Seller"), and MCE Technologies
Incorporated, a Washington corporation ("Buyer").
Seller desires to sell, and Buyer desires to purchase, certain of Seller's
assets related to the machining portion of Seller's fabrication business in
Sedro-Woolley, Washington, on the terms and conditions set forth in this
Agreement.
The parties agree as follows:
1. Purchase and Sale. On the Closing Date (as defined in Section 3
below), Seller will sell, transfer, assign, convey and deliver to Buyer, and
Buyer will purchase from Seller, all of Seller's right, title and interest in
the assets listed on Schedule 1 to this Agreement (the "Assets"). The Assets
will not include any assets not listed on Schedule 1, including without
limitation Seller's books and records, corporate name or trade names, cash or
prepaid items, accounts receivable, inventory, intellectual property, contracts,
licenses or permits, or interests in real property. The sale of the Assets will
be effected by Seller's execution and delivery to Buyer at Closing of a Xxxx of
Sale in the form attached as Exhibit A (the "Xxxx of Sale"), vehicle titles, and
any other instruments of transfer reasonably requested by Buyer, in form
sufficient to vest in Buyer all Seller's right, title and interest in and to the
Assets, free and clear of any liens, claims or encumbrances. Seller will deliver
the Assets to Buyer at Closing, at Seller's facility, "as is" without warranty
of any kind, including without limitation any warranty as to condition,
performance, merchantability, or fitness for any purpose. Buyer will not assume
and will not be liable for any liabilities of Seller.
2. Purchase Price. As full payment for the purchase of the Assets, Buyer
will deliver to Seller at Closing $200,000, payable by wire transfer, certified
check, or other immediately available funds.
3. Closing. The closing of the sale of the Assets (the "Closing") will
take place at 10:00 a.m. on May 31, 2001 (the "Closing Date") at Seller's
offices, or at such other time and place as the parties may agree.
4. Representations and Warranties of Seller. Seller represents and
warrants to Buyer that the following are true and correct as of the date of this
Agreement, and will be true and correct as of the Closing Date.
4.1 Authorization. Seller is a corporation, duly organized and
validly existing under the laws of Washington. Seller has taken all corporate
action necessary to authorize, and, to the extent required by applicable law,
Seller's shareholder has approved, Seller's execution and delivery of, and the
performance of its obligations under, this Agreement. Seller has full corporate
power and authority to enter into, and to carry out its obligations under, this
Agreement. Seller has duly executed and delivered this Agreement, and this
Agreement is a valid and binding obligation of Seller, enforceable against
Seller in accordance with its terms.
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Except for any required consents set forth on Schedule 4.2, the execution and
delivery of this Agreement by Seller, and the performance of its obligations
hereunder, will not conflict with, result in the breach of, or constitute a
default under (a) Seller's Articles of Incorporation or Bylaws; (b) any note,
mortgage, deed of trust, loan agreement, lease or other agreement or instrument
to which Seller is a party or by which Seller is bound; or (c) any order,
judgment, rule or regulation of any applicable authority.
4.2 Consents. Except as set forth on Schedule 4.2, no consent
or approval by any third person or public authority is required to authorize, or
is required in connection with, the execution, delivery or performance of this
Agreement by Seller.
4.3 Assets. Except as set forth on Schedule 4.3, Seller has
good and marketable title to all of the Assets, free and clear of all
liabilities, claims, liens, sales agreements (conditional or otherwise), leases,
or other encumbrances of any kind.
4.4 Employment Matters. Seller is not a party to or bound by
any employment or collective bargaining agreement, and each of Seller's
employees is an "at-will" employee. Seller will pay, and will indemnify Buyer
against all salaries, vacation pay, medical and other employment benefits or
severance payments due to be paid to its employees for all periods up to the
Closing Date.
4.5 Brokers. Seller has not entered into or authorized any
arrangements with any broker, finder, or investment banker that will result in
payment of a fee in connection with this transaction. Seller will indemnify
Buyer against any claim for payment of any such fee.
5. Representations and Warranties of Buyer. Buyer represents and warrants
to Seller that the following are true and correct as of the date of this
Agreement, and will be true and correct as of the Closing Date:
5.1 Authorization. Buyer is a corporation, duly organized and
validly existing under the laws of Washington. Buyer has taken all corporate
action necessary to authorize execution and delivery of, and the performance of
its obligations under, this Agreement. Buyer has full corporate power and
authority to enter into, and to carry out the terms of, this Agreement. Buyer
has duly executed and delivered this Agreement, and this Agreement is a valid
and binding obligation of Buyer, enforceable in accordance with its terms. The
execution and delivery of this Agreement by Buyer , and the performance of its
obligations hereunder, will not conflict with, result in the breach of, or
constitute a default under: (a) Buyer's Articles of Incorporation or Bylaws; (b)
any material note, mortgage, deed of trust, loan agreement, lease or other
agreement or instrument to which Buyer is a party or by which Buyer is bound; or
(c) any order, judgment, rule or regulation of any applicable authority.
5.2 Consents. No consent or approval by any third person or
public authority is required to authorize, or is required in connection with,
the execution, delivery or performance of this Agreement by Buyer. Buyer will
indemnify Seller against any claim for payment of any such fee.
5.3 Brokers. Buyer has not entered into or authorized any
arrangements with any broker, finder, or investment banker that will result in
payment of a fee in connection with this transaction.
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6. Pre-Closing Covenants. Buyer and Seller agree that, between the date
of this Agreement and the Closing Date:
6.1 Access. To permit Buyer to complete its due diligence
investigation, subject to the terms of the separate confidentiality agreement
between the parties, Seller will (a) permit Buyer and its agents to have
reasonable access to the premises in which Seller conducts its business and to
all of its books, records, and personnel files related to Seller's machining
operations; (b) furnish to Buyer such relevant information as Buyer reasonably
requests; and (c) provide Buyer reasonable access to Buyer's customers,
suppliers and employees upon request.
6.2. Solicitation of Employees. Buyer may solicit certain of
Seller's employees for employment with Buyer. Buyer will identify these
employees to Seller in writing.
6.3 Operation of the Business. Buyer will operate the business
in a reasonable and prudent manner, in accordance with the Operating Agreement
between the parties dated May 4, 2001.
6.4 Assets. Seller will not transfer, lease, or dispose of any
of the Assets without Buyer's prior written consent.
6.5 Sublease. Seller will use its best efforts to obtain the
consent of Seller's landlord to two subleases substantially in the forms
attached as Exhibit B and Exhibit C (the "Subleases").
6.6 Project Completion. Buyer and Seller will identify up to
1500 hours of Seller's backlog, which Buyer agrees to complete for Seller,
either before or after Closing, at a cost of $35.00 per hour, within a time
frame and to quality levels agreed upon by the parties.
6.7 Customers. Seller agrees to cooperate with Buyer to provide
a reasonable level of assistance to Buyer, upon request, for the purpose of
transferring existing relationships of the machining business with current
customers to Buyer.
7. Confidentiality. No information concerning one party that has been
furnished to or obtained by another party in connection with this Agreement may
be disclosed to any person other than in confidence to employees, legal counsel,
financial advisers or independent public accountants who reasonably need to know
such information in connection with the transactions contemplated by this
Agreement and who agree to be bound by this Section. Each party agrees not to
use any such information for any purpose other than fulfilling its obligations
under this Agreement. Each party agrees that, upon request, it will immediately
return to the other party all such information in the event this Agreement is
terminated before Closing. Notwithstanding the foregoing, this obligation shall
not apply to information that (a) is, or becomes, publicly available from a
source other than the other party; (b) was known and can be shown to have been
known by the other party at the time of its receipt; (c) is received by the
other party from a third party without breach of this Agreement; (d) is required
by law or court order to be disclosed; or (e) is disclosed in accordance with
the written consent of the other party. Buyer will not be prohibited from
disclosing or using information regarding the Assets after Closing
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8. Closing Conditions of Buyer. The obligation of Buyer to purchase the
Assets is subject to satisfaction, at or before the Closing, of each of the
following conditions:
8.1 Consents. All consents required to be obtained from any
third-party, including Seller's landlord, and including those listed on Schedule
4.2, shall have been obtained.
8.2 Representations, Warranties and Covenants. The
representations and warranties of Seller contained in this Agreement shall be
true and correct in all material respects as if made at Closing. Seller shall
have complied with or performed, in all material respects, all covenants to be
complied with or performed by it at or before the Closing Date.
8.3 Conveyance. Seller shall have executed and delivered to
Buyer the Xxxx of Sale, vehicle titles, and such other instruments of conveyance
and transfer as Buyer may reasonably request in order to effect the transfer,
assignment and conveyance of the Assets.
8.4 Control of Assets. Seller shall have taken all steps
necessary or desirable to place Buyer in possession and operating control of the
Assets.
8.5 Subleases. Seller shall have executed and delivered the
Subleases to Buyer.
9. Closing Conditions of Seller. The obligation of Seller to sell the
Assets is subject to satisfaction, at or before the Closing, of each of the
following conditions:
9.1 Consents. All consents required to be obtained from any
third-party, including Seller's landlord, and including those listed on Schedule
4.2, shall have been obtained.
9.2 Representations, Warranties and Covenants. The
representations and warranties of Buyer contained in this Agreement shall be
true and correct in all material respects as if made at Closing. Buyer shall
have complied with or performed, in all material respects, all covenants to be
complied with or performed by it at or before the Closing Date.
9.3 Purchase Price. Buyer shall have delivered the Purchase
Price to Seller by wire transfer, cashier's check, or other immediately
available funds.
9.4 Subleases. Buyer shall have executed and delivered the Subleases
to Seller.
10. Expenses. The parties each agree to bear their own costs and
expenses incurred in connection with the negotiation and preparation of this
Agreement and the consummation of the transaction contemplated in this
Agreement.
11. Termination.
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11.1 Termination Events. This Agreement may be terminated prior
to Closing: (a) by written agreement of the parties; or (b) by either Seller or
Buyer if the Closing has not occurred on or before May 31, 2001, unless the
terminating party's failure to fulfill or perform any obligation under this
Agreement has been the cause of, or resulted in, the failure of the Closing to
occur on or before such date.
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11.2 Effect of Termination. Upon termination of this Agreement
pursuant to Section 11.1, the parties will thereafter be released from all
liabilities and obligations arising under this Agreement, unless such
termination arises from a breach of this Agreement or except as otherwise
provided in this Agreement. Notwithstanding the foregoing, if the Closing has
not occurred by June 29, 2001, Buyer will provide the services described in
Section 6.6 at no charge, and Buyer will forfeit the rent for May and June 2001
payable under the Operating Agreement.
12. Survival. The representations, warranties, covenants and
agreements of the parties contained in this Agreement or in any agreement
delivered in accordance with this Agreement shall survive for a period of one
year after the Closing.
13. Notices. The parties shall deliver any notices required under
this Agreement in writing by personal or courier delivery, facsimile
transmission, or by registered or certified U.S. mail, return receipt requested,
postage prepaid, to the addresses set forth below, or to such other address as
specified by a party in writing. Notices shall be deemed effective as of the
date of personal or courier delivery, confirmed facsimile transmission, or three
days after the date on the U.S. postmark affixed to the notice.
14. Attorneys' Fees. The prevailing party in any arbitration or
litigation concerning this Agreement is entitled to reimbursement of its
reasonable attorneys' fees, costs and expenses from the non-prevailing party,
including fees, costs and expenses incurred on appeal.
15. Other Provisions. No party may assign its interest under this
Agreement without the prior written consent of the other party. Subject to the
foregoing, this Agreement shall be binding upon and shall inure to the benefit
of the parties and their respective successors and assigns. The provisions of
this Agreement, or of any agreement or document executed in connection with this
Agreement, may be amended or waived only in a written agreement signed by the
party against which enforcement is sought. If any portion of this Agreement is
held to be invalid by a court of competent jurisdiction, the remaining terms of
this Agreement shall remain in full force and effect to the extent possible.
The construction and performance of this Agreement will be governed by the laws
of the State of Washington (except for the choice of law provisions thereof).
This Agreement, its attached schedules and exhibits, and the documents executed
in connection with this Agreement, including the confidentiality agreement and
the Xxxx of Sale, contain the entire agreement of the parties with respect to
the subject matter of this Agreement and supersede any prior agreements, written
or oral, relating to their subject matter.
16. Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original but all of which together
will constitute the same instrument.
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Executed as of the first date written above.
BUYER: MCE TECHNOLOGIES INCORPORATED
By /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
Its: President
Address: 0000 Xxxx Xxxxxxxx Xxx Xxxxx
Xxxxxxx, XX 00000
SELLER: SKAGIT ENGINEERING & MANUFACTURING,
INC.
By /s/ Xxxxxx Xxxxxxxxxxx
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Name: Xxxxxx Xxxxxxxxxxx
Its: President
Address: 0000 000xx Xx. XX, Xxxxx 000
Xxxxxxxxx Xxxxxxx, XX 00000
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The following Exhibits and Schedules are omitted from the Asset Purchase
Agreement, dated May 4, 2001 between MCE Technologies Incorporated and Skagit
Engineering & Manufacturing, Inc., filed as Exhibit 2.3 to the foregoing report
on Form 10-K, pursuant to Regulation S-K, item 601(b)(2). The Company agrees to
furnish supplementally a copy of the omitted exhibit to the Securities and
Exchange Commission upon request.
Exhibits
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Exhibit A Xxxx of Sale
Exhibit B Sublease
Exhibit C Sublease
Schedules
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Schedule 1 Assets
Schedule 4.2 Consents
Schedule 4.3 Encumbrances
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