ASSET PURCHASE AGREEMENT
BETWEEN
RONBRIDGE INVESTMENTS, LTD.
AND
FREEDOM SURF, INC.
October 17, 2000
TABLE OF CONTENTS
1. Definitions
2. Basic Transaction
(a) Purchase and Sale of Assets
(b) Assumption of Liabilities
(c) Purchase Price
(d) The Closing
(e) Deliveries at the Closing
(f) Allocation
3. Representations and Warranties of the Target
(a) Organization of the Target
(b) Authorization of Transaction
(c) Noncontravention
(d) Brokers' Fees
(e) Title to Assets
(f) Subsidiaries
(g) Financial Statements
(h) Events Subsequent to Most Recent Fiscal Year End
(i) Undisclosed Liabilities
(j) Legal Compliance
(k) Tax Matters
(l) Real Property
(m) Intellectual Property
(n) Tangible Assets
(o) Inventory
(p) Contracts
(q) Notes and Accounts Receivable
(r) Powers of Attorney
(s) Insurance
(t) Litigation
(u) Product Warranty
(v) Product Liability
(w) Employees
(x) Employee Benefits
(y) Guaranties
(z) Environment, Health, and Safety
(aa) Certain Business Relationships with the Target and Its
Sub-sidiaries
(bb) Disclosure
(cc) Investment
4. Representations and Warranties of the Buyer
(a) Organization of the Buyer
(b) Authorization of Transaction
(c) Noncontravention
(d) Brokers' Fees
5. Pre-Closing Covenants
(a) General
(b) Notices and Consents
(c) Operation of Business
(d) Preservation of Business
(e) Full Access
(f) Notice of Developments
(g) Exclusivity
(h) Title Insurance
(i) Surveys
6. Conditions to Obligation to Close
(a) Conditions to Obligation of the Buyer
(b) Conditions to Obligation of the Target
7. Termination
(a) Termination of Agreement
(b) Effect of Termination
8. Post Closing Obligations
9. Miscellaneous
(a) Survival of Representations and Warranties
(b) Press Releases and Public Announcements
(c) No Third-Party Beneficiaries
(d) Entire Agreement
(e) Succession and Assignment
(f) Counterparts
(g) Headings
(h) Notices
(i) Governing Law
(j) Amendments and Waivers
(k) Severability
(l) Expenses
(m) Construction
(n) Incorporation of Exhibits and Schedules
(o) Specific Performance
(p) Submission to Jurisdiction
(q) Tax Matters
(r) Employee Benefits Matters
(s) Bulk Transfer Laws
Exhibit A--None
Exhibit B--List of Assets
Exhibit C--Forms of Assignments
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement") is entered into as of
this 17th day of October, 2000, by and between Ronbridge Investments, Ltd., a
Corporation organized under the laws of Hong Kong or Assignee (the "BUYER"), and
FREEDOM SURF, Inc., a California corporation (the "SELLER"). The Buyer and the
Seller are referred to collectively herein as the "PARTIES."
This Agreement contemplates a transaction in which the Buyer will
purchase equipment and materials related to the manufacture of neoprene products
(as detailed in Exhibit B) in return for cash and debt as evidenced by a
promissory note.
Now, therefore, in consideration of the premises and the mutual
promises herein made, and in consideration of the representations, warranties,
and covenants herein contained, the Parties agree as follows.
1. DEFINITIONS.
"ACCREDITED INVESTOR" has the meaning set forth in Regulation D
promulgated under the Securities Act.
"ACQUIRED ASSETS" means all right, title, and interest in all of the
equipment listed in the attached schedule titles "Exhibit B".
"AFFILIATE" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act.
"AFFILIATED GROUP" means any affiliated group within the meaning of
Internal Revenue Code ss.1504(a) [or any similar group defined under a similar
provision of state, local, or foreign law].
"AGREEMENT WITH SELLER STOCKHOLDERS" means the Agreement with Seller
Stockholders entered into concurrently herewith and attached hereto as Exhibit
A.
"ASSUMED LIABILITIES" means (a) all Liabilities of the Seller set forth
on the face of the Most Recent Balance Sheet, (b) all Liabilities of the Seller
which have arisen after the Most Recent Fiscal Month End in the Ordinary Course
of Business (other than any Liability resulting from, arising out of, relating
to, in the nature of, or caused by any breach of contract, breach of warranty,
tort, infringement, or violation of law), (c) all obligations of the Seller
under the agreements, contracts, leases, licenses, and other arrangements
referred to in the definition of Acquired Assets either (i) to furnish goods,
services, and other non-Cash benefits to another party after the Closing or (ii)
to pay for goods, services, and other non-Cash benefits that another party will
furnish to it after the Closing, and (d) all other Liabilities and obligations
of the Seller set forth in an appendix to the Disclosure Schedule under an
express statement (that the Buyer has initialed) to the effect that the
definition of Assumed Liabilities will include the Liabilities and obligations
so disclosed; PROVIDED, HOWEVER, that the Assumed Liabilities shall not include
(i) any Liability of the Seller for Taxes, excluding sales tax generated by the
sale of the assets hereunder, (ii) any Liability of the Seller for the unpaid
Taxes of any Person (other than any of the Seller and its Subsidiaries) under
Reg. ss.1.1502-6 (or any similar provision of state, local, or foreign law), as
a transferee or successor, by contract, or otherwise, (iii) any obligation of
the Seller to indemnify any Person (including any of the Seller Stockholders) by
reason of the fact that such Person was a director, officer, employee, or agent
of any of the Seller and its Subsidiaries or was serving at the request of any
such entity as a partner, trustee, director, officer, employee, or agent of
another entity (whether such indemnification is for judgments, damages,
penalties, fines, costs, amounts paid in settlement, losses, expenses, or
otherwise and whether such indemnification is pursuant to any statute, charter
document, bylaw, agreement, or otherwise), (iv) any Liability of the Seller for
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby, or (v) any Liability or obligation of the
Seller under this Agreement (or under any side agreement between the Seller on
the one hand and the Buyer on the other hand entered into on or after the date
of this Agreement).
"BASIS" means any past or present fact, situation, circumstance,
status, condition, activity, practice, plan, occurrence, event, incident,
action, failure to act, or transaction that forms or could form the basis for
any specified consequence.
"BUYER" has the meaning set forth in the preface above.
"CASH" means cash and cash equivalents (including marketable securities
and short term investments) calculated in accordance with GAAP applied on a
basis consistent with the preparation of the Financial Statements.
"CLOSING" has the meaning set forth in ss.2(d) below.
"CLOSING DATE" has the meaning set forth in ss.2(d) below.
"CODE" means the Internal Revenue Code of 1986, as amended.
"CONTROLLED GROUP OF CORPORATIONS" has the meaning set forth in Code
ss.1563.
"DEFERRED INTERCOMPANY TRANSACTION" has the meaning set forth in
Reg.ss.1.1502-13.
"DISCLOSURE SCHEDULE" has the meaning set forth in ss.3 below.
"EMPLOYEE BENEFIT PLAN" means any (a) nonqualified deferred
compensation or retirement plan or arrangement which is an Employee Pension
Benefit Plan, (b) qualified defined contribution retirement plan or arrangement
which is an Employee Pension Benefit Plan, (c) qualified defined benefit
retirement plan or arrangement which is an Employee Pension Benefit Plan
(including any Multiemployer Plan), or (d) Employee Welfare Benefit Plan or
material fringe benefit plan or program.
"EMPLOYEE PENSION BENEFIT PLAN" has the meaning set forth in ERISA
ss.3(2).
"EMPLOYEE WELFARE BENEFIT PLAN" has the meaning set forth in ERISA
ss.3(1).
"ENVIRONMENTAL, HEALTH, AND SAFETY LAWS" means the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, the Resource
Conservation and Recovery Act of 1976, and the Occupational Safety and Health
Act of 1970, each as amended, together with all other laws (including rules,
regulations, codes, plans, injunctions, judgments, orders, decrees, rulings, and
charges thereunder) of federal, state, local, and foreign governments (and all
agencies thereof) concerning pollution or protection of the environment, public
health and safety, or employee health and safety, including laws relating to
emissions, discharges, releases, or threatened releases of pollutants,
contaminants, or chemical, industrial, hazardous, or toxic materials or wastes
into ambient air, surface water, ground water, or lands or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling of pollutants, contaminants, or chemical, industrial,
hazardous, or toxic materials or wastes.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"EXCESS LOSS ACCOUNT" has the meaning set forth in Reg.ss.1.1502-19.
"EXTREMELY HAZARDOUS SUBSTANCE" has the meaning set forth in ss.302 of
the Emergency Planning and Community Right-to-Know Act of 1986, as amended.
"FIDUCIARY" has the meaning set forth in ERISA ss.3(21).
"FINANCIAL STATEMENT" has the meaning set forth in ss.3(g) below.
"GAAP" means United States generally accepted accounting principles as
in effect from time to time.
"XXXX-XXXXX-XXXXXX ACT" means the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended.
"INTELLECTUAL PROPERTY" means (a) all inventions (whether patentable or
unpatentable and whether or not reduced to practice), all improvements thereto,
and all patents, patent applications, and patent disclosures, together with all
reissuances, continuations, continuations-in-part, revisions, extensions, and
reexaminations thereof, (b) all trademarks, service marks, trade dress, logos,
trade names, and corporate names, together with all translations, adaptations,
derivations, and combinations thereof and including all goodwill associated
therewith, and all applications, registrations, and renewals in connection
therewith, (c) all copyrightable works, all copyrights, and all applications,
registrations, and renewals in connection therewith, (d) all mask works and all
applications, registrations, and renewals in connection therewith, (e) all trade
secrets and confidential business information (including ideas, research and
development, know-how, formulas, compositions, manufacturing and production
processes and techniques, technical data, designs, drawings, specifications,
customer and supplier lists, pricing and cost information, and business and
marketing plans and proposals), (f) all computer software (including data and
related documentation), (g) all other proprietary rights, and (h) all copies and
tangible embodiments thereof (in whatever form or medium).
"KNOWLEDGE" means actual knowledge after reasonable investigation.
"LIABILITY" means any liability (whether known or unknown, whether
asserted or unasserted, whether absolute or contingent, whether accrued or
unaccrued, whether liquidated or unliquidated, and whether due or to become
due), including any liability for Taxes.
"MOST RECENT BALANCE SHEET" means the balance sheet contained within
the Most Recent Financial Statements, including any notes thereto.
"MOST RECENT FINANCIAL STATEMENTS" has the meaning set forth in ss.3(g)
below.
"MOST RECENT FISCAL MONTH END" has the meaning set forth in ss.3(g)
below.
"MOST RECENT FISCAL YEAR END" has the meaning set forth in ss.3(g)
below.
"MULTIEMPLOYER PLAN" has the meaning set forth in ERISA ss.3(37).
"ORDINARY COURSE OF BUSINESS" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).
"PARTY" has the meaning set forth in the preface above.
"PBGC" means the Pension Benefit Guaranty Corporation.
"PERSON" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization, or a governmental entity (or any department, agency, or political
subdivision thereof).
"POST CLOSING OBLIGATIONS" has the meaning set forth in ss.8 below.
"PROCESS AGENT" has the meaning set forth in ss.9(p) below.
"PROHIBITED TRANSACTION" has the meaning set forth in ERISA ss.406 and
Code ss.4975.
"PURCHASE PRICE" has the meaning set forth in ss.2(c) below.
"REPORTABLE EVENT" has the meaning set forth in ERISA ss.4043.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SECURITIES EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"SECURITY INTEREST" means any mortgage, pledge, lien, encumbrance,
charge, or other security interest, OTHER THAN (a) mechanic's, materialmen's,
and similar liens, (b) liens for Taxes not yet due and payable [or for Taxes
that the taxpayer is contesting in good faith through appropriate proceedings],
(c) purchase money liens and liens securing rental payments under capital lease
arrangements, and (d) other liens arising in the Ordinary Course of Business and
not incurred in connection with the borrowing of money.
"SUBSIDIARY" means any corporation with respect to which a specified
Person (or a Subsidiary thereof) owns a majority of the common stock or has the
power to vote or direct the voting of sufficient securities to elect a majority
of the directors.
"SURVEY" has the meaning set forth in ss.5(i) below.
"SELLER" has the meaning set forth in the preface above.
"SELLER SHARE" means any share of the Common Stock, no stated par
value, of the Seller.
"SELLER STOCKHOLDER" means any person who or which holds any Seller
Shares.
"TAX" means any federal, state, local, or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under Code ss.59A),
customs duties, capital stock, franchise, profits, withholding, social security
(or similar), unemployment, disability, real property, personal property, sales,
use, transfer, registration, value added, alternative or add-on minimum,
estimated, or other tax of any kind whatsoever, including any interest, penalty,
or addition thereto, whether disputed or not.
"TAX RETURN" means any return, declaration, report, claim for refund,
or information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
2. BASIC TRANSACTION.
(a) PURCHASE AND SALE OF ASSETS. On and subject to the terms and
conditions of this Agreement, the Buyer agrees to purchase from the Seller, and
the Seller agrees to sell, transfer, convey, and deliver to the Buyer, all of
the Acquired Assets as detailed in Exhibit B at the Closing for the
consideration specified below in this ss.2.
(b) [blank]
(c) PURCHASE PRICE. The Buyer agrees to pay to Seller $4,500,000 U.S.
(four million five hundred thousand US dollars) in two installments. The parties
acknowledge that the first installment of $750,000.00 (seven hundred fifty
thousand US dollars) was paid on August 31, 2000 and receipt thereof is hereby
acknowledged. The balance shall be payable in one lump sum on October 16, 2002.
The balance shall carry interest until paid at the rate of 6% per annum on the
declining balance due and all interest shall be payable quarterly commencing
with the first interest payment due on or before January 15, 2001.
(d) CLOSING. Closing shall occur before 5:00 PM on or before October
17, 2000 at such location as agreed to between Buyer and Seller.
(e) DELIVERIES AT THE CLOSING. At the Closing, (i) the Seller will
deliver to the Buyer the various certificates, instruments, and documents
referred to in ss.6(a) below; (ii) the Buyer will deliver to the Seller the
various certificates, instruments, and documents referred to in ss.6(b) below;
(iii) the Seller will execute, acknowledge (if appropriate), and deliver to the
Buyer (A) assignments (including real property and Intellectual Property
transfer documents) in the forms attached hereto marked collectively Exhibit C
and (B) such other instruments of sale, transfer, conveyance, and assignment as
the Buyer and its counsel reasonably may request; (iv) the Buyer will execute,
acknowledge (if appropriate), and deliver to the Seller (A) an assumption in the
form attached hereto as Exhibit D and (B) such other instruments of assumption
as the Seller and its counsel reasonably may request; and (v) the Buyer will
deliver to Seller, or on Seller's behalf, the consideration specified in ss.2(c)
above.
(f) ALLOCATION. The Parties agree to allocate the Purchase Price (and
all other capitalizable costs) among the Acquired Assets for all purposes
(including financial accounting and tax purposes) in accordance with the
allocation schedule attached hereto as Exhibit E.
3. REPRESENTATIONS AND WARRANTIES OF THE SELLER. The Seller, to the
best of Seller's knowledge, represents and warrants to the Buyer that the
statements contained in this ss.3 are correct and complete as of the date of
this Agreement and will be correct and complete as of the Closing Date (as
though made then and as though the Closing Date were substituted for the date of
this Agreement throughout this ss.3), except as set forth in the disclosure
schedule accompanying this Agreement and initialed by the Parties (the
"DISCLOSURE SCHEDULE"). The Disclosure Schedule will be arranged in paragraphs
corresponding to the lettered and numbered paragraphs contained in this ss.3.
(a) ORGANIZATION OF THE SELLER. The Seller is a California Corporation,
duly organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation.
(b) AUTHORIZATION OF TRANSACTION. The Seller has full power and
authority (including full corporate power and authority) to execute and deliver
this Agreement and to perform its obligations hereunder. Without limiting the
generality of the foregoing, the board of directors of the Seller and the Seller
Stockholders have duly authorized the execution, delivery, and performance of
this Agreement by the Seller. This Agreement constitutes the valid and legally
binding obligation of the Seller, enforceable in accordance with its terms and
conditions.
(c) NONCONTRAVENTION. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby
(including the assignments and assumptions referred to in ss.2 above), will (i)
violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which Seller is subject or any provision of the
charter or bylaws of Seller or (ii) conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in any party
the right to accelerate, terminate, modify, or cancel, or require any notice
under any agreement, contract, lease, license, instrument, or other arrangement
to which Seller is a party or by which it is bound or to which any of its assets
is subject (or result in the imposition of any Security Interest upon any of its
assets). Seller is not required to give any notice to, make any filing with, or
obtain any authorization, consent, or approval of any government or governmental
agency in order for the Parties to consummate the transactions contemplated by
this Agreement (including the assignments and assumptions referred to in ss.2
above).
(d) BROKERS' FEES. The Seller has no Liability or obligation to pay any
fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which the Buyer could become
liable or obligated. Seller has no Liability or obligation to pay any fees or
commissions to any broker, finder, or agent with respect to the transactions
contemplated by this Agreement.
(e) TITLE TO ASSETS. The Seller has good and marketable title to, or a
valid leasehold interest in, the properties and assets used by them, located on
their premises, or shown on the Most Recent Balance Sheet or acquired after the
date thereof, free and clear of all Security Interests, except as disclosed on
the Most Recent Balance Sheet and except for properties and assets disposed of
in the Ordinary Course of Business since the date of the Most Recent Balance
Sheet. Without limiting the generality of the foregoing, the Seller has good and
marketable title to all of the Acquired Assets, free and clear of any Security
Interest or restriction on transfer, except for such security interest as set
forth on the Most Recent Balance Sheet.
4. REPRESENTATIONS AND WARRANTIES OF THE BUYER. The Buyer represents
and warrants to the Seller that the statements contained in this ss.4 are
correct and complete as of the date of this Agreement and will be correct and
complete as of the Closing Date (as though made then and as though the Closing
Date were substituted for the date of this Agreement throughout this ss.4),
except as set forth in the Disclosure Schedule. The Disclosure Schedule will be
arranged in paragraphs corresponding to the lettered and numbered paragraphs
contained in this ss.4.
(a) ORGANIZATION OF THE BUYER. The Buyer is a corporation duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation.
(b) AUTHORIZATION OF TRANSACTION. The Buyer has full power and
authority (including full corporate power and authority) to execute and deliver
this Agreement and to perform its obligations hereunder. This Agreement
constitutes the valid and legally binding obligation of the Buyer, enforceable
in accordance with its terms and conditions.
(c) NONCONTRAVENTION. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby
(including the assignments and assumptions referred to in ss.2 above), will (i)
violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which the Buyer is subject or any provision of
its charter or bylaws or (ii) conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to which
the Buyer is a party or by which it is bound or to which any of its assets is
subject. The Buyer does not need to give any notice to, make any filing with, or
obtain any authorization, consent, or approval of any government or governmental
agency in order for the Parties to consummate the transactions contemplated by
this Agreement (including the assignments and assumptions referred to in ss.2
above).
(d) BROKERS' FEES. Seller has no Liability or obligation to pay any
fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which the Buyer may become
liable or obligated.
5. PRE-CLOSING COVENANTS. The Parties agree as follows with respect to
the period between the execution of this Agreement and the Closing.
(a) GENERAL. Each of the Parties will use its reasonable best efforts
to take all action and to do all things necessary, proper, or advisable in order
to consummate and make effective the transactions contemplated by this Agreement
(including satisfaction, but not waiver, of the closing conditions set forth in
ss.6 below).
(b) NOTICES AND CONSENTS. The Seller will give any notices to third
parties that the Buyer reasonably may request in connection with the matters
referred to in ss.3(c) above. Each of the Parties will give any notices to, make
any filings with, and use its reasonable best efforts to obtain any
authorizations, consents, and approvals of governments and governmental agencies
in connection with the matters referred to in ss.3(c) and ss.4(c) above.
(c) [blank]
(d) [blank]
(e) [blank]
(f) NOTICE OF DEVELOPMENTS. Each Party will give prompt written notice
to the other Party of any material adverse development causing a breach of any
of its own representations and warranties in ss.3 and ss.4 above. No disclosure
by any Party pursuant to this ss.5(f), however, shall be deemed to amend or
supplement the Disclosure Schedule or to prevent or cure any misrepresentation,
breach of warranty, or breach of covenant.
(g) EXCLUSIVITY. The Seller will not (and the Seller will not cause or
permit any of its Subsidiaries to) (i) solicit, initiate, or encourage the
submission of any proposal or offer from any Person relating to the acquisition
of the Acquired Assets.
6. CONDITIONS TO OBLIGATION TO CLOSE.
(a) CONDITIONS TO OBLIGATION OF THE BUYER. The obligation of the Buyer
to consummate the transactions to be performed by it in connection with the
Closing is subject to satisfaction of the following conditions:
(i) the representations and warranties set forth inss.3 above
shall be true and correct in all material respects at and as of the Closing
Date;
(ii) the Seller shall have performed and complied with all of
its covenants hereunder in all material respects through the Closing;
(iii) the Seller and its Subsidiaries shall have procured all
of the third party consents specified inss.5(b) above;
(iv) [blank]
(v) [blank]
(vii) [blank]
The Buyer may waive any condition specified in this ss.6(a) if it executes a
writing so stating at or prior to the Closing.
(b) CONDITIONS TO OBLIGATION OF THE SELLER. The obligation of the
Seller to consummate the transactions to be performed by it in connection with
the Closing is subject to satisfaction of the following conditions:
(i) the representations and warranties set forth inss.4 above
shall be true and correct in all material respects at and as of the Closing
Date;
(ii) the Buyer shall have performed and complied with all of
its covenants hereunder in all material respects through the Closing;
(iii) [blank]
(iv) [blank]
(v) [blank]
The Seller may waive any condition specified in this ss.6(b) if it executes a
writing so stating at or prior to the Closing.
7. TERMINATION.
(a) TERMINATION OF AGREEMENT. Certain of the Parties may terminate this
Agreement as provided below:
(i) the Buyer and the Seller may terminate this Agreement by
mutual written consent at any time prior to the Closing;
(ii) the Buyer may terminate this Agreement by giving written
notice to the Seller at any time prior to the Closing (A) in the event the
Seller has breached any material representation, warranty, or covenant contained
in this Agreement in any material respect, the Buyer has notified the Seller of
the breach, and the breach has continued without cure for a period of 10 days
after the notice of breach or (B) if the Closing shall not have occurred on or
before May 1, 2000, by reason of the failure of any condition precedent under
ss.6(a) hereof (unless the failure results primarily from the Buyer itself
breaching any representation, warranty, or covenant contained in this
Agreement); and
(iii) the Seller may terminate this Agreement by giving
written notice to the Buyer at any time prior to the Closing (A) in the event
the Buyer has breached any material representation, warranty, or covenant
contained in this Agreement in any material respect, the Seller has notified the
Buyer of the breach, and the breach has continued without cure for a period of
10 days after the notice of breach or (B) if the Closing shall not have occurred
on or before May 1, 2000, by reason of the failure of any condition precedent
under ss.6(b) hereof (unless the failure results primarily from the Seller
itself breaching any representation, warranty, or covenant contained in this
Agreement).
(b) EFFECT OF TERMINATION. If any Party terminates this Agreement
pursuant to ss.7(a) above, all rights and obligations of the Parties hereunder
shall terminate without any Liability of any Party to any other Party (except
for any Liability of any Party then in breach).
8. POST CLOSING OBLIGATIONS. [blank]
9. MISCELLANEOUS.
(a) SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All of the
representations and warranties of the Parties contained in this Agreement shall
survive the Closing hereunder as and to the extent provided in the Agreement
with Seller Stockholders.
(b) PRESS RELEASES AND PUBLIC ANNOUNCEMENTS. No Party shall issue any
press release or make any public announcement relating to the subject matter of
this Agreement prior to the Closing without the prior written approval of the
other Party; PROVIDED, HOWEVER, that any Party may make any public disclosure it
believes in good faith is required by applicable law or any listing or trading
agreement concerning its publicly-traded securities (in which case the
disclosing Party will use its reasonable best efforts to advise the other Party
prior to making the disclosure).
(c) NO THIRD-PARTY BENEFICIARIES. This Agreement shall not confer any
rights or remedies upon any Person other than the Parties and their respective
successors and permitted assigns.
(d) ENTIRE AGREEMENT. This Agreement (including the documents referred
to herein) constitutes the entire agreement between the Parties and supersedes
any prior understandings, agreements, or representations by or between the
Parties, written or oral, to the extent they related in any way to the subject
matter hereof.
(e) SUCCESSION AND ASSIGNMENT. This Agreement shall be binding upon and
inure to the benefit of the Parties named herein and their respective successors
and permitted assigns. No Party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of the other Party; PROVIDED, HOWEVER, that the Buyer may (i) assign any or all
of its rights and interests hereunder to one or more of its Affiliates and (ii)
designate one or more of its Affiliates to perform its obligations hereunder (in
any or all of which cases the Buyer nonetheless shall remain responsible for the
performance of all of its obligations hereunder).
(f) COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(g) HEADINGS. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(h) NOTICES. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given if (and then two
business days after) it is sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient as set forth
below:
IF TO THE SELLER: COPY TO:
----------------- --------
Xxxxx XxXxxxxx Xxxxxxxx X. Xxxxx & Associates, P.C.
Freedom Surf, Inc. 0000 X. Xxxxxxxx Xxxxxxx, Xxxxx X
00000 Xxxxx Xxxx, Xxxxx 000 Xxxxxx, XX 00000-0000
Xxxxxxxxxx Xxxxx, XX 00000
IF TO THE BUYER:
----------------
Ronbridge Investments, Ltd.
3809 Asia Pacific Finance Xxxxx
Xxxxxxxx Xxxxx, 0 Xxxxxx Xxxx
Xxxxxxx Xxxx Xxxx
Any Party may send any notice, request, demand, claim, or other
communication hereunder to the intended recipient at the address set
forth above using any other means (including personal delivery,
expedited courier, messenger service, telecopy, telex, ordinary mail,
or electronic mail), but no such notice, request, demand, claim, or
other communication shall be deemed to have been duly given unless and
until it actually is received by the intended recipient. Any Party may
change the address to which notices, requests, demands, claims, and
other communications hereunder are to be delivered by giving the other
Party notice in the manner herein set forth.
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE DOMESTIC LAWS OF THE STATE OF CALIFORNIA WITHOUT GIVING
EFFECT TO ANY CHOICE OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE STATE
OF NEVADA OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE
LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF CALIFORNIA.
(j) AMENDMENTS AND WAIVERS. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by the
Buyer and the Seller. No waiver by any Party of any default, misrepresentation,
or breach of warranty or covenant hereunder, whether intentional or not, shall
be deemed to extend to any prior or subsequent default, misrepresentation, or
breach of warranty or covenant hereunder or affect in any way any rights arising
by virtue of any prior or subsequent such occurrence.
(k) SEVERABILITY. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
(l) EXPENSES. Each of the Buyer and the Seller will bear his or its own
costs and expenses (including legal fees and expenses) incurred in connection
with this Agreement and the transactions contemplated hereby.
(m) CONSTRUCTION. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof shall
arise favoring or disfavoring any Party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word "including" shall mean including without limitation.
(n) INCORPORATION OF EXHIBITS AND SCHEDULES. The Exhibits and Schedules
identified in this Agreement are incorporated herein by reference and made a
part hereof.
(o) SPECIFIC PERFORMANCE. Each of the Parties acknowledges and agrees
that the other Party would be damaged irreparably in the event any of the
provisions of this Agreement are not performed in accordance with their specific
terms or otherwise are breached. Accordingly, each of the Parties agrees that
the other Party shall be entitled to an injunction or injunctions to prevent
breaches of the provisions of this Agreement and to enforce specifically this
Agreement and the terms and provisions hereof in any action instituted in any
court of the United States or any state thereof having jurisdiction over the
Parties and the matter [(subject to the provisions set forth in ss.8(p) below)],
in addition to any other remedy to which it may be entitled, at law or in
equity.
(p) SUBMISSION TO JURISDICTION. Each of the Parties submits to the
jurisdiction of any state or federal court sitting in the Southern District of
California or County of Dade in any action or proceeding arising out of or
relating to this Agreement and agrees that all claims in respect of the action
or proceeding may be heard and determined in any such court.
(o) BULK TRANSFER LAWS. The Buyer acknowledges that the Seller will not
comply with the provisions of any bulk transfer laws of any jurisdiction in
connection with the transactions contemplated by this Agreement.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on
[as of] the date first above written.
Ronbridge Investments, Ltd.
A Hong Kong Corporation
By: /S/ Xxxx Xxxxxxxxxx
------------------------
Xxxx Xxxxxxxxxx
President
Freedom Surf, Inc.
a California corporation
By: /S/ Xxxxx XxXxxxxx
------------------------
Xxxxx XxXxxxxx
Executive Vice President
EXHIBIT "A"
Indemnity Agreement with Seller's Stockholders
EXHIBIT "B"
List of Acquired Assets
MACHINE SHOP
QUANTITY UOM DESCRIPTION CUR VALUE
-------- --- ----------- ----------
1each Xxxxxx milling machine with GE CNC control $ 122,400
1each Xxxxx Index milling machine with GE CNC control $ 86,400
1each 3 ton hydraulic shear with punch attachment $ 16,200
1each Material feed attachment $ 19,800
1each Eiselcold circular saw with automatic feed unit $ 14,400
1each 4 ton hydraulic press $ 20,340
1each 6 foot hydraulic brake $ 30,600
12each Speed chucks $ 12,960
7each Drill press, 1-1/2HP bench mount, variable speed $ 2,835
3each Drill press, 3HP free standing, variable speed $ 2,160
1each Drill press, radial arm $ 2,430
2each Steel work bench, 1M x 3M $ 684
6each Heavy wood work bench, 1M x 2.5M $ 864
1set Countersink set $ 108
1each Belt sander, 6 foot horizontal $ 765
1each Belt sander, finishing, free standing, adjustable angle $ 540
4each Belt sander, hand held pneumatic (finishing) $ 324
1each Air Compressor, vertical, 200G capacity $ 1,440
1each Spray booth with ventilation system $ 5,400
1lot Shop tools, various $ 13,500
4each Shelves, heavy steel, 3' x 6' x 1' $ 576
1each Material rack, rod and tube storage $ 1,350
12sets Drill bits through 1/2" $ 1,620
2sets Alpha numeric punch $ 504
1each Large tool storage case $ 3,150
4each Rolling tool chests $ 4,320
25each End xxxxx, various sizes $ 2,250
1each Dremel tool $ 225
1each Dremel tool accessories $ 135
1each Custom metal brake $ 25,200
12each Indicators $ 2,160
4sets Metal C clamps, various $ 360
2each Bench vise, 12" jaw $ 1,620
2each Bench vise, 6" jaw $ 720
4each Hand drill, 1/2" xxxxx $ 306
1each Shop Vac $ 113
1each Shop desk, metal with drawer $ 135
1each Shop chair $ 113
1each Drawing flat file with base $ 315
1each Pentium PC with 15" monitor & dot matrix printer $ 1,620
TOTAL MACHINE SHOP ACTUAL CASH VALUE $ 400,941
ENGINEERING
QUANTITY UOM DESCRIPTION CUR VALUE
-------- --- ----------- ----------
6each Work benches with outlet strips and shelves $ 6,480
1each Hewlett Packard Spectrum Analyzer $ 23,400
1each IFR Frequency generator $ 14,400
1each Hitachi Oscilloscope $ 2,520
2each Fluke digital meters, bench mount $ 3,960
2each Fluke hand held multimeters $ 1,080
2each AD stations (Pentium PC's) $ 4,320
2sets CAD software $ 10,800
1each HP plotter with color pens $ 2,250
1each VEMCO V-Track drafting machine $ 1,620
1each Xxxxxxxx drafting table with 3' x 6' surface $ 1,080
6each Drafting chairs $ 1,620
1each RF power amplifier (1W - 5W) $ 585
1each RF power amplifier (20-100W) $ 1,350
4each Bird Watt meters $ 2,880
4sets Bird Watt meter plugs $ 4,320
2each Executive desks with hutches $ 1,080
4each 4 drawer file cabinets, black $ 360
2each Xxxxxx electronic tool kits $ 2,700
2each Executive chairs $ 270
4each Stackable chairs $ 180
2each White boards 3' x 6' $ 135
2each Flat drawing files with bases $ 630
TOTAL ENGINEERING AREA ACTUAL CASH VALUE $ 88,020
MANUFACTURING
QUANTITY UOM DESCRIPTION CUR VALUE
-------- --- ----------- ----------
37each Material Storage Racks (1M x 6M x 2M) $ 93,240
13each Yi Tzung YK110-HD cast iron dispersion
mixers with auto-temp controller and
integral xxxxxx unit $ 795,600
5each Xxx Xxxxx Hot Forming Presses $ 967,500
1150each Mold trays $ 124,200
74each Neoprene Xxxx aging racks with 3" casters $ 39,960
4each Talc buckets (55G) with rolling base $ 180
13each Polypropylene xxxxxx scoops $ 117
3each Extraction fan/flow hood assembly $ 9,450
2each MC2K Heavy Duty Industrial flatbed cutter $ 612,000
1each Computer control module for MC2K $ 22,500
2each Gun metal refit blades for MC2K $ 10,800
1each YDL1000 Dry Lamination machine (20 Ton),
PLC controlled, 3 zone drying chamber,
automatic tension control stainless glue
tank with auto feed system (automatic glue
replenishment) $1,057,500
18each Hard hats $ 243
25each Safety goggles $ 180
12each Welded Q/C inspection tables $ 1,080
1each Large banding machine with tools & supplies $ 1,350
1lot Equipment spares $ 11,520
30each Tables, 4' x 10' $ 16,200
60each Work chairs $ 6,480
3each Material layout tables $ 1,620
15each Assembler tool kits $ 4,725
4each Rolling carts, metal $ 2,160
2each Metal desks with drawers $ 450
2each Shop chairs $ 270
2each Pentium PC with CNC software $ 11,700
1lot Electrical fittings and drop downs $ 14,850
62each Electric hand tools $ 16,740
1lot Hand tool bits and fittings $ 3,600
1each Pneumatic tool grid with fittings $ 7,650
1each Large extraction fan and hood $ 1,440
1each Packaging machine/shrink wrap $ 12,600
3each Glue dryers $ 3,240
TOTAL MANUFACTURING AREA ACTUAL CASH VALUE $3,851,145
STOCK ROOM
QUANTITY UOM DESCRIPTION CUR VALUE
-------- --- ----------- ----------
50each Steel shelves, 1' x 3' x 6' with back support struts $ 13,500
3200each Small plastic parts bins (4 x 8") $ 5,760
1500each Large plastic parts bins $ 5,400
1each Metal desk with drawer $ 225
2each Pentium PC with 15" monitor & dot matrix printer $ 3,240
1each Large metal scale $ 3,150
1each Electronic count scale $ 2,700
1lot Fence material $ 4,500
2each Rolling metal carts $ 1,080
1lot Misc stock room supplies $ 1,350
TOTAL STOCK ROOM ACTUAL CASH VALUE $ 40,905
SHIPPING/RECEIVING
QUANTITY UOM DESCRIPTION CUR VALUE
-------- --- ----------- ----------
1each Yale Fork Lift $ 10,800
1each Hydraulic lift $ 2,250
1each Shipping/packing table $ 1,080
1lot Shipping supplies $ 1,800
2each Metal shelves $ 540
2each Large flat rolling cart $ 1,080
1each Pentium computer with 15" monitor & dot matrix printer $ 1,620
TOTAL SHIPPING/RECEIVING ACTUAL CASH VALUE $ 19,170
OFFICE
QUANTITY UOM DESCRIPTION CUR VALUE
-------- --- ----------- ----------
4each Executive desks with hutches $ 5,400
2each Secretarial desks with L returns $ 1,440
6each Standard wooden desks with 2 file drawers $ 2,700
16each Lateral files (black) $ 3,600
4each Pentium computers with 17" monitors $ 7,920
8each Pentium computers with 15" monitors $ 12,960
4each Brother small dot matrix printers $ 540
1each Epson high speed dot matrix printer $ 540
1each Tektronix color hot wax printer $ 5,400
12each Laminated bookshelves (wood grain) $ 2,160
4each Printer stands, small $ 540
1each Walnut conference table with leather chairs $ 7,200
1each Walnut wall mount presentation board $ 1,800
1each Wall sized world map (8' x 12') $ 1,350
1each Refrigerator $ 450
2each Microwave ovens $ 360
2each Xerox typerwriters $ 720
2each HP Laserjet III printers $ 720
6each Motorola 2 way radios $ 3,240
12each Executive chairs $ 2,160
24each Leather guest chairs $ 3,240
1each Leather couch $ 720
4each Coffee tables with chairs $ 900
12each ABC fire extinguishers $ 324
6each Texas instruments desk calculator $ 135
12lots Desk supplies (staplers, scissors etc.) $ 540
4sets Employee lockers (16 lockers per set) $ 1,440
1each Time clock $ 315
1each Overhead projector $ 360
2each Electric staplers $ 45
1lots Stationary and office supplies $ 3,600
TOTAL OFFICE AREA ACTUAL CASH VALUE $ 72,819
TOTAL ACTUAL CASH VALUE AS IS TODAY $4,473,000
EXHIBIT C
List and Forms of Assignments
