Dated as of , 20 AMONG CONGLOMERATE, INC. BUSINESS, INC. AND SOLE SHAREHOLDERS OF BUSINESS, INC. TABLE OF CONTENTS ARTICLE 1 TRANSFER OF ASSETS 1.1 Owned Real Property 1.2 Real Property Leases 1.3 Equipment 1.4 Inventories 1.5 Accounts Receivable 1.6 Intangibles 1.7 Books and Records 1.8 Prepaid Expenses 1.9 Permits, etc. 1.10 All Property Not Elsewhere Described ARTICLE 2 PURCHASE PRICE 2.1 Payment of Purchase Price 2.2 Allocation of Purchase Price ARTICLE 3 THE CLOSING 3.1 Selling Parties’ Obligations at the Closing 3.2 Buyer’s Obligations at the Closing 3.3 Inventories ARTICLE 4. ASSUMPTION OF LIABILITIES ARTICLE 5. RETURN OF DEPOSIT
ARTICLE 6. EXCISE AND PROPERTY TAXES ARTICLE 7. REPRESENTATIONS AND WARRANTIES OF SELLING PARTIES 7.1 Organization, Good Standing and Qualification 7.2 Internal Controls 7.3 Absence of Specified Changes 7.4 Tax Matters 7.5 Real Property 7.6 Land Use 7.7 Inventories 7.8 Other Tangible Personal Property 7.9 Accounts Receivable 7.10 Trade Names, Trademarks and Copyrights 7.11 Patents and Patent Rights 7.12 Trade Secrets 7.13 Other Intangible Property 7.14 Title to Assets 7.15 Customers and Sales 7.16 Existing Employment Contracts 7.17 Insurance Policies 7.18 Other Contracts 7.19 Compliance with Laws 7.20 Litigation 7.21 Assets Sufficient for Conduct of Business
7.22 Agreement Will Not Cause Breach or Violation 7.23 Authority and Consents 7.24 Interest in Customers, Suppliers and Competitors 7.25 Personnel Identification and Compensation 7.26 Bank Accounts, etc. 7.27 Information Furnished to Buyer for Bulk Transfer Notice 7.28 Environmental Matters 7.29 Labor Matters 7.30 Documents Delivered 7.31 Full Disclosure ARTICLE 8. BUYER’S REPRESENTATIONS AND WARRANTIES ARTICLE 9. SELLING PARTIES’ OBLIGATIONS BEFORE CLOSING 9.1 Buyer’s Access to Premises and Information 9.2 Conduct of Business in Normal Course 9.3 Preservation of Business and Relationships 9.4 Maintenance of Insurance 9.5 Employees and Compensation 9.6 New Transactions 9.7 Payment of Liabilities and Waiver of Claims 9.8 Existing Agreements 9.9 Consent of Others 9.10 Representations and Warranties True at Closing 9.11 Sales and Use Tax on Prior Sales
9.12 Statutory Filings 9.13 Maintenance of Inventories ARTICLE 10. BUYER’S OBLIGATIONS BEFORE CLOSING ARTICLE 11. CONDITIONS PRECEDENT TO BUYER’S PERFORMANCE 11.1 Premerger Notification Compliance 11.2 Accuracy of Selling Parties’ Representations and Warranties 11.3 Absence of Liens 11.4 Selling Parties’ Performance 11.5 Certification by Seller 11.6 Opinion of the Selling Parties’ Counsel 11.7 Absence of Litigation 11.8 Corporate Approval 11.9 Title Policies 11.10 Corporation Tax Clearance 11.11 Consents 11.12 Approval of Documentation 11.13 Consulting Agreement 11.14 Bulk Transfer Notice 11.15 Change of Corporate Name 11.16 Employee Payments 11.17 Acceptance of Offers 11.18 Condition of Assets 11.19 Noncompetition Agreement
ARTICLE 12. CONDITIONS PRECEDENT TO SELLER’S PERFORMANCE 12.1 Accuracy of Buyer’s Representations and Warranties 12.2 Buyer’s Performance 12.3 Opinion of Buyer’s Counsel 12.4 Buyer’s Corporate Approval ARTICLE 13. EMPLOYEE PLANS 13.1 Definitions (a) Employee Plan (b) Subject Employee 13.2 Plan Operations (a) Plans Listed (b) Plan Documents (c) Operations in General (d) PBGC, etc. (e) Excise Taxes, etc. (f) Communication, etc. (g) Payments, etc. 13.3 Plan Liabilities and Costs (a) Defined Benefit Plans (b) Previous Years’ Costs (c) No Unfunded Defined Benefit Plans 13.4 Taxes and Trusts (a)Taxes
(b)Separate Trusts 13.5 Amendments 13.6 Payment of Contributions 13.7 Other Liabilities 13.8 Information ARTICLE 14. SELLING PARTIES’ OBLIGATIONS AFTER THE CLOSING 14.1 Preservation of Goodwill 14.2 Change of Name 14.3 Guarantee of Accounts Receivable 14.4 Selling Parties’ Indemnities 14.5 Cash Holdback 14.6 Access to Records 14.7 Nonsolicitation of Employees 14.8 Deposit of Checks 14.9 Guarantee ARTICLE 15. COSTS 15.1 Finder’s or Broker’s Fees 15.2 Expenses ARTICLE 16. FORM OF AGREEMENT 16.1 Headings 16.2 Entire Agreement; Modification; Waiver 16.3 Counterparts ARTICLE 17. PARTIES
17.1 Parties in Interest 17.2 Assignment ARTICLE 18. REMEDIES 18.1 Recovery of Litigation Costs 18.2 Conditions Permitting Termination 18.3 Defaults Permitting Termination ARTICLE 19. NATURE AND SURVIVAL OF REPRESENTATIONS AND WARRANTIES ARTICLE 20. NOTICES ARTICLE 21. GOVERNING LAW ARTICLE 22. MISCELLANEOUS 22.1 Announcements 22.2 References Asset Purchase Agreement (Buyer’s Draft) This Asset Purchase Agreement (the “Agreement”)is made to be effective, 20 (the “Effective Date”), among CONGLOMERATE, INC., a corporation (“Buyer”), BUSINESS, INC., a corporation (“Seller”), and , the sole shareholders of Seller (the “Shareholders”). Seller and the Shareholders are sometimes collectively referred to in this Agreement as the “Selling Parties.” Buyer desires to purchase from Seller, and Seller desires to sell to Buyer, on the terms and subject to the conditions of this Agreement, substantially all of the assets, properties and business of Seller. NOW, THEREFORE, in consideration of the mutual covenants, agreements, representations and warranties contained in this Agreement, the parties agree as follows: ARTICLE 1. TRANSFER OF ASSETS Subject to the terms and conditions set forth in this Agreement, Seller agrees to sell, convey, transfer, assign and deliver to Buyer, and Buyer agrees to purchase from Seller at the Closing described in Article 3 hereof, all the assets, properties and business of Seller of every kind, character and description, whether tangible, intangible, real, personal or mixed, and wherever located(but excluding any assets expressly excluded in the following Sections of this Article 1),
all of which are sometimes collectively referred to in this Agreement as the “Assets.” The Assets shall include, but not be limited to, the following: 1.1 Owned Real Property. The parcels of land more fully described on SCHEDULE 1.1, together with all privileges and appurtenances thereto and all plants, buildings, structures, installations, fixtures, betterments, additions and other improvements situated thereon and together with all easements used or useful in connection therewith (such land, improvements, easements, and entitlements together hereinafter collectively referred to as the “Owned Real Property”); 1.2 Real Property Leases. All right, title and interest of Seller in the leases of the real property more fully described on SCHEDULE 1.2, together with all rights and privileges under such leases (hereinafter referred to as the “Real Property Leases”)to the real property subject to such leases (hereinafter referred to as the “Leased Real Property” and together with the Owned Real Property being hereinafter collectively referred to as the “Real Property”); 1.3 Equipment. All the machinery, tools, dies, appliances, vehicles, furniture, equipment (including without limitation spares and replacement parts) and other tangible personal property of every kind and description that are located upon or within the Real Property, and/or are owned or held by Seller, and/or are utilized in connection with Seller’s operations (whether or not upon or within the Real Property), a current list of which is attached hereto as SCHEDULE 1.3 (hereinafter referred to collectively as the “Equipment”); 1.4 Inventories. All of Seller’s finished goods and raw materials(whether expensed or not), including work in process, consumable manufacturing supplies, spare parts and repair materials that are actually on hand as of the Closing Date, whether on or within the Real Property or en route thereto or elsewhere, an approximate summary of which items currently on hand is attached hereto as SCHEDULE 1.4 (hereinafter referred to collectively as the “Inventories”); 1.5 Accounts Receivable. All of Seller’s accounts receivable not more thandays old at the Closing Date (as defined in Article 3) arising out of the operation of Seller’s business in the ordinary course and unpaid as of the Closing Date (hereinafter referred to as “Accounts Receivable”); 1.6 Intangibles. All trade names, trademarks, service marks, copyrights, mask work rights, patents, patent rights, licenses, brand names, trade secrets, trade dress, technical know-how, goodwill and other intangibles(including without limitation (i) tort or insurance proceeds arising out of any damage or destruction of any of the Assets between the date of this Agreement and the Closing Date (as hereinafter defined) and (ii) all right, title and interest of Seller in the leases, contracts and agreements to be assumed by Buyer pursuant to Article 4) used by Seller in (or owned by Seller and useful in) the operation of the business (whether or not located upon or within the Real Property), but excluding accounts payable, contracts not assumed by Buyer pursuant to Article 4, bank accounts, tax deposits, [add description of any other items specifically excluded]; 1.7 Books and Records. All papers, computerized databases and records in Seller’s care, custody or control in whatever form, relating to any or all of the above described Assets and the operation
of Seller’s business, including but not limited to all blueprints and specifications, product designs, personnel and labor relations records, environmental control records, sales records, marketing materials, accounting and financial records, maintenance and production records, plats and surveys of the Real Property, and plans and designs of buildings, structures, fixtures and equipment; 1.8 Prepaid Expenses. All prepaid expenses and other prepaid items relating to any of the Assets and the operation of Seller’s business; 1.9 Permits, etc. All permits, licenses, franchises, consents or authorizations issued by, and all registrations and filings with, any governmental agency in connection with Seller’s business, whenever issued or filed, excepting only those which by law or by their terms are nontransferable or those which have expired; and 1.10 All Property Not Elsewhere Described. All other properties of Seller of every kind, character or description owned, used or held for use (whether or not exclusively) in connection with Seller’s business, wherever located and whether or not similar to the things set forth elsewhere in this Article 1, but excluding any assets expressly excluded in this Article 1. ARTICLE 2. PURCHASE PRICE 2.1 Payment of Purchase Price. In consideration for the transfer and assignment by Seller of the Assets and in consideration of the representations, warranties and covenants of the Selling Parties set forth herein, Buyer on the conditions set forth herein, (a) shall pay to Seller concurrently with the execution of this Agreement an earnest money deposit in the amount of $ (the “Deposit”), which will be applied to the Purchase Price (as hereinafter defined) if the transactions contemplated by this Agreement are consummated; (b) shall deliver to Seller at the Closing (as hereinafter defined), in addition to the application of the Deposit, $ plus or minus any prorations provided in Article 6, payable in cash as more fully described in Section 3.2 hereof; (c) shall deliver to Seller within () days after the Closing Date the amount of the cash holdback set forth in Article 14, less any amounts applied against the cash holdback as permitted in such Article; (d) shall pay Seller within () days after submission of the invoice referred to in Section 3.3 an amount equal to the sale value of the Inventories actually on hand as of the Closing Date, as determined in accordance with Section 3.3 and SCHEDULE 3; and (e) shall assume and discharge, and shall indemnify Seller against, liabilities and obligations of Seller under the leases, contracts or other agreements, if any, specified on SCHEDULE 4 but only to the extent that such liabilities or obligations accrue after the Closing Date.
2.2 Allocation of Purchase Price. The parties agree that the Purchase Price (defined as the sum of the amounts specified in clauses (a),(b), and (c) above plus the full amount of the cash holdback referred to in clause (c) above) shall be allocated as set forth on SCHEDULE 2.2 and that such allocation will be used by the parties in reporting the transaction contemplated by this Agreement for Federal and state tax purposes. ARTICLE 3. THE CLOSING The closing of the purchase and sale of the Assets by Seller to Buyer (the “Closing”) shall take place at the offices of within 5 business days after the satisfaction (or written waiver by the party entitled to waive) of all conditions set forth in Articles 11 and 12 (the actual date of the Closing being herein referred to as the “Closing Date”). In the event that the conditions specified in this Agreement have not been fulfilled by such date, Buyer may extend the Closing Date for a period or periods not exceeding an aggregate of 30 days by written notice to the Selling Parties. If on the original or any postponed Closing Date the Selling Parties shall have been unable to obtain all waivers and consents of private parties and governmental agencies required by this Agreement, then Buyer, on written notice, may postpone the Closing to a time not later than _.m. local time, on , 20. 3.1 Selling Parties’ Obligations at the Closing. (a)At the Closing, the Selling Parties shall deliver or cause to be delivered to Buyer: (i) For all the owned Real Property and interests in the owned Real Property, [a] general warranty deed[s] in recordable form, properly executed and acknowledged, conforming to and conveying the agreed state of the title; (ii) Assignments in recordable form of all the Real Property Leases, properly executed and acknowledged by Seller, and accompanied by all consents of lessors required by this Agreement and the leases being assigned; (iii) Assignment and assumption agreements for personal property leases, all contracts and agreements of Seller to be assumed in connection herewith, in form and substance satisfactory to Buyer’s counsel, and accompanied by all consents required by this Agreement and the personal property leases, contracts and agreements being assigned; and (iv) Instruments of assignment and transfer (including a bill of sale) of all of the other Assets of Seller to be transferred hereunder, in form and substance satisfactory to Buyer’s counsel. (b)Simultaneously with the consummation of the transfer, Seller, through its officers, agents, and employees, shall put Buyer into full possession and enjoyment of all the Assets to be sold, conveyed, transferred, assigned and delivered by this Agreement. (c)The Selling Parties, at any time before or after the Closing Date, shall execute, acknowledge, and deliver any further deeds, assignments, conveyances and other assurances, documents and instruments of transfer, reasonably requested by Buyer and shall take any other action consistent
with the terms of this Agreement that may reasonably be requested by Buyer for the purpose of assigning, transferring, granting, conveying and confirming to Buyer, or reducing to possession, any or all property and assets to be conveyed and transferred by this Agreement. If requested by Buyer, the Selling Parties further agree to prosecute or otherwise enforce in their own names for the benefit of Buyer any claims, rights, or benefits that are transferred to Buyer by this Agreement and that require prosecution or enforcement in either of the Selling Parties’ name. Any prosecution or enforcement of claims, rights, or benefits under this Section shall be solely at Buyer’s expense, unless the prosecution or enforcement is made necessary by a breach of this Agreement by the Selling Parties. 3.2 Buyer’s Obligations at the Closing. At the Closing, Buyer shall deliver to Seller against delivery of the items specified in Section 3.1 a certified or bank cashier’s check, or a wire transfer of immediately available funds, in the amount of $ , payable to Seller. 3.3 Inventories. On or before the Closing Date, the parties shall make a joint physical count and determination of the sale value of the Inventories for the purpose of determining the amount to be paid pursuant to Section 2.1(d) above, utilizing the procedures and the inventory prices set forth in SCHEDULE 3.3. Upon the final determination of such amounts pursuant to such procedures, Seller shall submit an invoice to Buyer for such amount, together with a reasonably detailed list of the items covered thereby. Buyer shall make payments to Seller of the amount due within days after the date of such invoice. ARTICLE 4. ASSUMPTION OF LIABILITIES Buyer is not assuming any debt, liability or obligation of Seller, whether known or unknown, fixed or contingent, except as expressly otherwise provided in this Agreement. The Selling Parties agree to indemnify and hold Buyer harmless against all debts, claims, liabilities and obligations of Seller not expressly assumed by Buyer hereunder, and to pay any and all attorneys’ fees and legal costs incurred by Buyer, its successors and assigns in connection therewith. ARTICLE 5. RETURN OF DEPOSIT The Deposit shall be returned, with interest at the annual rate of ____% to Buyer upon Buyer’s demand upon (a) any objection to the consummation of the transactions contemplated hereby, or by any request for additional information, by the United States Justice Department or the Federal Trade Commission prior to the Closing, (b) the failure of any of the conditions set forth in Article 11 to be met within ___ days after the date of this Agreement, (c) the existence of any of the conditions described in Section 18.2; or (d) the occurrence of any default by the Selling Parties described in Section 18.3. If the Closing occurs after return of the Deposit, the original Deposit amount shall be added to the amount due at Closing pursuant to Section 2.1(b). ARTICLE 6. EXCISE AND PROPERTY TAXES Seller shall pay all sales, use and transfer taxes arising out of the transfer of the Assets and shall pay its portion, prorated as of the Closing Date, of state and local real and personal property
taxes of the business being sold hereunder. Buyer shall not be responsible for any business, occupation, withholding or similar tax, or for any income, sales, use, value-added or similar taxes related to any period, or transaction occurring during any period, before the Closing Date. ARTICLE 7. REPRESENTATIONS AND WARRANTIES OF SELLING PARTIES. The Selling Parties, jointly and severally, hereby represent and warrant to Buyer that the following facts and circumstances are and, except as contemplated hereby, at all times up to the Closing Date will be true and correct, and hereby acknowledge that such facts and circumstances constitute the basis upon which Buyer is induced to enter into and perform this Agreement. Each warranty set forth in this Article 7 shall survive the Closing and any investigation made by or on behalf of Buyer. 7.1 Organization, Good Standing and Qualification. Seller is a corporation duly organized, validly existing, and in good standing under the laws of , has all necessary corporate powers to own its properties and to carry on its business as now owned and operated by it, and is duly qualified to transact intrastate business and is in good standing in all jurisdictions in which the nature of its business or of its properties makes such qualification necessary. The Seller does not have any subsidiaries, as defined under generally accepted accounting principles(“GAAP”). 7.2 Financial Statements, Internal Controls SCHEDULE 7.2(a) sets forth balance sheets of Seller as of , 20, (the “Last Fiscal Year End”) and the two prior fiscal year-ends, and the related statements of income, cash flows and retained earnings for the years then ending, certified by , Seller’s independent certified public accountants, whose opinions with respect to such financial statements are included in such Schedule. SCHEDULE 7.2(b) sets forth unaudited consolidated and consolidating balance sheets of Seller as of , 20 (the “Stub Period Date”), together with related unaudited statements of income, cash flows and retained earnings for the month period then ending, certified by the Chief Financial Officer of Seller. The financial statements in SCHEDULES 7.2(a) and 7.2(b) are referred to as the “Financial Statements.” The Financial Statements have been prepared in accordance with GAAP consistently followed by Seller throughout the periods indicated, are complete and correct in all material respects and accurately and fairly present the financial position of Seller as of the respective dates of the balance sheets included in the Financial Statements, and the results of their operations for the respective periods indicated. Seller has no liabilities or obligations of any nature(known or unknown, absolute, accrued, and whether or not) of the type required to be reflected or disclosed in a balance sheet (or the notes thereto) prepared in accordance with GAAP other than those fully reflected or reserved against in the Financial Statements or set forth in SCHEDULE 7.2(c). Seller has in place systems and processes that are customary for a company at the same stage of development as Seller that are designed to (i) provide reasonable assurances regarding the reliability of the Financial Statements and (ii) in a timely manner accumulate and communicate to the Seller’s principal executive officer and principal financial officer the type of information that would be required to be disclosed in the Financial Statements (such systems and processes are herein referred to as the “Controls”). Neither Seller nor any employee, auditor, accountant or representative of Seller has received or otherwise had or obtained knowledge of any complaint, allegation, assertion or claim, whether written or oral, regarding the Controls or the Financial Statements. To Seller’s knowledge, there have been no instances of fraud, whether or not
material, which occurred during any period covered by the Financial Statements. Seller is not insolvent. 7.3 Absence of Specified Changes. Since the Last Fiscal Year End there has not been any: (a) Transaction by Seller except in the ordinary course of business as conducted prior to that date, any payment of any obligation in excess of $ , or any satisfaction or discharge of any claim in excess of $ by Seller; (b) Capital expenditure by Seller exceeding $ ; (c) Adverse change in the financial condition, liabilities, assets, business, operating results or prospects of Seller; (d) Destruction, damage to, or loss of any assets or properties of Seller (whether or not covered by insurance) that adversely affects the assets, properties, financial condition, business, operating results or prospects of Seller; (e) Labor trouble or other event or condition of any character adversely affecting the financial condition, business, assets or prospects of Seller; (f) Change in accounting methods or practices (including, without limitation, any change in depreciation or amortization policies or rates) by Seller; (g) Revaluation by Seller of any of its assets; (h) Increase in the salary or other compensation or benefits payable or to become payable by Seller to any of its officers, directors or employees, or the declaration, payment, or commitment or obligation of any kind for the payment by Seller of a bonus or other additional salary or compensation or benefit to any such person; (i) Sale or transfer or licensing of any asset or property of Seller, except in the ordinary course of business; (j) Execution, creation, amendment, nonrenewal or termination of any contract, agreement or license to which Seller is a party, except in the ordinary course of business; (k) Loan or advance by Seller to any person or entity, or guaranty by Seller of any loan or advance; (l) Waiver or release of any right or claim of Seller or debt owed to Seller, except in the ordinary course of business; (m) Creation or assumption by Seller of any mortgage, pledge, security interest or lien or other encumbrance on any asset of Seller;
(n) Any receipt by Seller of notice of any loss of, or material order cancellation by, any major customers of Seller; (o) Other event or condition of any character that has or might reasonably have an adverse effect on the financial condition, business, assets, operating results or prospects of Seller; or (p) Agreement by Seller to do any of the things described in the preceding clauses (a) through (o). 7.4 Tax Matters. (a)All Tax Returns (as defined below) for all periods ending on or before the Closing Date that are or were required to be filed by or with respect to Seller, either separately or as a member of an affiliated group of corporations, have been filed on a timely basis, and in accordance with the laws, regulations and administrative requirements of any applicable Taxing Authority (as defined below). All such Tax Returns that have been filed on or before the Closing Date were, when filed, and continue to be, true, correct and complete in all material respects. (b)Seller has made available to Buyer all reports of and communications for all open years from Internal Revenue Service agents and the corresponding agents of other state, local and foreign governmental agencies who have examined the respective books and records applicable to Seller or any affiliated group of which Seller is a member. SCHEDULE 7.4(b) describes all adjustments in respect of Seller to Income Tax Returns (as defined below)filed by, or on behalf of, Seller or any affiliated group of corporations of which Seller is or was a member, for all open taxable years, that have been proposed by any representative of any Taxing Authority, and SCHEDULE 7.4(b) describes the resulting Taxes (as defined below), if any, proposed to be assessed. All deficiencies proposed (plus interest, penalties and additions to tax that were or are proposed to be assessed thereon, if any) as a result of such examinations have been paid, reserved against, settled, or, as described in SCHEDULE 7.4(b), are being contested in good faith by appropriate proceedings. Except as set forth in SCHEDULE 7.4(b), neither Seller, no