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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 1, 1999
AMERICAN EDUCATIONAL PRODUCTS, INC.
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(Exact name of registrant as specified in its charter)
COLORADO 0-16310 84-1012129
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(State or other (Commission file number) (Employer Identi-
incorporation fication No.)
6550 Gunpark Drive, Suite 200, Boulder, Colorado 80301
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (303) 527-3230
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(Former name or former address, if changed since last report)
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ITEM 2: ACQUISITION OF ASSETS
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On September 1, 1999, American Educational Products, Inc., a Colorado
corporation, and its wholly-owned subsidiary, AEP California, Inc., a
Colorado corporation ("AMEP" or the "Company") closed upon and consummated
a definitive Asset Purchase and Sale Agreement dated as of September 1,
1999, (the "Agreement") between the Company and To Sew, Inc., a California
corporation, ("To Sew") pursuant to which the Company purchased
substantially all of the tangible and intangible properties and assets
("Assets") used in connection with the manufacture and distribution of
supplemental educational products under the name "To-Sew" (the "Business").
Under the terms of the Agreement, the Company acquired the Assets of
the Business, including inventories, furniture, fixtures, office machinery
and equipment and other tangible property, all mailing, client and customer
lists, fixtures, prepaid expenses, contracts and licenses, development
assets and intangible assets.
The purchase price paid by Company to To Sew for the Assets of the
Business was the sum of (i) $450,000 plus (ii) one hundred percent (100%)
of the net carrying value of the Seller's inventory as of August 31, 1999,
(subject to future adjustments) of which the sum of $450,000 was paid at
Closing. In addition, the Company agreed to pay to certain principals of
the Business an aggregate of $220,000 under Consulting Agreements and an
additional $100,000 for their Non-Competition Agreements.
In connection with the transaction, the Company entered into a
Sublease Agreement pursuant to which it will operate the Business at its
existing facilities in Canoga Park, California until January 31, 1999.
Thereafter, the Company plans to move the operations to its existing
facilities in Fort Collins, Colorado.
The cash used by the Company to pay the purchase price was obtained
from the Company's existing revolving credit facility which had sufficient
additional borrowing capacity to cover the purchase price. The Company has
reached an agreement with its primary commercial lender to expand its
existing revolving and term credits to accommodate the acquisition.
ITEM 7: FINANCIAL STATEMENTS AND EXHIBITS
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(a) Financial Statements and Pro Forma Financial Information
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The Company has determined in consultation with its independent
public accountants that the acquisition of To Sew, Inc. does not constitute
a significant subsidiary within the meaning of Regulation 210.11-01(b). As
a result, financial statements and pro forma financial information under
Items 7(a)(4) and 7(b) of Form 8-K will not be provided.
(b) Exhibits
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Item Title
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1.1 Asset Purchase and Sale Agreement dated as of September 1,
1999.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
AMERICAN EDUCATIONAL PRODUCTS, INC.
Dated: September 14, 1999 By: /s/ Clifford C. Thygesen
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Clifford C. Thygesen, President
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ASSET PURCHASE AND SALE AGREEMENT
Dated as of
September 1, 1999
between
AMERICAN EDUCATIONAL PRODUCTS, INC.
and its subsidiary,
AEP CALIFORNIA, INC.
and
TO SEW, INC.
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TABLE OF CONTENTS
SECTION 1: GENERAL DEFINITIONS -1-
1.1 Best Knowledge -1-
1.2 Effective Date -1-
1.3 Governmental Authority -1-
1.4 Governmental Requirement -1-
1.5 Legal Requirements -2-
1.6 Person -2-
1.7 Section -2-
1.8 Taxes -2-
SECTION 2: PURCHASE AND SALE OF ASSETS -2-
2.1 Description of Assets -2-
2.2 Excluded Assets -3-
2.3 Allocation of Purchase Price -4-
2.4 No Assumption of Liabilities -4-
2.5 Labor Matters -4-
2.6 Taxes and Other Costs -4-
2.7 Premises Sublease -4-
2.8 Bulk Sales -5-
2.9 Consultation Agreements -5-
2.10 Non-Competition Agreement -5-
2.11 Telephone Consultation Agreement -5-
SECTION 3. PURCHASE PRICE -5-
SECTION 4: CLOSING -6-
4.1 General Procedure. -6-
4.2 Time and Place. -6-
4.3 Effective Date of Closing -6-
4.4 Covenants Regarding Closing -6-
4.5 Conditions to Obligation of Buyer -6-
4.6 Conditions to Obligation of Seller -8-
4.7 Specific Items to be Delivered at the Closing -9-
4.8 Retention Escrow -11-
SECTION 5: REPRESENTATIONS AND WARRANTIES OF SELLER -12-
5.1 Organization and Standing. -12-
5.2 Subsidiaries, Etc -12-
5.3 Qualification -12-
5.4 Financial Statements -13-
5.5 Corporate Authority -13-
5.6 Financial Information -13-
5.7 No Defaults -14-
5.8 Taxes -14-
5.9 No Actions, Proceedings, Etc -14-
5.10 Post Balance Sheet Changes -14-
5.11 No Breaches -15-
5.12 Condition of Corporation's Assets -15-
5.13 Inventory -15-
5.14 Corporate Acts and Proceedings -15-
5.15 Registered Rights and Proprietary Information -15-
5.16 Changes in Suppliers and Customers -17-
5.17 No Liens or Encumbrances -17-
5.18 Obligations and Liabilities -17-
5.19 Employee Matters -17-
5.20 Legal Proceedings and Compliance with Law -17-
5.21 Representations and Warranties -18-
5.22 Disclosure of Information -18-
5.23 Contract Schedules -18-
5.24 Environmental -18-
SECTION 6: REPRESENTATIONS AND WARRANTIES OF BUYER -19-
6.1 Organization and Standing -19-
6.2 Corporate Acts and Proceedings -19-
SECTION 7: TERMINATION -19-
7.1 Termination -19-
7.2 Effect of Termination -20-
SECTION 8: INDEMNIFICATION -20-
8.1 Indemnification Covenants of Seller -20-
8.2 Indemnification Covenants of Buyer -20-
8.3 Method of Asserting Claims -20-
8.4 Survival -22-
SECTION 9: CONFIDENTIAL INFORMATION AND RELATED MATTERS -22-
SECTION 10: EXPENSES -23-
SECTION 11: MISCELLANEOUS -23-
11.1 Incorporation by Reference -23-
11.2 Parties in Interest -23-
11.3 Amendments and Waivers -23-
11.4 Waiver -23-
11.5 Governing Law - Construction -23-
11.6 Limitation of Actions -24-
11.7 Notices -24-
11.8 Fax/Counterparts -25-
11.9 Captions -25-
11.10 Severability -25-
11.11 Jurisdiction and Venue -25-
11.12 Good Faith Cooperation and Additional Documents -25-
11.13 Specific Performance -25-
11.14 Assignment -25-
11.15 Entire Agreement - Amendment -25-
11.16 Authority to Sign -26-
11.17 Execution of Documents -26-
11.18 Time -26-
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ASSET PURCHASE AND SALE AGREEMENT
THIS AGREEMENT is made and entered into effective this 1st day of
September, 1999, by AMERICAN EDUCATIONAL PRODUCTS, INC., a Colorado
corporation, and its wholly-owned subsidiary, AEP CALIFORNIA, INC., a
Colorado corporation, (the "Buyer") and TO SEW, INC., a California
corporation, ("Seller").
WITNESSETH
WHEREAS, Seller is the owner of certain tangible and intangible
properties and assets (the "Assets") used in connection with the
manufacture and distribution of supplemental educational products under the
name "To Sew" (the "Business"); and
WHEREAS, Buyer desires to purchase and Seller desires to sell the
Assets used in connection with such Business effective as of September 1,
1999 (the "Effective Date"), subject to the terms and conditions
hereinbelow set forth.
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties contained in this Agreement, and other good
and valuable consideration, the receipt and adequacy whereof is hereby
acknowledged, the parties agree as follows:
SECTION 1: GENERAL DEFINITIONS
For purposes of this Agreement, the following terms shall have the
respective meanings set forth below:
1.1 Best Knowledge. "Best Knowledge" shall mean both what a Person
knew as well as what the Person should have known had the Person exercised
reasonable diligence. When used with respect to a Person other than a
natural person, the term "Best Knowledge" shall include matters that are
known to the current directors and executive officers of the Person.
1.2 Effective Date. "Effective Date" shall mean September 1, 1999 at
9:00 a.m. Pacific Time.
1.3 Governmental Authority. "Governmental Authority" shall mean any
and all foreign, federal, state or local governments, governmental
institutions, public authorities and governmental entities of any nature
whatsoever, and any subdivisions or instrumentalities thereof, including,
but not limited to, departments, boards, bureaus, commissions, agencies,
courts, administrations and panels, and any division or instrumentalities
thereof, whether permanent or ad hoc and whether now or hereafter
constituted or existing.
1.4 Governmental Requirement. "Governmental Requirement" shall mean
any and all laws (including, but not limited to, applicable common law
principles), statutes, ordinances, codes, rules regulations,
interpretations, guidelines, directions, orders, judgments, writs,
injunctions, decrees, decisions or similar items or pronouncements,
promulgated, issued, passed or set forth by any Governmental Authority.
1.5 Legal Requirements. "Legal Requirements" means applicable common
law and any statute, ordinance, code or other laws, rule, regulation,
order, technical or other standard, requirement, or judgment adopted,
promulgated, applied or followed by any governmental authority, including,
without limitation, any order, decree, award, verdict, findings of fact,
conclusions of law, decision or judgment of any court, arbitrator,
arbitration board or administrative agency.
1.6 Person. "Person" shall mean any natural person, any Governmental
Authority and any entity the separate existence of which is recognized by
any Governmental Authority or Governmental Requirement, including, but not
limited to, corporations, partnerships, joint ventures, joint stock
companies, trusts, estates, companies and associations, whether organized
for profit or otherwise.
1.7 Section. Unless otherwise stated herein, the term "Section" when
used in this Agreement shall refer to the Sections of this Agreement.
1.8 Taxes. "Tax" and "Taxes" shall mean any and all income, excise,
franchise or other taxes and all other charges or fees imposed or collected
by any Governmental Authority or pursuant to any Governmental Requirement,
and shall also include any and all penalties, interest, deficiencies,
assessments and other charges with respect thereto.
SECTION 2: PURCHASE AND SALE OF ASSETS
On the terms and subject to the conditions of this Agreement, and in
reliance upon the representations and warranties of Seller and Buyer
contained in this Agreement:
2.1 Description of Assets. Buyer agrees to acquire from Seller and
Seller agrees to transfer to Buyer, as of the Effective Date, all of the
properties and assets, both tangible and intangible, owned by Seller and
used by it in connection with the operation of the Business under the
trade name "To Sew," including, without limitation, the following:
(a) All inventories of the Business of every nature whatsoever,
including, but not limited to, finished goods, work in process and raw
materials;
(b) Seller's furniture, fixtures, office machinery and equipment
and other tangible property used in the operation of the Business and
located at the premises of the Business in Canoga Park, California,
including, without limitation, all computer systems, hardware and software,
telephone systems, warehouse assembly, storage, packaging and distribution
equipment and fixtures;
(c) All mailing, client and customer lists used in the conduct
and operation of the Business;
(d) All prepaid expenses of the Business including, without
limitation, royalty, contract, catalog expense or lease advances or
deposits and other similar types of advances to vendors, suppliers, lessors
and others;
(e) All contracts and licenses used in the conduct of the
Business and assumed by the Buyer pursuant to Section 2.4, including,
without limitation, contracts and licenses with vendors, suppliers,
manufacturers, distributors, publishers, programmers, consultants and
collaborators; all contracts and licenses for outside art, production and
editorial work; all confidentiality, invention and similar contracts with
employees and consultants; all contracts with depositories for warehousing
and order fulfillment; all printing or manufacturing contracts requiring
performance after closing; all sales orders and contracts and all contracts
for the distribution of products;
(f) All of Seller's development assets used in the conduct of
the Business, including, without limitation, all pre-publication, sales,
marketing, advertising and promotional materials, transcripts, catalogs,
brochures, mailers, edited works in process, mechanicals, camera copy,
flats, plates, intermediate film, final plate-making film, magnetic disks,
artwork, photographs and transparencies, and other sales, advertising and
promotional materials and rights associated therewith;
(g) All intangible assets used in the conduct of the Business
including, without limitation, any and all software, prospects lists,
databases, marketing scripts, procedures and practices, copyrights,
trademarks, trade names, including registrations thereof and applications
for registration thereof, and all patents and patent application for any
and all of the foregoing;
(h) All goodwill associated with the Business;
(i) The telephone numbers of Seller, including, without
limitation, all "800" numbers used in the conduct of the Business; and
(j) Those assets being transferred by Madonna Cord Matheson
Corporation to Buyer by Bill of Sale dated as of the Effective Date.
2.2 Excluded Assets. The following assets owned by Seller and used
in the conduct of the Business shall not be included in the properties and
Assets to be purchased by Buyer from Seller on the Effective Date:
(a) All business and accounting records of Seller pertaining to
the Business, except as specified above; provided, however, that Purchaser
shall have reasonable access and opportunity to make copies of any such
records that may be necessary for the continuing conduct of the Business by
Purchaser; and
(b) Cash and cash equivalents as of the Effective Date;
(c) All accounts receivable of the Seller of every nature
whatsoever, including trade and other receivables as of the Effective Date;
(d) Certain pieces of furniture and decorative items used by the
Seller that are personal assets of the Seller's shareholders, Madonna
Matheson ("M. Matheson") and Harold Matheson ("H. Matheson") (hereafter M.
Matheson and H. Matheson may collectively be referred to as the
"Mathesons"), which assets are excluded items on the Bill of Sale and the
balance of which are separately tagged;
(e) A BMW Series 740 automobile; and
(f) The agreement with, including the rights to use the logo and
name of the Easton Corporation.
2.3 Allocation of Purchase Price. The Purchase Price as defined in
Section 3 hereof shall be allocated among the Assets purchased as set forth
in this Section 2.3. The allocation shall be binding on the parties in
accordance with Section 1060 of the Code for all purposes, including
without limitation, the appropriate tax treatment to be accorded to the
transactions contemplated by this Agreement. The Purchase Price shall be
allocated to inventory as determined in Section 3.1.
2.4 No Assumption of Liabilities. Except as expressly provided for
in this Section 2.4, Buyer will acquire the Assets free and clear of all
claims, liens or liabilities of Seller and shall have no obligation to pay
or otherwise discharge any obligation or liability of Seller incurred in
connection with its operation of the Business or otherwise; and Seller
agrees to indemnify and hold harmless Buyer with respect to any claim,
damage or liability for such obligations. Notwithstanding the forgoing
provisions, Buyer shall assume and agree to pay the following obligations
of Seller incurred in connection with the operation of the Business:
(a) The obligation of Seller under purchase orders issued prior
to the Effective Date for the delivery of goods after the Effective Date to
the extent such purchase order has been approved and initialed by Buyer
prior to the Effective Date.
(b) Any obligations incurred after the Effective Date by virtue
of the assignment by Seller to Buyer of certain contracts and other
agreements associated with the operation of the Business; provided,
however, that such obligations arise from operations conducted by Buyer
after the Effective Date. Those contracts and agreements consist
exclusively of a printing contract for the October 1999 catalog.
(c) Any obligation of Seller which may arise after the Effective
Date in connection with the use of any trademark or trade name included in
the Assets and assigned to Buyer.
2.5 Labor Matters. It is expressly understood and agreed that Buyer
is not assuming any union contracts, pension liabilities, workman's
compensation commitments or employee obligations of Seller up to the
Effective Date, including, without limitation, obligations for wages,
salaries, vacation pay, severance or other benefits and all such matters
shall be and remain Seller's sole responsibility and obligation.
2.6 Taxes and Other Costs. All transfer and conveyance taxes related
to the sale shall be payable by Seller except to the extent incurred solely
by Buyer.
2.7 Premises Sublease. On the Effective Date, Buyer shall sublease
from the Seller the business premises currently occupied by Seller located
at 8945-8959 Independence Avenue, Canoga Park, California 91304 (the
"Premises"), which premises the Seller has possession of pursuant to a
lease agreement between Seller and Seller's landlord. The term of the
sublease shall begin on the Effective Date and shall terminate on January
31, 2000. For the period of such sublease, Buyer shall pay to Seller a
gross rent of $7,000 per month. Upon expiration of the sublease on January
31, 2000, Buyer shall vacate the Premises and shall have no further
liability to the Seller arising from its occupancy of same.
2.8 Bulk Sales. The parties acknowledge that the bulk transfer law
of the State of California as currently in effect may apply to the
transactions provided for in this Agreement. Seller agrees to fully comply
with the requirements of such bulk transfer law prior to closing and shall
provide the Buyer with a certificate at the time of closing that all
requirements of such bulk transfer law have been fulfilled. If and to the
extent necessary in order to effectuate compliance with such bulk transfer
law it is necessary to escrow all or a portion of the purchase price as
provided for herein, Seller and Buyer agree to implement such escrow at
the time of closing upon terms and subject to conditions mutually agreed
upon by the parties.
2.9 Consultation Agreements. At the Closing, Buyer shall enter into
consultation agreements with the Mathesons substantially in the form of
Exhibit 2.9 hereto. Under such consultation agreements, the Mathesons will
provide such services as may be reasonably requested by Buyer in order to
assure the proper training of Buyer's management and personnel in the
operation of the Business. The term of such consultation agreements shall
begin on September 1, 1999 and terminate on August 31, 2000. In
consideration of such services, Buyer shall pay to the Mathesons on January
15, 2000 a one time consultation fee in the amount of $20,000.
2.10 Non-Competition Agreement. At the Closing, Seller and the
Mathesons shall jointly and severally execute and deliver a non-competition
agreement having a term of five years substantially in the form of Exhibit
2.10 hereto. An aggregate of $100,000 of the purchase price shall be
allocated to the consideration paid by the Buyer to the Seller and
Mathesons for their non-competition agreements, which sum shall be paid at
closing by certified funds or wire transfer of immediately available funds.
2.11 Telephone Consultation Agreement. At the Closing, the Buyer
shall enter into a second consultation agreement with the Mathesons
substantially in the form of Exhibit 2.11 hereto. Pursuant to such
consultation agreement, the Mathesons shall agree to provide telephone
consulting services for the Buyer at such times as Buyer and the Mathesons
shall jointly agree. The term of such telephone consultation agreement
shall begin on September 1, 2000 and shall end on August 31, 2014. In
consideration of such services, Buyer shall prepay at the time of closing a
one time consultation fee in the amount of $200,000, which sum shall be
paid at closing by certified funds or wire transfer of immediately
available funds.
SECTION 3: PURCHASE PRICE
3.1 The Purchase Price for the Assets (the "Purchase Price")
exclusive of all sums to be paid pursuant to the consultation agreements
described in Sections 2.9 and 2.11 and to be paid pursuant to the non-
competition agreement described in Section 2.10 shall be the sum of (i)
$450,000 plus (ii) one hundred percent (100%) of the net carrying value of
the Seller's inventory as of August 31, 1999, as approved and accepted by
Buyer and agreed by Seller prior to the Closing. The net carrying value of
Seller's inventory shall be valued at Seller's cost.
3.2 The Purchase Price to be paid by Buyer to Seller for the Assets
shall be paid as follows:
(a) The sum of $20,000 heretofore paid by the Buyer and held in
escrow shall be delivered to the Seller; and
(b) The balance of $430,000 shall be paid in certified funds or
wire transfer of immediately available funds at the time of closing.
SECTION 4: CLOSING
4.1 General Procedure. At the Closing each party shall deliver such
documents, instruments and materials as may be reasonably required in order
to effectuate the intent and provisions of this Agreement, and all such
documents, instruments and materials shall be satisfactory in form and
substance to counsel for the other parties.
4.2 Time and Place. The Closing shall take place on September 1,
1999, or on such later date as the Buyer and Seller may agree, at the Law
Offices of Bryan Kravetz, 1875 Century Park East, Suite 800, Los Angeles,
California 90067-2509, following the satisfaction or waiver of all
conditions precedent set forth in Sections 4.5 and 4.6.
4.3 Effective Date of Closing. Notwithstanding the actual time and
place of Closing, the parties stipulate and agree that the Effective Date
of the sale and purchase of the Assets shall be September 1, 1999 at 9:00
a.m. Pacific Time.
4.4 Covenants Regarding Closing. Buyer and Seller hereby covenant
and agree that they shall (i) use reasonable efforts to cause each of their
respective Exhibits to be prepared and exchanged with the other party, and
its legal counsel, within ten (10) business days following the execution of
this Agreement, except to the extent the express terms of this Agreement
provide for a different time period for such delivery to be accomplished,
(ii) use reasonable efforts to cause all of their respective
representations and warranties set forth in this Agreement, and Exhibits
hereto, to be true on and as of the Closing, (iii) use reasonable efforts
to cause all of their respective obligations that are to be fulfilled on or
prior to the Closing to be so fulfilled, (iv) use reasonable efforts to
cause all conditions to the Closing set forth in this Agreement to be
satisfied on or prior to the Closing, and (v) use reasonable efforts to
deliver to each other at the Closing the certificates, updated lists,
notices, consents, authorizations, approvals, agreements, transfer
documents, receipts and amendments contemplated hereby (with such additions
or exceptions to such items as are necessary to make the statements set
forth in such items accurate and acceptable, provided that if any such
additions or exceptions cause any of the conditions to a party's
obligations hereunder as set forth hereinbelow not to be fulfilled, such
additions and exceptions shall in no way limit the rights of the other
party hereunder to terminate this Agreement or refuse to consummate the
transactions contemplated hereby).
4.5 Conditions to Obligation of Buyer. The obligation of Buyer to
complete the purchase of the Assets on the Closing date on the terms set
forth in this Agreement is, at the option of Buyer, subject to the
satisfaction or waiver by Buyer of each of the following conditions, all of
which will be deemed to be satisfied upon closing:
(a) Accuracy of Representations and Warranties. The
representations and warranties made by Seller in this Agreement shall be
correct in all material respects on and as of the Closing Date.
(b) Compliance with Covenants. All covenants which Seller is
required to perform or comply with on or before the Closing date shall have
been fully complied with or performed in all material respects.
(c) Corporate Approvals. The Board of Directors of the Seller
shall have approved and ratified this Agreement and shall have authorized
the appropriate officers of the Seller to execute same and fully perform
its terms.
(d) Consents and Approvals. Except as disclosed on Exhibit
4.5(d), to the extent that any material lease, mortgage, deed of trust,
contract or agreement to which Seller is a party shall require the consent
of any person to the purchase and sale of the Assets or any other
transaction provided for herein, such consent shall have been obtained;
provided, however, that the Seller shall not make, as a condition for the
obtaining of any such consent, any agreements or undertakings not approved
in writing by Buyer to the extent that such condition otherwise has an
effect on Buyer.
(e) Review and Due Diligence. Buyer, its bankers, legal counsel
and/or auditors shall have had the opportunity to complete, and shall have
completed, a satisfactory due diligence investigation of the Seller,
together with a satisfactory review of the Seller's corporate status and
the marketability of title to the Seller's property.
(f) No Governmental Actions. No action or proceeding before any
governmental authority shall have been instituted or threatened to restrain
or prohibit the transactions contemplated by this Agreement, and the Seller
shall have delivered to Buyer a certificate dated as of the Closing Date
and executed by Seller, stating that to its Best Knowledge, no such items
exist. No governmental authority shall have taken any other action as a
result of which the management of any of the Companies, in its sole
discretion, reasonably deems it inadvisable to proceed with the
transactions contemplated by this Agreement.
(g) No Material Adverse Change. No material adverse change in
the business, property or assets of Seller shall have occurred, and no loss
or damage to any of the Assets, whether or not covered by insurance, has
occurred, and the Seller shall have delivered to Buyer a certificate dated
as of the Closing Date and executed by Seller to all such effects.
(h) Update of Contracts. The Seller shall have delivered to
Buyer an accurate list, as of the Closing Date, showing (i) all agreements,
contracts and commitments of the type listed on Exhibit 5.23, entered into
since the date of this Agreement; and (ii) all other agreements, contracts
and commitments related to the businesses or the assets of the respective
parties entered into since the date of this Agreement, together with true,
complete and accurate copies of all such documents (the "New Contracts").
Buyer shall have had the opportunity to review and approve the New
Contracts of the other, and Buyer shall have the right to delay the Closing
for up to ten (10) days if it in its sole discretion deems such delay
necessary to enable it to adequately review the New Contracts.
(i) Approval of Counsel. All actions, proceedings, instruments
and documents required or incidental to carry out this Agreement, including
all schedules and exhibits thereto, and all other related legal matters
shall have been approved by Neuman & Drennen, counsel to Buyer, and Bryan
Kravetz, counsel to Seller.
(j) No Adverse Information. The investigations with respect to
Seller, the Assets and the business of To Sew performed by Buyer's
professional advisors and other representatives shall not have revealed any
information concerning the Seller, its Assets or its business that has not
been made known to the Buyer, in writing prior to the date of this
Agreement and that, in the opinion of such party and its advisors,
materially and adversely affects the business or assets of the other party
or the viability of the transaction contemplated by this Agreement.
(k) Ordinary Course of Business. During the period from the
date of this Agreement until the Closing Date, the Seller shall have
carried on its business in the ordinary and usual course, and shall have
delivered to Buyer a certificate to that effect.
(l) Liens. Seller shall have delivered to Buyer a reasonably
current lien and judgment search (both state and county levels in each
jurisdiction where the party is qualified to or is doing business or owns
material assets) confirming the absence of any judicial liens, security
interests, tax liens and similar such liens affecting any of its business
or assets. Each and every lien or encumbrance of any nature, if any,
relating to the Assets or Business shall have been terminated and released,
and proof thereof delivered to the Buyer.
(m) Other Documents. Seller shall have delivered or caused to
be delivered all other documents, agreements, resolutions, certificates or
declarations as Buyer or its attorneys may have reasonably requested.
(n) Agreements. At Closing, Seller and the principal
stockholders of Seller shall execute and deliver to Buyer the Consulting
Agreements and Non-Competition Agreement substantially in the form of
Exhibits 2.9, 2.10 and 2.11 hereto.
4.6 Conditions to Obligation of Seller. The obligations of Seller to
complete the Sale of Assets on the Closing date on the terms set forth in
this Agreement is, at the option of Seller subject to the satisfaction or
waiver by Seller of each of the following conditions, all of which are
deemed satisfied upon Closing:
(a) Accuracy of Representations and Warranties. The
representations and warranties made by Buyer in this Agreement shall be
correct in all material respects on and as of the Closing date with the
same force and effect as though such representations and warranties had
been made on the Closing date.
(b) Compliance with Covenants. All covenants which Buyer is
required to perform or comply with on or before the Closing date shall have
been fully complied with or performed in all material respects.
(c) Corporate Approvals. The Board of Directors of Buyer shall
have approved and ratified this Agreement and shall have authorized the
appropriate officers to execute same and fully perform its terms.
(d) No Governmental Actions. No action or proceeding before any
governmental authority shall have been instituted or threatened to restrain
or prohibit the transactions contemplated by this Agreement, and the Buyer
shall have delivered to Seller a certificate dated as of the Closing Date
and executed by Buyer, stating that to its Best Knowledge, no such items
exist. No governmental authority shall have taken any other action as a
result of which the management of Seller, in its sole discretion,
reasonably deems it inadvisable to proceed with the transactions
contemplated by this Agreement.
(e) Approval of Counsel. All actions, proceedings, instruments
and documents required or incidental to carry out this Agreement, including
all schedules and exhibits thereto, and all other related legal matters
shall have been approved as to substance and form by Neuman & Drennen,
counsel to Buyer, and Bryan Kravetz, counsel to Seller.
(f) Other Documents. The parties shall have delivered or caused
to be delivered all other documents, agreements, resolutions, certificates
or declarations as each respective party or its attorneys may have
reasonably requested.
(g) Agreements. At closing, the parties shall have executed and
delivered the Consultation Agreements described in Exhibits 2.9 and 2.11
hereto and the Non-Competition Agreement described in Exhibit 2.10 hereto.
4.7 Specific Items to be Delivered at the Closing. The parties shall
deliver the following items to the appropriate party at the Closing of the
transactions contemplated by this Agreement.
(a) To be delivered by Seller:
(i) Bills of Sale, or other documents of conveyance, in
form satisfactory to Buyer and its legal counsel,
conveying the Assets to Buyer free and clear of all
claims, liens or encumbrances, except as disclosed in
the Exhibits and except for the Assumed Obligations,
and containing general warranties with respect to
title.
(ii) Copy of corporate resolutions authorizing the execution
of this Agreement, and the consummation by Seller of
the transactions contemplated by this Agreement.
(iii) A certificate of the President of Seller stating that
the representations and warranties of Seller set forth
in this Agreement are true and correct. Said
certificate shall further verify and affirm that,
except as disclosed in the Exhibits, all covenants on
the part of Seller have been performed and all consents
or waivers, if any, which may be necessary to execute
and deliver this Agreement have been obtained and are
in full force and effect.
(iv) A certificate dated the Closing Date, signed by the
Chief Executive Officer and the Chief Financial Officer
of Seller, in form and substance satisfactory to the
other party and its legal counsel, certifying that all
conditions precedent set forth in this Agreement to the
obligations of Seller to close, have been fulfilled,
and that no event of default hereunder and no event
which, with the giving of notice or passage of time, or
both, would be an event of default, has occurred as of
such date.
(v) Certificates dated the Closing Date, signed by the
Secretary of Seller, (i) certifying resolutions duly
adopted by the Board of Directors of Seller,
authorizing the execution of this Agreement and all of
the other transactions to be consummated pursuant
thereto; (ii) certifying the names and incumbency of
the officers of Seller who are empowered to execute the
foregoing documents for and on behalf of such company;
(iii) certifying the authenticity of copies of the
Articles of Incorporation and Bylaws of Seller; and
(iv) certifying the authenticity of a reasonably
current Certificate of Good Standing, from all
jurisdictions in which the Company is qualified to
conduct business.
(vi) A Non-Competition Agreement and Consultation
Agreements, dated the Closing Date, signed by the
proper parties.
(b) To be delivered by Buyer:
(i) Certified funds or wire transfer, payable to Seller, in
the amount of the Purchase Price as defined in Section
3.1, less the Escrow Amount, if any, defined in Section
4.8 hereof;
(ii) Payment in the amount of $200,000 payable to the
Mathesons pursuant to the Telephone Consultation
Agreement described in Section 2.11;
(iii) Payment in the amount of $100,000 payable to the order
of Seller and the Mathesons in connection with the Non-
Competition Agreement
(iv) Copy of corporate resolution authorizing the execution
of this Agreement and the consummation by Buyer of the
transactions contemplated by this Agreement;
(v) A certificate of the President of Buyer stating that
the representations and warranties of Buyer set forth
in this Agreement are true and correct. Said
certificate shall further verify and affirm that all
consents or waivers, if any, which may be necessary to
execute and deliver this Agreement have been obtained
and are in full force and effect;
(vi) A certificate dated the Closing Date, signed by the
Chief Executive Officer and the Chief Financial Officer
of Buyer, in form and substance satisfactory to the
other party and its legal counsel, certifying that all
conditions precedent set forth in this Agreement to the
obligations of Buyer to close, have been fulfilled, and
that no event of default hereunder and no event which,
with the giving of notice or passage of time, or both,
would be an event of default, has occurred as of such
date; and
(vii) Certificates dated the Closing Date, signed by the
Secretary of Buyer, (i) certifying resolutions duly
adopted by the Board of Directors of Buyer, authorizing
the execution of this Agreement and all of the other
transactions to be consummated pursuant thereto; (ii)
certifying the names and incumbency of the officers of
Buyer who are empowered to execute the foregoing
documents for and on behalf of each such company; (iii)
certifying the authenticity of copies of the Articles
of Incorporation and Bylaws of Buyer; and
(iv) certifying the authenticity of a reasonably
current Certificate of Good Standing, from all
jurisdictions in which the company is qualified to
conduct business.
4.8 Retention Escrow
(a) Escrow Deposit. On the closing date, Buyer shall deposit
the sum of Seventy-five Thousand Dollars ($75,000) (the "Escrow Amount"),
representing a portion of the Purchase Price, into a checking account to be
opened jointly by Seller and Buyer (the "Escrow Account") to be held, in
escrow, in accordance with the terms and conditions of this Section 4.8.
All checks, withdrawals or wire transfers from the Escrow Account shall
require the joint signatures of a representative of Buyer and a
representative of Seller. Interest, if any, which is earned and accrued on
the Escrow Amount shall be credited to Seller and added to the Escrow
Amount.
(b) The Escrow Account shall be maintained for a period of one
(1) year, unless sooner depleted by virtue of the provisions of Section
4.8(c) below or unless sooner released in accordance with Section 4.8(e),
subject to the terms and conditions of this Section 4.8.
(c) Notwithstanding any other provision hereof to the contrary,
in the event (1) any trade vendor of Seller proposes or requires a change
of terms due to the existence of any outstanding account payable due and
owing to said vendor by Seller, or (2) Buyer has reasonable grounds to
believe that the existence of an outstanding account payable by Seller is
reasonably likely to cause a disruption in the business operations of Buyer
following the Closing, Buyer shall deliver written notice to Seller
identifying the trade vendor in question and the amount of the outstanding
liability to such trade vendor. Seller shall have a period of five (5)
business days following the date of such written notice to satisfy and pay
in full the outstanding liability of Seller to such trade vendor and to
provide Buyer with written evidence of such payment. Should the Seller
fail to provide Buyer with written evidence of such payment within five (5)
days, Buyer and Seller agree to cooperate to pay the trade vendor out of
the Escrow Amount.
(d) Unless sooner released in accordance with the provisions of
Section 4.8(e) below, any amounts remaining in escrow upon the expiration
of one (1) year from the Closing Date shall be released and delivered to
the Seller as final payment of the Purchase Price.
(e) Notwithstanding the provisions of Section 4.8(d) above,
Seller may, at its election, obtain the earlier release and payment of the
Escrow Amount by complying with the following:
(i) Within seven (7) days (30 days for royalties) following
the Closing Date, Seller shall provide the Buyer with a
list of all obligations and liabilities of Seller
outstanding as of the Closing Date, which list Seller
shall certify as being true and accurate;
(ii) Seller shall satisfy and discharge all liabilities and
obligations of Seller identified in writing on the list
to be provided to Buyer at Closing, and shall establish
such payment to the reasonable satisfaction of Buyer;
(iii) Upon receipt by Buyer from Seller of evidence
establishing the satisfaction and discharge of all such
liabilities and obligations, Buyer and Seller shall
release and pay to Seller all sums remaining in escrow,
whereupon the Retention Escrow shall be deemed
terminated for all purposes.
(f) If, at the Closing, Buyer delivers to Seller a Certificate
stating that "there are no liabilities or obligations of Seller and trade
creditors as of the Effective Date and that all trade creditors that have
delivered goods to Seller (which goods are included in Seller's inventory)
have been paid in full," then and in that event the retention funds
contemplated by this paragraph shall not be funded and all funds otherwise
to be retained shall be paid by Buyer to Seller at Closing.
SECTION 5: REPRESENTATIONS AND WARRANTIES OF SELLER
As a material inducement to Buyer to enter into this Agreement and
with the understanding and expectations that Buyer will be relying thereon
in consummating the transactions contemplated hereunder, Seller
(hereinafter referred to as the "Corporation" for the purposes of this
Section 5 only), hereby represents and warrants as follows:
5.1 Organization and Standing. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the
State of California qualified to do business in the State of California and
has all requisite corporate power and authority to own its assets and
properties and to carry on its business as it is now being conducted.
5.2 Subsidiaries, etc. Except as set forth on Exhibit 5.2, the
Corporation does not have any direct or indirect ownership interest in any
corporation, partnership, joint venture, association or other business
enterprise.
5.3 Qualification. The Corporation is not qualified to engage in
business as a foreign corporation in any state, and, to Seller's Best
Knowledge, there is no other jurisdiction wherein the character of the
properties presently owned by the Corporation or the nature of the
activities presently conducted by the Corporation makes necessary the
qualification, licensing or domestication of the Corporation as a foreign
corporation.
5.4 Financial Statements. Except as otherwise provided, the
following statements will be attached to this Agreement as Exhibit 5.4:
(a) Unaudited financial statements of the Corporation containing
balance sheets, together with statements of operation, statements of cash
flows, and statements of stockholders' equity as of and for the period
ended June 30, 1999;
(b) Unaudited financial statements of the Corporation containing
balance sheets and statements of operations covering the period from July
1, 1999 to August 31, 1999, to be provided within thirty days of Closing.
To the Best Knowledge of Seller, such financial statements,
together with and subject to the disclosures and notes thereto, (i) are in
accordance with the books and records of the Corporation; (ii) present
fairly and accurately the financial condition of the Corporation; as of the
dates of the balance sheets; (iii) present fairly and accurately the
results of operations for the periods covered by such statements; and (iv)
include all adjustments (consisting of only normal recurring accruals)
which are necessary for a fair presentation of the financial condition of
the Corporation, and of the results of operations of the Corporation for
the periods covered by such statements. Without in any way limiting the
foregoing, Buyer acknowledges that such financial statements are compiled
statements, and as such may not contain all of the customary disclosures,
or necessarily comply with generally accepted accounting principles.
5.5 Corporate Authority. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby nor
compliance by Seller with any on the provisions hereof will:
(a) conflict with or result in a breach of any provision of its
articles of incorporation or bylaws;
(b) other than as disclosed on Exhibit 5.5(b) hereto, result in
a default (or give rise to any right of termination, cancellation, or
acceleration) under any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, license, agreement or other instrument or
obligation to which Seller is a party, or by which any of its properties or
assets may be bound except for such default (or right of termination,
cancellation, or acceleration) as to which requisite waivers or consents
shall either have been obtained by Seller prior to the Closing Date or the
obtaining of which shall have been waived by Buyer; or
(c) violate any order, writ, injunction, decree or, to Seller's
Best Knowledge, any statute, rule or regulation applicable to Seller or any
of its properties or assets. To Seller's Best Knowledge, no consent or
approval by any governmental authority is required in connection with the
execution and delivery by Seller of this Agreement or the consummation by
Seller of the transactions contemplated hereby, except for possible notice
under plant closing laws.
5.6 Financial Information. In connection with the investigations
performed by and audit to be undertaken by Buyer of Seller, Seller
furnished certain financial information and data including, without
limitation, tax and accounting records, financial records, statements,
worksheets, and other information requested by the Buyer and its auditors
necessary to undertake and complete the audited financial examinations.
Seller represents and warrants that any and all such information furnished
in connection with the conduct of such investigations and audits shall be
true, accurate and complete in all material respects and shall not contain
to Seller's Best Knowledge, any material misstatements nor any material
omissions of fact or information respecting the financial condition or
results of operation of the Business for the respective periods covered by
the audits.
5.7 No Defaults. Except as set forth on the attached Exhibit 5.7,
each of the leases, contracts, agreements and insurance policies to which
Seller is a party, and which will be assumed by Buyer, is in full force and
effect as of the date hereof with no material defaults existing thereunder.
5.8 Taxes. Except as set forth in Exhibit 5.8:
(a) the Corporation has filed (or has obtained extensions for
filing) all income, excise, sales, corporate franchise, property, payroll
and other tax returns or reports required to be filed by it, as of the date
hereof by the United States of America, any state or other political
subdivision thereof or any foreign country and has paid all Taxes or
assessments relating to the time periods covered by such returns or
reports;
(b) Seller has paid all tax liabilities imposed or assessed by
any governmental authority for all periods prior to the Closing Date for
which such taxes have become due and payable and has received no notice
from any such governmental authority of any deficiency or delinquency with
respect to such obligation. Seller is not currently undergoing any audit
conducted by any taxing authority and has received no notice of audit
covering any prior period for which taxes have been paid or are or will be
due and payable prior to the Closing Date, except that Seller will be
undergoing a sales tax audit commencing September 2, 1999. There are no
present disputes as to taxes of any nature payable by Seller.
5.9 No Actions, Proceedings, etc. Except as listed on the attached
Exhibit 5.9, there is no action or proceeding (whether or not purportedly
on behalf of the Corporation) pending or threatened by or against the
Corporation, nor does there exist any basis therefor, which might result in
any material adverse change in the condition, financial or otherwise, of
the Corporation's business or assets. No order, writ or injunction or
decree has been issued by, or requested of any court or governmental agency
which does nor may result in any material adverse change in the
Corporation's assets or properties or in the financial condition or the
business of the Corporation. The Corporation is not liable for damages to
any employee or former employee as a result of any violation of any state,
federal or foreign laws directly or indirectly relating to such employee or
former employee.
5.10 Post Balance Sheet Changes. Except as set forth on the attached
Exhibit 5.10, since the date of the financial statements contained in
Exhibit 5.4 hereto through the Closing Date, the Corporation has not (a)
issued, bought, redeemed or entered into any agreements, commitments or
obligations to sell, buy or redeem any shares of its capital stock; (b)
incurred any obligation or liability (absolute or contingent), other than
current liabilities incurred, and obligations under contracts entered into,
in the ordinary course of business; (c) discharged or satisfied any lien or
encumbrance or paid any obligation or liability (absolute or contingent),
other than current liabilities incurred in the ordinary course of business;
(d) except for Seller's credit line, which is to be retired at or
immediately following Closing, mortgaged, pledged or subjected to lien
charges, or other encumbrance any of its assets, other than the lien of
current or real property taxes not yet due and payable; (e) waived any
rights of substantial value, whether or not in the ordinary course of
business; (f) suffered any damage, destruction or loss, whether or not
covered by insurance, materially and adversely affecting its assets or its
business; (g) made or suffered any amendment or termination of any material
contract or any agreement which adversely affects its business; (h)
received notice or had knowledge of any labor trouble other than routine
grievance matters, none of which is material; (i) increased the salaries or
other compensation of any of its directors, officers or employees or made
any increase in other benefits to which employees may be entitled, other
than employee salary increases made in the ordinary course of business; (j)
sold, transferred or otherwise disposed of any of its assets, other than in
the ordinary course of business; (k) declared or made any distribution or
payments to any of its shareholders, officers or employees, other than
wages and salaries made to employees in the ordinary course of business;
(l) revalued any of its assets; or (m) entered into any transactions not in
the ordinary course of business.
5.11 No Breaches. The Corporation is not in violation of, and except
for matters set forth in Exhibit 5.5(b), the consummation of the
transactions contemplated hereby do not and will not result in any material
breach of, any of the terms or conditions of any mortgage, bond, indenture,
agreement, contract, license or other instrument or obligation to which the
Corporation is a party or by which its assets are bound; nor will the
consummation of the transactions contemplated hereby cause Seller to
violate any statute, regulation, judgment, writ, injunction or decree of
any court, threatened or entered in a proceeding or action in which the
Corporation is, was or may be bound or to which any of the Corporation's
assets are subject.
5.12 Condition of Corporation's Assets. Seller's assets are currently
in good and usable condition and there are no defects or other conditions
which, in the aggregate, materially and adversely affect the operation or
values of such assets. Except as disclosed on the attached Exhibit 5.12,
no third party (including any officer or employee of the Corporation) has
any proprietary interest in any know-how or other intangible assets used by
the Corporation in the conduct of its business.
5.13 Inventory. At the Closing, Seller shall provide to Buyer an
inventory schedule reflecting inventories as of a date not more than five
(5) days prior to the Closing Date (the "Inventory"). Except as otherwise
set forth on Exhibit 5.13, all inventories reflected in the Inventory in
excess of the reserves for excess or obsolete inventories are stated at the
lowest of cost, replacement cost or market, and, as so stated, are in good
condition and usable or salable in the category in which they are
inventoried, in the ordinary course of business of the Corporation, without
discounts other than normal trade discounts regularly offered by the
Corporation, for prompt payment or quantity purchase.
5.14 Corporate Acts and Proceedings. This Agreement has been duly
authorized by all necessary corporate action on behalf of Seller, has been
duly executed and delivered by authorized officers of Seller, and is a
valid and binding Agreement on the part of Seller that is enforceable
against Seller in accordance with its terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency, moratorium,
reorganization or other similar laws affecting the enforcement of
creditors' rights generally and to judicial limitations on the enforcement
of the remedy of specific performance and other equitable remedies.
5.15 Registered Rights and Proprietary Information.
(a) Exhibit 5.15 hereto contains a true and complete list of any
and all patents, letters patent and patent applications, service marks and
trademarks (including, without limitation, the name "To Sew"), trademark
and service mark registrations and applications, copyright, copyright
registrations and applications, grants of licenses and rights to Seller
with respect to the foregoing, both domestic and foreign, claimed by Seller
or used or proposed to be used by Seller in the conduct of the Business
(collectively herein, "Registered Rights"). Exhibit 5.15 hereto also
contains a true and complete list of all and every trade secret, know-how,
process, formula, discovery, development, research, design, technique,
customer and supplier list, contracts, and any other matter required for,
incident to, or related to the conduct of the Business (hereafter
collectively the "Proprietary Information"). Except as described in
Exhibits 2.4(a) and 5.15 hereto, Seller is not obligated or under any
liability whatever to make any payments by way of royalties, fees or
otherwise to any owner or licensor of, or other claimant to, any Registered
Right or Proprietary Information with respect to the use thereof in the
conduct of the Business or otherwise.
(b) Except as described in Exhibit 5.15 hereto, to Seller's best
knowledge after reasonable inquiry, Seller owns and has the unrestricted
right to use the Registered Rights and Proprietary Information required for
or incident to the design, development, manufacture, operation, sale and
use of all products and services sold or rendered or proposed to be sold or
rendered by Seller or relating to the conduct or proposed conduct of the
Business, free and clear of any right, title, interest, equity or claim of
others. Except as described in Exhibit 5.15 hereto, Seller has taken all
necessary steps (including without limitation entering into appropriate
confidentiality, assignment of rights and non-competition agreements with
all officers, directors, employees and consultants of Seller and others
with access to or knowledge of the Proprietary Information) to safeguard
and maintain the secrecy and confidentiality of, and its proprietary rights
in, the Proprietary Information and all related documentation and
intellectual property rights therein necessary for the conduct or proposed
conduct of the Business.
(c) Except as described in Exhibit 5.15 hereto, Seller has not
sold, transferred, assigned, licensed or subjected to any right, lien,
encumbrance or claim of others, any Proprietary Information, including
without limitation any Registered Right, or any interest therein, related
to or required for the design, development, manufacture, operation, sale or
use of any product or service currently under development or manufactured,
or proposed to be developed, sold or manufactured, by Seller. Exhibit 5.15
contains a true and complete list and description of all licenses of
Proprietary Information granted to Seller by others or to others by Seller.
Except as described in Exhibit 5.15 hereto, there are no claims or demands
of any person pertaining to, or any proceedings that are pending or
threatened, which challenge the rights of Seller in respect of any
Proprietary Information used in the conduct of the Business.
(d) Except as described in Exhibit 5.15 and without in any way
limiting the foregoing, Seller owns and on the Closing Date shall own, has
and shall have, holds and shall hold, exclusively all right, title and
interest in the Registered Rights, free and clear of all liens,
encumbrances, restrictions, claims and equities of any kind whatsoever, has
and shall have the exclusive right to use, sell, license or dispose of, and
has and shall have the exclusive right to bring action for the infringement
of the Registered Rights and the Proprietary Information. The marketing,
promotion, distribution or sale by Seller of any products or interests
subject to the Registered Rights or making use of Proprietary Information
shall not constitute an infringement of any patent, copyright, trademark,
service mark or misappropriation or violation of any other party's
proprietary rights or a violation of any license or agreement by Seller.
Except as described in Exhibit 5.15 hereto, to the knowledge of Seller
after due inquiry no facts or circumstances exist that could result in the
invalidation of any of the Registered Rights.
5.16 Changes in Suppliers and Customers. Except as disclosed on
Exhibit 5.16, Seller is not aware of any fact which indicates that any of
the suppliers supplying products, components or materials to Seller intends
to cease selling such products to Seller, nor is Seller aware of any fact
which indicates that any major customer of Seller intends to terminate its
business relations with Seller.
5.17 No Liens or Encumbrances. Except as otherwise disclosed in this
Agreement or the Exhibits hereto, the Seller has good and marketable title
to all of the Assets, tangible and intangible, employed in the operations
of its Business, free of any mortgages, security interests, pledges,
easements or encumbrances of any kind whatsoever, except for such property
and assets as may be leased by the Seller, and except for the Assumed
Obligations.
5.18 Obligations and Liabilities. Except as otherwise disclosed in
this Agreement or the Exhibits hereto, all of the Assets to be transferred
and conveyed to Buyer pursuant to this Agreement shall, on the Closing
Date, be free and clear of any claim, lien, encumbrance or any liability of
Seller. Buyer shall not be liable or obligated to pay, discharge or
otherwise satisfy any indebtedness, liability or obligation of Seller,
whether incurred in connection with the operation of the Business or
otherwise; and Seller, for itself, successors and assigns, agrees to
indemnify and hold harmless Buyer, its successors and assigns, from any
such liability or obligation.
5.19 Employee Matters. Exhibit 5.19 attached hereto contains a true,
complete and accurate list of all employees of the Corporation and the
remuneration of each (including wages, salaries and fringe benefits). The
Corporation has no information or facts indicating that any employee listed
on Exhibit 5.19 intends to terminate his/her employment relationship with
the Corporation prior or subsequent to the Closing date, except as may be
required by this Agreement. Except as specifically described on Exhibit
5.19, the Corporation has no employee benefit plans (including, but not
limited to, pension plans and health or welfare plans), arrangements or
understandings, whether formal or informal. Except as disclosed in Exhibit
5.19, there are no strikes, slowdowns, stoppages, organizational efforts,
discrimination charges or other labor disputes pending or, to the knowledge
of Seller or any of its agents or employees, threatened against Seller.
The Corporation does not now and has never contributed to a "multi-employer
plan" as defined in Section 400(a)(3) of the Employee Retirement Income
Securities Act of 1934, as amended ("ERISA"). The Corporation has complied
with all applicable provisions of ERISA and all rules and regulations
promulgated thereunder, and neither the Corporation nor any trustee,
administrator, fiduciary, agent or employee thereof has at any time been
involved in a transaction that would constitute a "prohibited transaction"
within the meaning of Section 406 of ERISA as to any covered plan of the
Corporation. The Corporation is not a party to any collective bargaining
or other union agreement. Except as disclosed in Exhibit 5.19, the
Corporation has not, within the past five (5) years had, or been threatened
with, any union activities, work stoppages or other labor trouble with
respect to its employees which had or might have had a material adverse
effect on the Corporation, its business or assets.
5.20 Legal Proceedings and Compliance with Law. Except as set forth
in Exhibits 5.4, 5.7, 5.8, 5.9, 5.10, 5.14 or 5.20, there is no legal,
administrative, arbitration or other proceeding or governmental
investigation pending or threatened (including those relating to the
health, safety, employment of labor, or protection of the environment)
pertaining to Seller which might have a material adverse effect on the
Business or the Assets following the Closing Date. Except as set forth in
such Exhibits, Seller has substantially complied with, and is not in
default in any respect under any laws, ordinances, requirements,
regulations, or orders applicable to the business of Seller, the violation
of which might materially and adversely affect it. Except as set forth in
such Exhibits, Seller is not a party to any agreement or instrument, nor is
it subject to any charter or other corporate restriction or any judgment,
order, writ, injunction, decree, rule, regulation, code or ordinance which
materially and adversely affects, or might reasonably be expected
materially and adversely to affect the business, operations, prospects,
property, assets or condition, financial or otherwise, of Seller.
5.21 Representations and Warranties. The representations and
warranties contained in this Agreement shall be true on and as of the
Closing Date with the same force and effect as though such representations
and warranties had been made on and as of the Closing Date. Such
representations and warranties shall survive the Closing Date and shall
remain operative in full force and effect for the period of time set forth
in Section 11.6 hereof regardless of any investigation at any time made by
or on behalf of Buyer and shall not be deemed merged in any document or
instruction so executed and/or delivered by Buyer or the Seller.
5.22 Disclosure of Information. Sellers represent and warrant that
all financial statements, data and other written information provided to
Buyer, as well as Buyer's consultants and representatives has been true,
accurate and correct in all material respects as of the date provided and
has been provided to Buyer with the knowledge of Seller that Buyer will be
relying upon same in connection with Buyer's decision to purchase the
Assets as provided for in this Agreement. Seller represents and warrants
that, to its best knowledge, there exists no material information
concerning the Business, its financial condition or operations which has
not been disclosed to or made available to Buyer or Buyer's representatives
or consultants and which would be material to an investment decision.
5.23 Contract Schedules.
(a) There are no contracts, leases, agreements, covenants,
licenses, instruments or commitments of Seller pertaining to the Business
calling for the payment of $5,000 or more or which are otherwise material
to the business of Seller.
(b) There are no labor contracts, employment agreements or
collective bargaining agreements related to Seller.
(c) There are no instruments evidencing any liens or security
interests securing any indebtedness of Seller covering any asset of Seller.
(d) Attached as Exhibit 5.23 is a list generally describing all
computer programs and related software proprietary to Seller and all
management proprietary systems utilized by Seller in its operations.
5.24 Environmental. Except as disclosed on Exhibit 5.24, and except
for normal office and consumer products utilized in the ordinary course of
business, the conduct and operation of the business of Seller has not and
does not:
(a) Involve or require the storage, disposal, generation,
manufacture, refinement, transportation, production or treatment of toxic
wastes, hazardous wastes, or hazardous substances;
(b) Resulted in any spill, discharge, leak, emission, injection,
escape, dumping, or release of any kind onto the business premises, or into
the environment surrounding the business premises, of any toxic wastes or
hazardous substances; or
(c) Involve or require the treatment, collection, storage or
disposal of any refuse or objectionable wastes so as to require a permit or
approval from the United States Environmental Protection Agency, or
otherwise subject to the regulation of the United States Environmental
Protection Agency or any state regulatory agency.
The terms "hazardous wastes" and "hazardous substances" shall have the
meaning specified by any applicable local, state, or federal statute or
regulation concerning or governing water pollution, groundwater protection,
air pollution, solid wastes, hazardous wastes, spills, and other releases
of toxic or hazardous substances, transportation of hazardous substances,
materials, and wastes and occupational or employee health and safety.
SECTION 6: REPRESENTATIONS AND WARRANTIES OF AEP AND AEP CALIFORNIA
6.1 Organization and Standing. AEP and AEP California are
corporations duly organized, validly existing and in good standing under
the laws of the State of Colorado and have all requisite corporate power
and authority to own their assets and properties and to carry on their
business as it is now being conducted.
6.2 Corporate Acts and Proceedings. This Agreement has been duly
authorized by all necessary corporate action on behalf of AEP and AEP
California, has been duly executed and delivered by authorized officers of
AEP and AEP California, and is a valid and binding Agreement on the part of
AEP and AEP California that is enforceable against AEP and AEP California
in accordance with its terms, except as the enforceability thereof may be
limited by bankruptcy, insolvency, moratorium, reorganization or other
similar laws affecting the enforcement of creditors' rights generally and
to judicial limitations on the enforcement of the remedy of specific
performance and other equitable remedies. All corporate action necessary
to consummate the transactions provided for herein has been taken by AEP
and AEP California.
SECTION 7: TERMINATION
7.1 Termination. This Agreement may be terminated and abandoned
solely as follows:
(a) At any time until the Closing Date by the mutual agreement
of the Seller and Buyer.
(b) By either Buyer or Seller, if for any reason the parties
have failed to close this Agreement on or before September 10, 1999,
provided that neither Buyer nor Seller is then in default thereunder.
In the event of any termination pursuant to this Section 7.1
(other than pursuant to Subparagraph 7.1(a), written notice setting forth
the reasons therefor shall forthwith be given by Seller, if it is the
terminating party, to Buyer, or by Buyer, if it is the terminating party,
to the Seller.
7.2 Effect of Termination. If the sale and purchase of Assets is
terminated and abandoned as provided for in this Section, this Agreement
shall forthwith become wholly void and of no effect without liability to
any party to this Agreement except for breach of this Agreement.
SECTION 8: INDEMNIFICATION
8.1 Indemnification Covenants of Seller. Subject to the limitations
set forth in this Section 8, the Seller shall defend, indemnify, save and
keep harmless the Buyer and its affiliates, directors, officers, agents or
representatives and their respective successors and permitted assigns (the
"Buyer Indemnitees"), against and from all liability, demands, claims,
actions or causes of action, assessments, losses, fines, penalties, costs,
damages and expenses, including reasonable attorneys' fees (collectively
the "Damages") sustained or incurred by any of the Buyer Indemnitees as a
result of or arising out of or relating to:
(a) Any inaccuracy in a representation or breach of a warranty
made by the Seller in this Agreement or in any document or instrument
delivered to the Buyer in connection with this Agreement; or
(b) The failure of the Seller to comply with, or the breach by
the Seller of, any of the covenants contained in this Agreement or in any
document or instrument delivered to the Buyer in connection with this
Agreement, to be performed by the Seller; or
(c) Any liability now or subsequently existing arising out of or
in connection with the Business relating to periods prior to the Effective
Date, except to the extent that any such liability is expressly assumed by
the Buyer pursuant to this Agreement.
8.2 Indemnification Covenants of Buyer. Subject to the limitations
set forth in this Section 8, the Buyer shall defend, indemnify, save and
keep harmless the Seller and its affiliates, directors, officers, agents or
representatives and their respective successors and permitted assigns (the
"Seller Indemnitees"), against and from all Damages sustained or incurred
by any of the Seller Indemnitees as a result of or arising out of or
relating to:
(a) Any inaccuracy in a representation or breach of a warranty
made by the Buyer in this Agreement or in any document or instrument
delivered to the Seller in connection with this Agreement; or
(b) The failure of the Buyer to comply with, or the breach by
the Buyer of, any of the covenants contained in this Agreement or in any
document or instrument delivered to the Seller in connection with this
Agreement, to be performed by the Buyer; or
(c) Any liability now or subsequently existing arising out of or
in connection with the Business, solely to the extent that such liabilities
and/or obligations relate to the acts or omissions of the Buyer subsequent
to the Effective Date; except to the extent that any such liability is
expressly retained by the Seller pursuant to this Agreement.
8.3 Method of Asserting Claims. For purposes of this Section 8.3,
the following terms shall be defined as follows:
(a) "Claims" shall mean all claims asserted pursuant to this
Section 8, whether or not arising as a result of a Third Party Claim.
(b) "Indemnified Person" shall mean any Buyer Indemnitee or any
Seller Indemnitee, as the context requires.
(c) "Indemnifying Person" shall mean any person obligated to
indemnify an Indemnified Person pursuant to this Section 8, as the context
requires.
(d) "Third Party Claims" shall mean any Claim asserted by any
person not a party to this Agreement (including without limitation any
governmental authority), asserting that an Indemnified Person is liable for
monetary or other obligations which may constitute or result in Damages for
which such Indemnified Person may be entitled to indemnification pursuant
to this Section 8.
(e) All Claims shall be made in writing and shall set forth with
reasonable specificity the facts and circumstances of the Claim, as well as
the basis upon which indemnification pursuant to this Section 8 is sought.
Notwithstanding the foregoing, no delay or failure by any Indemnified
Person to provide notification of any Claim shall preclude any Indemnified
Person from recovering for Damages pursuant to this Section 8, except to
the extent that such delay or failure materially compromises the rights of
any Indemnifying Person under this Section 8.
(f) Within ten (10) days after receipt by an Indemnifying Person
of any notification of a Claim, the Indemnifying Person may, upon written
notice thereof to the Indemnified Person, assume (at the Indemnifying
Person's expense) control of the defense of such action, suit or proceeding
with counsel reasonably satisfactory to the Indemnified Person, provided
the Indemnifying Person acknowledges in writing to the Indemnified Person
that any Damages that may be assessed against the Indemnified Person in
connection with such action, suit or proceeding constitute Damages for
which the Indemnified Person shall be entitled to indemnification pursuant
to this Section 8. If the Indemnifying Person does not so assume control
of such defense, the Indemnified Person shall control such defense, but in
so doing shall not waive or limit its right to recover under this Section 8
for any Damages that may be assessed against the Indemnified Person in
connection with such action, suit or proceeding. The party not controlling
such defense may participate therein at its own expense; provided that if
the Indemnifying Person assumes control of such defense, and the
Indemnified Person has been advised in writing by outside legal counsel
that under the applicable standards of professional conduct, the
Indemnifying Person and the Indemnified Person may not be represented by
the same counsel with respect to such action, suit or proceeding, the
reasonable fees and expenses of one law firm for the Indemnified Person
shall be paid by the Indemnifying Person. The party controlling such
defense shall keep the other party advised of the status of such action,
suit or proceeding and the defense thereof and shall consider in good faith
recommendations made by the other party with respect thereto. The
Indemnified Person shall not agree to any settlement of such action, suit
or proceeding without the prior written consent of the Indemnifying Person,
which (with respect to an action, suit or proceeding as to which the
Indemnifying Person has not elected to assume control of the defense) shall
not be unreasonably withheld. The Indemnifying Person shall not agree to
any settlement of such action, suit or proceeding without the prior written
consent of the Indemnified Person, which shall not be unreasonably withheld
so long as the settlement includes a complete release of the Indemnified
Person from all liability and does not contain or contemplate any payment
by, or injunctive or other equitable relief binding upon, the Indemnified
Person.
8.4 Survival. The representations, warranties, covenants, agreements
and indemnities of the parties set forth in this Agreement shall survive
the Closing and the consummation of the transactions contemplated hereby
and shall continue until the first anniversary of the date hereof. If a
notice is properly given with respect to a Claim prior to the expiration of
the relevant survival period set forth in this Section 8.4, then
notwithstanding such expiration, the representation, warranty, covenant,
agreement or indemnity applicable to such Claim shall survive until, but
only for purposes of, the resolution of such Claim.
SECTION 9: CONFIDENTIAL INFORMATION AND RELATED MATTERS
9.1 Each of the Buyer and Seller recognizes and acknowledges that it
has and will have access to certain non-public information of the other
which shall be deemed the confidential information of the other party that
is included in the Assets (including, but not limited to, business plans,
costs, trade secrets, licenses, research projects, profits, markets, sales,
customer lists, strategies, plans for future development, financial
information and any other information of a similar nature) that after the
consummation of the transactions contemplated hereby will be valuable,
special and unique property of the Buyer. Information shall not be deemed
Confidential Information and afforded the protections of this Section 9 if,
on the Closing Date, such information has been (i) developed by the
receiving party independently of the disclosing party, (ii) rightfully
obtained without restriction by the receiving party from a third party,
provided that the third party had full legal authority to possess and
disclose such information, (iii) publicly available other than through the
fault or negligence of the receiving party, (iv) released without
restriction by the disclosing party to anyone, including the United States
government, or (v) properly and lawfully known to the receiving party at
the time of its disclosure, as evidenced by written documentation
conclusively established to have been in the possession of the receiving
party on the date of such disclosure. Each of the Companies agrees that
they will not disclose, and that they will use their best efforts to
prevent disclosure by any other Person of, any such confidential
information to any Person for any purpose or reason whatsoever, except to
authorized representatives of the Companies. Notwithstanding, a party may
use and disclose any such confidential information to the extent that a
party may become compelled by Legal Requirements to disclose any such
information; provided, however, that such party shall use all reasonable
efforts and shall have afforded the other Companies the opportunity to
obtain an appropriate protective order or other satisfactory assurance of
confidential treatment for any such information compelled to be disclosed.
In the event of termination of this Agreement, each party shall use all
reasonable efforts to cause to be delivered to the other parties, and to
retain no copies of, any documents, work papers and other materials
obtained by such party or on such party's behalf during the conduct of the
matters provided for in this Agreement, whether so obtained before or after
the execution hereof. Each of the Companies recognizes and agrees that
violation of any of the agreements contained in this Section 9 will cause
irreparable damage or injury to the Companies, the exact amount of which
may be impossible to ascertain, and that, for such reason, among others,
the Companies shall be entitled to an injunction, without the necessity of
posting bond therefor, restraining any further violation of such
agreements. Such rights to any injunction shall be in addition to, and not
in limitation of, any other rights and remedies the Companies may have
against each other.
9.2 Seller further covenants with Buyer that all information
concerning the customers, clients, contracts, mailing lists and business of
Seller is confidential information, is being acquired by Buyer and will be
treated by Seller as such, and that Seller will not hereafter, directly or
indirectly, make use of such information or divulge any such information
nor reveal any customer or mailing lists or other confidential information
to any other person except as provided for herein. The foregoing
restrictions on disclosure of information shall not include (i) information
that has properly come into the public domain, (ii) information learned by
Seller from a third party without an obligation of confidentiality or (iii)
information gained or learned by Seller independent of and subsequent to
the closing of the transactions covered by this Agreement. After
consummation of this Agreement, either the Buyer or the Seller, or both,
may notify customers, suppliers or other third parties that this
transaction has occurred.
SECTION 10: EXPENSES
10.1 Each of the parties will pay all costs and expenses of its
performance in compliance with this Agreement. Notwithstanding the
foregoing, if the Agreement is not consummated by reason of a default of
one of the parties, then the expenses of each party in connection with the
transaction contemplated herein shall be paid by such defaulting party.
Joint expenses shall be borne equally by the parties.
10.2 Buyer covenants that it has not engaged the services of any
broker or finder in connection with the transactions provided for herein
and that no brokers' or finders' fees are payable hereunder and Buyer
hereby agrees to indemnify Seller with regard to any claims for such fees.
Seller has engaged the services of Sunbelt Business Brokers and Seller
agrees that it is solely responsible for payment of brokers' or finders'
fees hereunder.
SECTION 11: MISCELLANEOUS
11.1 Incorporation by Reference. All appendices to this Agreement and
all documents delivered pursuant to or referred to in this Agreement are
herein incorporated by reference and made a part hereof.
11.2 Parties in Interest. Nothing in this Agreement, whether express
or implied, is intended to, or shall, confer any rights or remedies under,
or by reason of, this Agreement, on any person other than the parties
hereto and their respective and proper successors and assigns. Nor shall
anything in this Agreement act to relieve or discharge the obligation or
liability of any third persons to any party to this Agreement.
11.3 Amendments and Waivers. This Agreement may not be amended, nor
may compliance with any term, covenant, agreement, condition or provision
set forth herein be waived (either generally or in a particular instance
and either retroactively or prospectively) unless such amendment or waiver
is agreed to in writing by all parties hereto.
11.4 Waiver. No waiver of any breach of any one of the agreements,
terms, conditions, or covenants of this Agreement by the parties shall be
deemed to imply or constitute a waiver of any other agreement, term,
condition, or covenant of this Agreement. The failure of any party to
insist on strict performance of any agreement, term, condition, or
covenant, herein set forth, shall not constitute or be construed as a
waiver of the rights of either or the other thereafter to enforce any other
default of such agreement, term, condition, or covenant; neither shall such
failure to insist upon strict performance be deemed sufficient grounds to
enable either party hereto to forego or subvert or otherwise disregard any
other agreement, term, condition, or covenants of this Agreement.
11.5 Governing Law - Construction. This Agreement, and the rights and
obligations of the respective parties, shall be governed by and construed
in accordance with the laws of the State of Colorado, excluding conflict of
law provisions which would act to apply the laws of another state.
Notwithstanding the preceding sentence, it is acknowledged that each party
hereto is being represented by, or has waived the right to be represented
by, independent counsel. Accordingly, the parties expressly agree that no
provision of this Agreement shall be construed against any party on the
ground that the party or its counsel drafted the provision. Nor may any
provision of this Agreement be construed against any party on the grounds
that party caused the provision to be present.
11.6 Limitation of Actions. No action may be brought by any party to
this Agreement to enforce any covenant made by any party hereto or to seek
damages or equitable relief arising from any claimed breach or
nonperformance of a covenant, representation, warranty or other performance
provided for herein unless such action is commenced within one (1) year of
the date of Closing. The parties hereto agree to be bound by the aforesaid
limitation of actions notwithstanding the provisions of any applicable
statutory limitation of actions to the contrary.
11.7 Notices. Any notice, communication, offer, acceptance, request,
consent, reply, or advice (herein severally and collectively, for
convenience, called "Notice"), in this Agreement provided
or permitted to be given, served, made, or accepted by any party or person
to any other party or parties, person or persons, hereunder must be in
writing, addressed to the party to be notified at the address set forth
below, or such other address as to which one party notifies the other in
writing pursuant to the terms of this Section, and must be served by
(1) telefax or other similar electronic method, or (2) depositing the same
in the United States mail, certified, return receipt requested and postage
paid to the party or parties, person or persons to be notified or entitled
to receive same, or (3) delivering the same in person to such party.
Notice shall be deemed to have been given immediately when sent by telefax
or other electronic method and seventy-two hours after being deposited in
the United States mail, or when personally delivered in the manner
hereinabove described. Notice provided in any manner not specified above
shall be effective only if and when received by the party or parties,
person or persons to be, or provided to be notified. All notices,
requests, demands and other communications required or permitted under this
Agreement shall be addressed as set forth below:
If Buyer, to: American Educational Products, Inc.
6550 Gunpark Drive, Suite 200
Boulder, Colorado 80301
With copy to: Clifford L. Neuman, Esq.
Neuman & Drennen, LLC
1507 Pine Street
Boulder, Colorado 80302
If Seller, to: To Sew, Inc.
18332 Wakecrest Drive
Malibu, California 90265
With copies to: Bryan Kravetz, Esq.
Law Offices of Bryan Kravetz
1875 Century Park East, Suite 800
Los Angeles, California 90067-2509
Any party receiving a facsimile transmission shall be entitled to rely upon
a facsimile transmission to the same extent as if it were an original. Any
party may alter the address to which communications or copies are to be
sent by giving notice of such change of address in conformity with the
provisions of this Section for the giving of notice.
11.8 Fax/Counterparts. This Agreement may be executed by telex,
telecopy or other facsimile transmission, and such facsimile transmission
shall be valid and binding to the same extent as if it were an original.
Further, this Agreement may be signed in one or more counterparts, all of
which when taken together shall constitute the same documents. For all
evidentiary purposes, any one complete counter set of this Agreement shall
be considered an original.
11.9 Captions. The caption and heading of various sections and
paragraphs of this Agreement are for convenience only and are not to be
construed as defining or limiting, in any way, the scope or intent of the
provisions hereof.
11.10 Severability. Wherever there is any conflict between any
provision of this Agreement and any statute, law, regulation or judicial
precedent, the latter shall prevail, but in such event the provisions of
this Agreement thus affected shall be curtailed and limited only to the
extent necessary to bring it within the requirement of the law. In the
event that any part, section, paragraph or clause of this Agreement shall
be held by a court of proper jurisdiction to be invalid or unenforceable,
the entire Agreement shall not fail on account thereof, but the balance of
the Agreement shall continue in full force and effect unless such
construction would clearly be contrary to the intention of the parties or
would result in unconscionable injustice.
11.11 Jurisdiction and Venue. Jurisdiction over any action,
proceeding or arbitration shall be proper only if filed and maintained in
Colorado, and venue shall be proper therefor only in the County of Boulder
as to state court proceedings or the District Court for the District of
Colorado as to federal court proceedings.
11.12 Good Faith Cooperation and Additional Documents. The parties
shall use their reasonable good faith efforts to fulfill all of the
conditions set forth in this Agreement over which it has control or
influence. Each party covenants and agrees to cooperate in good faith and
to enter into and deliver such other documents and papers as the other
party reasonably shall require in order to consummate the transactions
contemplated hereby, provided in each instance, any such document is in
form and substance approved by the parties and their respective legal
counsel.
11.13 Specific Performance. The obligations of the parties under
Section 8 are unique. If either party should default in its obligations
under said section(s), the parties each acknowledge that it would be
extremely difficult and impracticable to measure the resulting damages;
accordingly, the non-defaulting party, in addition to any other available
rights and remedies, may sue in equity for injunction (mandatory or
prohibitive) or specific performance (all without the need to post a bond
or undertaking of any nature), and the parties each expressly waive the
defense that a remedy at law in damages is adequate.
11.14 Assignment. Neither party may directly or indirectly assign or
delegate, by operation of law or otherwise, all or any portion of
its/their/his rights, obligations or liabilities under this Agreement
without the prior written consent of all other parties, which consent may
be withheld in their respective sole and absolute discretion.
11.15 Entire Agreement - Amendment. For purposes of this Section, the
term "Agreement" shall include this Agreement and the Exhibits and other
documents attached hereto. This Agreement, and other documents delivered
pursuant to this Agreement, contain all of the terms and conditions agreed
upon by the parties relating to the subject matter of this Agreement and
supersede all prior and contemporaneous agreements, letters of intent,
representations, warranties, disclosures, negotiations, correspondence,
undertakings and communications of the parties, oral or written, respecting
that subject matter.
11.16 Authority to Sign. Each of the persons signing below on behalf
of any party hereby represents and warrants that s/he or it is signing with
full and complete authority to bind the party on whose behalf of whom s/he
or it is signing, to each and every term of this Agreement.
11.17 Execution of Documents. The parties hereto agree to execute
and deliver any and all other documents necessary and convenient to
effectuate the exchange of stock herein provided for, and Seller as an
inducing condition, represent that it has the authority to enter into this
Agreement and to make the foregoing commitments for itself.
11.18 Time. Time is of the essence of this Agreement and each of its
provisions.
IN WITNESS WHEREOF, the parties have signed the Agreement the date and
year first above written.
TO SEW, INC.
ATTEST: a California corporation
By:
- ---------------------------- ----------------------------------
Secretary Name/Title:
------------------------
AMERICAN EDUCATIONAL PRODUCTS, INC.,
ATTEST: a Colorado corporation
By:
- --------------------------- --------------------------------------
Secretary Clifford C. Thygesen, President
AEP CALIFORNIA, INC.,
ATTEST: a Colorado corporation
By:
- ---------------------------- -------------------------------------
Secretary Clifford C. Thygesen, President
