Exhibit 10(p)
ASSET PURCHASE
AGREEMENT
THIS ASSET PURCHASE AGREEMENT
(“Agreement”) is made June 22, 2006, by and between
National Signal, Inc., a California corporation
(“Purchaser”), and U.S. Traffic Corporation, a Delaware
corporation (“Seller”).
R E C I T A L S
A.
Seller is engaged, among other
things, in the manufacture and sale of portable, changeable message
signs, arrow boards, radar trailers and other miscellaneous
portable traffic-related signage (“PCMS”) and lighting
products (“Lighting”) (PCMS and Lighting collectively,
the “Product Line”).
B.
Seller desires to sell to Purchaser,
and Purchaser desires to purchase from Seller, certain of
Seller’s assets used primarily in or related primarily to the
Product Line, on the terms contained in this Agreement.
A G R E E M E N T
S
Therefore, for good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
1.
Agreement to Purchase and
Sell . On the terms
contained in this Agreement, at the Closing (as herein defined)
Purchaser shall purchase from Seller, and Seller shall sell to
Purchaser, all of Seller’s right, title and interest in
certain of Seller’s rights and assets used exclusively in or
held in connection with and/or relating primarily to the Product
Line (the “Purchased Assets”), free and clear of any
liens, claims, encumbrances or security interests (collectively,
“Claims”), exclusive of the Excluded Assets (as herein
defined) and shall include the following assets of Seller which are
used primarily in or relate primarily to the Product
Line:
(a)
The inventory of packaging supplies,
purchased parts, raw materials, work in process and finished goods
(“Inventory”), including without limitation, the
Inventory listed in Exhibit A hereto;
(b)
The furniture, fixtures, equipment,
tools, dies, jigs, patterns, molds and other tangible personal
property located at Seller’s facilities in Santa Fe Springs,
California, Salt Lake City, Utah or Tecate, Mexico (the
“Equipment”), including without limitation the items of
Equipment listed on Exhibit B and the molds listed on Exhibit B-1
hereto;
(c)
The trademarks, trademark
applications, trade names, service marks, patents, patent
applications and copyrights relating primarily to the Product Line,
including, without limitation, the names “Display
Solutions,” “National Signal,”
“Nu-Art,” “Holcor,” and
“Intermark” (the “Intellectual Property”)
that are identified on Exhibit C, all goodwill
associated
with the Intellectual Property and
other intangible property rights associated therewith and all
claims for past infringement thereof; all proprietary unpatented
know-how and methods utilized to produce the products of the
Product Line, and all engineering drawings, Gerber files, software
and related source code that are identified as Exhibit
C;
(d)
The contracts and agreements listed
on Exhibit D hereto (the “Contracts”);
(e)
The purchase orders listed on
Exhibit E hereto, except any purchase orders that require purchases
of components that will not be used within one year in the ordinary
course of business (the “Purchase Orders”);
(f)
The sales orders and sales contracts
listed on Exhibit F hereto (the “Sales
Orders”);
(g)
The customer lists, records and
information, and all other books and records; and
(h)
The claims and rights (and benefits
arising therefrom) with or against all persons whomsoever,
including all rights against suppliers under warranties covering
any of the Inventory or Equipment.
2.
Excluded Assets
. Seller shall retain the
following assets (the “Excluded Assets”), which shall
not be Purchased Assets under this Agreement: (a) all assets
of Seller which are not specifically identified in Section 1 as
being Purchased Assets; (b) all accounts receivable resulting from
sales of products of the Product Line prior to Closing; (c) all
accounts payable resulting from operations of the Product Line
prior to Closing; (d) the “U.S. Traffic” name and mark;
(e) Seller’s corporate name; (f) Seller’s documents
relating to the organization, maintenance and existence of Seller
as a corporation, including without limitation Seller’s
corporate charter, by-laws, minute and stock records, corporate
seal; qualifications to conduct business as a foreign corporation,
arrangements with registered agents, taxpayer and other
identification numbers; (g) Seller’s insurance policies in
effect on the Closing Date; and (h) all cash, cash equivalents and
investments.
3.
Liabilities
.
(a)
On the terms and subject to the
conditions contained in this Agreement, at the Closing, Purchaser
assumes and agrees to discharge and perform when due all
liabilities of Seller under the Contracts, Purchase Orders and
Sales Orders, to the extent such liabilities relate to performance
after the Closing Date and all product warranty and return claims
assumed by Purchaser pursuant to Section 9(f) (the “Assumed
Liabilities”).
(b)
Other than as set forth in Section
3(a) above, Seller shall retain and Purchaser shall not assume, and
nothing contained in this Agreement shall be construed as an
assumption by Purchaser of any liabilities, obligations or
undertakings of Seller of any nature whatsoever, whether accrued,
absolute, fixed or contingent, known or unknown, due or to become
due, unliquidated or otherwise. Seller shall be responsible
for all of the liabilities, obligations and undertakings of Seller
which are not Assumed Liabilities pursuant to Section 3(a) above,
and such liabilities shall remain the sole liabilities of Seller,
and Purchaser does not
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assume and shall not be responsible
for, and shall not otherwise bear the economic burden of, any other
liabilities of Seller, including liabilities for accounts payable,
accrued expenses, taxes, indebtedness for borrowed money, or
violations of or obligations under law (including environmental
matters) or otherwise (the “Excluded
Liabilities”). Seller agrees to discharge and perform
in full when due, all of the Excluded Liabilities.
4.
Purchase Price
. The aggregate purchase price
of the Purchased Assets (the “Purchase Price”) is One
Million Five Hundred Thousand Dollars ($1,500,000). The
Purchase Price shall be allocated among the Purchased Assets in the
manner required by Section 1060 of the Internal Revenue Code of
1986, as amended, in accordance with Exhibit G. Purchaser
shall pay the Purchase Price by wire-transfer of immediately
available funds to such bank account as Seller shall specify by
written notice delivered on or prior to the Closing
Date.
5.
Time and Place of
Closing . The
transactions contemplated by this Agreement shall be consummated
(the “Closing”) at 10:00 a.m., prevailing business
time, at the offices of Holland & Knight LLP, 131 S. Dearborn
Street, Chicago, Illinois 60603, and remotely at such other offices
and locations as may be suited by delivery by facsimile or
overnight courier, on the date hereof (the “Closing
Date”). The Closing shall be deemed to be effective for
all purposes as of the commencement of business on June 22,
2006.
At the Closing, Seller shall deliver
the Purchased Assets to Purchaser, Purchaser shall confirm receipt
of the Purchased Assets and Seller shall confirm receipt of the
Purchase Price. At the Closing, the Seller and the Purchaser
shall execute and deliver:
(a)
a Sublease of approximately 57,000
square feet of the Seller’s facilities at 9603 John Street,
Santa Fe Springs, California in the form substantially similar to
Exhibit H (the “Santa Fe Springs Sublease”);
(b)
a Sublease of approximately 2,000
square feet of the Seller’s facilities at 3612 West 2100
South Street, Salt Lake City, Utah in the form substantially
similar to Exhibit I (the “Salt Lake City Sublease,”
and together with the Santa Fe Springs Sublease, the
“Subleases”)
(c)
a Transition Services Agreement in
the form substantially similar to Exhibit J (the “Transition
Services Agreement”).
6.
Purchaser’s Representations
and Warranties .
Purchaser represents and warrants to Seller that:
(a)
Corporate. Purchaser is a
corporation duly organized, validly existing and in good standing
under the laws of California.
(b)
Power and Authority. Purchaser
has full corporate power and authority to enter into and perform
(i) this Agreement, (ii) the Sublease, and (iii) the Transition
Services Agreement. This Agreement, the Sublease and the
Transition Services Agreement have been duly executed and delivered
by a duly authorized officer or manager of Purchaser. Neither
the execution and delivery of this Agreement, the Sublease, and the
Transition Services Agreement by Purchaser, nor the consummation by
Purchaser of the transactions contemplated hereby, will
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conflict with or result in a breach
of any of the terms, conditions or provisions of Purchaser’s
Articles of Incorporation or by-laws, or of any statute or
administrative regulation, or of any order, writ, injunction,
judgment or decree of any court or governmental authority or of any
arbitration award.
(c)
Consents. No consent,
authorization, order or approval of, or filing or registration
with, any governmental authority or other person, organization or
association is required for the execution and delivery by Purchaser
of this Agreement, the Sublease and the Transition Services
Agreement, and the consummation by Purchaser of the transactions
contemplated by this Agreement.
7.
Representations and Warranties of
Seller . Seller
represents and warrants to Purchaser that:
(a)
Corporate. Seller is a
corporation duly organized, existing and in good standing, under
the laws of the State of Delaware. Seller has all necessary
corporate power and authority and all authorizations, licenses,
permits and certifications necessary to manufacture and sell the
Product Line in the manner in which the Product Line is presently
being manufactured and sold. Seller has qualified as a
foreign corporation, and is in good standing, under the laws of the
States of California and Utah, and all other jurisdictions where
the nature of the Product Line or the nature or location of the
assets of the Product Line requires such qualification.
(b)
Power and Authority. Seller
has full power and authority to enter into and perform this
Agreement, the Sublease and the Transition Services
Agreement. This Agreement, the Sublease and the Transition
Services Agreement have been duly executed and delivered by a duly
authorized officer of Seller. Neither the execution and
delivery of this Agreement, the Sublease and the Transition
Services Agreement by Seller, nor the consummation by Seller of the
transactions contemplated hereby, will conflict with or result in a
breach of (i) any of the terms, conditions or provisions of
Seller’s Certificate of Incorporation or By laws, (ii) of any
statute or administrative regulation, or of any order, writ,
injunction, judgment or decree of any court or any governmental
authority or of any arbitration award, (iii) constitute a default
under, result in the acceleration of, create in any party the right
to accelerate, terminate, modify or cancel, or require any notice
under any agreement, contract, lease, license, instrument or other
arrangement to which the Seller is a party or by which it is bound
or to which any of its assets is subject, or (iv) result in the
imposition of any security interest, lien, claim or other
encumbrance upon any of the Purchased Assets.
(c)
Consents. Except with
respect to Seller’s lender and Seller’s landlord, no
consent, authorization, order or approval of, or filing or
registration with, any governmental authority or other person,
organization or association is required for the execution and
delivery by Seller of this Agreement, the Sublease and the
Transition Services Agreement and the consummation by Seller of the
transactions contemplated by this Agreement, the Sublease and the
Transition Services Agreement.
(d)
Equipment. The Equipment
constitutes all tangible personal property necessary in order for
Seller to manufacture products of the Product Line in the manner in
which
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Seller has done so in the
past. All Equipment is in reasonable operating condition and
repair (ordinary wear and tear excepted).
(e)
Title to Assets. Subject to
the liens of Seller’s lender which will be released at
Closing, Seller has good and marketable title to the Purchased
Assets, free and clear of any Claims, and no unreleased mortgage,
trust deed, chattel mortgage, security agreement, financing
statement or other instrument encumbering any of the Purchased
Assets has been recorded, filed, executed or delivered.
(f)
Contracts. The Contracts,
Purchase Orders and Sales Orders constitute all of the contracts
and agreements between Seller and any other party which relate to
the manufacture or sale of the products of the Product Line.
Except as set forth on Schedule 7(f), the Contracts, Purchase
Orders and Sales Orders are legal and in full force and binding
upon the parties thereto, and the Contracts, Purchase Orders and
Sales Orders will continue to be legal, binding and in full force
and effect on identical terms immediately after the Closing
Date. No default by Seller has occurred thereunder and, to
the best of Seller’s knowledge, no default by the other
contracting parties has occurred thereunder. To
Seller’s knowledge, no event, occurrence or condition exists
which, with the lapse of time, the giving of notice, or both, or
the happening of any further event or condition, would become a
default by Seller thereunder. Complete and accurate copies of
all Contracts, Purchase Orders and Sales Orders have previously
been delivered to Purchaser.
(g)
Conflicts. Subject to the liens of
Seller’s lender which will be released at Closing and receipt
of Seller’s landlord’s consent, Seller is not a party
to, or bound by, any unexpired, undischarged or unsatisfied written
or oral contract, agreement, indenture, mortgage, debenture, note
or other instrument under the terms of which performance by Seller
according to the terms of this Agreement will be a default or an
event of acceleration, or whereby timely performance by Seller
according to the terms of this Agreement may be prohibited,
prevented or delayed.
(h)
Tax Matters. Seller has filed
all tax returns that it was required to file and all such tax
returns were correct and complete in all material respects.
All taxes owed by Seller have been paid. There are no liens
or security interests on any of the assets of the Seller that arose
in connection with any failure to pay any tax. The Seller has
withheld and paid all taxes that the Seller is required to withhold
and pay in connection with amounts paid or owing to any employee,
independent contractor, creditor, or other third party.
(i)
Intellectual Property. Seller
owns or has the right to use pursuant to license, sublicense
agreement, or permission all intellectual property necessary for
the operation of the Product Line as presently conducted, and
Seller has taken all necessary action to maintain and protect each
item of intellectual property that it owns or uses in connection
with the Product Line. To its knowledge, Seller has not
interfered with, infringed upon, misappropriated, or otherwise come
into conflict with any intellectual property rights of third
parties, and Seller has not received any charge, complaint, claim,
demand, or notice alleging any such interference, infringement,
misappropriation, or violation (including any claim that Seller
must license or refrain from using any intellectual property rights
of any third party) that has not previously been resolved. To
Seller’s knowledge, no third party has interfered with,
infringed upon,
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misappropriated, or otherwise come
into conflict with any intellectual property rights of Seller with
respect to the Product Line. To Seller’s knowledge,
none of the intellectual property will interfere with, infringe
upon, misappropriate, or otherwise come into conflict with, any
intellectual property rights of third parties as a result of the
continued operation of its Product Line as presently
conducted. Sellers owns or has the right to use pursuant to
license, sublicense, agreement or permission all Intellectual
Property identified on Exhibit C. Except as set forth on
Schedule 7(i), each item of Intellectual Property owned or used by
Seller immediately prior to the Closing Date will be owned or
available for use by the Purchaser on identical terms and
conditions immediately subsequent to the Closing Date
hereunder.
(j)
Product Warranty. No product
of the Product Line manufactured, sold, leased, or delivered by
Seller is subject to any guaranty, warranty, or other indemnity
beyond the applicable standard terms and conditions of sale or
lease of Seller. Seller has made available to Purchaser
copies of the standard terms and conditions of sale or lease used
by Seller (containing applicable guaranty, warranty, and indemnity
provisions) in the Product Line.
(k)
Product Liability; Product
Safety. Except as set forth on Schedule 7(k), Seller has not
been notified, nor is it aware of any liability arising out of any
death or injury to individuals or damage to property as a result of
the ownership, possession, or use of any product manufactured,
sold, leased, or delivered, or any service provided, by Seller with
respect to the Product Line. Seller has not been required to
file any notification or other report with or provide information
to any product safety agency, commission, board or other
governmental authority of any jurisdiction concerning actual or
potential hazards with respect to any product manufactured or sold
by Seller with respect to the Product Line. To the best of
Seller’s knowledge, each product manufactured, distributed or
sold by Seller in the conduct of the Product Line complies in all
material respects with all product safety standards of each
applicable product safety agency, commission, board or other
governmental authority.
(l)
Employee Benefits. Seller has
provided Purchaser with a description of each employee benefit plan
that Seller maintains or to which Seller contributes for the
benefit of any current employee of Seller with respect to the
Product Line. Seller has no obligation to contribute to any
multiemployer benefit plan. Seller has complied with all
HIPAA requirements.
(m)
Environmental, Health and
Safety.
