ASSET PURCHASE AGREEMENT
by and
among
AETRIUM
INCORPORATED
AETRIUM
CORPORATION
AETRIUM-WEB TECHNOLOGY,
LP
and
WEB TECHNOLOGY,
INC.
Dated as of December 28,
2006
TABLE OF CONTENTS
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ARTICLE I SALE
AND PURCHASE OF ASSETS
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1.3
Assumed Liabilities of
Buyer
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1.4
Liabilities Not Assumed
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1.5
Assignments Requiring
Consents
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1.7
Allocation of Purchase
Price
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
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3.1
Corporate Organization
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3.4
Consents and Approvals
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
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4.2
Due Authorization, Execution and
Delivery; Effect of Agreement
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ARTICLE V
COVENANTS
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5.1
Cooperation and
Assignments
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5.3
Accounts Receivable and Accounts
Payable
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5.4
Continuation Payments
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ARTICLE VI
CONDITIONS TO BUYER'S OBLIGATIONS
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6.1
Representations, Warranties and
Covenants of Seller
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ARTICLE VII
CONDITIONS TO SELLER'S OBLIGATIONS
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7.1
Representations, Warranties and
Covenants of Buyer
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ARTICLE VIII
MISCELLANEOUS
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8.2
Successors and Assigns
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8.5
Modifications and Waivers
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8.10
Governing Law; Consent to
Jurisdiction
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8.11
Public Announcements
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8.13
No Third Party
Beneficiaries
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8.14
Rule of Construction
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EXHIBITS
B - Business Balance Sheet
C - Form of Promissory Note
D - Form of Opinion of Counsel for
Seller
E - Form of Opinion of Counsel for
Buyer
ASSET PURCHASE AGREEMENT
THIS AGREEMENT, made and entered into this 28th
day of December, 2006, is by and among WEB Technology, Inc., a
Delaware corporation (" Buyer "), and Aetrium
Incorporated, a Minnesota corporation and its affiliates Aetrium
Corporation, a Minnesota corporation, and Aetrium-WEB Technology,
LP, a Texas limited partnership (together, " Seller
").
RECITALS
:
FIRST, Seller is engaged in the business (the "
Business ") of the manufacture and sale of the product
lines scheduled on Exhibit A (the “ Product Lines
”); and
SECOND, Buyer desires to purchase and Seller
desires to sell substantially all of the assets of the
Business;
NOW, THEREFORE, in consideration of the recitals
and the mutual representations, warranties, covenants and
agreements contained herein, and upon the terms and subject to the
conditions hereinafter set forth, the parties hereby agree as
follows:
ARTICLE I
SALE AND PURCHASE OF
ASSETS
1.1
Transfer of Assets
Subject to the terms and conditions
of this Agreement, and except as otherwise provided in Sections 1.2
and 1.5 hereof, on the Closing Date (as hereinafter defined),
Seller will sell, assign, transfer, and convey to Buyer, and Buyer
will pur-chase, acquire and accept from Seller, all of Seller's
right, title and interest in and to all of the assets, properties,
rights, contracts and claims employed in connection with the
Business, wherever located, whether tangible or intangi-ble, real,
personal or mixed, as the same exist at the Closing (as hereinafter
defined) (collectively, the " Assets "). The Assets
include, without limitation, the assets, properties, rights,
contracts and claims described in the following paragraphs (a)
through (l):
(a) Seller's leasehold interests in the Business
premises located at 10501 Markison Road, Dallas, Texas;
(b) title to, or Seller's leasehold interests in,
all the furnishings, furniture, office supplies, spare parts,
tools, machinery and equipment that are used in the operation of
the Business;
(c) title to, or Seller's leasehold interests in,
all fixed assets, other than the Equipment, that are used in
connection with the Business;
(d)
all quantities of inventory,
including without limitation raw materials, work-in-process,
finished goods and supplies, used in connection with the Business (
“Inventory” );
(e) all accounts receivable and all notes
receivable (whether short-term or long-term) from third parties
arising out of the operation of the Business, together with any
unpaid interest accrued thereon and any security or collateral
therefor, including without limitation recoverable deposits (the "
Accounts Receivable ");
(f) all rights of Seller under or pursuant to all
warranties, representations and guarantees made by suppliers,
manufacturers and contractors in connection with products or
services of the Business, or affecting the Assets;
(g) all rights and interests of Seller in and to
patents and patent applications owned by Seller or licensed to
Seller by third parties and used in connection with the Business,
and all rights and interests of Seller in and to research,
development and commercially practiced processes, trade secrets,
know-how, inventions and manufacturing, engineering and other
technical information, whether owned by Seller or licensed from
third parties by Seller, which are used in connection with the
Business (“ Technology Rights ”);
(h) all rights and interests of Seller in and to
all trademarks, trade names and service marks, and registrations
and applications for such trademarks, trade names and service
marks, used in connection with the Business, exclusive of Aetrium
and all derivatives thereof, and all rights and interests of Seller
in and to copyrights, and registrations and applications for such
copyrights, used in connection with the Business;
(i) all contracts, agreements, arrangements and/or
commitments of any kind which relate to the Business or the
Assets;
(j) all customer and vendor lists relating to the
Business, and all files and documents (including credit
information) relating to such customers and vendors, and other
business and financial records, files, books and documents relating
to the Assets and/or the Business, including without limitation
manuals and data, sales and advertising materials, and sales,
distribution and purchase correspondence relating to the Assets
and/or the Business;
(k) all prepaid charges, sums and fees and all
rights to refunds per-taining to the Business; and
(l) all other assets of Seller employed in
connection with the Business of the nature reflected or reserved
against in the balance sheet of the Business indicated as
transferred to/assumed by Buyer on Exhibit B attached hereto (
“Business Balance Sheet” ), including as
acquired since November 25, 2006 in the ordinary course of the
Business and consistent with past practice.
1.2
Excluded Assets
. Nothwithstanding any other terms
contained herein, Seller is not hereunder selling, assigning,
transferring or conveying to Buyer the following assets, rights and
properties (the " Excluded Assets "):
(a) any policies of liability or casualty insurance
relating to the Business or the Assets or any prepaid premiums or
other rights thereunder;
(b) any refunds or reimbursements for income or
other taxes;
(c) any cash, depository accounts, certificates of
deposit or securitites;
(d) any payments on Accounts Receivable made by
wire transfer or electronic deposit initiated or by check dated on
or before December 31, 2006;
(e) any intercompany accounts among
Seller;
(f) any right, title or interest in or to the name
Aetrium and any derivative thereof;
(g) except as provided in Section 5.7, any right,
title or interest in or to Seller’s Manage 2000 enterprise
management software system;
(h) except as otherwise set forth in the last
sentence of Section 1.5 hereof, any right, title and interest under
all leases, contracts, agreements, licenses, permits, exemptions,
franchises, variances, waivers, consents, approvals and other
authorizations which are not transferable without consent (unless
such consent has been obtained);
(i) all other assets of Seller employed in
connection with the Business of the nature indicated as reserved to
Seller on Exhibit B attached hereto, including as acquired since
November 25, 2006; and
(j) minute books, stock record books and corporate
certificates of authority.
1.3
Assumed Liabilities of
Buyer . Subject to
Sections 1.4 and 1.5 hereof, Buyer will assume and pay, perform and
discharge as and when due the following liabilities and
obligations, whether known, unknown, contingent, absolute,
determined, indeterminable or otherwise on the Closing Date and
whether incurred or accru-ing prior to, on or after the Closing
Date, to the extent relating to or arising from the Business ("
Assumed Liabilities "):
(a) all pending customer purchase orders and
deposits;
(b) all pending supplier purchase
orders;
(c) all obligations under sales representative and
distributor agreements;
(d) all obligations under non-disclosure
agreements;
(e) Lease on the Business premises dated December
19, 1987 with Crow-Markison 22-27, as amended (“ Facility
Lease ”);
(f) Copier leases with Savin Credit Corp. dated by
Seller on January 22, 2003 and with Ricoh Corp. dated by Seller on
March 22, 2005;
(g) all other liabilities and obligations of Seller
not performed or satisfied as of the Closing Date under all of the
other contracts, agreements and other commitments to which Seller
is a party or by which Seller or any of its properties is bound;
and
(h) all other liabilities of Seller of the nature
reflected or reserved against in the Business Balance Sheet,
including as incurred since November 25, 2006 in the ordinary
course of the Business and consistent with past
practice.
1.4
Liabilities Not
Assumed . Notwithstanding
Section 1.3 hereof, Buyer will not assume and will not be liable
for:
(a) sponsorship of Seller's 401(k) plan or any
liabilities in connection therewith;
(b) any intercompany accounts among
Seller;
(c) accrued compensation, severance and related
payroll taxes for employees terminated by Seller and not hired by
Buyer;
(d) all other liabilities of Seller indicated as
reserved to Seller on Exhibit B attached hereto, including as
incurred since November 25, 2006; and
(e) expenses and any tax liabilities incurred by
Seller in connection with the negotiation and consummation of this
Agreement.
1.5
Assignments Requiring
Consents . Seller will
use reasonable efforts, and Buyer will cooperate with Seller, to
obtain all non-governmental approvals, consents or waivers
necessary to assign to Buyer all leases, contracts, licenses,
agreements, sales or purchase orders, commitments, property
interests, qualifications or other assets described in Section
1.1 hereof or any claim, right or benefit arising
thereunder or resulting therefrom (the " Interests ") as
soon as practi-cable; provided, however, that neither Seller nor
Buyer will be obligated to pay any consideration therefor (except
for filing fees and other ordinary administrative charges which
will be paid by Buyer) to the third party from whom such approval,
consent or waiver is requested.
To the extent any of the approvals, consents or
waivers referred to above have not been obtained by Seller as of
the Closing, Buyer may elect by written notice to Seller to exclude
the
applicable Interests and liabilities in
connection therewith from the Assets and the Assumed Liabilities.
In the event Buyer does not make such election, and without
limiting the rights of Buyer under this Agreement, Seller will (a)
take all reasonable steps necessary to obtain the consent of any
such third party, (b) cooperate with Buyer in any reasonable and
lawful arrangements designed to provide the benefits of such
Interests to Buyer so long as Buyer fully cooperates with Seller in
such arrangements and promptly reimburses Seller for all payments,
charges or other liabilities made or suffered by Seller in
connection therewith (provided that nothing herein will require
Buyer to make any payment or reimbursement of any consideration for
third party consent not agreed to by Buyer), and (c) enforce, at
the request of Buyer and at the expense and for the account of
Buyer, any rights of Seller arising from such Interests against
such issuer thereof or the other party or parties thereto
(including the right to elect to terminate any such Interests in
accordance with the terms thereof upon the written advice of
Buyer). To the extent that Seller enters into lawful arrangements
designed to provide the benefits of any Interests as set forth in
clause (b) above, such Interests will be deemed to have been
assigned to Buyer for purposes of Section 1.1 hereof.
1.6
Purchase Price
. The aggregate purchase price to be
paid by Buyer to Seller for the Assets (the " Purchase
Price ") will be Five Hundred Twenty-Two Thousand Dollars
($522,000). The Purchase Price will be paid by delivery to Seller
at Closing of a promissory note executed by Buyer and payable to
the order of Seller, such note payable in equal quarterly
installments over two (2) years with interest at the annual rate of
five percent (5%) and otherwise issued on the terms contained in
and in the form of Exhibit C hereto (the " Note
").
1.7
Allocation of Purchase
Price .
(a) Buyer will prepare (or cause to be prepared) an
allocation (the " Allocation Schedule ") of the Purchase
Price (plus Assumed Liabilities and Buyer's expenses of the
transaction) among the Assets. Such allocation will be made in
accordance with Code Section 1060 and any applicable rules or
regulations thereunder. Seller will have the right to review and
reasonably approve the Allocation Schedule, and Seller and Buyer
will consult and resolve in good faith any issues arising as a
result of Seller's review of such Allocation Schedule.
(b) Seller and Buyer (1) will be bound by the
allocation contained in the Allocation Schedule for purposes of
determining any and all consequences with respect to Taxes of the
transactions contemplated herein, (2) will prepare and file all tax
returns to be filed with any tax authority in a manner consistent
with such Allocation Schedule (including Form 8594, "Asset
Acquisition Statement"), and (3) will take no position inconsistent
with such Allocation Schedule in any tax return, any discussion
with or proceeding before any tax authority, or otherwise. In the
event that such Allocation Schedule is disputed by any tax
authority, the party receiving notice of such dispute will promptly
notify the other party thereof.
ARTICLE II
CLOSING
2.1
Closing . The closing of the transac-tions contemplated
hereby (the " Closing ") will take place on December 31,
2006 or, if later, two (2) business days following the satisfaction
or waiver of all of the conditions to the parties' obligations set
forth in Articles VI and VII, unless the
parties otherwise mutual-ly agree (the " Closing Date ").
All matters at the Closing will be considered to take place
simultaneously effective immediately after the close of business on
the Closing Date and no de-livery of any document will be deemed
complete until all transactions and deliveries of documents are
completed.
2.2
Deliveries of Seller . At the Closing, Seller will deliver
the following documents to Buyer:
(a) such bills of sale, endorsements, assignments
(together with any necessary consents), deeds and other good and
sufficient instruments of conveyance and transfer, in form and
substance reasonably satisfactory to Buyer and its counsel, to vest
in Buyer valid legal title to the Assets;
(b) the certificate required of Seller pursuant to
Section 6.1 hereof;
(c) an opinion of counsel for Seller, substantially
in the form of Exhibit D attached hereto; and
(d) any other documents reasonably requested by
Buyer, to confirm the accuracy of the representations and
warranties and the performance of the agreements of Seller
hereunder.
2.3
Deliveries of Buyer
. At the Closing, Buyer will
deliver to Seller the following:
(a) such instruments of assumption, in form and
substance reasonably satisfactory to Seller and its counsel, to
constitute an assumption by Buyer of all Assumed
Liabilities;
(c) the certificate required of Buyer pursuant to
in Section 7.1 hereof;
(d) the opinion of counsel for Buyer, in the form
of Exhibit E attached hereto; and
(e) any other documents reasonably requested by
Seller, to confirm the accuracy of the representations and
warranties and the performance of the agreements of Buyer
hereunder.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF SELLER
Seller represents and warrants to Buyer
that:
3.1
Corporate Organization
. Aetrium Incorporated, Aetrium
Corporation and Aetrium-WEB Technology Inc., the general partner of
Aetrium-WEB Technology, LP ( “General Partner”
), are each a corporation duly organized, validly existing and in
good standing under the Laws of the state of Minnesota, and
Aetrium-WEB Technology, LP is a limited partnership duly organized,
validly existing and in good standing under the Laws of the state
of Texas. Each Seller and the General Partner has full
organizational power and authority to carry on its business as it
is now being conducted and to own, lease and operate its properties
and assets.
3.2
Authorization
. Each Seller and the General
Partner has all requisite corporate power and authority to execute,
deliver and perform this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and
performance by Seller of this Agreement and the consummation by
Seller of the transactions contemplated hereby have been duly
authorized by all necessary organizational action. This Agreement
has been duly and validly executed by each Seller and constitutes
the valid and binding legal obligation of each Seller, enforce-able
against such Seller in accordance with its terms, except to the
extent that such enforceability (a) may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws
relating to creditors' rights generally, and (b) is subject to
general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at
law).
3.3
Non-Contravention
. Neither the execution, delivery
and performance of this Agreement nor the consummation of the
transactions contemplated hereby will (a) result in the creation or
imposition of any Encumbrance upon any property or assets of
Seller, or (b) violate any treaty, law, rule, regulation,
order, judgment or decree (individually and collectively, "
Law(s) ") of any foreign, federal, state or local
governmental or quasi-governmental administrative, regulatory or
judicial court, department, commission, agency, board,