ASSET PURCHASE AGREEMENT

EXHIBIT 10.32

EXECUTION COPY

ASSET PURCHASE AGREEMENT

This Agreement, dated as of February 28, 2007, is between C. M. JACKSON ASSOCIATES, INC. , a New Jersey corporation (“ Seller ”), and SOUTHERN GRAPHIC SYSTEMS, INC. , a Kentucky corporation (“ Buyer ”).

RECITALS

Seller wishes to sell and transfer to Buyer substantially all of its assets and the business conducted by Seller (the “ Business ”), and Buyer wishes to acquire such assets and the Business, in accordance with the terms and conditions of this Agreement (the “ Transaction ”).

The parties therefore agree as follows:

ARTICLE I

PURCHASE AND SALE OF ASSETS

1.1 Agreement to Purchase and Sell . On the terms and conditions contained in this Agreement, Buyer shall purchase from Seller, and Seller shall sell to Buyer, all of Seller’s right, title and interest in the assets, properties and rights used or held for use in the Business as of the Closing Date (as herein defined) and enumerated in Section 1.2 hereof, wherever located. All of the assets, properties and rights being purchased and sold are collectively referred to as the “ Purchased Assets ”. Seller shall transfer and sell all of the Purchased Assets to Buyer free and clear of any liens, debts, mortgages, pledges, charges, title claims, encumbrances or security interests (“ Liens ”), other than Permitted Liens (as herein defined).

1.2 Enumeration of the Purchased Assets . Subject to Section 1.3, the Purchased Assets shall consist of the following:

(a) all fixed assets, furniture, fixtures, equipment, machinery (and related supplies and spare parts), computer hardware, automobiles and trucks and all other tangible personal property, including (without limitation) the items listed on Schedule 1.2(a) (the “ Equipment ”);

(b) all raw materials, work in process and finished goods inventories (the “ Inventory ”), subject to Sections 3.1(b) and 10.7;

(c) any claims and rights (and benefits arising therefrom) against suppliers under warranties covering any of the Inventory or Equipment;

 

(d) Seller’s rights under all customer contracts and customer orders (collectively, the “ Customer Contracts ”);

(e) [INTENTIONALLY OMITTED];

(f) all customer lists, files, process materials (including, without limitation, work orders, prepress proofs (e.g., color keys, cromalins, etc.) and engraving files) and other business records of the Business;

(g) all of Seller’s rights as licensee under licenses of software used in the Business (the “ Software Licenses ”);

(h) all of Seller’s patents and patent applications (including all rights with respect to a Project Management System for Packaging Industry for which an application for United States Letters Patent was filed 08-07-2006, application serial number 60/836,080 and for which an application for United States Letters Patent is as yet unfilled, entitled Projects Management System); trademarks, service marks, and registrations thereof and applications therefor; copyrights and registrations thereof and applications therefor ; computer software owned by Seller; technology; know-how; the name “C. M. Jackson Associates Inc.” (and any variation thereof used by Seller); websites (including www.cmjackson.com ); domain names; rights to image library; and other intellectual property rights (including the right to sue for past infringement);

(i) the leasehold interest of Seller as lessee of the facility located at 133 Williams Drive, Ramsey, NJ (the “ Ramsey Facility ”) in which the Business currently is operating (the lease of the Ramsey Facility being referred to herein as the “ Ramsey Lease ”);

(j) [INTENTIONALLY OMITTED]

(k) all of Seller’s rights under the contracts listed on Schedule 1.2(k) (the “ Other Contracts ”);

(l) prepaid expenses and deposits and all other “current assets” reflected on Seller’s balance sheet (it being acknowledged, for avoidance of doubt, that Buyer will acquire current assets only in the amount that exists at Closing);

(m) to the extent legally assignable or transferable from Seller to Buyer, all of Seller’s rights under all Permits (as herein defined) and Environmental Permits (as herein defined) required for the operation of the Business; and

(n) all other assets used or held for use in the Business except for those enumerated in Section 1.3.

 

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1.3 Excluded Assets . The Purchased Assets shall not include (i) cash or checking or savings accounts; (ii) accounts receivable; (iii) marketable securities; (iv) rights under contracts other than the Assumed Contracts; (v) assets held in or for any pension, health care or other employee benefit plan for employees of Seller; (vi) the corporate charter, and minute and stock record books of Seller; (vii) books and records that Seller is required by law to retain, so long as Seller delivers one copy thereof to Buyer, and books and records pertaining exclusively to Excluded Assets (as herein defined) and Excluded Liabilities (as herein defined); (viii) loans receivable from shareholders, directors, officers and their affiliates; or (ix) off-balance sheet Materials Inventory (as defined below). The assets referred to in the preceding clauses (i) through (ix) are referred to herein as the “ Excluded Assets ”.

ARTICLE II

ASSUMPTION OF LIABILITIES

2.1 Assumed Liabilities . Buyer shall assume the following liabilities and obligations of Seller at Closing (the “ Assumed Liabilities ”):

(a) Seller’s liabilities and obligations (but only to the extent that such liabilities and obligations relate to performance after Closing and only to the extent that such post-Closing performance does not relate to any pre-Closing breach or default by Seller) under (i) the Customer Contracts, the Ramsey Lease, and the Other Contracts (collectively, the “ Assumed Contracts ”); (ii) the Software Licenses; and (iii) Permits (as herein defined) and/or Environmental Permits (as herein defined) that are transferred to Buyer; and

(b) “accrued vacation” as shown as a current liability on Seller’s balance sheet.

2.2 Excluded Liabilities . Except as set forth in Section 2.1, and without implication that Buyer is assuming any liability not expressly excluded by this Section 2.2, Buyer is not assuming or undertaking to assume and shall have no responsibility for any liabilities or obligations of Seller, actual or contingent, past, present or future (the “ Excluded Liabilities ”), including, without limitation, (i) any “current liabilities” reflected on Seller’s balance sheet; (ii) any liabilities for long-term debt or other “long term liabilities” reflected on Seller’s balance sheet; (iii) any liabilities for taxes; (iv) any liabilities for deferred compensation; (v) any liabilities with respect to compensation, commissions, bonuses, profit sharing, or other compensation plans or programs; (vi) any retirement liabilities of Seller or liabilities of Seller under pension, savings, health care or other employee benefit plans or programs for Business employees; (vii) any severance liabilities; (viii) bank overdrafts; (ix) any liabilities incurred by Seller for legal, accounting, audit, investment banking, management consulting, brokerage, finder’s or other fees and expenses in connection with the sale of the Purchased Assets or related negotiations; (x) any liabilities (including Superfund liabilities) for environmental

 

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contamination at or adjoining real estate owned, leased or operated by Seller, for regulatory noncompliance existing at the Closing Date (as defined below) or for off-site handling (including without limitation disposal) of wastes or, with respect to laws or regulations relating to protection of human health (including occupational safety) and the environment, for any noncompliance existing at or prior to the Closing Date; (xi) any liabilities with respect to products of the Business manufactured, or services of the Business provided, before Closing; (xii) any liabilities for customer rebates incurred before Closing; (xiii) any liabilities of Seller under any leases, licenses, agreements or contracts, oral or written, other than the Assumed Contracts and the Software Licenses; (xiv) any liabilities arising out of or in connection with any violation of any Permit, Environmental Permit, law or governmental rule or regulation; (xv) any liabilities with respect to litigation or claims pending or threatened against Seller as of the Closing Date; (xvi) any liabilities under any Federal or state civil rights or similar laws, or the Worker Adjustment and Retraining Notification Act, as amended (the “ WARN Act ”), resulting from the termination of employment by Seller of employees of the Business or any other employment action taken by Seller with respect to employees of the Business; or (xvii) any other liabilities of Seller, or any other liabilities associated with the ownership or operation of the Purchased Assets or the Business before the Closing, except the Assumed Liabilities.

ARTICLE III

CONSIDERATION; CLOSING

3.1 Purchase Price .

(a) The aggregate purchase price for the Assets will be $16,650,000 (the “ Cash Purchase Price ”). SGS will pay the Cash Purchase Price in three cash installments, as follows:

(i) $11,650,000 at Closing. Also at Closing, Buyer shall reimburse Seller for the amount of Seller’s security deposit held by the landlord with respect to the Ramsey Lease.

(ii) $2,500,000 on the first anniversary of the Closing Date.

(iii) $2,500,000 on the second anniversary of the Closing Date; provided, that $500,000 of this installment (the “ EBITDA Holdback ”) will only be payable if the Business has achieved a threshold EBITDA Margin of 21% for the second year of operations following Closing. (It being agreed that “ EBITDA Margin ” will be calculated and determined in accordance Sections 3.3 and 3.4).

The preceding notwithstanding, the payments contemplated by subsections 3.1(a)(ii) and (iii) are subject to forfeiture in the following circumstances: if Mr. Jackson and/or Mr. Nussbaum voluntarily terminates his employment before the scheduled

 

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expiration of his Leased Employment Agreement (defined below), Seller will forfeit 50% (if there is one terminating employee) or 100% (if there are two terminating employees) of any remaining portion of the payments contemplated by subsections 3.1(a)(ii) and (iii). In addition, if Robert Jackson voluntarily terminates his employment before the scheduled expiration of his employment agreement with Buyer and, at the time of Robert Jackson’s voluntary termination Michael Jackson Sr. has not voluntarily terminated his own employment in a manner that would cause a forfeiture, Seller will forfeit 50% of any remaining portion of the payments contemplated by subsections 3.1(a)(ii) and (iii). For avoidance of doubt, there will be no forfeiture in the event of a termination of employment by reason of death or disability.

In the event that Buyer sells the Business to a non-Affiliated third party (by way of a sale of all or substantially all the assets of the Business or a sale of all or substantially all the assets of Buyer) before the second anniversary of the Closing Date, any amounts payable by Buyer under subsection 3.1(a)(ii) and/or (iii) will become payable upon the date of such sale, subject to any set-off exercised by Buyer under Section 10.2(f) before such date and/or any forfeiture occurring before such date under Section 3.1(a). In the event that such a sale occurs after the first anniversary of the Closing Date but before the second anniversary of the Closing Date, whether the EBITDA Holdback is payable upon such sale will be determined on the basis of 2008 EBITDA Margin through the month-end preceding such sale, annualized for all of 2008.

(b) Buyer acknowledges that Seller owns certain packaging and shipping materials inventory that is not shown on Seller’s balance sheet (the “ Materials Inventory ”), which Buyer will not acquire at Closing and which will constitute an Excluded Asset. At Closing, Seller will identify the Materials Inventory on hand as of the Closing Date. Buyer will pay to Seller proceeds of sales of the Materials Inventory subject to and in accordance with Section 10.7.

(c) Subject to Section 10.2(f), Buyer shall pay each installment of the Cash Purchase Price by wire transfer of immediately available federal funds to Seller’s account as follows (or to such other account as Seller shall designate by written notice delivered to Buyer):

The Bank of New York

ABA Routing No.: 021000018

Account Name: R.L. Ecker, P.C.

Account No.: 6776702402

In escrow for C.M. Jackson Associates, Inc.

(d) The Cash Purchase Price shall constitute the “Consideration”. The Consideration shall be allocated among the Purchased Assets in the manner proposed by Buyer within 60 days after Closing and approved as promptly as practicable thereafter by Seller, Seller’s approval not to be unreasonably withheld.

 

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3.2 The Closing . The closing (the “ Closing ”) of the sale and purchase of the Purchased Assets shall take place on February 28, 2007, unless otherwise agreed by the parties; provided, however, that subject to Section 13.1, the date of the Closing shall be automatically extended from time to time for so long as any of the conditions set forth in Articles VII and VIII shall not be satisfied or waived. The date on which the Closing occurs shall be the “ Closing Date ”. The Closing shall be deemed to be effective as of 11:59 p.m. (local time) on the Closing Date.

3.3 EBITDA Statement .

The amount of the EBITDA Margin will be determined from a calculation for the 12 months ending on the second anniversary of the Closing Date in the form set forth in Exhibit 3.3 (the “ EBITDA Statement ”), prepared by Buyer consistent with Buyer’s practices and accounting policies. The EBITDA Statement shall be subject to review and confirmation by Seller. The parties shall cooperate in the determination of the EBITDA Statement. Buyer shall cause the EBITDA Statement to be delivered to Seller not later than 90 days after the second anniversary of the Closing Date. Seller may confirm that it agrees with the EBITDA Statement at any time following receipt from Buyer.

3.4 Disputes Regarding the EBITDA Statement . Disputes with respect to the EBITDA Statement shall be resolved as follows:

(a) Seller shall have 30 days after receipt of the EBITDA Statement from Seller (the “ Dispute Period ”) to dispute any amounts reflected on the EBITDA Statement (a “ Dispute ”). If Seller does not give written notice of a Dispute within the Dispute Period to Buyer (a “ Dispute Notice ”), the EBITDA Statement shall be deemed to have been accepted and agreed to by Seller in the form in which it was delivered by Buyer, and shall be final and binding upon the parties. If Seller has a Dispute, Seller shall give Buyer a Dispute Notice within the Dispute Period, setting forth in reasonable detail the elements and amounts with which it disagrees. Within 30 days after delivery of such Dispute Notice (the “ Negotiating Period ”), the parties shall attempt to resolve such Dispute and agree in writing upon the final content of the EBITDA Statement.

(b) If Buyer and Seller are unable to resolve any Dispute within the Negotiating Period, the parties shall engage within five days following the end of the Negotiating Period a nationally recognized certified public accounting firm mutually acceptable to Buyer and Seller, who is not rendering (and during the preceding two-year period has not rendered) audit services in North America to either Seller or Buyer, or their respective Affiliates, to serve as arbitrator (the “ Arbitrating Accountant ”) to settle such Dispute. In connection with the resolution of any Dispute, the Arbitrating Accountant shall have access to all documents,

 

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records, work papers, facilities and personnel necessary to perform its function as arbitrator. The arbitration before the Arbitrating Accountant shall be conducted in accordance with the commercial arbitration rules of the American Arbitration Association. The Arbitrating Accountant’s award with respect to any Dispute shall be final and binding upon the parties hereto, and judgment may be entered on the award. Seller and Buyer shall each pay one-half of the fees and expenses of the Arbitrating Accountant with respect to any Dispute.

(c) Within 5 business days after the EBITDA Statement has been finalized under Section 3.3 or 3.4, Buyer shall pay the EBITDA Holdback to Seller by wire transfer if EBITDA Margin equals or exceeds 21%.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF SELLER

Seller represents and warrants to Buyer as follows:

4.1 Organization, Standing, Qualification, etc. of Seller . Seller is a corporation duly organized, validly existing and in good standing under the laws of the State of New Jersey. Seller is qualified to do business, and is in good standing as a foreign corporation, in each jurisdiction where the ownership or operation of the Purchased Assets or the conduct of the Business requires such qualification, except where the failure to be so qualified or in good standing, as the case may be, would not, individually or in the aggregate, reasonably be expected to impair Seller’s ability to effect the Closing.

4.2 Authority, Binding Effect . Seller has the corporate power and authority to enter into this Agreement and all other agreements to which Seller is a party delivered hereunder (“ Seller’s Ancillary Documents ”) and to carry out the transactions contemplated hereby and thereby. The sale of the Purchased Assets by Seller to Buyer has been approved by Seller’s shareholders. The execution and delivery of this Agreement and Seller’s Ancillary Documents and the consummation of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate action on the part of Seller. This Agreement has been, and Seller’s Ancillary Documents will be, executed and delivered by a duly authorized representative of Seller. This Agreement constitutes, and Seller’s Ancillary Documents when executed and delivered will constitute, the valid, legal and binding obligation of Seller enforceable in accordance with the terms hereof and thereof, respectively (except to the extent that enforcement is limited by (i) laws pertaining to bankruptcy, reorganization, insolvency and creditors’ rights generally or (ii) general principles of equity, whether considered in a proceeding in equity or at law).

 

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4.3 Non-contravention; Consents .

(a) The execution and delivery of this Agreement and Seller’s Ancillary Documents and the consummation of the transactions contemplated hereby and thereby will not (i) violate, conflict with or result in any breach of any provision of the charter documents or by-laws of Seller, (ii) violate, conflict with or result in any breach of any statute, rule or governmental regulation applicable to Seller, (iii) violate, conflict with or result in any breach of any order, writ, injunction, judgment or decree or arbitration award binding on Seller or the Purchased Assets, or (iv) violate, conflict with or result in any breach of, or constitute a default or event of default or result in the creation or imposition of any Lien on any of the Purchased Assets under, any agreement, indenture, mortgage, deed of trust, loan or credit agreement, debenture, note, bond or other instrument to which Seller is a party or by which it or any of its assets are bound or affected.

(b) No consent, approval or authorization of, or declaration or filing with, any governmental authority is required to be made or obtained by Seller in connection with the execution or delivery of this Agreement or Seller’s Ancillary Documents or the consummation of the transactions contemplated hereby or thereby. No notice is required to be delivered to Seller’s employees under the WARN Act in connection with the Transaction. Except as set forth on Schedule 4.3 , there is no requirement that any party to any Permit or Environmental Permit or to any of the Assumed Contracts or the Software Licenses or to any other agreement, indenture, mortgage, deed of trust, loan or credit agreement, debenture, note or other instrument to which Seller is a party consent to the transactions contemplated by this Agreement.

4.4 Legal Proceedings . There are no actions, suits, proceedings, or investigations, at law or in equity, or before any governmental agency or other person, pending or, to Seller’s knowledge, threatened against Seller or its assets (i) which question the validity of this Agreement or any action taken or to be taken hereunder or (ii) which are related to the Business or the Purchased Assets, or the ownership or operation thereof. There are no outstanding judgments, orders, writs, injunctions or decrees of any court or governmental agency against or affecting the Purchased Assets.

4.5 Condition of Certain Purchased Assets .

(a) The Equipment and the buildings and other improvements constituting the Ramsey Facility are (i) in good operating condition and repair (ordinary wear and tear excepted) and (ii) to Seller’s knowledge, free of any latent structural or engineering defects.

(b) The Inventory is of merchantable quality and is usable and saleable in the ordinary course of business, except for items of obsolete material which have been written down to estimated net realizable value. Except for items of below standard quality which have been written down to their estimated net realizable value, the Inventory is free from defects in materials and/or workmanship.

 

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Except as disclosed on Schedule 4.5(b), all of the Inventory is located at the Ramsey Facility. None of the Inventory is consigned inventory.

4.6 Finders and Brokers . Seller has not employed, paid or become obligated to pay any finder, broker, agent, management consultant or other intermediary in connection with the negotiation or consummation of this Agreement or any of the transactions contemplated hereby.

4.7 Assumed Contracts .

(a) All of the Customer Contracts as of the date hereof are listed, and as of the Closing Date will be listed, on Schedule 4.7(a) by customer, indicating sales value.

(b) Each of the Assumed Contracts is in full force and effect according to its terms. Neither Seller nor, to Sellers’ knowledge, any third party is in default or breach under any Assumed Contract. No event, occurrence or condition exists which, with the lapse of time, the giving of notice, or both would become a default by Seller or, to Seller’s knowledge, by any third party under any Assumed Contract.

4.8 Ownership of Purchased Assets . Except for liens for current taxes not yet due and payable (“ Permitted Liens ”), and except for the Liens set forth on Schedule 4.8 (“ Non-Permitted Liens ”, all of which Non-Permitted Liens shall be removed before Closing), Seller has good and marketable title to the Purchased Assets, free and clear of all Liens.

4.9 Operation in the Ordinary Course; No Material Adverse Change .

(a) Since December 31, 2005, the Business has been conducted in all respects only in the ordinary course.

(b) Since December 31, 2005, there has been no material adverse change in the Business or the Purchased Assets.

 

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4.10 Intellectual Property, etc .

(a) Schedule 4.10(a) identifies all of the following: (i) all patents and pending applications therefor used in the Business; (ii) all copyrights, registrations thereof and applications therefor used in the Business; (iii) all service marks, trademarks and trade names, including registrations thereof and applications therefor, used in the Business; and (iv) all licenses of rights in the items referred to in the foregoing clauses (i) through (iii), whether to or by Seller, whether or not used in the Business. The scheduled rights are referred to herein collectively as the “ Intellectual Property .” Except as identified on Schedule 4.10(a) with respect to clause (iv) of the first sentence of this subsection, Seller has not licensed or sublicensed any of the Intellectual Property as a licensor.

(b) (i) Each patent, copyright, service mark, trademark and trade name, and each registration thereof and application therefor, included in the Intellectual Property exists, is owned by or licensed to Seller, and has been maintained in good standing; (ii) Seller has no knowledge of any claim that any third party asserts ownership rights in any of the Intellectual Property owned by Seller; (iii) Seller has no knowledge of any claim that Seller’s use of any intellectual property, including the Intellectual Property, infringes any right of any third party; and (iv) Seller has no knowledge or any reason to believe that any third party is infringing any of Seller’s rights in any of the Intellectual Property.

(c) Schedule 4.10(c) lists all of the Software Licenses.

4.11 Customers . To Seller’s knowledge, its business relationships with its customers are satisfactory, and Seller has no knowledge or notice of any termination, cancellation, or adverse change in its business relationship with any customer (or affiliated group of customers) whose purchases accounted for more than 2% in 2006.

4.12 Accuracy of Documents . The documents and/or copies of documents furnished by Seller to Buyer under this Agreement (including without limitation copies of the Assumed Contracts, the Software Licenses and documents provided in response to Buyer’s November 13, 2006 Due Diligence Request) are complete and accurate in all material respects.

4.13 Taxes . All ad valorem or other taxes imposed on or with respect to the Purchased Assets or the non-payment of which may give rise to a Lien on any of the Purchased Assets which have or will become due and payable on or before the Closing Date have been or will be timely paid by Seller and all ad valorem or other tax returns which have or will become due on or before the Closing Date have been or will be timely filed by Seller. All real estate taxes imposed on or with respect to the Ramsey Facility which have or will become payable on or before the Closing Date have been or will be timely paid. There are no administrative or judicial disputes involving the taxability or valuation of any of the Purchased Assets or the Ramsey Facility. There are no special elections or other conditions in effect with respect to the Business or any of the Purchased Assets which could impose on Buyer, as transferee of the Purchased Assets or as successor to Seller, any liability for any taxes imposed with respect to the Purchased Assets with respect to periods prior to Closing or upon Seller for any period.

 

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4.14 Financial Statements . Seller’s compiled financial statements for the years ended December 31, 2005, 2004 and 2003 and unaudited financial statements for the interim period ended September 30, 2006 (the “ Financial Statements ”) are attached as Schedule 4.14 . The Financial Statements have been prepared from the books and records of Seller in accordance with generally accepted accounting principles consistently applied (“ GAAP ”) and present fairly the assets, liabilities and financial condition and results of operations as of each date and for each period covered.

4.15 Books and Records . Sellers’ books, accounts and records with respect to the Business (i) are true, accurate and complete in all material respects, (ii) have been maintained in Seller’s usual, regular and ordinary manner in accordance with GAAP and (iii) properly reflect all material transactions to which Seller is or has been a party with respect to the Purchased Assets.

4.16 Permits . Schedule 4.16 contains a complete and correct list of every license, permit, registration and governmental approval, agreement and consent applied for, pending by, issued or given to Seller with respect to the Business, except for Environmental Permits (collectively, the “ Permits ”). All Permits are in full force and effect, and no other license, permit, registration, governmental approval, agreement or consent (except for Environmental Permits) is required in connection with the ownership of the Purchased Assets or operation of the Business.

4.17 Compliance with Laws . Seller is, with respect to the Business, in compliance in all material respects with each decree, order or arbitration award or law, statute, or regulation of or agreement with, or Permit from, any Federal, state, or local governmental authority.

4.18 Employees . With respect to employees of Seller who are or were employed in the conduct of the Business:

(a) Seller is not a party to any collective bargaining agreement or other labor union contract;

(b) there is no unfair labor practice complaint against Seller pending or, to Seller’s knowledge, threatened before the National Labor Relations Board or any comparable state or local or foreign agency with respect to the Business;

(c) there is no labor strike, dispute, slowdown or stoppage actually pending or, to Seller’s knowledge, threatened against or directly affecting the Business;

 

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(d) Seller has not experienced any material work stoppage in the last eighteen months with respect to the Business; and

(e) Seller is not a party to any employment agreement.

4.19 Environmental .

(a) To the best of Seller’s knowledge, Seller is in compliance in all respects with all Environmental Laws. A description of any outstanding notice, citation, inquiry or complaint which Seller has received of any alleged violation of any Environmental Law or Environmental Permit relating to the Business or the Purchased Assets is contained in Schedule 4.19(a) . (As used in the preceding sentence, the term “outstanding” refers to any notice, citation, inquiry or complaint that pertains to a matter that has not been corrected or otherwise resolved.) To the best of Seller’s knowledge, Seller possesses all Environmental Permits which are currently required for the operation of the Business. All Environmental Permits issued to Seller with respect to the Purchased Assets or conduct of the Business are listed in Schedule 4.19(a) and Seller is in compliance in all material respects with the provisions of all such Environmental Permits.

(b) (i) There has been no generation, storage, disposal, treatment or transportation of any Hazardous Materials (as herein defined) at the Ramsey Facility or at or to any Offsite Facility by or on behalf of Seller in violation of, or which could give rise to any liability or obligation of Seller under, any Environmental Laws; and (ii) there has been no Release (as herein defined) by Seller or, to the best of Seller’s knowledge, by any other party, at the Ramsey Facility.

(c) Schedule 4.19(c) sets forth a complete list of all (i) Offsite Facilities to which Seller has sent Hazardous Materials; (ii) Containers (as herein defined) that are now present at, or have been removed from, the Ramsey Facility; and (iii) locations of PCB’s and/or asbestos at the Ramsey Facility. All Containers which have been removed from the Ramsey Facility have been removed in accordance with all applicable Environmental Laws.

(d) For the purposes of this Agreement:

(i) “ Containers ” means above-ground and underground storage tanks and/or other containers having a capacity of more than 100 gallons;

(ii) “ Environmental Laws ” means all federal, state, and local statutes, ordinances, guides having the effect of law, rules and regulations, all court orders and decrees and arbitration awards, which pertain to environmental matters or contamination of any type whatsoever.

 

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Environmental Laws include, without limitation, those relating to: manufacture, processing, use, distribution, treatment, storage, disposal, generation or transportation of Hazardous Materials; air, soil, surface or ground water or noise pollution; Releases; protection of wildlife, endangered species, wetlands or natural resources; Containers; health and safety of employees and other persons; and notification requirements relating to the foregoing;

(iii) “ Environmental Permits ” means licenses, permits, registrations, governmental approvals, orders, directives, agreements, consents and the like which are required for the operation of the Business under or are issued under Environmental Laws;

(iv) “ Facility ” means any facility as defined in CERCLA (as herein defined);

(v) “ Hazardous Materials ” means pollutants, contaminants, pesticides, petroleum and petroleum products, radioactive substances, solid, gaseous or liquid wastes or hazardous or extremely hazardous, special, industrial, toxic or otherwise dangerous wastes, substances, chemicals or materials within the meaning of any Environmental Law, including, without limitation, any (i) “hazardous substance” as defined in the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. 9601, et. seq. , as amended and reauthorized (“ CERCLA ”), and (ii) any “hazardous waste” as defined in the Resource Conservation and Recovery Act (“ RCRA ”), 42 U.S.C., Sec. 6902 et. seq. , and all amendments thereto and reauthorizations thereof;

(vi) “ Offsite Facility ” means any Facility which is not presently, and has not heretofore been, owned, leased, subleased or occupied by Seller with respect to the Business; and

(vii) “ Release ” means any actual or threatened spill, discharge, leak, emission, escape, injection, dumping or other release of any Hazardous Materials into the environment, whether or not notification or reporting to any governmental agency was or is required, including without limitation any Release which is subject to CERCLA or a similar state statute.

4.20 Certain Matters Relating to the Ramsey Facility, the Purchased Assets and the Business .

(a) Seller holds a valid leasehold interest in the Ramsey Facility under the Ramsey Lease free and clear of all Liens except for real estate taxes not delinquent. To the best of Seller’s knowledge, neither the improvements comprising the Ramsey Facility

 

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nor the conduct of the Business at the Ramsey Facility is in violation of any use or occupancy restriction, limitation, condition or covenant of record or any zoning or building law, code or ordinance or public utility easement or servitude. To the best of Seller’s knowledge, the improvements comprising the Ramsey Facility are in compliance in all material respects with applicable laws and regulations.

(b) The continued operation of the Ramsey Facility (as it is currently operated) is not dependent on facilities located at other property, nor is the continued operation of other facilities dependent on the Ramsey Facility. Seller has adequate rights of ingress and egress with respect to the Ramsey Facility. The Ramsey Facility currently is served by gas and/or electricity, telephone, water, sewage and waste disposal and other utilities adequate to operate such facility at its current rate of operation.

(c) There are no condemnation proceedings pending or, to Seller’s knowledge, threatened with respect to any portion of the Ramsey Facility.

(d) Seller does not own any real property. The Ramsey Facility is the only real property leased by Seller (as lessee) in connection with the Business. Seller does not lease any real property as lessor in connection with the Business.

(e) Seller has not received any written notice from, or on behalf of, any insurance carrier issuing policies covering the Business to the effect that (i) insurance rates with respect to the Business will hereafter be substantially increased (except to the extent that insurance rates may be increased for all similarly situated risks), (ii) there will hereafter be no renewal of an existing policy, or (iii) there will be required or is suggested any material alteration of the Ramsey Facility or any item of Equipment, purchase of additional equipment or material modification of any of Seller’s methods of conducting the Business.

(f) The Purchased Assets are adequate to conduct the Business as it is currently being conducted.

4.21 Buyer Obligation under Plans or Non-Assumed Contracts .

(a) Buyer will have no liability or obligation under any savings, 401K, profitsharing, pension, retirement or other similar arrangement or plan maintained by Seller for its employees, and all such plans have been maintained by Seller in accordance with applicable laws.

(b) Except for the Assumed Liabilities, Buyer will have no liability or obligation under any contract or agreement entered into by Seller to which Buyer is not a party.

 

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4.22 Employee Benefit Plans .

(a) Schedule 4.22 is a true and complete list of each employee benefit plan, program or practice, profit sharing, pension, retirement or other similar arrangement or plan, whether or not subject to ERISA, and including all fringe benefits, programs and practices, and any commitment with respect to which Seller has any liability or obligation relating to employees or their beneficiaries (each, an “Employee Arrangement” ). All Employee Arrangements have been maintained by Seller in accordance with applicable laws. Seller has provided copies of each Employee Arrangement to Buyer. Except as specifically provided in this Agreement, Seller has not taken any action that may result in Buyer being a party to, or bound by, any Employee Arrangement of Seller, and Buyer shall have no liability arising out of or relating to any Employee Arrangement of Seller following the consummation of the transact