Exhibit 10.1
ASSET PURCHASE
AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this
“ Agreement ”) dated as of
______________, 2008, by and among Brimmer Company, LLC, a
Minnesota limited liability company (“ Buyer
”), STEN Corporation, a Minnesota corporation (“
STEN ”), and STENCOR, Inc., a Minnesota
corporation and wholly owned subsidiary of STEN (“ Old
Stencor ”, and each of Old Stencor and STEN, a
“ Seller ” and collectively, the “
Sellers ”).
BACKGROUND
A.
Sellers own and operate a manufacturing
business (the “ Business ” )
located at 4555 North Jackson Street, Jacksonville, Texas including
a building of approximately 37,000 square feet and approximately 15
acres of land (the “ Real Property
”).
B.
Sellers desire to sell to Buyer, and
Buyer desires to purchase from Sellers, substantially all assets
used in the operation of the Business including the real property
assets.
C.
Kenneth W. Brimmer is CEO of STEN and
also serves as Chief Manager of Buyer. On November 6, 2008,
STEN established a Special Committee of the Board of Directors of
STEN to negotiate and approve the sale of the Business to one or
more buyers, including Buyer (the “ Special
Committee ”).
NOW, THEREFORE, in consideration of the
facts recited above and the mutual covenants and agreements herein
contained, the parties hereby agree as follows:
Article 1
Purchase and Sale of Assets
1.1
Purchase and Sale of Assets
. On and as of the Closing Date (as
defined in Section 3.1 below) on the terms of this Agreement,
Sellers will sell, transfer, convey and deliver to Buyer and Buyer
shall purchase from Sellers all property and assets of Sellers
related to the Business of every kind and description, wherever
located, real or personal, tangible or intangible, including but
not limited to the Real Property and those identified on
Schedule 1.1 (the “ Assets ”).
Without limitation of the foregoing, the Assets shall include
the following:
(a)
Sellers’ accounts receivable and
all other obligations of customers with respect to sale of goods or
services, or amounts due under any invoice or any other contract as
set forth on Schedule 1.1(a) ;
(b)
All furniture, fixtures (including all
signage, whether or not a fixture) and equipment relating to the
Business, including but not limited to those items set forth on
Schedule 1.1(b) .
(c)
All of Sellers’ inventory and
office or other supplies relating to the Business as set forth on
Schedule 1.1(c) (the “ Inventory
”).
(d)
All mailing lists, customer lists,
supplier lists and similar records of the Business as set forth on
Schedule 1.1(d) .
(e)
All intangible assets relating to the
Business, all of the United States, state and foreign registered
and unregistered copyrights, trademarks, trade names (including the
name Stencor as a corporate and trade name and ZBiZ and
GoZBiZ as tradenames), logos, service marks, service names,
technology, trade secrets, recipes and know-how, and applications
and registrations for the foregoing, and all licenses and other
contracts related thereto and all renewals, modifications and
extensions thereof, in each case relating to the Business as set
forth on Schedule 1.1(e) (collectively, the “
Intellectual Property ”).
(f)
All of Sellers’ right, title and
interest to all licenses and permits necessary to operate the
Business as set forth on Schedule 1.1(f) (the “
Permits ”).
(g)
All of Sellers’ right, title and
interest to all personal property and real estate leases to which
any Assets used by Sellers in connection with the Business are
subject as set forth on Schedule 1.1(g) (“
Leases ”).
(h)
All books and records relating to the
Business (other than stock records and corporate minute books) as
set forth on Schedule 1.1(h) .
(i)
All saleable goodwill and other general
intangibles of Sellers relating to the Business as set forth on
Schedule 1.1(i) .
(j)
All rights of Sellers under any warranty
or guarantee by any manufacturer, supplier, or original vendor of
the Assets hereunder as set forth on Schedule 1.1(j)
.
(k)
Sellers’ rights in and to the
Internet Web site locations and/or Internet domains and all
telephone and facsimile numbers relating to the Business as set
forth on Schedule 1.1(k) .
(l)
All rights of Sellers in the agreements
or contracts set forth on Schedule 1.1(l) (together with the
Leases, the “ Assumed Contracts
”).
(m)
Any claim (contractual or otherwise),
recovery, refund, counterclaim, right to offset or other right
Sellers may have with respect to, or which arise out of any of the
Assets or the Business.
(n)
All claims, deposits, warranties,
guarantees, refunds primarily related to the Assets, causes of
action, right of recovery, rights of set-off and rights of
recoupment of every kind and nature (except relating to the payment
of taxes), other than those relating primarily to the Excluded
Assets.
1.2
Excluded Assets
. All property and assets of
Sellers, of every kind and description, wherever located, real or
personal, tangible or intangible, not relating to the Business (the
“ Excluded Assets ”) are specifically
excluded from this Agreement and shall not be sold to Buyer
pursuant hereto.
Article 2
Purchase Price
2.1
Purchase Price . The aggregate purchase price (the “
Purchase Price ”) to be paid by Buyer to
Sellers in full consideration for the Assets shall be $1,300,000,
subject to adjustment, (a) $680,000 in cash payable at Closing to
Sellers and (b) the assumption by Buyers of the Assumed
Liabilities.
2.2
Adjustment to Purchase
Price . At Closing, if
the net working capital of Old Stencor (calculated by adding the
sum of the trade accounts receivable plus the value of the
Inventory, and then subtracting the sum of the trade accounts
payable) is more or less than $945,000, the cash portion of the
Purchase Price shall be decreased or increased by the difference
between $945,000 and the Net Working Capital on a dollar-for-dollar
basis.
2.3
Allocation of Purchase
Price . The parties
agree that the allocation of the Purchase Price shall be mutually
agreed upon by the parties and that each party will report such
allocation to the Internal Revenue Service for tax purposes on Form
8594.
2.4
Assumption of Liabilities
. On the Closing Date, Buyer shall
deliver to Sellers a Bill of Sale, Assignment and Assumption
Agreement pursuant to which Buyer shall assume and agree to
discharge the following obligations and liabilities of Sellers in
accordance with their respective terms and subject to the
respective conditions thereof (the “ Assumed
Liabilities ”):
(a)
Sellers’ obligations under that
certain [Mortgage Note] by Old Stencor to Austin State
Bank.
(b)
Trade accounts payable and accrued
liabilities of Old Stencor existing on the Closing Date.
(c)
The executory portion of the Assumed
Contracts, except that Buyer shall not assume or agree to pay,
discharge or perform any liabilities or obligations arising out of
any breach by Sellers prior to the Closing Date of any such
contracts, including but not limited to liabilities or obligations
arising out of Sellers’ failure to perform any contract in
accordance with its terms prior to the Closing Date.
(d)
Liabilities and obligations of Sellers
arising on or after the Closing Date out the Assets.
The Assumed Liabilities shall not include
any obligations or liabilities associated with that certain
litigation matter listed on Schedule 4.6 .
Article 3
Closing and Pre-Closing
Conduct
3.1
Closing Time and Place
. The consummation of the transaction
herein contemplated (the “ Closing ”)
shall take place at 10 a.m. on December 31, 2008 (the “
Closing Date ”) at a location to be mutually
agreed upon by the parties, or such other date and time as may be
mutually agreed to by the parties following the Go Shop
Period.
3.2
Conduct of Business Prior to
Closing . During
the period from the date of this Agreement until Closing, Sellers
shall cause the Business to carry on in all material respects in
the ordinary course, and to the extent consistent therewith, use
all commercially reasonable efforts to keep available the services
of its current employees and consultants, and preserve its
relationships with customers, suppliers, licensor, licensees,
distributors and others having business dealings with
it.
3.3
Go Shop Period; Termination
Payment .
Notwithstanding any other provision of this Agreement to the
contrary, during the period beginning the date of this Agreement
and continuing for 45 days (the “ Go Shop
Period ”), the Special Committee shall have the right
to actively solicit offers from third parties for the sale of the
Assets or the Business (“ Third Party Offers
”), evaluate and compare such Third Party Offers to one
another and to the terms of this Agreement. If, within the Go
Shop Period, the Special Committee determines in good faith that
failure to accept any such Third Party Offer would be inconsistent
with the Special Committee’s fiduciary duties, the Special
Committee shall authorize and direct the preparation and execution
of any agreement memorializing or furthering the sale of the Assets
or the Business to such third party offeror, thereby binding the
Company to the terms and conditions thereof. During the Go Shop
Period, the Special Committee shall promptly notify Buyer of any
Third Party Offers, which notice shall include the material terms
of, and identity of, the Person(s) making such Third Party Offer.
Should the Special Committee accept a Third Party Offer and
terminate this Agreement pursuant to Section 7.2(c), Kenneth W.
Brimmer shall be entitled to receive from STEN within ten (10) days
following such termination, payment in the amount of
$50,000.
Article 4
Representations and Warranties of Sellers
Sellers, jointly and severally, hereby
represent and warrant to Buyer as of the date hereof and as of the
Closing Date:
4.1
Organization and Good Standing;
Ownership Structure .
Each of STEN and Old Stencor is a corporation duly organized,
validly existing and in good standing under the laws of the State
of Minnesota. Old Stencor has all requisite corporate power
and authority to own its properties and assets and to conduct the
Business as it is now being conducted. Neither Seller has
failed to qualify in any jurisdiction where such failure to so
qualify would have a material adverse effect on the Business.
Each of Sellers has the power and authority to enter into and
perform their obligations under this Agreement. Old Stencor has no
subsidiaries and does not own any interest, directly or indirectly,
in any other corporation, partnership or other organization or
entity. STEN owns all of the issued and outstanding capital
stock of Old Stencor.
4.2
Authority; Execution and
Delivery . The
execution, delivery and performance of this Agreement by Sellers,
including, without limitation, the sale, conveyance, transfer and
delivery of the Assets contemplated hereby, have been duly
authorized by all necessary corporate action. Sellers each
have all requisite power and authority to enter into this Agreement
and to carry out its obligations hereunder. This Agreement
has been duly executed and delivered by each of Sellers and
constitutes the legal, valid and binding obligation of Sellers and
is enforceable against them in accordance with its terms, except as
may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or similar laws of
general applicability relating to or limiting creditors' rights
generally, now or hereafter in effect and subject to the
application of equitable principles and the availability of
equitable remedies.
4.3
Consents, No Conflict, Etc
. Except as set forth on
Schedule 4.3 , no consent, waiver, authorization or approval
or any governmental or regulatory authority, domestic or foreign,
or of any other person, firm or corporation, entity or association
(collectively, any “ Person ”), and no
filing or registration with any such Person is required in
connection with the execution and delivery of this Agreement by
either Seller or the performance by Sellers of their obligations
hereunder. Except as indicated on Schedule 4.3 , the
execution, delivery and performance of this Agreement by Sellers
and the consummation by Sellers of the transactions contemplated
hereby will not, with or without the giving of notice or the
passage of time, (a) violate any law, ordinance, rule or
regulation, or violate any judgment, writ, injunction or order of
any court, arbitrator or governmental, administrative or
self-regulatory authority, applicable to either Seller or the
Assets, (b) constitute a violation of or conflict with any
provision of the articles or certificate of incorporation or bylaws
of either Seller, or (c) conflict with, or result in the breach,
modification or termination of, require the consent or
authorization of or waiver by, or filing with, any other Person, or
result in the creation of any Encumbrance (as defined in Section
4.4 hereof) upon the Assets under, or constitute a default under,
any license, franchise, contract, indenture, agreement or other
in
