Stock Purchase Agreement (2007)Full Document 

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Exhibit 10.1   
STOCK PURCHASE AGREEMENT
 
BY AND AMONG
 
ASTEC INDUSTRIES, INC.
 
PETERSON, INC.
 
A. NEIL PETERSON
 
AND THE OTHER SHAREHOLDERS
 
OF
 
PETERSON, INC.
 

 
DATED AS OF MAY 31, 2007
 





ARTICLE 1  DEFINITIONS 
ARTICLE 2  SALE AND TRANSFER OF STOCK; CLOSING; AGREEMENTS 
2.1           Stock. 
2.3           Closing. 
2.4           Closing Obligations. 
2.5           Purchase Price Adjustment. 
2.6           Non-Competition Obligations of the Sellers. 
2.7           Tax Covenants. 
2.8           Sellers’ Cooperation. 
2.9           Conditional Earn-Out. 
2.10           Release of Company by Sellers. 
2.11           Certain Employment Matters. 
2.12           Excluded Assets. 
2.13           Purchase of Certain Assets from Dale Peterson. 
ARTICLE 3  REPRESENTATIONS AND WARRANTIES OF SELLERS 
3.1           Organization and Good Standing. 
3.2           Authority; No Conflict. 
3.3           Capitalization. 
3.4           Financial Statements. 
3.5           Books and Records. 
3.6           Title to Properties; Encumbrances. 
3.7           Ownership of Assets; Condition and Sufficiency of Assets.
3.8           Accounts Receivable and Inventory. 
3.9           Accounts Payable. 
3.10           No Undisclosed Liabilities. 
3.11           Taxes. 
3.12           No Material Adverse Change. 
3.13           Employees and Employee Benefit Plans. 
3.14           Compliance With Legal Requirements; Governmental Authorizations. 
3.15           Legal Proceedings; Orders. 
3.16           Absence of Certain Changes and Events. 
3.17           Contracts; No Defaults. 
3.18           Insurance. 
3.19           Environmental Matters. 
3.20           Employees. 
3.21           Labor Relations; Compliance. 
3.22           Intellectual Property & Intangible Assets. 
3.23           Certain Payments. 
3.24           Disclosure. 
3.25           Relations with Related Persons. 
3.26           Brokers or Finders. 
ARTICLE 4  REPRESENTATIONS AND WARRANTIES OF BUYER 
4.1           Organization and Good Standing. 
4.2           Authority; No Conflict. 
4.3           Certain Proceedings. 
4.4           Brokers or Finders. 
ARTICLE 5  COVENANTS OF SELLERS AND THE COMPANY PRIOR TO CLOSING DATE 
5.1           Required Approvals. 
5.2           Company’s and Sellers’ Approval. 
5.3           Current Information. 
5.4           No Negotiation. 
5.5           Operations Prior to Closing Date. 
5.6           Miscellaneous Agreements and Consents. 
5.7           Access and Investigation; Deliveries. 
5.8           Notification. 
ARTICLE 6  COVENANTS OF BUYER PRIOR TO CLOSING DATE 
ARTICLE 7  CONDITIONS PRECEDENT TO BUYER’S OBLIGATION TO CLOSE 
7.1           Accuracy of Representations. 
7.2           Performance. 
7.3           Consents. 
7.4           Additional Documents; Due Diligence Investigation; Certain Payables. 
7.5           No Proceedings. 
7.6           No Claim Regarding Stock Ownership or Sale Proceeds.
ARTICLE 8  CONDITIONS PRECEDENT TO SELLERS’ OBLIGATION TO CLOSE 
8.1           Accuracy of Representations. 
8.2           Buyer’s Performance. 
8.3           Consents. 
8.4           Additional Documents. 
8.5           No Injunction. 
ARTICLE 9  TERMINATION 
9.1           Termination Events. 
9.2           Effect of Termination. 
ARTICLE 10  INDEMNIFICATION; REMEDIES 
10.1           Survival; Right to Indemnification Not Affected By Knowledge. 
10.2           Indemnification and Payment of Damages by Sellers. 
10.3           Indemnification and Payment of Damages by Buyer. 
10.4           Indemnity Limitations—Sellers. 
10.5           Indemnity Limitations—Buyer. 
10.6           Procedure for Indemnification—Third Party Claims. 
10.7           Procedure for Indemnification—Other Claims. 
10.8           Treatment of Indemnification Payment. 
ARTICLE 11  GENERAL PROVISIONS 
11.1           Expenses. 
11.2           Confidentiality/Public Announcement. 
11.3           Notices. 
11.4           Jurisdiction. 
11.5           Further Assurances. 
11.6           Waiver. 
11.7           Entire Agreement and Modification. 
11.8           Assignments, Successors, And No Third-Party Rights. 
11.9           Severability. 
11.10               Sellers’ Representative. 
11.11               Section Headings; Construction. 
11.12               Governing Law. 
11.13               Counterparts. 


 





STOCK PURCHASE AGREEMENT
 
This Stock Purchase Agreement (“Agreement”) is made and entered into as of May 31, 2007, by and among ASTEC INDUSTRIES, INC., a Tennessee corporation (“Buyer”), A. NEIL PETERSON, individually and as the Sellers' Representative, a resident of Oregon ("Neil Peterson"), the shareholders listed in Schedule 3.1(a), ("Shareholders") and PETERSON, INC., an Oregon corporation (the “Company”). Neil Peterson and the other Shareholders are referred to collectively herein as “Sellers.”
 
RECITALS
 
The Company designs, engineers, manufactures, sells, and services wood chippers, horizontal recyclers, blower trucks, and related parts and equipment (the "Business").
 
Sellers own all of the shares of the capital stock of Company (the “Stock”).
 
Sellers desire to sell, and Buyer desires to purchase, the Stock for the consideration and on the terms set forth in this Agreement.
 
AGREEMENT
 
The parties, intending to be legally bound, agree as follows:
 

 
ARTICLE 1

DEFINITIONS

For purposes of this Agreement, the following terms have the meanings specified or referred to in this Section 1:
 
2004 Balance Sheet”—as defined in Section 3.4.
 
 “2005 Balance Sheet”—as defined in Section 3.4.
 
 “2006 Balance Sheet”—as defined in Section 3.4.
 
2008 Target” —as defined in Section 2.9(a).
 
2009 Target” —as defined in Section 2.9(b).
 
 “Agreement”—this Stock Purchase Agreement.
 
“April 28, 2007 Balance Sheet”—as defined in Section 2.5.
 
Balance Sheets”—as defined in Section 3.4.
 
Best Efforts”—the efforts that a prudent Person desirous of achieving a result would use in similar circumstances to ensure that such result is achieved as expeditiously as possible;
provided, however, that an obligation to use Best Efforts under this Agreement does not require the Person subject to that obligation to take actions that would result in a materially adverse change in the benefits to such Person of this Agreement and the Contemplated Transactions.
 
Breach”—a “Breach” of a representation, warranty, covenant, obligation, or other provision of this Agreement or any instrument delivered pursuant to this Agreement will be deemed to have occurred if there is or has been (a) any inaccuracy in or breach of, or any failure to perform or comply with, such representation, warranty, covenant, obligation, or other provision, or (b) any occurrence or circumstance that is or was inconsistent with such representation, warranty, covenant, obligation, or other provision, and the term “Breach” means any such inaccuracy, breach, failure, claim, occurrence, or circumstance.
 
"Business" —as defined in the recitals of this Agreement.
 
Buyer”—as defined in the first paragraph of this Agreement.
 
Buyer Indemnified Persons”—as defined in Section 10.2.
 
 “Buyer’s Advisors”—as defined in Section 5.7.
 
Buyer’s Closing Certificate”—as defined in Section 2.4(b).
 
Buyer’s Closing Documents”—as defined in Section 4.2.
 
Cash Payment”—as defined in Section 2.4(b).
 
Closing”—as defined in Section 2.3.
 
Closing Balance Sheet"—as defined in Section 2.2.
 
Closing Date”— as defined in Section 2.3.
 
Company”—Peterson Inc., an Oregon corporation, together with its wholly-owned subsidiary, Peterson Pacific Corp., an Oregon corporation.
 
Company Contract”—any Contract presently in effect, (a) under which the Company has or may acquire any rights, or (b) under which the Company has or may become subject to any obligation or liability, or (c) by which the Company or any of the assets owned or used by it is or may become bound, or (d) to which a Seller is a party that relates to or may affect the business of, or any of the assets owned or used by, the Company.
 
"Company Indebtedness"—as defined in Section 3.4(d).
 
Consent”—any approval, consent, ratification, waiver, or other authorization (including any Governmental Authorization).
 
Contemplated Transactions”—all of the transactions contemplated by this Agreement, including:

(a)           the sale by Sellers to Buyer and the purchase by Buyer from Sellers of the Stock;
 
(b)           the performance by Buyer and Sellers of their respective covenants and obligations under this Agreement;
 
(c)           Buyer’s acquisition and ownership of the Stock and exercise of control over the Company; and
 
(d)           the performance (including performance by Persons who are not parties hereto) or occurrence of the actions, transactions, events or obligations necessary to satisfy the conditions set forth in Sections 7 and 8 hereof.
 
Contract”—any agreement, contract, obligation, promise, or undertaking (whether written or oral and whether express or implied) that is legally binding.
 
Copyrights”—as defined in Section 3.22(a)(iii).
 
“Dale Peterson Assets”—as defined in Section 2.13.
 
Damages”—as defined in Section 10.2.
 
"EBIT"—Earnings before interest and taxes determined in accordance with GAAP.
 
Effective Time”—12:01 a.m. of the first business day following the Closing Date.
 
Encumbrance”—any charge, claim, community property interest, condition, equitable interest, lien, option, pledge, security interest, right of first refusal, or restriction of any kind, including any restriction on use, voting, transfer, receipt of income, or exercise of any other attribute of ownership.
 
Environment”—soil, land surface or subsurface strata, surface waters (including navigable waters, ocean waters, streams, ponds, drainage basins, and wetlands), groundwaters, drinking water supply, stream sediments, ambient air (including indoor air), plant and animal life, and any other environmental medium or natural resource.
 
Environmental, Health, and Safety Liabilities”—any cost, damages, expense, liability, obligation, or other responsibility arising from or under Environmental Law or Occupational Safety and Health Law and consisting of or relating to:
 
(e)           any environmental, health, or safety matters or conditions (including on-site or off-site contamination, occupational safety and health, and  regulation of chemical substances or products);

 
(f)           fines, penalties, judgments, awards, settlements, legal or administrative proceedings, damages, losses, claims, demands and response, investigative, remedial, or inspection costs and expenses arising under Environmental Law or Occupational Safety and Health Law;

    (g)           financial responsibility under Environmental Law or Occupational Safety and Health Law for cleanup costs or corrective action, including any investigation, cleanup, removal, containment, or other remediation or response actions (“Cleanup”) required by applicable Environmental Law or Occupational Safety and Health Law (whether or not such Cleanup has been required or requested by any Governmental Body or any other Person) and for any natural resource damages; or

(h)           any other compliance, corrective, investigative, or remedial measures required under Environmental Law or Occupational Safety and Health Law.

The terms “removal,” “remedial,” and “response action,” include the types of activities covered by the United States Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. § 9601 et seq., as amended (“CERCLA”).
 
Environmental Law”—any Legal Requirement that requires or relates to:
 
(a)           advising appropriate authorities, employees, and the public of intended or actual releases of pollutants or hazardous substances or materials, violations of discharge limits, or other prohibitions and of the commencements of activities, such as resource extraction or construction, that could have significant impact on the Environment;

(b)           preventing or reducing to acceptable levels the release of pollutants or hazardous substances or materials into the Environment;

(c)           reducing the quantities, preventing the release, or minimizing the hazardous characteristics of wastes that are generated;

(d)           assuring that products are designed, formulated, packaged, and used so that they do not present unreasonable risks to human health or the Environment when used or disposed of;

(e)           protecting resources, species, or ecological amenities;

(f)           reducing to acceptable levels the risks inherent in the transportation of hazardous substances, pollutants, oil, or other potentially harmful substances;

(g)           cleaning up pollutants that have been released, preventing the threat of release, or paying the costs of such clean up or prevention; or

(h)           making responsible parties pay private parties, or groups of them, for damages done to their health or the Environment, or permitting self-appointed representatives of the public interest to recover for injuries done to public assets.

 
ERISA”—the Employee Retirement Income Security Act of 1974 or any successor law, and regulations and rules issued pursuant to that Act or any successor law.
 
ERISA Affiliate”—as defined in Section 3.13(h).
 
     Escrow Agreement” —as defined in Section 2.4(b)(i).
 
"Escrow Amount"– as defined in Section 2.4(b)(i)
 
Excluded Assets” —as defined in Section 2.11.
 
Financial Statements”—as defined in Section 3.4.
 
GAAP”—generally accepted United States accounting principles, applied on a consistent basis.
 
Governmental Authorization”—any approval, consent, license, permit, waiver, or other authorization issued, granted, given, or otherwise made available by or under the authority of any Governmental Body or pursuant to any Legal Requirement.
 
Governmental Body”—any:
 
(a)           nation, state, county, city, town, village, district, or other jurisdiction of any nature;

(b)           federal, state, local, municipal, foreign, or other government;

(c)           governmental or quasi-governmental authority of any nature (including any governmental agency, branch, department, official, or entity and any court or other tribunal);

(d)           body exercising, or entitled to exercise, any administrative, executive, judicial, legislative, police, regulatory, or taxing authority or power of any nature.

Hazardous Activity”—the distribution, generation, handling, importing, management, manufacturing, processing, production, refinement, Release, storage, transfer, transportation, treatment, or use (including any withdrawal or other use of groundwater) of Hazardous Materials in, on, under, about, or from a property or any part thereof into the Environment, and any other act, business, operation, or thing that increases the danger, or risk of danger, or poses an unreasonable risk of harm to persons or property on or off a property, or that may affect the value of a property of the Company.
 
Hazardous Materials”—any waste or other substance that is listed, defined, designated, or classified as, or otherwise determined to be, hazardous, radioactive, or toxic or a pollutant or a contaminant under or pursuant to any Environmental Law, including any admixture or solution thereof, and specifically including petroleum and all derivatives thereof or synthetic substitutes therefor and asbestos or asbestos-containing materials.
 
Indebtedness” —as defined in Section 3.4(c).
 
Indemnified Person”—a Buyer Indemnified Person and/or a Seller’s Indemnified Person, as the context shall apply.
 
Intellectual Property Assets”—as defined in Section 3.22.

      “IRC”—the Internal Revenue Code of 1986 or any successor law, and regulations issued by the IRS pursuant to the Internal Revenue Code or any successor law.
 
IRS”—the United States Internal Revenue Service or any successor agency, and, to the extent relevant, the United States Department of the Treasury.
 
Knowledge”—an individual will be deemed to have “Knowledge” of a particular fact or other matter if such individual is actually aware of such fact or other matter; provided, however, that a Seller and the Company will be deemed to have “Knowledge” of a particular fact or other matter if any individual who is serving, or who has since July 1, 2004 served, as a director or officer of the Company has, or at any time had, actual knowledge of such fact or other matter.
 
Legal Requirement”—any federal, state, local, municipal, foreign, international, multinational, or other administrative order, constitution, law, ordinance, principle of common law, regulation, statute, or treaty.
 
Liability”—means any liability or obligation, whether known or unknown, asserted or unasserted, absolute or contingent, accrued or unaccrued, liquidated or unliquidated and whether due or to become due, regardless of when asserted.
 
Marks”—as defined in Section 3.22(a)(i).
 
Material Adverse Effect”—a material adverse effect on the financial condition, business relationships or economic prospects of the Company.
 
Modification Notice”—as defined in Section 5.8.
 
Occupational Safety and Health Law”—any Legal Requirement designed to provide safe and healthful working conditions and to reduce occupational safety and health hazards, and any program, whether governmental or private (including those promulgated or sponsored by industry associations and insurance companies), designed to provide safe and healthful working conditions.
 
Order”—any award, decision, injunction, judgment, order, ruling, subpoena, or verdict entered, issued, made, or rendered by any court, administrative agency, or other Governmental Body or by any arbitrator.
 
Ordinary Course of Business”—an action taken by a Person will be deemed to have been taken in the “Ordinary Course of Business” only if:
 
(a)           such action is consistent with the past practices of such Person and is taken in the ordinary course of the normal day-to-day operations of such Person; and

(b)           such action is not required to be authorized by the board of directors of such Person (or by any Person or group of Persons exercising similar authority).

Organizational Documents” — (a) the charter or articles or certificate of incorporation and the bylaws of a corporation; (b) the articles or certification of formation or organization of a limited liability company and the operating agreement or equivalent of a limited liability company agreement; (c) the partnership agreement and any statement of partnership of a general partnership; (d) the limited partnership agreement and the certificate of limited partnership of a limited partnership; (e) any charter or similar document adopted or filed in connection with the creation, formation, or organization of a Person; and (f) any amendment to any of the foregoing.
 
Owned Assets”—as defined in Section 3.7(a).
 
Patents”—as defined in Section 3.22(a)(ii).
 
Pension Plan”—as defined in Section 3.13.
 
Person”—any individual, corporation (including any non-profit corporation), general or limited partnership, limited liability company, joint venture, estate, trust, association, organization, labor union, or other entity or Governmental Body.
 
Plan or Plans”—as defined in Section 3.13.
 
Proceeding”—any action, arbitration, audit, hearing, investigation, litigation, or suit (whether civil, criminal, administrative, investigative, or informal) commenced, brought, conducted, or heard by or before, or otherwise involving, any Governmental Body or arbitrator.
 
Property Interest” or “Property Interests”—as defined in Section 3.19(a).
 
Proprietary Rights Agreement”—as defined in Section 3.20(b).
 
Purchase Price”—as defined in Section 2.2.
 
Purchase Price Adjustment”—as defined in Section 2.5.
 
Related Person”—with respect to a particular individual:
 
(a)           each other member of such individual’s Family;

(b)           any Person that is directly or indirectly controlled by such individual or one or more members of such individual’s Family;

(c)           any Person in which such individual or members of such individual’s Family hold (individually or in the aggregate) a Material Interest; and

(d)           any Person with respect to which such individual or one or more members of such individual’s Family serves as a director, officer, partner, executor, or trustee (or in a similar capacity).

With respect to a specified Person other than an individual:
 
(a)           any Person that directly or indirectly controls, is directly or indirectly controlled by, or is directly or indirectly under common control with such specified Person;

      (b)           any Person that holds a Material Interest in such specified Person;

(c)           each Person that serves as a director, officer, partner, executor, or trustee of such specified Person (or in a similar capacity);

(d)           any Person in which such specified Person holds a Material Interest;

(e)           any Person with respect to which such specified Person serves as a general partner or a trustee (or in a similar capacity); and

(f)           any Related Person of any individual described in clause (b) or (c).

For purposes of this definition, (a) the “Family” of an individual includes (i) the individual, (ii) the individual’s spouse, (iii) any other natural person who is related to the individual or the individual’s spouse within the second degree, and (iv) any other natural person who resides with such individual, and (b) “Material Interest” means direct or indirect beneficial ownership (as defined in Rule 13d-3 under the 1934 Act and Regulations of voting securities or other voting interests representing at least 5% (five percent) of the outstanding voting power of a Person or equity securities or other equity interests representing at least 5% (five percent) of the outstanding equity securities or equity interests in a Person.
 
Release”—any spilling, leaking, emitting, discharging, depositing, escaping, leaching, dumping, or other releasing into the Environment, whether intentional or unintentional.
 
Representative”—with respect to a particular Person, any director, officer, employee, agent, consultant, advisor, or other representative of such Person, including legal counsel, accountants, and financial advisors.
 
Securities Act”—the Securities Act of 1933 or any successor law, and regulations and rules issued pursuant to that Act or any successor law.
 
Sellers”— Shall be all The Shareholders as listed in Schedule 3.1(a).
 
 “Sellers’ Closing Certificate”—as defined in Section 2.4(a).
 
Sellers’ Closing Documents”—as defined in Section 3.2(a).
 
"Sellers' Indemnified Persons"– as defined in Section 10.3.
 
Sellers’ Representative”—A. Neil Peterson.
 
"Shareholder" – as defined in Section 3.1(a).
 
Stock”—as defined in the Recitals of this Agreement and in Section 2.1(b).
 
Subsidiary”—with respect to any Person (the “Owner”), any corporation or other Person of which securities or other interests having the power to elect a majority of that corporation’s or other Person’s board of directors or similar governing body, or otherwise having the power  to direct the business and policies of that corporation or other Person (other than securities or other interests having such power only upon the happening of a contingency that has not occurred) are held by the Owner or one or more of its Subsidiaries; when used without reference to a particular Person, “Subsidiary” means a Subsidiary of the Company.
 
Tax Return”—any return (including any information return), report, statement, schedule, notice, form, or other document or information filed with or submitted to, or required to be filed with or submitted to, any Governmental Body in connection with the determination, assessment, collection, or payment of any tax or in connection with the administration, implementation, or enforcement of or compliance with any Legal Requirement relating to any tax.
 
Threat of Release”—a substantial likelihood of a Release that may require action in order to prevent or mitigate damage to the Environment that may result from such Release.
 
Threatened”—a claim, Proceeding, dispute, action, or other matter will be deemed to have been “Threatened” if any demand or statement has been made (orally or in writing) or any notice has been given (orally or in writing), or if any other event has occurred or any other circumstances exist, that would lead a prudent Person to conclude that such a claim, Proceeding, dispute, action, or other matter is likely to be asserted, commenced, taken, or otherwise pursued in the future.
 
"Total Stockholder Equity"—as used in the Balance Sheets.
 
Trade Secrets”—as defined in Section 3.22(a)(v).
 


 
ARTICLE 2

SALE AND TRANSFER OF STOCK; CLOSING; AGREEMENTS

2.1           Stock.

(a)           Subject to the terms and conditions of this Agreement, at the Closing, Sellers will sell and transfer the Stock to Buyer, and Buyer will purchase the Stock from Sellers.
 
(b)           Upon notice to Sellers' Representative on or before June 15, 2007, Sellers and the Company shall take all steps and file all documents necessary to merge Peterson, Inc. with and into its wholly-owned subsidiary, Peterson Pacific Corp., with Peterson Pacific Corp. as the surviving corporation, effective as of the end of the day on June 30, 2007.  Such merger documents shall be subject to pre-approval by Buyer and shall conform in all respects to Oregon law.  In the event such merger is directed by Buyer, the term "Stock" in this Agreement shall refer as necessary to the capital stock of Peterson Pacific Corp., the term "Company" shall refer as necessary to Peterson Pacific Corp., and this Agreement shall have the same effect with respect to the Stock of Peterson Pacific Corp. as it shall have in respect to the Stock of Peterson, Inc. in the absence of such merger.
 
2.2           Purchase Price.
 

The total purchase price (the "Purchase Price") is based upon the Company's 2006 Financial Statements and shall be Twenty-seven Million Dollars ($27,000,000.00) minus the Company Indebtedness reflected on the 2006 Balance Sheet, as further adjusted in accordance with Section 2.5 and other applicable provisions of this Agreement.
 
2.3           Closing.

Unless this Agreement is terminated in accordance with Section 9 hereof, the purchase and sale (the “Closing”) provided for in this Agreement will take place at the offices of Luvaas Cobb, counsel to the Sellers, in Eugene, Oregon on or about July 31, 2007, at 10:00 a.m. (local time), to be effective as of July 1, 2007 (the "Closing Date"), or at such other time and place as the Buyer and Sellers’ Representative may agree.

Subject to the provisions of Section 9, failure to consummate the Contemplated Transactions on the date and time and at the place determined pursuant to this Section 2.3 will not result in the termination of this Agreement and will not relieve any party of any obligation under this Agreement.
 
2.4           Closing Obligations.

At the Closing:
 
(a)           Sellers will deliver to Buyer:

(i)           certificates representing the Stock, duly endorsed (or accompanied by duly executed stock powers), with signatures guaranteed by a commercial bank, for transfer to Buyer;

(ii)           The written resignation, effective as of the Closing, of the officers and directors of the Company; and

(iii)           a certificate executed by the Sellers representing and warranting to Buyer that each of Sellers’ representations and warranties in this Agreement was accurate in all respects as of the date of this Agreement and is accurate in all respects as of the Closing Date as if made on the Closing Date (giving full effect to any Modification Notices) (the “Sellers’ Closing Certificate”);
 
(b)           Buyer will deliver to Sellers:
 
(i)           a cash payment by wire transfer in immediately available funds to an account specified by the Sellers’ Representative in an amount equal to the Purchase Price as adjusted according to Section 2.5, minus the sum of One Million Dollars ($1,000,000) (the "Escrow Amount") that shall be paid into an escrow account pursuant to the escrow agreement attached hereto as Exhibit 2.4(b)(i) (the “Escrow Agreement”).  The total amount paid pursuant to this Section 2.4(b)(i) shall be the "Cash Payment."
 

(ii)           a certificate executed by Buyer to the effect that each of Buyer’s representations and warranties in this Agreement was accurate in all respects as of the date of this Agreement and is accurate in all respects as of the Closing Date as if made on the Closing Date (the “Buyer’s Closing Certificate”);
 
(c)           From funds advanced at the Closing by Buyer, the Company shall deliver to each of the holders of Company Indebtedness an amount equal to the Company Indebtedness held by such holder.
 
2.5           Purchase Price Adjustment.

(a)           Seller has prepared and delivered to Buyer a balance sheet of the Company as of April 28, 2007 (the "April 28, 2007 Balance Sheet").  The parties acknowledge and agree that the April 28, 2007 Balance Sheet, including certain agreed upon adjustments, fairly presents the items listed thereon as of April 28, 2007 on a basis consistent with GAAP, and reflects the results of a physical inventory taken by Sellers immediately prior to April 28, 2007 with Buyer and its internal and external auditors and other Representatives having had the opportunity to observe such physical inventory and review all ledgers and supporting information, and having had full access after delivery to review the April 28, 2007 Balance Sheet and make any objections to Sellers.

(b)           During the period through June 30, 2007, Sellers and the Company shall conduct the financial and accounting operations of the Company in accordance with Company's financial and accounting practices and procedures and on a basis consistent with GAAP.  During June, 2007 Buyer shall provide on-site training to Company accounting personnel at mutually convenient times and dates to assist the Company and its personnel in adopting Buyer's procedures and practices.

(c)           Seller shall prepare and deliver to Buyer and Company’s independent C.P.A. a balance sheet of the Company as of June 30, 2007 (the "Closing Balance Sheet") on or before July 9, 2007.  The Closing Balance as reviewed by the C.P.A. shall be delivered to the Buyer no later than July 19, 2007.  The Closing Balance Sheet shall fairly present the items listed thereon as of June 30, 2007 on a basis consistent with GAAP and consistent with the agreed upon adjustments to the April 28, 2007 Balance Sheet.  Buyer and its internal and external auditors and other Representatives shall have full access after delivery of the Closing Balance Sheet to review it and make any objections in writing to Sellers.  Any objections shall be delivered to Seller’s Representative as soon as possible, but no later than July 30, 2007.  Any such objections shall be resolved by Buyer and Sellers in consultation with Buyer's Chief Financial Officer, internal and external auditors, and other Representatives.
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