Exhibit 10.14 STOCK PURCHASE AGREEMENT

 

 

This STOCK PURCHASE AGREEMENT (the "Agreement") is made this 14^th day of May, 2004, by and among Torrey Pines Networks, Inc., a Delaware corporation (“TPN”), having an address at 12 Morgan, Irvine, California 92618, Entrada Networks, Inc., a Delaware corporation (“ESAN”), having an address at 12 Morgan, Irvine, California 92618, and James Dziak ("Seller"), an individual, having an address at c/o Microtek Systems, Inc., 5343 North 118th Court, Milwaukee, Wisconsin ###-###-####.

WHEREAS, TPN is a wholly owned subsidiary of ESAN;

WHEREAS, the Seller is the owner of one hundred (100) shares of the common stock of Microtek Systems Inc., a Wisconsin corporation ("MSI"), which constitutes all of the issued and outstanding shares of common stock of MSI as of the date hereof; and

WHEREAS, the Seller desires to sell all of his shares of common stock of MSI to TPN, and TPN desires to acquire the shares of common stock of MSI from the Seller, upon the terms and subject to the conditions set forth herein.   

NOW, THEREFORE, in consideration of the mutual agreements recited herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound, TPN, ESAN and the Seller agree as follows:

1.01   Definitions. The following terms shall have the meanings ascribed thereto:

1.01.1"Closing Price" means the last closing trade price for ESAN Common Stock in the over-the-counter market on the electronic bulletin board for ESAN Common Stock as reported by Bloomberg or Nasdaq (www.OTCBB.com).

1.01.2   "ESAN Common Stock" means the shares of ESAN common stock, par value $.001 per share, of ESAN.

1.01.3 “knowledge,” “best knowledge” or “know” means (i) with respect to TPN, the knowledge of TPN (including its directors, managers and officers) after due inquiry and investigation and (ii) with respect to Seller, the knowledge of Seller (including MSI’s directors and officers) after reasonable due diligence and investigation.

1.01.4 “Material Adverse Effect” means with respect to any entity, to the extent not reflected on such entity’s balance sheet, any liability, obligation, impairment, restriction, lien, cost, expense, loss, compensation, payment, reimbursement, damage, judgment or settlement to, of, by or on the business (including on assets that has such effect on the business), operations, cash flow, property, assets, prospects or condition (financial or otherwise) of such entity and its subsidiaries taken as a whole in the amount of $25,000 or more for an individual occurrence or $50,000 or mo re in the aggregate for multiple occurrences, arising outside the ordinary course of business. “Material Adverse Effect” includes, without limitation, any effect that impairs the ability of any of the parties hereto to consummate any transaction contemplated hereby.

1.01.5   “Net Assets Employed” means total tangible assets less current liabilities.

1.01.6 “Net Working Capital” means all current assets minus current liabilities with deferred maintenance contract revenue recognized at a delivery cost of $108,000.

1.01.7   "Value" of ESAN Common Stock means the arithmetic average of the Closing Price of ESAN Common Stock on each trading day during the twenty (20) consecutive trading days immediately preceding each Closing Date.

 

1.02.   Purchase and Sale. Subject to the terms and conditions of, and in reliance on the representations and warranties set forth in, this Agreement, on the Closing Date (as defined in Article 8 of this Agreement), Seller will sell, transfer and deliver to TPN, and TPN shall purchase and acquire from Seller one hundred (100) shares of common stock of MSI, being all of the issued and outstanding shares of common stock of MSI on the date hereof (the "MSI Common St ock"), free and clear of all liens, pledges, encumbrances, charges, and claims thereon. Certificates evidencing the MSI Common Stock shall be either duly endorsed in blank or accompanied by appropriate stock powers endorsed in blank. Such certificates shall also be accompanied by evidence satisfactory to TPN of the Seller's payment of any applicable transfer taxes.

1.03.   Purchase Price. In consideration of the sale, transfer and delivery of the MSI Common Stock by the Seller to TPN, TPN will pay to the Seller the aggregate consideration of One Million Four Hundred Thousand ($1,400,000) Dollars (the “Purchase Price”), as follows:

1.03.1 Seven Hundred Fifty Thousand ($750,000) Dollars in immediately available funds;

1.03.2 That number of Shares of ESAN Common Stock as has an aggregate Value of Two Hundred Fifty Thousand ($250,000) Dollars; plus

1.03.3 Two Hundred Fifty Thousand ($250,000) Dollars, subject to adjustment and to be paid pursuant to the terms of an Earnout Agreement to be executed and delivered at the Closing by the parties hereto, a form of which is attached hereto as Exhibit A.

1.03.4 One Hundred Fifty Thousand ($150,000) Dollars payable in four equal installments of principal, together with interest on the unpaid balance at the rate of six percent (6%), on November 14, 2004, and May 14, 2005, November 14, 2005 and May 14, 2006, pursuant to the terms of the Promissory Note to be executed and delivered by TPN, a form of which is attached hereto as Exhibit A-1.

1.04   Holdback. At the Closing, TPN shall retain in escrow that number of shares of ESAN Common Stock as has an aggregate value of One Hundred Thousand Dollars ($100,000) from the Purchase Price set forth in 1.03(2) (the "Holdback Amount") for a period of One Hundred Eighty (180) days following the Closing Date (the "Holding Period"). The Holdback Amount may be used by TPN to satisfy indemnification settlements arising from a breach of a representation, warranty and/or covenant by the Seller and/or MSI in this Agreement (the "Indemnification Settlements") The Holdback Amount will not be deemed a limit on the Seller’s indemnification obligations set forth in Section 9.02 of this Agreement.  

 

2.01   Due Diligence Investigation.    Prior to the Closing, TPN shall have the opportunity to conduct and complete to TPN’s satisfaction in its sole discretion, customary business, financial, tax, legal and environmental due diligence investigations of MSI (the "Due Diligence Investigation"). The Due Diligence Investigation shall include, but not be limited to, corporate records, sales records and contract, financial and tax records, legal matters, regulatory matters, en vironmental matters, employment matters, contractual matters, insurance matters, employment and labor matters, patent and trademark matters, pension and benefit records and matters, and such other agreements and matters as such party and its counsel and financial advisors deem relevant. Each party acknowledges that the consummation of the transactions contemplated by this Agreement is subject to the completion of the Due Diligence Investigation, the results of which shall be satisfactory to TPN in its sole discretion. Representatives of TPN shall have access to MSI's facilities, management, books, records, personnel, customers and suppliers only after obtaining Seller’s written consent, which shall not be unreasonably withheld or delayed, and only when accompanied by Seller, for the purpose of conducting the Due Diligence Investigation.

2.02   Restricted Securities. The Seller understands that the shares of ESAN Common Stock issuable as part of the Purchase Price are characterized as "restricted securities" under the federal securities laws inasmuch as they are being issued by TPN in a transaction not involving a public offering and that under such laws and applicable regulations ESAN Common Stock may be resold without registration under the Securities Act of 1933, as amended (the "Act"), only in certain limited circumstances.

2.03   Further Limitations on Disposition. Without in any way limiting the representations set forth above, unless there is then in effect a registration statement under the Act covering such proposed disposition and such disposition is made in accordance with such registration statement or an exception from registration applies, the Seller further agrees not to make any disposition of all or any portion of ESAN Common Stock unless and until the transferee has agreed in writing for the benefit of TPN and ESAN to be bound by this Section 2.03 and, if reasonably requested by TPN or ESAN, the Seller shall have furnished TPN with an opinion of counsel, reaso nably satisfactory to TPN or ESAN, that such disposition will not require registration of such shares under the Act.

2.04   Legends. It is understood that the certificates evidencing ESAN Common Stock will bear the following legend unless such securities are registered under the Act:

“The shares evidenced by this certificate have not been registered or qualified under the Securities Act of 1933, as amended, or any state securities laws and may not be sold or transferred unless registered or qualified pursuant to such Act and applicable state securities laws or an exemption from registration under such Act or such applicable state securities laws is available.”

2.05   Employment Agreement. TPN and the Seller shall enter into an employment agreement (the “Employment Agreement”), in the form set forth on Exhibit B, attached hereto and made a part hereof.

2.06     Restrictive Covenant. As an express and prime inducement for TPN to enter into this Agreement, the Seller and TPN shall enter into a non-compete and confidentiality agreement (the “Non-Compete Agreement”), in the form is set forth on Exhibit C, attached hereto and made a part hereof.

 

2.07     Shareholder Distribution. Prior to or at the Closing, MSI shall distribute Three Hundred Thousand Dollars ($300,000) of its working capital to Seller.

 

    The Seller and MSI make the following representations and warranties to TPN, each of which shall be deemed material (and TPN, in executing and delivering, and performing its obligations under this Agreement has relied and will rely upon the correctness and completeness of each of such representations and warranties).

  3.01.     Corporate Existence and Qualification. MSI is a corporation duly organized, validly existing and in good standing under the laws of the State of Wisconsin. MSI has the corporate power to carry on its business as now conducted and to own its assets. MSI is duly qualified to conduct business and is in good standing as a foreign corporation in those jurisdictions set forth on Schedule 3.01, which are the only jurisdictions in which MSI is required to qualify in order to own its assets or properties or to carry on its business as now conducted, except where the failure to so qualify could not be reasonably expected to have a Material Adverse Effect. The copies of MSI's Certificate of Incorporation (certified by the Department of Financial Institutions of the State of Wisconsin) and By-Laws (certified by MSI's secretary), as amended to date, which have been delivered to TPN, are true and complete copies of those documents as now in effect. The minute books of MSI contain accurate records, in all material respects, of all material mee tings of its Board of Directors and shareholders since its incorporation, and accurately reflect, in all material respects, all actions referred to therein.

3.02.     Capitalization. The authorized capital stock of MSI consists of two thousand (2,000) shares of common stock, no par value, of one hundred (100) shares are issued and outstanding. All of the shares of MSI Common Stock are duly authorized and validly issued and outstanding, fully paid and nonasse ssable, except as set forth in Section 180.0622, Wis. Stats. Except as set forth on Schedule 3.02 to this Agreement, there are no subscriptions, options, warrants, rights or calls or other commitments or agreements to which MSI or the Seller is a party or by which MSI or the Seller is bound, calling for the issuance, transfer, sale or other disposition of the MSI Common Stock. Except as set forth on Schedule 3.02, there are no outstanding securities of MSI convertible or exchangeable, actually or conti ngently, into shares of MSI Common Stock or any other securities of MSI.

3.03.     Subsidiaries. Except as set forth in Schedule 3.03, there are no corporations, partnerships, limited liability companies, trusts or other business entities controlled by MSI. MSI has made no investments in, or owns, none of the capital stock of, or any other proprietary interest in, any other corporation, partnership or other business entity.

3.04.     Consents. All requisite consents of governmental and other regulatory agencies, foreign or domestic, and of other parties required to be received by or on the part of MSI or the Seller to enable such persons to enter into and carry out this Agreement in all material respects have been, or prior to the Closing will have been, obtained.

3.05.     Binding Nature of Agreement; Title to Shares. This Agreement constitutes the Seller's valid and binding obligation and is enforceable in accordance with its terms, except that: (i) such enforcement may be subject to bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to creditors rights generally, and (ii) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to the discretion of the court before which any proceeding therefore may be brought. The Seller is, and at the Closing will be, the sole record and beneficial owner of the MSI Common Stock, free and clear of all manner of liens, charges, encumbrances, and claims. The Seller has, and at the Closing will have, good and marketable title to the MSI Common Stock, and has, and at the Closing will have, the absolute and unqualified right to sell, transfer and deliver such MSI Common Stock to TPN. The delivery of the MSI Common Stock to TPN at the Closing pursuant to the provisions of this Agreement will transfer valid title thereto, free and clear of all manner of liens, charges, encumbrances and claims.

3.06.     Financial Statements, etc. The books of accounts of MSI, taken as a whole, fairly reflect its income, expenses, assets and liabilities in all material respects. MSI's balance sheets as of December 31, 2002, December 31, 2003, and March 31, 2004, and the related statements of income and retained earnings for the years ended December 31, 2001, 2002 and 2003 and the three month period ended March 31, 2004 (collectively, the "Financial Statements") fairly present the financial position of MSI in all material respects as of the said dates and the results of its operations for such fiscal years and periods and, except as set forth therein or in Schedule 3.06 were prepared in all material respects in conformity with generally accepted accounting principles consistently applied throughout the fiscal year and periods covered thereby. The Financial Statements have been compiled or, with respect to the March 31, 2004 Financial Statements only, were internally prepared and have been delivered to TPN prior to the execution and delivery of this Agreement. For the calendar year ending December 31, 2003, MSI had an unadjusted/unaudited earnings before interest, taxes, depreciation and amortization, prior to the bonus and/or S Corporation distribution to Seller (“EBITDA”) of at least Three Hundred Forty Five Thousand Dollars ($345,000), and net assets employed (with the liability for deferred maintenance contracts calculated based upon actual delivery cost) of at least Four Hundred Thousand ($400,000). For purposes of this Section 3.06, EBITDA and net assets employed shall be calculated (except as set forth in the preceding sentence) in a manner consistent with the accounting pr actices and policies employed by MSI prior to the Closing Date as depicted on the Exhibit attached to Schedule 3.06.

3.07.     Liabilities. As of March 31, 2004 (the "MSI Balance Sheet Date"), except as set forth on Schedule 3.07 MSI had no material debts, liabilities or obligations, contingent or absolute, other than those debts, liabilities and obligations reflected or reserved against MSI's Consolidated Balance Sheet at the Balance Sheet Date (the "MSI Balance Sheet").

3.08.     Action Since Balance Sheet Date. Except as set forth in Schedule 3.08, or as otherwise expressly provided or set forth in, or required by, this Agreement, since the MSI Balance Sheet Date, MSI has not: (i) issued or sold, or agreed to issue or sell any of its capital stock, options, warrants, rights or calls to purchase such stock, any securities convertible or exchangeable into such capital stock or other corporate securities, or effected any subdivision or other recapitalization affecting its capital stock; (ii) inc urred any material obligation or liability, absolute or contingent, except those arising in the ordinary and usual course of its business; (iii) discharged or satisfied any lien or encumbrance, except in the ordinary and usual course of business, or paid or satisfied any liability, absolute or contingent, other than liabilities as to the MSI Balance Sheet Date and current liabilities incurred since the MSI Balance Sheet Date in the ordinary and usual course of business; (iv) made any wage or salary increases or granted any bonuses other than wage and salary increases and bonuses granted in accordance with its normal salary increase and bonus policies; (v) mortgaged, pledged or subjected to any lien or other encumbrance any of its properties or assets, or permitted any of its property or assets to be subjected to any lien or other encumbrance, except in the ordinary and usual course of business; (vi) sold, assigned or transferred any of its properties or assets, except in the ordinary and usual course of busi ness; (vii) entered into any transaction having an aggregate value greater than $25,000 (excluding outstanding quotes or proposals); ; (viii) waived any rights of substantial value, or cancelled, modified or waived any indebtedness for borrowed money held by it, except in the ordinary and usual course of business; (ix) declared, paid or set aside any dividends or other distributions or payments on its capital stock, or redeemed or repurchased, or agreed to redeem or repurchase, any shares of its capital stock; (x) made any loans or advances to any person, or assumed, guaranteed, endorsed or otherwise became responsible for the obligations of any person; or (xi) incurred any indebtedness for borrowed money (except for endorsement, for collection or deposit of negotiable instruments received in the ordinary and usual course of business).

3.09.     Adverse Developments. Except as otherwise expressly provided or set forth in, or required by, this Agreement (including the Schedules hereto) and except for changes in the general economy and the information technology industry, since the MSI Balance Sheet Date, there have been no changes in the properties, operations or financial condition of MSI, and no event has occurred other than in the ordinary and usual course of business which could be reasonably expected to have a Materially Adverse Effect upon the business of MSI, and neither the Seller nor MSI, after reason able inquiry, knows of any development or threatened development of a nature that is, or which could be reasonably expected to have a Materially Adverse Effect upon the business of MSI or upon any of its assets or properties, including, without limitation, the loss of any licenses or permits, suppliers, customers or employees, which loss would result in a Materially Adverse Effect.

3.10.     Taxes. The Seller has delivered to TPN true and complete copies of the Federal income tax returns of MSI as filed with the Internal Revenue Service for the fiscal years ended December 31, 2001 and 2002. [Note: 2003 income taxes are on extension]Such returns were prepared in conformity in all material respects with information contained in the books and records of MSI and contain no untrue statement of a material fact or omit to state any fact required to make any such return not materially misleading. Except as set forth in Schedule 3.10, all taxes, including, without limitation, income, property, sales, use, franchise, capital stock, excise, added value, employees' income withholding, social security and unemployment taxes imposed by the United States, any state or any foreign country, or by any other taxing authority, which have or may have become due or payable by MSI and all interest and penalties thereon, whether disputed or not, have been paid in full or adequately provided for by reserves shown in its books of account; all deposits required by law to be made by MSI with respect to estimated income, franchise and employees' withholding taxes have been duly made; and all tax returns, including estimated tax returns, required to be filed have been d uly filed. No extension of time for the assessment of deficiencies for any year is in effect. Except as set forth in said Schedule 3.10, no deficiency is proposed or to the knowledge of MSI, after reasonable inquiry, threatened against MSI. Schedule 3.10 also sets forth a list of those states in which income, franchise or sales and use tax returns were or will be filed by MSI for the fiscal year ended December 31, 2003.

3.11.     Ownership of Assets. Except as set forth in Schedule 3.11, MSI owns outright, and has good and marketable title to all of its assets, properties and business (including all assets reflected in MSI’s Balance Sheet, except as the same may have been disposed of in the ordinary course of business since the MSI Balance Sheet Date), free and clear of all liens, mortgages, pledges, conditional sales agreements, restrictions on transfer or other encumbrances or changes. Schedule 3.11 sets forth a true and complete list and brief description of all patents, copyrights, trademarks, trade names and other similar intangible assets which are either owned by MSI or in which it has an interest. Except as set forth in said Schedule 3.11, no other person, firm or corporation has any proprietary or other interest in any such intangible assets. Such assets so owned or leased are, in the reasonable business judgment of Seller, sufficient to permit MSI to conduct its business as now conducted. Except as set forth in Schedule 3.11, MSI is not a party to or bound by any license or agreement requiring the payment to any person, firm or corporation of any royalty. To the knowledge of the Seller, MSI is not infringing upon any patent, copyright, trade name or trademark or otherwise is violating the rights of any third party with respect thereto, and no proceedings have been instituted or, to the knowledge of the Seller, after reasonable inquiry, are threatened and no claim has been received by MSI or the Seller alleging any such violation.

3.12.     Insurance. Schedule 3.12 sets forth a list and brief description of all policies of fire, liability and other forms of insurance held by MSI as of the date hereof. Except as set forth in Schedule 3.12, such policies are valid, outstanding and enforceable policies, as to which premiums have been paid currently. Except as set for th in Schedule 3.12, Seller, after reasonable inquiry, does not know of any state of facts, or of the occurrence of any event which might reasonably (i) form the basis for any claim against MSI not fully covered by insurance for liability on account of any express or implied warranty or tortious omission of commission, or (ii) result in a material increase in insurance premiums of MSI.

3.13.     Litigation, Compliance with Law. Except as set forth in Schedule 3.13, there are no actions, suits, proceedings or governmental investigations relating to MSI or to any of its properties, assets or businesses pending or, to the knowledge of Seller, after reasonable inquiry, threatened, or any order, injunction, award or decree outstanding against MSI or against or relating to any of its properties, assets or businesses. Except as set forth in Schedule 3.13, to the knowledge of the Seller, MSI is not in violation of any law, regulation, ordinance, order, injunction, decree, award or other requirement of any governmental body, court or arbitrator relating to its properties, assets or business, which violation would have a Materially Adverse Effect on MSI.

3.14.     Real Property. Schedule 3.14 sets forth a brief description of all real property which is owned by, or leased to MSI, including all material structures located hereon. The real property leases described in Schedule 3.14 that relate to the leased properties described therein are now in full force and effect, and all amounts payable thereunder have been paid. All uses of such owned or leased prope rty by MSI conform, in all material respects, to all applicable building and zoning ordinances, laws, and regulations and, in the case of leased property, to all terms of the leases relating thereto.

3.15.     Agreements and Obligations; Performance. Except as set forth in this Agreement or listed and briefly described in Schedule 3.15 (the "Listed Agreements"), MSI is not a party to, or bound by any: (i) written or oral agreement or other contractual commitment, understanding or obligation which involves aggregate payments or receipts in excess of $50,000; (ii) contract, arrangement, commitment or understanding which involves aggregate payments or receipts in excess of $50,000 that cannot be cancelled on thirty (30) days or less notice without penalty or premium or any continuing obligation or liability: (iii) contractual obligation or contractual liability of any kind to the Seller; (iv) contract, arrangement, commitment or understanding with its customers or any officer, employee, shareholder, director, representative or agent thereof for the repurchase of products, sharing of fees, the rebating of charges to such customers, bribes, kickbacks from such customers or other similar arrangements; (v) contract for the purchase or sale of any materials, products or supplies which c ontain, or which commits or will commit it for a fixed term, (vi) contract of employment with any officer or employee not terminable at will without penalty or premium or any continuing obligation of liability; (vii) deferred compensation, bonus or incentive plan or agreement not cancelable at will without penalty or premium or any continuing obligation or liability; (viii) management or consulting agreement not terminable at will without penalty or premium or any continuing obligation or liability; (ix) lease for real or personal property (including borrowings thereon), license or royalty agreement; (x) union or other collective bargaining agreement; (xi) agreement, commitment or understanding relating to the indebtedness for borrowed money; (xii) contract which, by its terms, requires the consent of any party thereto to the consummation of the transactions conte mplated hereby; (xiii) contract containing covenants limiting the freedom of MSI to engage or compete in any line or business or with any person in any geographical area; (xiv) contract or option relating to the acquisition or sale of any business; (xv) voting trust agreement or similar shareholders' agreement. A true and correct copy of each of the written listed Agreements, has been made available or delivered to TPN. MSI has in all material respects performed all obligations required to be performed by it to date under all of the Listed Agreements, is not in default in any material respect under any of the Listed Agreements which would reasonably be expected to result in a Material Adverse Effect on MSI and has received no notice of any default or alleged default thereunder which has not heretofore been cured or which notice has not heretofore been withdrawn. T he Seller knows of no material default under any of the Listed Agreements by any other party thereto or by any other person, firm or corporation bound thereunder.

3.16.     Condition of Assets. Except for normal breakdowns and servicing requirements, all machinery and equipment regularly used by MSI in the conduct of its respective businesses are in good operating condition and repair, ordinary wear and tear excepted.

 

3.17   Accounts Receivable. All of the accounts receivable are reflected in the books of account of MSI in accordance with GAAP and arose in the ordinary course of its business from the sale of services or goods.

 

3.18.     Permits and Licenses. Schedule 3.18 sets forth all material permits, licenses, orders, franchises and approvals from all federal, state, local and foreign governmental regulatory bodies held by MSI. MSI has all permits, licenses, order and approvals of all federal, state, local and foreign governmental or regulatory bodies required of it to carry on its business as presently conducted; all such permits, licenses, orders, franchises and approvals are in full force and effect, and to the knowledge of the Seller, after reasonable inquiry, no suspension or cancellation or any of such other permits, licenses, etc. is threatened, the suspension or cancellation of which would have a Material Adverse Effect on MSI; and to Seller’s knowledge, MSI is in compliance in all material respects with all requirements, standards and procedures of the federal, state, local and foreign governmental bodies which have issued such permits, licenses, orders, franchises and approvals. Schedule 3.18 also sets forth a brief description of all vans, automobiles, trucks or other vehicles owned or leased by MSI and the state of title thereof.

3.19.     Banking Arrangements. Schedule 3.19 sets forth the name of each bank in or with which MSI has an account, credit line or safety deposit box, and a brief description of each such account, credit line or safety deposit box including the names of all persons currently authorized to draw thereon or having access thereto, and the names of all persons, if any, now holding powers of attorney from MSI and a summary statement of the terms thereof.

3.20.     Interest in Assets. Neither the Seller nor, any third party owns any property or rights, tangible or intangible, used in the business of MSI.

3.21.     Salary Information. Schedule 3.21 contains a list of the names and current salary rates of and bonus commitments to all present officers of MSI, and the names and current annual salary rates of all other persons employed by MSI whose annual salaries and bonuses exceed $100,000.00.

3.22.     Employee Benefit Plans. Schedule 3.22 includes a list of all of the "pension" and "welfare" benefit plans (within the respective meanings of sections 3(2) and 3(1) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA")) maintained by MSI or to which it makes employer contributions with respect to its employees, a complete and correct copy of each of which has been delivered to TPN. There are no vested and unfunded benefits under any such plans.

 

3.22.1.     All of the pension and profit sharing plans maintained by MSI (herein collectively referred to as the "Pension Plans") are listed in Part A of Schedule 3.22. Each of the Pension Plans has received a favorable determination letter as to its qualification under section 4.01(a) of the Internal Revenue Code of 1986, as amended (the "Code") (including, but not limited to, amendments made by ERISA), to Seller’s knowledge, after reasonable inquiry, nothing has occurred with respect to any such Pension Plan which would cause the loss of such qualification, and MSI has delivered to TPN true and correct copies of all such determination letters.

 

3.22.2.     All of the Pension Plans not maintained by MSI but to which it makes employer contributions with respect to its employees (herein collectively referred to as the "Other Pension Plans"), are listed in Part B of Schedule 3.22. Each of the Other Pension Plans is a multi-employer plan (within the meaning of section 3(37) of ERISA), but MSI is not a substantial employer (within the meaning of section 4001(a)(2) of ERISA) with respect to any of the Other Pension Plans.

3.22.3.     To the Seller’s knowledge, after reasonable inquiry, all contributions required by law or required under the Pension Plans with respect to the three plan years ended prior to the Closing Date shall have been made on or prior to the Closing Date by MSI. With regard to the current plan year of each of the Other Pension Plans, all contributions required to meet the employer contribution obligations of MSI, under section 412 of the Code, Part 3 of Title I(B) of ERISA, such other Pension Plan or any applicable collective bargaining agreement, with respect to that portion of the current plan year ending on the Closing Date, to Seller’s knowledge, after reasonable inquiry, shall have been made on or prior to the Closing Date by MSI. < /div>