ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT, dated as of July 31, 1995, by and among BNZ
incorporated, a California corporation ("Seller"), Robert Bertrand, the sole
shareholder of Seller ("Shareholder") and XCEL Arnold Circuits, Inc., a New
Jersey corporation ("Purchaser"), with reference to the following RECITALS:
A. Seller is engaged, in part, in the business of manufacturing printed
circuit boards. Such business operations have been carried on as a distinct
business under the name of Arnold Circuits, Inc. (the "Arnold Circuits
Business"). Arnold Circuits, Inc., a wholly owned subsidiary of Seller ("Arnold
Circuits"), has been dissolved prior to the date hereof. AD assets of Arnold
Circuits have been distributed to Seller and all of the debts and liabilities of
Arnold Circuits have been assumed by Seller. All of the Arnold Circuits Business
operations of Seller desired to be purchased by Purchaser hereunder are referred
to herein as the "Arnold Circuits Business,"
B. The Purchaser acknowledges that the machinery and equipment included
in the Assets (as herein defined) have been valued by The Mentor Group as of
February 20, 1995 in a written appraisal (the "Mentor Report") to have a fair
market value in excess of $1,100,000, which valuation Purchaser accepts for
purposes of this Agreement.
C. Subject to the terms and conditions hereinafter set forth, Seller
desires to sell and Purchaser desires to purchase the Arnold Circuits Business,
its operations, and the Assets of Seller used therein.
NOW, THEREFORE, in consideration of the recitals and of the respective
covenants, representations, warranties and agreements herein contained, and
intending to be legally bound hereby, the parties hereto hereby agree as
follows:
1. PURCHASE AND SALE
1.1 AGREEMENT TO SELL. At the Closing hereunder (as defined in Section
2.1 hereof) and except as otherwise specifically provided in Section 1.3, Seller
shall grant, sell, convey, assign, transfer and deliver to Purchaser, all right,
title and interest of Seller in and to (a) the Arnold Circuits Business as a
going concern, (b) the name "Arnold Circuits, Inc." and all goodwill associated
therewith, (c) all purchase orders, including, but not limited to, all purchase
orders from Motorola Cellular Infrastructure Group and other locations
("Motorola") and (d) all of the assets, properties and rights of Seller
constituting the Arnold Circuits Business or used therein, of every kind and
description, real, personal and mixed, tangible and intangible, wherever
situated (which Arnold Circuits Business, name, goodwill, assets, properties and
rights arc herein sometimes called the "Assets"), free and clear of all
mortgages, liens, pledges, security interests, charges, claims, restrictions and
encumbrances of any nature whatsoever except Permitted Liens as defined in
Section 3.10 hereof.
1.2 INCLUDED ASSETS. The Assets shall include without limitation the
following assets, properties and rights of Seller used directly or indirectly in
the conduct of, or generated by or constituting, the Arnold Circuits Business,
except as otherwise expressly set forth in Section 1.3 hereof:
(a) all machinery, equipment, tools, vehicles, furniture, furnishings,
leasehold improvements, goods, and other tangible personal property
listed and described in the Mentor Report and those other assets leased
by Seller since the date of the Mentor Report;
(b) all cash or cash equivalents in transit, in hand or the following
bank accounts: El Dorado Bank (account number 349-03084) and Bank of
America (account number 02075-00377);
(c) all prepaid items, unbilled costs and fees, and accounts, notes and
other receivables;
(d) all supplies, raw materials, work-in-process, finished goods and
other inventories;
(e) to the extent permitted by applicable law, all rights larder any
written or oral contract, agreement, lease, plan, instrument,
registration, license, certificate of occupancy, operating permit or
other permit or approval of any nature, or other document, commitment,
arrangement, undertaking. practice or authorization;
(f) all right, title and interest of Seller in, to and under all
purchase orders, including, but not limited to, all purchase orders
from Motorola;
(g) all rights under any written or oral distribution, dealer, sales
agency or sales representative agreements, including, but not limited
to any agreements with Gerard and Associates ("Gerard") or Salvatore
Dimiceli ("Dimiceli");
(h) all of Seller's right, title and interest in and to the name
"Arnold Circuits, Inc.";
(i) all rights under any trademark, service mark, trade name ox
copyright, whether registered or unregistered, and any applications
therefor;
(j) all technologies, methods, formulations, data bases, trade secrets,
know-how, inventions and other intellectual property used in the Arnold
Circuits Business or under development;
(k) all rights in action arising out of occurrences before or after the
Closing, including without limitation all rights under express or
implied warranties relating to the Assets;
(l) all assets and properties reflected on the Closing Balance Sheet as
defined in Section 1.8; and
(m) all information, files, records, data, plans, contracts and
recorded knowledge, including customer and supplier lists, related to
the foregoing.
1.3 EXCLUDED ASSETS. Notwithstanding the foregoing, the Assets shall
not include any of the following:
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(a) the corporate seal, certificate of incorporation, minute books,
shock books, tax returns, books of account or other records having to
do with corporate organization of Seller or Arnold Circuits;
(b) the rights which accrue or will accrue to Seller under this
Agreement;
(c) the rights to any of Seller's claims for any federal, state, local,
or foreign tax refunds;
(d) the note receivable from Omega Lamina Partnership in the amount of
$569,000; or
(e) any cash in the following bank accounts: BNZ, Inc. (Account No.
349-042568); Bertrand Zoolalian, Inc. (No. 349-042576); Omega Lamina
(No. 349-042584).
1.4 AGREEMENT TO PURCHASE. At the Closing hereunder, Purchaser shall
purchase the Assets from Seller in exchange for the purchase price payable under
Section 1.5 and the Liabilities and obligations of Seller only to the extent and
as provided in Section 1.6 of this Agreement. Except as specifically provided in
Section 1.6 hereof, Purchaser shall not assume or be responsible for any
liabilities or obligations of the Arnold Circuits Business or Seller.
1.5 THE PURCHASE PRICE. As consideration for the Assets Purchaser will:
(a) pay to Seller on the Closing Date $1,200,000 by delivery of a
certified or bank cashier's check or by wire transfer (the "Closing
Payment");
(b) pay to Seller $200,000 on the terms set forth in the Promissory
Note of Purchaser attached hereto as EXHIBIT A;
(c) deliver to Seller 440,000 shares of common stock of XCEL
Corporation (the "XCEL Shares");
(d) issue to Seller 1,000 shares of Class A redeemable preferred stock
of Purchaser ("XCEL Arnold"), having substantially the terms set forth
in the Purchaser's Certificate of Amendment to Certificate of
incorporation attached hereto as EXHIBIT B (the "Class A Shares"); and
(e) issue m Seller 1,000 shares of Class B redeemable preferred stock
of Purchaser, having substantially the terms set forth in the
Purchase's Certificate of Amendment to Certificate of Incorporation
attached hereto as EXHIBIT B (the "Class B Shares").
1.6 ASSUMPTION OF LIABILITIES. At the Closing hereunder Purchaser shall
assume and agree to pay, discharge or perform, as appropriate, the following
liabilities and obligations of Seller:
(a) all liabilities and obligations of Seller in respect of the Arnold
Circuits Business existing as of July 31, 1995 (the "Interim Balance
Sheet Date"), but only if and to the extent that the same are accrued
or reserved for on the Interim Balance Sheet (as defined in Section
3.4) and remain unpaid and undischarged on the Closing Date;
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(b) all liabilities and obligations of Seller arising in the regular
and ordinary course of the Arnold Circuits Business between the Interim
Balance Sheet Date and the Closing Date; and
(c) all liabilities and obligations of Seller in respect of the
Contracts (as defined in Section 3.15) being assumed by Purchaser
including, but net limited to obligations to provide normal customer
service and warranty obligations to existing accounts, except that
Purchaser shall not assume or agree to pay, discharge or perform any:
(i) liabilities or obligations of the aforesaid character
existing as of the Interim Balance Sheet Date, and which under
generally accepted accounting principles should have been accrued or
reserved for on a balance sheet or the notes thereto as a liability or
obligation, if and to the extent that the same were not accrued or
reserved for on the Interim Balance Sheet with the exception of normal
customer service and warranty obligations which would not be reflected
on the Interim Balance Sheet under generally accepted accounting
principles; or
(ii) liabilities or obligations arising out of any breach by
Seller of any provision of any Contract including but not limited to
liabilities or obligations arising out of Seller's failure to perform
any Contract relating to the Arnold Circuits Business in accordance
with its terms prior to the Closing, but excluding however any
liability arising out of the assignment to Purchaser of such Contracts
in violation of the terms thereof.
In no evens, however, shall Purchaser assume or incur any
liability or obligation under this Section 1.6 or otherwise in. respect
of any of the following:
(t) any product liability or similar claim for injury to
person or property, regardless of when made or asserted, which arises
out of or is based upon any express or implied representation,
warranty, agreement or guarantee made by Seller or Arnold Circuits, or
alleged to have been made by Seller or Arnold Circuits, or which is
imposed or asserted to be imposed by operation of law, in connection
with any service performed or product sold or leased by or on behalf of
Seller or Arnold Circuits on or prior to the Closing, including without
limitation any claim relating to any product delivered in connection
with the performance of such service and any claim seeking recovery for
consequential damage, lost revenue or income;
(u) any federal, state or local income or other tax (i)
payable with respect to the Arnold Circuits Business. assets,
properties or operations of Seller or Arnold Circuits or any affiliated
entity for any period prior to the Closing Date, or (ii) incident to or
arising as a consequence of the negotiation or consummation by Seller
or any member of any affiliated group of which Seller is a member of
this Agreement and the transactions contemplated hereby;
(v) any liability or obligation under or in connection with
the Excluded Assets;
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(w) any liability or obligation arising prior to or as a
result of the Closing to any employees, agents, independent contractors
or sales representatives of Seller, whether or not employed by
Purchaser after the Closing except for the arrangements with
Shareholder set forth in Section 10.3 hereof;
(x) any liability or obligation of Seller arising or incurred
in connection with the negotiation, preparation and execution of this
Agreement and the transactions contemplated hereby and fees and
expenses of counsel, accountants and other experts;
(y) any liability or obligation of Seller or Arnold Circuits
to pay a brokerage or finder's fee or commission to Jack Sickel and
Associates or any other entity or person in connection with the
consummation of the transactions contemplated hereby; or
(z) any liability of Shareholder or Seller set forth on
SCHEDULE 1.6 hereto.
1.7 ALLOCATION OF PURCHASE PRICE. Purchaser and Seller shall negotiate
in good faith prior to the Closing Date and determine the allocation of the
consideration paid by Purchaser for the Assets. Each party hereto agrees (i)
that any such allocation shall be consistent with the requirements of Section
1060 of the Internal Revenue Code of 1986, as amended and the regulations
thereunder, (ii) to complete jointly and to file separately Form 8594 with its
federal income tax return consistent with such allocation for the tax year in
which the Closing Date occurs and (iii) that no party will take a position on
any income, transfer or gains tax return, before any governmental or regulatory
authority charged with the collection of any such tax or in any judicial
proceeding, that is in any manner inconsistent with the terms of any such
allocation without the consent of the other party.
1.8 ACCOUNTS RECEIVABLE. (a) Seller and Purchaser acknowledge and agree
that the consideration to be paid by Purchaser hereunder has been established in
part by reference to the accounts receivable assigned by Seller to Purchaser at
Closing as part of the Assets (the "Purchased Receivables").
(b) During the period which commences on the Closing Date and
ends 90 days thereafter (the "Collection Period"), Purchaser shall collect and
receive payment in the ordinary course of business with respect to the Purchased
Receivables (but shall not be obligated to retain any collection agency or
commence any litigation or other legal proceeding to collect or enforce any
Purchase Receivables). "Cash Received" is hereby defined as the sum of the
amount of cash actually received by Purchaser from Purchased Receivables prior
to the end of the Collection Period. Within 10 days following the end of the
Collection Period, Purchaser shall (i) deliver to Seller a list stating which
Purchased Receivables were collected within the Collection Period and which were
not and (ii) tender to Seller all Purchased Receivables not collected within the
Collection Period.
(c) To the extent that Cash Received is less than the amount
of the Purchased Receivables on the Interim Balance Sheet, less the amount
historically reserved for collection losses (the "Discounted Receivable
Amount"), then the difference between the Cash Received and the Discounted
Receivable Amount shall be offset against any Postclosing Consideration owed by
Purchaser to Seller.
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1.9 NOTE RECEIVABLE FROM OMEGA LAMINA. The Assets include a note from
the Omega Lamina Partnership in the original principal amount of $491,869 which
has outstanding as of the Interim Balance Sheet Date the amount of $416,434 (the
"Omega Lamina Note"). Seller and Purchaser agree that Omega Lamina shall provide
consulting services to Purchaser pursuant to a Consulting Agreement attached
hereto as EXHIBIT K. Pursuant to the terms of such Consulting Agreement, Omega
Lamina shall be compensated for its services by reducing the principal and
interest otherwise due and payable under the Omega Lamina Note as follows: the
Omega Lamina Note shall be reduced on the first and second anniversaries of the
Closing by an amount determined by Omega Lamina of up to $100,000 on each of
such anniversaries with the balance of the Omega Lamina Note to be reduced in
equal portions on the third, fourth and fifth anniversaries of the Closing.
Notwithstanding the foregoing, Omega Lamina may waive the reduction of the Omega
Lamina Note on the first and second anniversaries of the Closing in which case
the Omega Lamina Note shall be reduced in equal portions on each of the third,
fourth and fifth anniversaries of the Closing. Seller and Purchaser further
specifically acknowledge and agree that notwithstanding the term of the Omega
Lamina Note, no cash payment for any amount otherwise due and payable under the
Omega Lamina Note shall be made by Omega Lamina.
2. CLOSING
2.1 TIME AND PLACE OF CLOSING. The closing (the "Closing") of the sale
and purchase of the Assets shall take place at a time mutually agreed to by the
parties hereto on August 18, 1995 at such place and in such manner as may be
mutually agreed upon by Purchaser and Seller. The date of the Closing is
referred to herein as the "Closing Date."
2.2 ITEMS TO BE DELIVERED AT CLOSING. At the Closing: (a) Seller shall
deliver to Purchaser:
(i) a bill of sale and assignment and assumption agreement in
the form of EXHIBIT C;
(ii) a secretary's certificate of Seller in the form of
EXHIBIT D;
(iii) the independent sales representative and sales agency
agreement between Purchaser and Gerard and/or Dimiceli in the form of
EXHIBIT E;
(iv) assignment agreements for all leased real property and
equipment utilized in the Arnold Circuits Business, including equipment
leases with GE Capital and USL Capital; and
(v) such other documents or instruments as Purchaser may
reasonably require.
(b) Purchaser shall deliver to Seller:
(i) the Closing Payment;
(ii) the Promissory Note;
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(iii) the XCEL Shares;
(iv) the Class A Shares;
(v) the Class B Shares;
(vi) a secretary's certificate of Purchaser in the form of
EXHIBIT F; (vii) the security agreement between Purchaser and
Shareholder in the form of EXHIBIT G;
(viii) the registration rights agreement between Purchaser and
Shareholder in the form of EXHIBIT H;
(ix) the investment representation letter in the form of
EXHIBIT I; and
(x) an opinion of Mason, Briody, Gallagher & Taylor in the
form of EXHIBIT J;
(xi) the Omega Lamina Consulting Agreement in the form of
EXHIBIT K; and
(xii) such other documents or instruments as Seller may
reasonably require.
2.3 DELIVERY OF POSSESSION. At the Closing, Seller shall make available
to Purchaser all of the purchase orders, including, but not limited to, all
purchase orders from Motorola, all of the contracts. licenses. customer lists
and all other documents, books, records, papers, files and data belonging to the
Seller that are part of the Assets or relate to the Arnold Circuits Business;
and, simultaneously with such delivery, all such steps shall be taken as may be
required to put Purchaser in actual possession and operating control of the
Assets. Seller shall execute and deliver such further documents and instruments
as Purchaser may request in order to cause full possession and control of all of
the Assets and of all other things and matters pertaining to the operation of
the Arnold Circuits Business to be transferred. and. delivered to Purchaser.
2.4 THIRD PARTY CONSENTS. To the extent that Seller's rights under any
agreement, contract, commitment, lease, or other Asset to be assigned to
Purchaser hereunder may not be assigned without the consent of another person
which has not been obtained, this Agreement shall not constitute an agreement to
assign the same if an attempted assignment would constitute a breach thereof or
be unlawful, and Seller, at its expense, shall use its best efforts to obtain
any such required consents as promptly as possible. If any such consent shall
not be obtained or if any attempted assignment would be ineffective or would
impair Purchaser's rights under the Asset in question so that Purchaser would
not in effect acquire the benefit of all such rights, Seller, to the maximum
extent permitted by law and the Asset, shall act after the Closing as
Purchaser's agent in order to obtain for it the benefits thereunder and shall
cooperate, to the maximum extent permitted by law and the Asset, with Purchaser
in any other reasonable arrangement designed to provide such benefits to
Purchaser.
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2.5 FURTHER ASSURANCES. Seller from time to time after the Closing, at
Purchaser's request; will execute, acknowledge and deliver to Purchaser such
other instruments of conveyance and transfer and will take such other actions
and execute and deliver such other documents, certifications and further
assurances as Purchaser may reasonably require in order to vest more effectively
in Purchaser, or to put Purchaser more fully in possession of, any of the
Assets, or to better enable Purchaser to complete, perform or discharge any of
the liabilities or obligations assumed by Purchaser at the Closing pursuant to
Section 1.6 hereof. Each of the parties hereto will cooperate with the other and
execute and deliver to the other parties hereto such other instruments and
documents and take such other actions as may be reasonably requested from tune
to time by any other party hereto as necessary to carry out, evidence and
confirm the intended purposes of this Agreement.
2.7 TERMINATION. If the Closing shall not have taken place on or before
July 31, 1995, or such later date as shall be mutually agreed to in writing by
Purchaser and Seller, all of the rights and obligations of the parties hereunder
this Agreement shall terminate, without liability to any other party.
3. REPRESENTATIONS AND WARRANTIES OF SELLER
The Seller hereby represents and warrants to Purchaser as follows:
3.1 CORPORATE EXISTENCE. Seller is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation. Seller is duly qualified to do business and is in good standing
as a foreign corporation in each jurisdiction where the conduct of the Arnold
Circuits Business by it requires it to be so qualified. Arnold Circuits has been
dissolved prior to the date hereof in accordance with the provisions of the
California General Corporation Law, all of the assets of Arnold Circuits have
been duly assigned to Seller prior to the date hereof and Seller has acquired
good, valid and marketable title to all of the Assets pursuant to such
assignment.
3.2 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. Seller has
the corporate power, authority and legal right to execute, deliver and perform
this Agreement. The execution, delivery and performance of this Agreement by
Seller have been duly authorized by all necessary corporate action. This
Agreement has been, and the other agreements, documents and instruments required
to be delivered by Seller in accordance with the provisions hereof (the
"Seller's Documents") will be, duly executed and delivered by Seller, and this
Agreement constitutes, and the Seller's Documents when executed and delivered
will constitute, the legal, valid and binding obligations of Seller, enforceable
against Seller in accordance with their respective terms.
3.3 VALIDITY OF CONTEMPLATED TRANSACTIONS, ETC. The execution, delivery
and performance of this Agreement by Seller does not and will not violate,
conflict with or result in the breach of any term, condition or provision of, or
require the consent of any other person under, (a) any existing law, ordinance,
or governmental rule or regulation to which Seller is subject, (b) any judgment,
order, writ, injunction, decree or award of any court, arbitrator or
governmental or regulatory official, body or authority which is applicable to
Seller, (c) the charter documents or By-Laws of, or any securities issued, by
Seller, or (d) any mortgage, indenture, agreement, contract, commitment, lease,
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plan, or other instrument, document or understanding, oral or written, to which
Seller is a party, by which Seller may have rights or by which any of the Assets
may be bound or affected, or give any party with rights thereunder the right to
terminate, modify, accelerate of otherwise change the existing rights or
obligations of Seller thereunder. Except as set forth on the DISCLOSURE
SCHEDULE, no authorization, approval or consent of, and no registration or
filing with, any governmental or regulatory official, body or authority is
required in connection with the execution, delivery or performance of this
Agreement by .Seller.
3.4 FINANCIAL STATEMENTS. Seller has delivered to Purchaser true and
complete copies of (a) the balance sheets of the Arnold Circuits Business at
September 30, 1994, 1993 and 1992 and the related statements of income, cash
flow and changes in shareholders equity for the fiscal years then ended,
certified by Seller's Auditors; and (b) unaudited balance sheets of Seller at
July 31, 1995, and related statements of income and cash flow for the period
then ended, all of which have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the periods
involved. Such balance sheets, including the related notes, fairly present the
financial position, assets and liabilities (whether accrued, absolute,
contingent or otherwise) of the Arnold Circuits Business at the dates indicated
and such statements of income, cash flow and changes in shareholders equity
fairly present the results of operations, cash flow and changes in shareholders
equity for the periods indicated. The unaudited financial statements as at and
for the period ending July 31, 1995 contain all adjustments, which are solely of
a normal recurring nature, necessary to present fairly the financial position
for the period then ended. The Interim Balance Sheet specifically identifies the
assets and liabilities which, if the Closing had been held on the Interim
Balance Sheet Date, would have been transferred to or assumed by Purchaser in
accordance herewith. References in this Agreement to the "Interim Balance Sheet"
shall mean the balance sheet of the Arnold Circuits Business as of July 31, 1995
referred to above; and references in this Agreement to the "Interim Balance
Sheet Date" shall be deemed to refer to July 31, 1995.
3.5 ACCOUNTS RECEIVABLE. The accounts receivable set forth on the
Interim Balance Sheet or arising since the date thereof are valid and genuine;
have arisen solely out of bona fide sales and deliveries of goods, performance
of services and other business transactions in the ordinary course of business
consistent with past practice; are not subject to valid defenses, set-offs or
counterclaims; and are collectible within 90 days after billing at the full
recorded amount thereof less, in the case of accounts receivable appearing on
the Interim Balance Sheet, the amount specifically reserved therefor in the
allowance for collection losses on the Interim Balance Sheet. The allowance for
collection losses on the Interim Balance Sheet has been determined in accordance
with generally accepted accounting principles consistent with past practice.
3.6 INVENTORY. All inventory of Seller including without limitation raw
materials, work-in-process and finished goods, reflected on the Interim Balance
Sheet or acquired since the date thereof was acquired and has been maintained in
the ordinary course of the Arnold Circuits Business; is of good and merchantable
quality; consists substantially of a quality, quantity and condition usable,
leasable or saleable in the ordinary course of the Arnold Circuits Business; is
valued at reasonable amounts based on the ordinary course of business of Seller
during the past six months; and is not subject to any write-down or write-off.
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3.7 ABSENCE OF UNDISCLOSED LIABILITIES. Seller has no liabilities or
obligations with respect to the Arnold Circuits Business except:
(a) those liabilities or obligations set forth on the Interim Balance
Sheet and not heretofore paid or discharged;
(b) liabilities arising in the ordinary course of business consistent
with past practice under any Contract (as defined in Section 3.15); and
(c) those liabilities or obligations incurred, consistently with past
business practice, in or as a result of the normal and ordinary course
of business since the Interim Balance Sheet Date.
For purposes of this Agreement, the term "liabilities" shall include,
without limitation, any direct or indirect indebtedness, guaranty, endorsement,
claim, loss, damage, deficiency, cost, expense, obligation or responsibility,
fixed or unfixed, known or unknown, asserted or unasserted, choate or inchoate,
liquidated or unliquidated, secured or unsecured, including, but not limited to,
any claim, loss, damage, deficiency, cost, expense, obligation or responsibility
relating to any environmental matter.
3.8 BOOKS OF ACCOUNT. The books, records and accounts of Seller
maintained with respect-to the Arnold Circuits Business accurately and fairly
reflect, in reasonable detail. the transactions and the assets and liabilities
of Seller with respect to the Arnold Circuits Business. Seller has not engaged
in any transaction with respect to the Arnold Circuits Business, maintained any
bank account for the Arnold Circuits Business or used. any of the funds of
Seller in the conduct of the Arnold Circuits Business except for transactions,
bank accounts and funds which have been and are reflected in the normally
maintained books and records of the Arnold Circuits Business.
3.9 EXISTING CONDITION. Since the Interim Balance Sheet Date, with
respect to the Arnold Circuits Business, Seller has not:
(a) incurred any liabilities, other than liabilities incurred in the
ordinary course of business consistent with past practice, or
discharged or satisfied any lien or encumbrance, or paid any
liabilities, other than in the ordinary course of business consistent
with past practice, or failed to pay or discharge when due any
liabilities of which the failure to pay or discharge has caused or will
cause any material damage or risk of material loss to it or any of its
assets or properties;
(b) sold, encumbered, assigned or transferred any assets or properties
except for the sale of inventory in the ordinary course of business
consistent with past practice;
(c) created, incurred, assumed or guaranteed any indebtedness for money
borrowed, or mortgaged, pledged or Subjected any of the Assets to any
mortgage, lien, pledge, security interest, conditional sales contract
or other encumbrance of any nature whatsoever, except for Permitted
Liens (hereinafter defined in Section 3.10);
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(d) made or suffered. any amendment or termination of any material
agreement, contract, commitment, lease or plan to which it is a parry
or by which it is bound, or cancelled, modified or waived any
substantial debts or claims held by it or waived any rights of
substantial value, whether or not at the ordinary course of business;
(e) declared, set aside or paid any dividend or made or agreed to make
any other distribution or payment in respect of its capital shares or
redeemed, purchased or otherwise acquired or agreed to redeem, purchase
or acquire any of its capital shares;
(f) sufferer any damage, destruction or loss, whether or not covered by
insurance, materially and adversely affecting its business, operations,
assets, properties or prospects or suffered any repeated, recurring or
prolonged shortage, cessation or interruption of supplies or utility or
other services required to conduct its business and operations;
(g) suffered any material adverse change in its business, operations,
assets, properties, prospects or condition (financial or otherwise);
(h) received notice or had knowledge of any actual or threatened labor
trouble, strike or other occurrence, event or condition of any similar
character which has had or might have an adverse effect on its
business, operations, assets, properties or prospects;
(i) other than two drilling machines currently on order, made
commitments or agreements for capital expenditures or capital additions
or betterments exceeding in the aggregate $50,000 except such as may be
involved in ordinary repair, maintenance or replacement of its assets;
(j) increased the salaries or other compensation of, or made any
advance (excluding advances for ordinary and necessary business
expenses) or loan to, any of its employees or made any increase in, or
any addition to, other benefits to which any of its employees may be
entitled;
(k) changed any of the accounting principles followed by it or the
methods of applying such principles; or
(l) other than merger of Arnold Circuits into Seller, entered into any
transaction other than in the ordinary course of business consistent
with past practice.
3.10 TITLE TO PROPERTIES. Seller has good, valid and marketable title
to all of the Assets, including without limitation all properties and assets
reflected in the Mentor Report and the Interim Balance Sheet (except for
inventory sold since the date thereof in the ordinary course of business
consistent with past practice) free and clear of all mortgages, liens, pledges,
security interests, charges, claims, restrictions and ether encumbrances and
defects of title of any nature whatsoever, except for (i) liens for current real
or personal property taxes not yet due and payable, in (ii) worker's, carrier's
and materialman's liens, and (iii) liens that are immaterial in character,
amount, and extent, and which do not detract from the value or interfere with
the present or proposed use of the properties they affect ("Permitted Liens").
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3.11 CONDITION OF TANGIBLE ASSETS. All tangible property and assets
included in the Assets are as described in the Mentor Report and are in good
operating condition and repair, subject to normal wear and maintenance, are
usable in the regular and ordinary course of business and conform to all
applicable laws, ordinances, codes, rules and regulations, and Authorizations
relating to their construction, use and operation. No person other than Seller
owns any equipment or other tangible assets or properties situated on the
premises of Seller or necessary to the operation of the Arnold Circuits
Business, except for leased items and for items of immaterial value.
3.12 COMPLIANCE WITH LAW; AUTHORIZATIONS. With respect to the Arnold
Circuits Business, Seller and Arnold Circuits has complied with each, and is not
in violation of any, law, ordinance, or governmental or regulatory rule or
regulation ("Regulations"), whether federal, state, local or foreign, including,
but not limited to; any rule or regulation of the South Coast Air Quality
Management District ("South Coast AQMD"). Seller owns, holds, possesses or
lawfully uses in the operation of the Arnold Circuits Business all franchises,
licenses, permits, easements, rights, applications, filings, registrations and
other authorizations ("Authorizations") which are in any manner necessary for it
to conduct the Arnold Circuits Business as now or previously conducted or for
the ownership and use of the Assets, free and clear of all liens, charges,
restrictions and encumbrances and in compliance with all Regulations. Seller is
not in default, nor has it received any notice of any claim of default, with
respect to any such Authorization. All such Authorizations are renewable by
their terns or in the ordinary course of business without the need to comply
with any special qualification procedures or to pay any amounts other than
routine filing fees. None of such Authorizations will be adversely affected by
consummation of the transactions contemplated hereby. No director, officer,
employee or former employee of Seller or any affiliates of Seller, or any other
person, firm or corporation owns or has any proprietary, financial or other
interest (direct or indirect) in any Authorization which Seller owns, possesses
or uses in the operation of the Arnold Circuits Business as now or previously
conducted.
3.13 LITIGATION. No litigation, including any arbitration,
investigation or other proceeding of or before any court, arbitrator or
governmental or regulatory official, body or authority, including, but not
limited to the South Coast AQMD, is pending or, to the best knowledge of Seller,
threatened against Seller which relates to the Arnold Circuits Business, the
Assets or the transactions contemplated by this Agreement other than a claim of
noise abatement by a neighbor of Seller which matter has been resolved as of the
date of this Agreement, nor does Seller know of any reasonably likely basis for
any such litigation, arbitration, investigation or proceeding, the result of
which could adversely affect the Arnold Circuits Business, the Assets or the
transactions contemplated hereby. Seller is not a party to or subject to the
provisions of any judgment, order, writ, injunction, decree or award of any
court, arbitrator or governmental or regulatory official; body or authority,
including, but not limited to the South Coast AQMD, which may adversely affect
Seller, the Assets or the transactions contemplated hereby.
3.14 INSURANCE. The assets, properties and operations of the Arnold
Circuits Business are insured under various policies of general liability and
other forms of insurance. All such policies are in full force and effect in
accordance with their terms, no notice of cancellation has been received, and
their is no existing default or event which, with the giving of notice or lapse
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of time or both, would constitute a default thereunder. Such policies are in
amounts which are adequate in relation to the Arnold Circuits Business and all
premiums to date have been paid in full. Neither Seller nor Arnold Circuits has
been refused any insurance with respect to the Arnold Circuits Business, nor has
its coverage been limited, by any insurance carrier to which it has applied for
insurance or with which it has carried insurance during the past five years.
3.15 CONTRACTS AND COMMITMENTS. There have been delivered or made
available to Purchaser complete copies or descriptions of all written or oral
contracts, agreements, purchase orders, leases, mortgages and commitments
relating to the Arnold Circuits Business to which Seller is a party or may be
bound (the "Contracts").
The DISCLOSURE SCHEDULE contains an accurate list as of the date hereof
of the following Contracts:
(a) all agreements, contracts or commitments with any present or former
employee or consultant or for the employment of any person, including
any consultant, who is engaged in the conduct of the Arnold Circuits
Business;
(b) all distribution, dealer, sales representative or sales agency
agreements, contracts or commitments relating to the Arnold Circuits
Business;
(c) all leases under which Seller is either lessor or lessee relating
to the Assets or any property at which the Assets are located;
(d) all notes, debentures, bonds, equipment trust agreements, letter of
credit agreements, loan agreements or other contracts or commitments
for the borrowing or lending of money relating to the Arnold Circuits
Business or agreements or arrangements for a line of credit or
guarantee, pledge or undertaking of the indebtedness of any other
person relating to the Arnold Circuits Business;
(e) all commitments or agreements for any capital expenditure or
leasehold improvement in excess of $10,000 relating to the Arnold
Circuits Business;
(f) all material agreements, contracts or commitments relating to the
Arnold Circuits Business not made in the ordinary course of business.
Each of the Contracts under which Purchaser is to acquire rights or
obligations hereunder is valid and enforceable in accordance with its terms;,
Seller is, and to Seller's knowledge all other parties thereto are, in
compliance with the provisions thereof; Seller is not, and to Seller's knowledge
no other party thereto is, in default in the performance, observance or
fulfillment of any material obligation, covenant or condition contained therein;
and no event has occurred which with or without the giving of notice or lapse of
time. or both, would constitute a default thereunder. Furthermore, no such
Contract in the reasonable opinion of Seller, contains any contractual
requirement with which there is a reasonable likelihood Seller or any other
party thereto will be unable to comply. Except as set forth in the Disclosure
Schedule, no written or oral agreement, contract or commitment described therein
requires the consent of any party to its assignment in connection with the
transactions contemplated hereby.
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3.16 SALES REPRESENTATIVE, AGENCY AND CUSTOMER ARRANGEMENTS. Seller is
in good standing with its sales representative and agent Gerard and Dimiceli,
and Gerard and Dimiceli are in good standing with Motorola, a material customer
of the Arnold Circuits Business. There is no fact, development or threatened
development with respect to Gerard, Dimiceli or Motorola which are known to
Seller regarding this agency or sales arrangement. Seller has not received
notice of and does not have knowledge of any disruption or termination of its
relationship with Gerard or Dimiceli, or Gerard or Dimiceli's relationship with
Motorola. The sales representative and agency agreement between Seller and
Gerard and\or Dimiceli is valid and enforceable in accordance with its terms;
Seller and, to Seller's knowledge, Gerard and Dimiceli, are in compliance with
the provisions thereof; Seller is not, and to Seller's knowledge Gerard and
Dimiceli are not, in default in the performance, observance or fulfillment of
any obligation, covenant or condition contained therein; and no event has
occurred which with or without the giving of notice or lapse of time, or both,
would constitute a default thereunder. Seller acknowledges that its relationship
with Gerard and Dimiceli is material to the business and that at least 90% of
the revenues of the Arnold Circuits Business are attributable to Motorola, a
material customer of the Arnold Circuits Business. Seller further acknowledges
that the loss of Motorola would materially adversely affect the viability of the
Arnold Circuits Business.
3.17 LABOR MATTERS. Seller is not a party to any collective bargaining
agreement, no such agreement determines the terms and conditions of employment
of any employee of Seller, no collective bargaining agent has been certified as
a representative of any of the employees of Seller, and no representation
campaign or election is now in progress with respect to any of the employees of
Seller.
3.18 EMPLOYEE BENEFIT PLANS AND ARRANGEMENTS.
(a) There have been delivered or made available to Purchaser copies of
all employee benefit plans. sponsored or maintained by Seller with
respect to employees of the Arnold Circuits Business (the "Employee
Benefit Plans").
(b) No Employee Benefit Plan is subject to ERISA and no pension plan is
or has been sponsored or maintained by Seller for the benefit of its
employees.
(c) With respect to any Employee Benefit Plans, Seller has made or
accrued as a liability on the financial statements of the Arnold
Circuits Business and other books and records all required
contributions and has delivered to Purchaser copies of (i) all current
documents governing such plans, and all amendments thereto, (ii) all
reports filed by Arnold Circuits relating to its last three full fiscal
years with respect to such plans with the United States Department of
Labor. the Internal Revenue Service ("IRS"), the Pension Benefit
Guaranty Corporation and any other federal or state regulatory agency,
(iii) all summary plan descriptions, notices and other reporting and
disclosure material furnished to participants in any of such plans
during the last three full fiscal years of Arnold Circuits, (iv) all
actuarial, accounting and financial reports prepared with respect to
any of such plans during the last three full fiscal years of Arnold
Circuits, and (v) all currently effective IRS ruling or determination
letters on any of such plans.
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3.19 AFFILIATED TRANSACTIONS. Except for the relationship with Omega
Lamina and CCMP, no shareholder or director or officer of Seller or any member
of his or her immediate family or any other of its, his or her affiliates, owns
or has an ownership interest in any corporation or other entity that is or was
during the last three years a party to. or in any property that is or was during
the last three years the subject of, contracts, business arrangements or
relationships of any kind with Arnold Circuits. All transactions between Seller
and Omega Lamina have been on substantially the same terms and conditions as
similar transactions between non-affiliated parties and are properly recorded on
the books and records of Seller and Arnold Circuits.
3.20 INTELLECTUAL PROPERTY MATTERS. Seller does not utilize any patent,
trademark, tradename, service mark, copyright, software, trade secret or
know-how in the Arnold Circuits Business except for the name "Arnold Circuits,
Inc," (the "Intellectual Property"), which Intellectual Property is owned by
Seller free and clear of any liens, claims, charges or encumbrances. Seller does
not infringe upon or unlawfully or wrongfully use any patent, trademark,
tradename, service mark, copyright or trade secret owned or claimed by another.
Seller is not in default under, and has not received any notice of any claim of
infringement or any other claim or proceeding relating to any such patent,
trademark, tradename, service mark, copyright or trade secret. No present or
former employee of Seller or former employee of Arnold Circuits and no other
person owns or has any proprietary, financial or other interest, direct or
indirect, in whole or in part, in any patent, trademark, tradename, service mark
or copyright, or in any application therefor, or in any trade secret, which
Seller owns, possesses or uses in the operation of the Arnold Circuits Business
as now or heretofore conducted. There have been delivered or made available to
Purchaser all confidentiality or nondisclosure agreements to which Seller or any
of Seller's employees engaged in the Arnold Circuits Business is a party which
relates to the Arnold Circuits Business.
3.21 ENVIRONMENTAL MATTERS.
(a) Seller has obtained all permits, licenses and other authorizations
which are required in connection with the conduct of the Arnold
Circuits Business under Regulations relating to pollution or protection
of the environment, including Regulations relating to emissions,
discharges, releases or threatened releases of pollutants,
contaminants, chemicals, or industrial, toxic or hazardous substances
or wastes into the environment (including without limitation ambient
air, surface water, groundwater, or land), or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport, or handling of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes.
(b) Seller is in full compliance in the conduct of the Arnold Circuits
Business with all terms and conditions of the required permits,
licenses and authorizations, and is also in full compliance with all
other limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules and timetables contained in those
laws or contained in any regulation, code, plan, order, decree,
judgment, injunction, notice or demand letter issued, entered,
promulgated or approved thereunder.
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(c) Seller is not aware of, nor has Seller received notice of, any
past, present or future events, conditions, circumstances, activities,
practices, incidents, actions or plans in the conduct of the Arnold
Circuits Business which may interfere with or prevent compliance or
continued compliance with those laws or any regulations, code, plant,
order, decree, judgment, injunction, notice or demand letter issued,
sentered, promulgated or approved thereunder, or which may give rise to
any common law or legal liability, or otherwise form the basis of any
claim, action, demand, suit, proceeding, hearing, study or
investigation, based on or related to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or
handling, or the emission, discharge, release or threatened release
into the environment, of any pollutant, contaminant, chemical, or
industrial, toxic or hazardous substance or waste.
(d) There is no civil, criminal or administrative action, suit, demand,
claim, hearing, notice or demand letter, notice of violation,
investigation, or proceeding pending or threatened against Seller or
Arnold Circuits in connection with the conduct of the Arnold Circuits
Business relating in any way to those laws or any regulation, code,
plan, order, decree, judgment, injunction, notice or demand letter
issued, entered, promulgated or approved thereunder.
(e) Seller agrees to cooperate with Purchaser in connection with
Purchaser's application for the transfer, renewal or issuance of any
permits, licenses, approvals or other authorizations or to satisfy any
regulatory requirements involving the Arnold Circuits Business.
3.22 REAL PROPERTY. (a) The Seller does not own any real property which
is used in connection with the Arnold Circuits Business.
(b) Seller has delivered to Purchaser a true and complete copy of every
lease and sublease for real property (the "Real Property") which is
leased by Seller and is used in connection with the Arnold Circuits
Business to which Seller is a tenant or subtenant.
(c) Each Real Property lease of Seller (the "Leases") is, and at
Closing shall be, in full force and effect and has not been assigned,
modified, supplemented or amended and neither Seller nor the landlord
or sublandlord under any Lease is in default under any of the Leases,
and no circumstances or state of facts presently exists which, with the
giving of notice or passage of time, or both, would permit the landlord
or sublandlord under any Lease to terminate any Lease.
(d) At Closing Seller shall assign to the Purchaser all right, title
and interest of Seller in and to all Leases (and shall deliver to
Purchaser original copies of all consents required for such
assignments) and all security deposits made by Seller or Arnold
Circuits pursuant to any of the Leases, including, but not limited to,
the security deposits together with all interest earned on such
deposits.
3.23 ASSETS. The Assets include all rights and property necessary to
the conduct of the Arnold Circuits Business by Purchaser in the manner it is
presently conducted by Seller and no Excluded Assets constitutes property or
rights material to the Arnold Circuits Business.
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3.24 CONDITIONS AFFECTING ARNOLD CIRCUITS BUSINESS. There is no fact,
development or threatened development with respect to the markets, products,
services, clients, representatives (including, but not limited to, Gerard and
Dimiceli), customers (including, but not limited to Motorola), facilities,
personnel, vendors, suppliers. operations, assets or prospects of the Arnold
Circuits Business which are known to Seller which would materially adversely
affect the Arnold Circuits Business considered as a whole, other than such
conditions as may affect as a whole the economy generally. Seller has used its
best efforts to keep available for Purchaser the services of the employees,
agents and sales representatives (including, but not limited to, Gerard and
Dimiceli), customers (including, but not limited to Motorola) and suppliers of
Seller active in the conduct of the Arnold Circuits Business. Seller does not
have any reason to believe that any loss of any employee, agent or sales
representative (including, but not limited to, Gerald and Dimiceli), customer
(including, but not limited to, Motorola), distributor or supplier or other
advantageous arrangement will result because of the consummation of the
transactions contemplated hereby.
3.25 COMPLETENESS OF DISCLOSURE. No representation or warranty by
Seller in this Agreement nor any certificate, schedule, statement, document or
instrument furnished or to be furnished to Purchaser pursuant hereto, or in
connection with the negotiation, execution or performance of this Agreement,
contains or will contain any untrue statement of a material fact or omits or
will omit to state a material fact required to be stated herein or therein or
necessary to make any statement herein or therein not misleading.
4. REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser represents and
warrants to Seller as follows:
4.1 CORPORATE EXISTENCE. Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation.
4.2 CORPORATE POWER AND AUTHORIZATION. Purchaser has the corporate
power, authority and legal right to execute, deliver and perform this Agreement.
The execution, delivery and performance of this Agreement by Purchaser have
been, and the other agreements, documents and instruments required to be
delivered by Purchaser in accordance with the provisions hereof (the
"Purchaser's Documents") will be, duly authorized by all necessary corporate
action. This Agreement has been duly executed and delivered by Purchaser and
this Agreement constitutes, and the Purchaser's Documents when executed and
delivered will constitute, the legal, valid and binding obligations of Purchaser
enforceable against Purchaser in accordance with their respective terms.
4.3 VALIDITY OF CONTEMPLATED TRANSACTIONS, ETC. The execution, delivery
and performance of this Agreement by Purchaser does not and will not violate,
conflict with or result in the breach of any term, condition or provision of,
or, except for Foothill Capital Corp., require the consent of any other party
to, (a) any existing law, ordinance, or governmental rule or regulation to which
Purchaser is subject, (b) any judgment, order, writ, injunction, decree or award
of any court, arbitrator or governmental or regulatory official, body or
authority which is applicable to Purchaser, (c) the charter documents or By-Laws
of, or any securities issued by, Purchaser, or (d) any mortgage, indenture,
agreement, contract, commitment, lease, plan or other instrument, document or
understanding, oral or written, to which Purchaser is a party or by which
Purchaser is otherwise bound. No authorization, approval or consent of, and no
registration or filing with, any governmental or regulatory official, body or
authority is required in connection with the execution, delivery and performance
of this Agreement by Purchaser.
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4.4 CAPITALIZATION. (a) The authorized capital of Purchaser consists,
or will consist at or prior to the Closing of:
(i) PREFERRED STOCK. 2,000 shares of Preferred Stock, without
par value (the "Preferred Stock"), of which 1,000 shares have been
designated Series A Redeemable Preferred Stock and 1,000 shares have
been designated Series B Redeemable Preferred Stock. No shares of
Preferred Stock are presently issued and outstanding, although 1,000
shares of Series A Redeemable Preferred Stock and 1,000 shares of
Series B Redeemable Preferred Stock will be issued pursuant to this
Agreement. The rights, privileges and preferences of the Series A
Redeemable Preferred Stock and Series B Redeemable Preferred Stock will
be as stated in the Amendment to the Purchaser's Certificate of
Incorporation attached hereto as EXHIBIT B.
(ii) COMMON STOCK. 1,000 shares of Common Stock, without par
value ("Common Stock"), all of which are issued and outstanding and are
owned by XCEL Corporation.
(b) Except for the transactions contemplated by this Agreement, there
are no outstanding any options, warrants, rights or agreements for the
purchase or acquisition from Purchaser of any shares of its capital
stock.
4.5 XCEL CORPORATION. Purchaser has delivered to Seller true and
complete copies of (a) the balance sheets of XCEL Corporation ("XCEL"), at
September 30, 1994 and the related statements of income, cash flow and changes
in shareholders equity for the fiscal year then ended, certified by the auditors
of XCEL including the number of authorized shares of all classes of capital
stock, the number of shares outstanding and the number of all outstanding
options, warrants or other convertible securities of XCEL: (b) unaudited balance
sheets of XCEL at May 31, 1994 and the related statements of income, cash flow
and changes in shareholders equity for the fiscal year then ended; (c) an
updated schedule of the capitalization structure of XCEL as of the date of this
Agreement including the number of authorized shares of all classes of capital
stock, the number of shares outstanding and the number of all outstanding
options, warrants or other convertible securities of XCEL; and (d) an executive
summary regarding XCEL and certain attachments thereto.
5. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties made by the parties in this Agreement or in any certificate,
schedule, statement, document or instrument furnished hereunder or in connection
with negotiation, execution and performance of this Agreement shall survive the
Closing. Notwithstanding any investigation or audit conducted before or after
the Closing Date or the decision of any party to complete the Closing, each
party shall be entitled to rely upon the representations and warranties set
forth herein and therein.
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6. AGREEMENTS OF SELLER PENDING THE CLOSING. Seller covenants and agrees that,
pending the Closing and except as otherwise agreed to in writing by Purchaser.
6.1 ARNOLD CIRCUITS BUSINESS IN THE ORDINARY COURSE. The Arnold
Circuits Business shall be conducted solely in the ordinary course consistent
with past practice.
6.2 EXISTING CONDITION. Seller shall not cause nor permit to occur any
of the events or occurrences described in Section 3.9 hereof.
6.3 MAINTENANCE OF PHYSICAL ASSETS. Seller shall continue to maintain
and service the physical assets used in the conduct of the Arnold Circuits
Business in the same manner as has been its consistent past practice.
6.4 EMPLOYEES AND ARNOLD CIRCUITS BUSINESS RELATIONS. Seller shall use
its best efforts to keep available the services of the present employees, agents
and representatives of the Arnold Circuits Business and to maintain the
relations and goodwill with the employees, agents, sales representatives
(including, but not limited to Gerard and Dimiceli), customers (including, but
not limited to Motorola), distributors, suppliers and any others having business
relations with the Arnold Circuits Business.
6.5 MAINTENANCE OF INSURANCE. Seller shall notify Purchaser of any
changes in the terms of the insurance policies and binders referred to in
Section 3.14 hereto.
6.6 COMPLIANCE WITH LAWS, ETC. Seller shall comply with all laws,
ordinances, rules, regulations and orders applicable to the Arnold Circuits
Business, or Seller's operations, assets or properties in respect thereof, the
noncompliance with which might materially affect the Arnold Circuits Business or
the Assets.
6.7 UPDATE DISCLOSURE SCHEDULE. Seller shall promptly disclose to
Purchaser any information contained in its representations and warranties or the
Schedule which, because of an event occurring after the date hereof, is
incomplete or is no longer correct as of all times after the date hereof until
the Closing Date; provided, however, that none of such disclosures shall be
deemed to modify, amend or supplement the representations and warranties of
Seller or the schedules hereto for the purposes of Section 8 hereof, unless
Purchaser shall have consented thereto in writing.
6.8 CONDUCT OF ARNOLD CIRCUITS BUSINESS. Seller shall use its best
efforts to conduct the Arnold Circuits Business in such a manner that on the
Closing Date the representations and warranties of Seller contained in this
Agreement shall be true, as though such representations and warranties were made
on and as of such date. Furthermore, Seller shall cooperate with Purchaser and
use its best efforts to cause all of the conditions to the obligations of
Purchaser and Seller under this Agreement to be satisfied on or prior to the
Closing Date.
6.9 SALE OF ASSETS. Seller shall not, directly or indirectly, sell or
encumber all or any part of the Assets, other than in the ordinary course of
business consistent with past practice, or initiate or participate in any
discussions or negotiations or enter into any agreement to do any of the
19
foregoing. Seller shall not provide any confidential information concerning the
Arnold Circuits Business or its properties or assets to any third party other
than in the ordinary course of business.
6.10 ACCESS. Seller shall give to Purchaser's officers, employees,
counsel, accountants and other representatives free and full access to and the
right to inspect, during normal business hours, all of the premises, properties,
assets, records, contracts and other documents relating to the Arnold Circuits
Business and shall permit them to consult with the officers, employees,
accountants, counsel and agents of Seller for the purpose of making such
investigation of the Arnold Circuits Business, including without limitation the
Interim Balance Sheet, as Purchaser shall desire to make, provided that such
investigation shall not unreasonably interfere with Seller's business
operations. Furthermore, Seller shall furnish to Purchaser all such documents
and copies of documents and records and information with respect to the affairs
of the Arnold Circuits Business and copies of any working papers relating
thereto as Purchaser shall from time to time reasonably, request and shall
permit Purchaser and its agents to make such physical inventories and
inspections of the Assets as Purchaser may request from time to time.
6.11 PRESS RELEASES. Except as required by applicable law, Seller shall
not give notice to third parties or otherwise make any public statement or
releases concerning this Agreement or the transactions contemplated hereby
except for such written information as shall have been approved in writing as to
form and content by Purchaser, which approval shall not be unreasonably
withheld.
7. AGREEMENTS OF PURCHASER PENDING THE CLOSING. Purchaser covenants and agrees
that, pending the Closing and except as otherwise agreed to in writing by
Seller:
7.1 ACTIONS OF PURCHASER. Purchaser will not knowingly take any action
which would result in a breach of any of its representations and warranties
hereunder. Furthermore, Purchaser shall cooperate with Seller and use its best
efforts to cause all of the conditions to the obligations of Purchaser and
Seller under this Agreement to be satisfied on or prior to the Closing Date.
7.2 CONFIDENTIALITY. Unless and until the Closing has been consummated,
Purchaser will hold, and shall cause its counsel, independent certified public
accountants and appraisers to hold in confidence any confidential data or
information made available to Purchaser in connection with this Agreement .with
respect to the Arnold Circuits Business using the same standard of care to
protect such confidential data or information as is used to protect Purchaser's
confidential information. In the event the transactions contemplated by this
Agreement are not consummated Purchaser shall not contact any of the customers
of the Arnold Circuits Business under any circumstances, except as previously
existing customers and unrelated business relationships and Purchaser shall not
solicit business from any customers of the Arnold Circuits Business for products
sold to them by Seller or Arnold Circuits for at least thirty-six months from
the date of the termination of this Agreement.
7.3 PRESS RELEASES. Except as required by applicable law, Purchaser
will not give notice to third parties or otherwise make any public statement or
releases concerning this Agreement or the transactions contemplated hereby
except for such written information as shall have been approved in writing as to
form and content by Seller, which approval shall not be unreasonably withheld.
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8. CONDITIONS PRECEDENT TO THE CLOSING
8.1 CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATIONS. All obligations of
Purchaser under this Agreement are subject to the fulfillment or satisfaction,
prior to or at the Closing, of each of the following conditions precedent:
(a) REPRESENTATIONS AND WARRANTIES. The representations and warranties
of Seller contained in this Agreement or in any certificate or document
delivered by Seller to Purchaser pursuant to the provisions hereof
shall have been true on the date hereof without regard to any
DISCLOSURE SCHEDULE updates furnished by Seller after the date hereof
and shall be true on the Closing Date with the same effect as though
such representations and warranties were made as of such date.
(b) COMPLIANCE WITH THIS AGREEMENT. Seller shall have performed and
complied with all agreements and conditions required by this Agreement
to be performed or complied with by it prior to or at the Closing.
(c) NO THREATENED OR PENDING LITIGATION. On the Closing Date, no suit,
action or other proceeding, or injunction or final judgment relating
thereto, shall be threatened or be pending before any court or
governmental or regulatory official, body or authority in which it is
sought to restrain or prohibit or to obtain damages or other relief in
connection with this Agreement or the consummation of the transactions
contemplated hereby, and no investigation that might result in any such
suit, action or proceeding shall be pending or threatened.
(d) CONSENTS AND APPROVALS. Any required consent, approval,
authorization or order required in connection with the sale of the
Assets shall have been obtained or made and shall be in effect on the
Closing Date.
(e) PURCHASER REVIEW. Purchaser shall have completed and be satisfied
with its confidential review of the Arnold Circuits Business.
(f) NO MATERIAL ADVERSE CHANGES. The business, operations, assets,
properties or prospects of the Arnold Circuits Business shall not have
been and shall not be threatened to be materially adversely affected in
any way as a result of any event or occurrence including, but not
limited to, a material adverse change as a result of the termination of
the relationship between Seller and Gerard, Dimiceli or Motorola.
(g) FINANCING. Seller shall have received funds from Imperial Bank or
another lending institution shall otherwise have sufficient funds to
consummate the transactions contemplated by this Agreement.
(h) CLOSING DOCUMENTS. Seller and Purchaser shall have executed and
delivered the closing documents set forth in Section 2.2 hereof.
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(i) APPROVAL OF COUNSEL. All actions, proceedings, resolutions,
instruments and documents required to carry out this Agreement or
incidental hereto and all other related legal matters shall have been
approved on the Closing Date by counsel for Purchaser, in the exercise
of their reasonable judgment.
8.2 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER. All obligations
of Seller under this Agreement are subject to the fulfillment or satisfaction,
prior to or at the Closing, of each of the following conditions precedent:
(a) REPRESENTATIONS AND WARRANTIES. The representations and warranties
of Purchaser contained in this Agreement or in any certificate or
document delivered by Purchaser to Seller pursuant to the provisions
hereof shall be true on the Closing Date with the same effect as though
such representations and warranties were made as of such date.
(b) COMPLIANCE WITH THIS AGREEMENT. Purchaser shall have performed and
complied with all agreements and conditions required by this Agreement
to be performed or complied with by it prior to or at the Closing.
(c) NO THREATENED OR PENDING LITIGATION. On the Closing Date, no suit,
action or other proceeding, or injunction or final judgment relating
thereto, shall be threatened or be pending before any court or
governmental or regulatory official, body or authority in which it is
sought to restrain or prohibit or to obtain damages or other relief in
connection with this Agreement or the consummation of the transactions
contemplated hereby, and no investigation that might result in any such
suit, action or proceeding shall be pending or threatened.
(d) CLOSING DOCUMENTS. Seller and Purchaser shall have delivered the
closing documents set forth in Section 2.2 hereof.
(e) APPROVAL OF COUNSEL. All actions, proceedings, resolutions,
instruments and documents required to carry out this Agreement or
incidental hereto and all other related legal matters shall have been
approved on the Closing Date by counsel for Seller in the exercise of
their reasonable judgment.
9. INDEMNIFICATION
9.1 INDEMNIFICATION OBLIGATION OF SELLER. From and after the Closing,
Seller will reimburse, indemnify and hold harmless Purchaser and its successors
and assigns (an "Indemnified Purchaser Party") against and in respect of:
(a) Any and all damages, losses, deficiencies, liabilities, costs and
expenses incurred or suffered by any Indemnified Purchaser Party that
result from, relate to or arise out of:
(i) Except for those liabilities and obligations of Seller
which Purchaser specifically assumes pursuant to this Agreement, any
and all damages, losses, deficiencies, liabilities, costs and expenses
of, or claims against, Purchaser, resulting from, relating to or
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arising out of the operations or assets of the Arnold Circuits Business
prior to the Closing Date or the actions or omissions of Seller's or
Arnold Circuits' officers, directors, shareholders, employees or agents
relating to the Arnold Circuits Business prior to the Closing Date that
is asserted after the Closing Date, including, without limitation, any
liability relating to, and any claim which arises out of or is based
upon, negligence, strict liability, or any express or implied
representation, warranty, agreement or guarantee made by or on behalf
of Seller or Arnold Circuits, or alleged to have been made by or on
behalf of Seller or Arnold Circuits, or which is imposed or asserted to
be imposed on Seller of Arnold Circuits by operation of law, in
connection with any product of the Arnold Circuits Business designed,
used, rented, sold, manufactured, shipped or installed by or on behalf
of Seller or Arnold Circuits, or for any service relating do the Arnold
Circuits Business performed by or on behalf of Seller or Arnold
Circuits, in any case prior to the Closing Date and irrespective of the
date that any claim, suit or other cause of action related to any of
the foregoing is filed or otherwise instituted against Seller or Arnold
Circuits;
(ii) any and all actions, suits, claims, or legal,
administrative, arbitration, governmental or other proceedings or
investigations against any Indemnified Purchaser Party that relate to
the Arnold Circuits Business in which the event giving rise thereto
occurred prior to the Closing Date or which results from or arises out
of any action or inaction prior to the Closing Date of Seller or Arnold
Circuits or any director, officer, employee, agent, representative or
subcontractor of Seller or Arnold Circuits, except for those which
Purchaser specifically assumes pursuant to this Agreement; or
(iii) any misrepresentation, breach of warranty or
nonfulfillment of any agreement or covenant on the part of Seller under
this Agreement, or from any misrepresentation in or omission from any
certificate, schedule, statement, document or instrument furnished to
Purchaser pursuant hereto or in connection with the negotiation,
execution or performance of this Agreement; and
(b) any and all actions, suits, claims, proceedings, investigations,
demands, assessments, audits, fines, judgments, costs and other
expenses (including, without limitation, reasonable legal fees and
expenses) incident to any of the foregoing or to the enforcement of
this Section 9.1.
9.2 INDEMNIFICATION OBLIGATION OF PURCHASER. From and after the
Closing, Purchaser will reimburse, indemnify and hold harmless Seller and its
successors or assigns (an "Indemnified Seller Party") against and in respect of:
(a) Any and all damages, losses, deficiencies, liabilities, costs and
expenses incurred or suffered by any Indemnified Seller Party that
result from, relate to or arise out of:
(i) any and all liabilities and obligations of Seller which
have been specifically assumed by Purchaser pursuant to this Agreement;
(ii) any misrepresentation, breach of warranty or
non-fulfillment of any agreement or covenant on the part of Purchaser
under this Agreement, or from any misrepresentation in or omission from
any certificate, schedule, statement, document or instrument furnished
to Seller pursuant hereto or in connection with the negotiation,
execution or performance of this Agreement; and
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(b) any and all actions, suits, claims, proceeding, investigations,
demands, assessments, audits, fines, judgments, costs and other
expenses (including, without limitation, reasonable legal fees and
expenses) incident to any of the foregoing or to the enforcement of
this Section 9.2.
9.3 METHOD OF ASSERTING CLAIMS, ETC.
(a) In the event that any claim or demand for which a party or parties
(the "Indemnifying Party") would be liable to another party or party
(the "Indemnified Party") is asserted against or sought to be collected
from the Indemnified Patty by a third party, the Indemnified Party
shall promptly notify the Indemnifying Party of such claim or demand,
specifying the nature of such claim, or demand and the amount or the
estimated amount thereof to the extent then feasible (which estimate
shall not be conclusive of the final amount of such claim and demand)
(the "Claim Notice"). The Indemnifying Party shall have thirty days
from the personal delivery or mailing of the Claim Notice (the "Notice
Period") to notify the Indemnified Party, (i) whether or not they
dispute their liability to the Indemnified Party hereunder with respect
to such claim or demand and (ii) notwithstanding any such dispute,
whether or not they desire, at their sole cost and expense, to defend
the Indemnified Party against such claim or demand.
In the event that the Indemnifying Party notifies the Indemnified Party
within the Notice Period that they desire to defend the Indemnified Party
against such claim or demand then, except as hereinafter provided, the
Indemnifying Party shall have the right to defend the Indemnified Party by
appropriate proceedings, which proceedings shall be promptly settled or
prosecuted by them to a final conclusion. If any Indemnified Party desires to
participate in, but not control, any such defense or settlement, it may do so at
its sole cost and expense.
If the Indemnifying Party elects not to defend the Indemnified Party
against such claim or demand, whether by not giving the Indemnified Party timely
notice as provided above or otherwise, then the amount of any such claim or
demand, or if the same be contested by the Indemnifying Party then that portion
thereof as to which such defense is unsuccessful, shall be conclusively deemed
to be a liability of the Indemnifying Party hereunder.
If, in the reasonable opinion of the Indemnified Parry, any such claim
or demand or the litigation or resolution of any such claim or demand involves
an issue or matter which could have a materially adverse effect on the business,
operations, assets, properties or prospects of the Indemnified Party, then the
Indemnified Party shall have the right to participate in, but not control, the
defense or settlement of any such claim or demand and its reasonable costs and
expenses shall be included as part of the indemnification obligation of the
Indemnifying Party hereunder.
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(b) In the event an Indemnified Party should have a claim against the
Indemnifying Party hereunder that does not involve a claim or demand
being asserted against or sought to be collected from it by a third
party, the Indemnified Party shall promptly send a Claim Notice with
respect to such claim to the Indemnifying Party.
9.4 PAYMENT. Upon the determination of the liability under Section 9.1
or 9.2 hereof, the appropriate party shall pay to the other, as the case may be,
within ten days after such determination, the amount of any claim for
indemnification made hereunder. In the event that the Indemnified Party is not
paid in full for any such claim pursuant to the foregoing provisions promptly
after the other party's obligation to indemnify has been determined in
accordance herewith, it shall have the right, notwithstanding any other rights
that it may have against any other person, firm or corporation, to set off the
unpaid amount of any such claim against any amounts owed by it under this
Agreement to the Indemnifying Party. Upon the payment in full of any claim,
either by set off or otherwise, the entity making payment shall be subrogated to
the rights of the indemnified party against any person, firm or corporation with
respect to the subject matter of such claim.
9.5 RIGHT OF SET OFF. Purchaser shall be entitled to withheld payment
due Seller as Postclosing Consideration in an aggregate amount sufficient to
cover the full amount of any claim (or portion thereof) as to which it has
finally been determined that Purchaser is entitled to indemnification under this
Section 9; provided, however, that in the case of a good faith dispute as to
whether Purchaser is entitled to such indemnification (or as to the size of such
indemnification obligation), Purchaser shall not be required to make any payment
to the extent that such payment would reduce the Postclosing Consideration below
the Purchaser's good faith estimate of the amount of the claim (or a portion
thereof) which has not been finally determined. During any period when payment
is withheld by Purchaser relating to indemnification claims which have not been
finally determined, interest shall accrue on any withheld payment to which the
Seller is finally determined to be entitled at the rate set forth in the
Promissory Note. If it is finally determined that Purchaser is entitled to
indemnification, Purchaser may set off against the Postclosing Consideration,
the amount of the indemnification obligation and Seller shall not be entitled to
receive interest on the amounts set off.
9.6 COMPLIANCE WITH BULK SALES LAWS. Purchaser and Seller hereby waive
compliance by Purchaser and Seller with the bulk sales law and any other similar
laws in any applicable jurisdiction in respect of the transactions contemplated
by this Agreement. Seller shall indemnify Purchaser from, and hold it harmless
against, any liabilities, damages, costs and expenses resulting from or arising
out of (i) the parties' failure to comply with any of such laws in respect of
the transactions contemplated by this Agreement, or (ii) any action brought or
levy made as a result thereof, other than those liabilities which have been
expressly assumed, on such terms as expressly assumed, by Purchaser pursuant to
this Agreement.
9.7 MATTERS TO WHICH PURCHASER HAS KNOWLEDGE. The parties hereto
acknowledge that Purchaser has made an investigation of the Arnold Circuits
Business and the Assets and notwithstanding anything herein to the contrary,
Seller shall have no obligation to indemnify Purchaser hereunder as to any
matter of which Purchaser had actual knowledge prior to the Closing.
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9.8 OTHER RIGHTS AND REMEDIES NOT AFFECTED. The indemnification rights
of the pasties under this Section 9 are independent of and in addition to such
rights and remedies as the parties may have at law or in equity or otherwise for
any misrepresentation, breach of warranty or failure to fulfill any agreement or
covenant hereunder on the part of any party hereto, including without limitation
the right to seek specific performance, rescission or restitution, none of which
rights or remedies shall be affected or diminished hereby.
9.9 OBLIGATIONS SOLELY OF PURCHASER. The obligations and liabilities of
Purchaser under this Agreement are solely obligations and liabilities of
Purchaser and no affiliated person or entity shall have any obligation or
liability with respect to this Agreement.
10. POST CLOSING MATTERS
10.1 HIRING OF SELLER'S EMPLOYEES. As of the Closing Date, Purchaser
shall offer employment to, and Seller shall use its best efforts to assist
Purchaser in employing as new employees of Purchaser. all persons presently
engaged in the Arnold Circuits Business who are identified by Purchaser prior to
the Closing Date, including, but not limited to, those family relations of
Shareholder who currently are employees of Seller (the "Employees"). Seller
shall terminate effective as of the Closing Date all employment agreements it
has with any of the Employees. Purchaser shall retain such Employees in the same
manner as any other employees of Purchaser. During the Noncompete Period
described below, Seller will not directly or indirectly hire or offer employment
to any Employee who becomes an employee of Purchaser unless Purchaser first
terminates the employment of such employee.
10.2 EMPLOYEE BENEFITS. (a) All Employees who are employed by Purchaser
on or after the Closing Date shall be new employees of Purchaser and any prior
employment by Seller of such employees shall not affect entitlement to, or the
amount of, salary or other cash compensation which Purchaser may make available
to its employees. All employees who are employed by Purchaser shall no longer be
considered employees of Seller for any purposes.
(b) Purchaser will assume the liability for any earned and unused
vacation time for any Employees of Seller hired by Purchaser.
10.3 EMPLOYMENT OF SHAREHOLDER. The parties hereto agree that for a
period of five years after the Closing Date (the "Employment Term") Shareholder
shall act as a technical and business advisor to the Chairman and Chief
Executive Officer of Purchaser and to the President of Purchaser on a 2.5 day a
week basis (which need not necessarily be 2.5 days of every work week). Services
may be rendered in the offices of the Purchaser or such other place as is
mutually agreed upon. In consideration of such services, Shareholder shall be
entitled, for the Employment Term, to the medical benefits made available to
Purchaser's employees under an indemnity or HMO plan, which benefits may be
modified or changed by Purchaser from time-to-time provided any change in
medical benefits do not require Shareholder to submit to a physical examination
in order to qualify for such medical benefits. In addition, in each of the first
and second years after the Closing Date (the "Payment Years"). Purchaser shall
pay Shareholder an annual gross salary of $75,000, less withholding required by
law, and shall provide Shareholder with all benefits provided to other employees
(other than vacation pay). During the third, fourth and fifth year after the
Closing Date (the "Nonpayment Years"), no cash salary shall be paid to
Shareholder for such services although Purchaser may value such services at the
annual rate of $75,000. In the event that Shareholder is unable to perform his
duties and responsibilities hereunder by reason of illness, injury, incapacity
or death during the Payment Years Purchaser shall be obligated to pay
Shareholder or his heirs or assigns any unpaid salary which would otherwise be
payable through the last day of the Payment Years.
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10.4 COVENANT NOT TO COMPETE. Seller and Shareholder and each of their
affiliates agrees that for a period of three years after the Closing Date (the
"Noncompete Period"), except as set forth in Section 10.3, neither it nor any of
its affiliates will, directly or indirectly, own, manage, operate, join, control
or participate in the ownership, management, operation or control of, any
business which is competitive with the Arnold Circuits Business whether in
corporate, proprietorship or partnership form or otherwise as more than a five
percent owner in such business other than CCMP. The parties hereto specifically
acknowledge and agree that the remedy at law for any breach of the foregoing
will be inadequate and that the Purchaser, in addition to any other relief
available to it, shall be entitled to temporary and permanent injunctive relief
without the necessity of proving actual damage. In the event that the provisions
of this Section 10.4 should ever be deemed to exceed the limitation provided by
applicable law, then the parties hereto agree that such provisions shall be
reformed to set forth the maximum limitations permitted.
10.5 NONSOLICITATION. The Seller and Shareholder agree that, for the
Noncompete Period, neither Seller nor Shareholder will (directly or indirectly)
call on or solicit, or divert or take away from Purchaser the business of, or
divulge to any competitor or potential competitor of Purchaser or other entity
who or which at the Closing Date was, or at any time preceding the Closing Date
had been a customer of the Arnold Circuits Business or whose identity is known
to either the Seller or the Shareholder at the Closing Date as one whom
Purchaser intends to solicit within the succeeding year. Nothing contained in
this Section 10.5 shall be deemed to limit or impair, or be limited or impaired
by, the provisions of Section 10.4.
10.6 PAYMENTS RECEIVED. Seller and Purchaser each ague that after the
Closing they will hold and will promptly transfer and deliver to the other, from
time to time as and when received by them, any cash, checks with appropriate
endorsements (using their best efforts not to convert such checks into cash), or
other property that they may receive on or after the Closing which properly
belongs to the other party, including without limitation any insurance proceeds,
and will account to the other for all such receipts. From and after the Closing,
Purchaser shall have the right and authority to endorse without recourse the
name of Seller on any check or any other evidences of indebtedness received by
Purchaser on account of the Arnold Circuits Business and the Assets transferred
to Purchaser hereunder.
10.7 USE OF NAME. From and after the Closing Date, Seller will sign
such consents and take such other action as Purchaser shall reasonably request
in order to permit Purchaser to use the name "Arnold Circuits, Inc." and
variants thereof. From and after the Closing Date, Seller will not itself use
the name "Arnold Circuits, Inc." or any names similar thereto or variants
thereof.
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11. MISCELLANEOUS
11.1 AFFILIATE OF PURCHASER. The parties hereby agree that pending the
Closing, Harry James, an affiliate of Purchaser, shall be employed by Seller in
the Arnold Circuits Business at a mutually agreed upon salary.
11.2 BROKERS' AND FINDERS' FEES. Seller, on the one hand, and
Purchaser, on the other hand, each to the other represent and warrant that all
negotiations relative to this Agreement have been carried on by it directly
without the intervention of any person, who may be entitled to any brokerage or
finder's fee or other commission in respect of this Agreement or the
consummation of the transactions contemplated hereby other than Jack Sickel and
Associates who shall be paid by Seller, and Seller shall indemnify and hold
harmless Purchaser against any and all claims, losses, liabilities and expenses
which may be asserted against or incurred by it as a result of Seller's
dealings, arrangements or agreements with Jack Sickel and Associates or any
other entity or person acting as a broker or finder.
11.3 EXPENSES. Each party hereto shall pay its owe expenses incidental
to the preparation of this Agreement, the carrying out of the provisions of this
Agreement and the consummation of the transactions contemplated hereby. The
parties hereto acknowledge that Seller has agreed to pay a portion of the
Purchase Price payable under Section 1.5 hereof to Gerard and/or Dimiceli and
the parties hereto agree that any payment due under such agreement is solely the
responsibility and liability of Seller and Purchaser shall have no liability
whatsoever with respect to such payment and Seller shall indemnify and hold
harmless Purchaser against any and all liabilities and expenses which may be
asserted against or incurred by it as a result of Seller's arrangements or
agreements with Gerard or Dimiceli.
11.4 CONTENTS OF AGREEMENT; PARTIES IN INTEREST; ETC. This Agreement
sets forth the entire understanding of the parties hereto with respect to the
transactions contemplated hereby. It shall not be amended or modified except by
written instrument duly executed by each of the parties hereto. Any and all
previous agreements and understandings between or among the parties regarding
the subject matter hereof, whether written or oral, are superseded by this
Agreement.
11.5 ASSIGNMENT AND BINDING EFFECT. This Agreement may not be assigned
prior to the Closing by any party hereto without the prior written consent of
the other parties. Subject to the foregoing, all of the terms and provisions of
this Agreement shall be binding upon and inure to the benefit of and be
enforceable by the successors and assigns of Seller and Purchaser.
11.6 WAIVER. Any term or provision of this Agreement may be waived at
any time by the party entitled to the benefit thereof by a written instrument
duly executed by such party.
11.7 NOTICES. Any notice, request, demand, waiver, consent, approval or
other communication which is required or permitted hereunder shall be in writing
and shall be deemed given only if delivered personally or sent by registered or
certified mail, postage prepaid, as follows:
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If to Purchaser, to:
XCEL Arnold Circuits, Inc.
c/o XCEL Corporation
4290 East Brickell Street
Ontario, California 91761-1511
Attention: Carmine T. Oliva
With a required copy to:
Mason, Briody, Gallagher & Taylor
104 Carnegie Center, Suite 201
Princeton, NJ 08540
Attention: Thomas P. Gallagher
If to Seller or Shareholder to:
BNZ Incorporated
P.O. Box 1085
La Habra, California 90631
Attention: Robert Bertrand
With a required copy to:
Mantalica and Treadwell
835 Wilshire Boulevard, Suite 300
Los Angeles, CA 90017
Attention; Mark Treadwell
or to such other address as the addressee may have specified in a notice duly
given to the sender as provided herein. Such notice, request, demand, waiver,
consent, approval or other communication will be deemed to have been given as of
the date so delivered.
11.8 CALIFORNIA LAW TO GOVERN. THIS AGREEMENT SHALL BE GOVERNED BY AND
INTERPRETED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA.
THE PARTIES HEREBY AGREE THAT ANY PROCEEDING WITH RESPECT TO ENFORCEMENT OF THIS
AGREEMENT SHALL BE BROUGHT IN ANY COURT OF COMPETENT JURISDICTION IN ORANGE
COUNTY, CALIFORNIA.
11.9 NO BENEFIT TO OTHERS. The representations, warranties covenants
and agreements contained in this Agreement are for the sole benefit of the
parties hereto and, in the case of Section 9 hereof, the indemnified parties,
and their heirs, executors, administrators, legal representatives, successors
and assigns, and they shall not be construed as conferring any rights on any
other persons.
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11.10 HEADINGS AND "PERSON." All section headings contained in this
Agreement are for convenience of reference only, do not form a part of this
Agreement and shall not affect in any way the meaning or interpretation of this
Agreement. Any reference to a "person" herein shall include an individual, firm,
corporation, partnership, trust, governmental authority or body, association,
unincorporated organization or any other entity.
11.11 SCHEDULES AND EXHIBITS. All Exhibits and Schedules referred to
herein are intended to be and hereby are specifically made a part of this
Agreement.
11.12 SEVERABILITY. Any provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall be ineffective to the extent of such
invalidity or unenforceability without invalidating or rendering unenforceable
the remaining provisions hereof, and any such invalidity or unenforceability in
any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.
11.13 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and any party hereto may execute any such counterpart, each of
which when executed and delivered shall be deemed to be an original and all of
which counterparts taken together shall constitute but one and the same
instrument. This Agreement shall become binding when one or more counterparts
taken together shall have been executed and delivered by the parties. It shall
not be necessary in making proof of this Agreement or any counterpart hereof to
produce or account for any of the other counterparts.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date set forth above.
BNZ INCORPORATED
By: /S/ ROBERT BERTRAND
--------------------------------------
Robert Bertrand
President
SHAREHOLDER
/S/ ROBERT BERTRAND
-----------------------------------------
Robert Bertrand
XCEL Arnold Circuits, Inc.
By: /S/ CARMINE T. OLIVA
--------------------------------------
Carmine T. Oliva
Chairman and Chief Executive Officer
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