Initial Public Offering (IPO): Registration Statement (General Form) — Form S-1
Filing Table of Contents
Document/Exhibit Description Pages Size
1: S-1 Registration Statement (General Form) 117 564K
10: EX-10.10 Amendment #1 Stock Option Plan 4 23K
11: EX-10.11 Amendment #2 Stock Option Plan 1 9K
12: EX-10.12 Amendment #3 Stock Option Plan 2 13K
13: EX-10.13 Loan Agreement 22 71K
14: EX-10.14 Amendment #1 Loan Agreement 2 13K
15: EX-10.15 Amendment #2 Loan Agreement 2 14K
16: EX-10.16 Credit Agreement 141 486K
17: EX-10.17 Amendment #1 Credit Agreement 21 35K
18: EX-10.18 Amendment #2 Credit Agreement 4 17K
2: EX-10.2 Stock Purchase Agreement 45 213K
19: EX-10.20 Saturn Membership Regulations 38 131K
20: EX-10.21 Amendment #1 Membership Regulations 1 10K
21: EX-10.22 Amendment #2 Membership Regulations 4 21K
22: EX-10.23 Amendment #3 Membership Regulations 1 10K
23: EX-10.24 Amendment #4 Membership Regulations 1 11K
24: EX-10.25 Sublease 8 35K
25: EX-10.26 Amendment to Sublease 1 12K
3: EX-10.3 Methuen Division 21 100K
4: EX-10.4 Stock Purchase Agreement 6 31K
5: EX-10.5 Agreement and Plan of Merger 44 222K
6: EX-10.6 Split Dollar Agreement 12 40K
7: EX-10.7 Independent Contractor 6 26K
8: EX-10.8 Amendment to Independent Contractor 1 11K
9: EX-10.9 Saturn Stock Option Plan 12 46K
26: EX-23.1 Consent Pricewaterhousecoopers LLP 1 9K
27: EX-23.2 Consent Ernst & Young 1 9K
28: EX-27.1 Financial Data Schedule 1 11K
EXHIBIT 10.3
METHUEN DIVISION
AGREEMENT OF PURCHASE AND SALE
THIS AGREEMENT dated as of the 2nd day of December, 1998 is entered into by
and between EA Industries, Inc., a New Jersey corporation (the "Company"), and
Methuen Acquisition Corp., a Delaware corporation (the "Purchaser").
W I T N E S S E T H:
WHEREAS, the Company is engaged, among other things, in the business of
providing contract manufacturing electronic assembly services, including the
quick-turn, prototype and volume assembly and testing of a wide range of
products at a facility in Methuen. Massachusetts (such activities being
hereinafter referred to as the "Business"); and
WHEREAS, effective on the date of the Closing (as defined in Section VI
hereof), the Purchaser desires to acquire from the Company certain assets of the
Company as described in Section I(a) hereof (the "Assets"), and the Company
desires to sell or assign the Assets, on the terms and subject to the conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements hereinafter set forth, and intending to be legally bound, the
parties hereto hereby agree as follows:
SECTION I
PURCHASE AND SALE OF THE ASSETS
(a) Purchase and Sale of the Assets. Subject to the terms and conditions of
this Agreement and on the basis of the representations, warranties, covenants
and agreements herein contained:
(i) The Company hereby sells, assigns and conveys to the
Purchaser, and the Purchaser hereby purchases, acquires and accepts from the
Company, the Assets, free and clear of any liens, charges, security interests or
encumbrances of any kind whatsoever, including any successor liabilities
(collectively, "Liens or Encumbrances"). The Assets shall include the Business,
all assets used in connection with the Business, all assets specified on
Schedule I(a)(i) hereto, work in process, inventory, contract rights, equipment,
financial books and records, all other assets of every kind and nature, real,
personal, and mixed, tangible and intangible, wherever located, of the Company
used in or in any way related to the Business, except for the assets listed on
Schedule I(a)(i) hereto (the "Excluded Assets"), which Excluded Assets shall
include, without limitation, the Lease referred to in Section I(g) hereof, and
all cash and all accounts receivable related to the Business.
(ii) Except to the extent expressly set forth in this Agreement or any
document, instrument or agreement executed or entered into pursuant hereto or
contemporaneously herewith.
the Purchaser shall not assume and shall have no responsibility with respect to,
and shall be indemnified by the Company, against, any and all liabilities or
obligations of the Company, known or unknown, absolute or contingent, accrued or
unaccrued, whether due or to become due (collectively, "Liabilities").
(b) Purchase Price. The purchase price (the "Purchase Price") for the Assets
is Two Million Five Hundred Thousand Dollars ($2,500,000), which shall be paid
as follows. At the Closing, Purchaser shall pay to the Company an amount (the
"Closing Date Payment") equal to the Purchase Price minus the items set forth on
Schedule I(b) (the "Payout Amounts"), which Payout Amounts shall be paid by the
Purchaser except as otherwise noted on Schedule I(b). and less the Holdback
Amount described in Section I(d) below. The Closing Date Payment shall be paid
by wire transfer of immediately available funds to an account designated by the
Company; and
(c) Purchase Price Adjustment for Inventory. In the event the Inventory
Value determined in accordance with Section II(g) below is less than Six Hundred
Thousand Dollars ($600,000), the Purchase Price shall be reduced by one dollar
for each dollar that the Inventory Value is less than Six Hundred Thousand
Dollars ($600,000).
(d) Purchase Price Holdback.
(i) The Purchaser shall withhold from the Purchase Price an amount equal
to $350,000 (the "Holdback Amount") as collateral to secure the Company's
obligations described in Section VII(a) below, during the period commencing on
the Closing Date and terminating on the date that is eighteen (18) months from
the Closing Date. On the date that is eighteen (18) months from the Closing Date
(or if such date is not a business day, on the next business day thereafter),
the Holdback Amount, less the amount of any reductions thereto, as provided in
Section I(d)(ii) below, if a positive amount shall be distributed to the
Company without interest. The Purchaser shall not be required to segregate or
set aside the Holdback Amount. The Purchaser may, without obligation, file a
UCC-1 or other appropriate instruments with the California and New Jersey
Secretaries of State evidencing Purchaser's security interest in the Holdback
Amount.
(ii) The Holdback Amount is subject to reduction and retention by
Purchaser as follows:
(A) In the event that there is a Purchase Price reduction pursuant
to the terms of Section I(c) above, provided that immediately after any
reduction is made pursuant to Section I(c) ("Inventory Reduction"), Purchaser
shall promptly pay to the Company from the Holdback Amount the difference
between $100,000 and the Inventory Reduction. If the Inventory Reduction is
greater than $100,000, then Purchaser shall withhold any additional monies from
the Holdback Amount; and
(B) In satisfaction of any claim for Damages by the Purchaser
against the Company pursuant to the provisions of Section VII(a) below.
(iii) Without limiting the foregoing, in the event that reductions to
the Holdback Amount made by the Purchaser pursuant to this Section I(d) exceed
the amount of the Holdback Amount then in addition to any other remedies
available to the Purchaser, the Purchaser shall be able to recover any excess
amounts directly from the Company.
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(i.v) Under no circumstances will the Company, without the prior
written consent of the Purchaser, assign, transfer or grant any security
interest in the Holdback Amount to any party other than the Purchaser pursuant
to Section I(d)(i) above.
(e) Allocation. The Purchase Price for the Assets shall be allocated to the
Assets at their fair market values. The portion of the Purchase Price not
allocated to specific Assets shall be allocated to goodwill. The Purchase Price
shall be allocated as set forth in Schedule I(e)(i) hereto and the Purchaser
agrees to file Internal Revenue Service Form 8594 which shall be prepared in
accordance with the Internal Revenue Code of 1986, as amended and all rules and
regulations promulgated thereunder.
(f) Removal of Assets by Purchaser. The Company shall allow Purchaser up to
ninety (90) days from the Closing Date (as defined in Section VI hereof) in
which to transition the business and remove the Assets from the Company's
facility located at 126 Merrimack Street, Methuen, Massachusetts 01844 (the
"Facility"). Purchaser shall have full access and all rights of the Company to
the Facility. Notwithstanding the foregoing, the Purchaser acknowledges that the
Company's rights to the Facility are subject to the lease (the "Lease") between
Tanon Manufacturing, Inc., a California corporation and wholly-owned subsidiary
of the Company, and Tri-Star Realty Trust, a Massachusetts trust (the "Lease"),
which expires on January 31, 1999, and as a result, Purchaser shall remove all
of the Assets from the Facility prior to such date. This Section I(f) does not
constitute a lease or sublease, and nothing contained in this Section I(f) or
elsewhere in this Agreement shall be construed as subjecting Purchaser to or
obligating Purchaser under any of the terms and conditions of the Lease and
Purchaser shall incur no liability in connection with the Lease. Any obligation
to reimburse rental payments or other expenses shall be subject to negotiation.
(g) Business Cut-Off. All business conducted on and after the Closing Date
shall be the obligation and responsibility of the Purchaser, and all business
conducted prior to the Closing Date shall be the obligation and responsibility
of the Company. Accordingly, all sales commissions payable to sales
representatives of the Company who operate with respect to the Business which
were earned in connection with product shipped prior to the Closing Date shall
be paid by the Company, and all sales commissions earned in connection with
product shipped after the Closing Date shall be paid by the Purchaser.
SECTION II
REPRESENTATIONS, WARRANTIES, COVENANTS AND
AGREEMENTS OF THE COMPANY
The Company hereby represents and warrants to, and covenants and agrees
with the Purchaser, as of the date of the Closing that:
(a) Organization and Qualification. The Company is duly organized,
validly existing and in good standing under the laws of the State of New Jersey
and has full corporate power and authority to own its properties and to conduct
the business in which it is now engaged. The Company has full corporate power
and authority, and all necessary approvals, permits, licenses and
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authorizations to own its properties and to conduct the Business as currently
conducted and to enter into and consummate the transactions contemplated under
this Agreement.
(b) Authority/Enforceability. The execution and delivery of this Agreement
by the Company, the performance by the Company of its covenants and agreements
hereunder and the consummation by the Company of the transactions contemplated
hereby have been duly authorized by all necessary corporate action. This
Agreement constitutes a valid and legally binding obligation of the Company,
enforceable against the Company in accordance with its terms, and constitutes a
valid and legal binding obligation of the Purchaser, enforceable against it in
accordance with its terms. The Bill of Sale, when executed and delivered at
Closing, and assuming due and proper execution by the Purchaser, will constitute
a valid and legal binding obligation of the Company, enforceable against it in
accordance with its terms.
(c) No Legal Bar; Conflicts. Except as listed on Schedule II(c), neither the
execution and delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, violates any provision of the charter or
by-laws of the Company as amended or any statute, ordinance, regulation, order,
judgment or decree of any court or governmental agency or board, or conflicts
with or will result in any breach of any of the terms of or constitute a default
under or result in the termination of or the creation of any lien pursuant to
the terms of any contract or agreement to which the Company is a party or by
which the Company or any of its assets are bound. No consents, approvals or
authorizations of, or filings with. any governmental authority or any other
person or entity are required in connection with the execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby,
except for required consents, if any, to assignment of permits, certificates,
contracts, leases and other agreements as set forth in Schedule 11(c) attached
hereto.
(d) Title to Assets. Except as noted on Schedule II(d) or as set forth in a
validly filed UCC-1 financing statement, copies of which are attached hereto as
Exhibit II(d), (i) the Company has good and valid title to all Assets and (ii)
none of the Assets is subject to any liens, charges, encumbrances or security
interests. None of the Assets (or uses to which they are put) fails to conform
with any applicable agreement, law, ordinance or regulation in a manner which is
likely to be material to the operations of the Business.
(e) Condition and Sufficiency of Assets. The Assets are in good working
order and condition, ordinary wear and tear excepted and are suitable for the
uses for which they are being utilized in the Business. The Assets together with
the Excluded Assets constitute all of the assets, properties, rights, privileges
and interests necessary for the operation of the Business as it has been owned
and operated by the Company.
(f) Permits; Compliance with Applicable Law.
(i) General. The Company is not in default under any, and has complied
with all, statutes, ordinances, regulations and laws, orders, judgments and
decrees of any court or governmental entity or agency, relating to the Business
or the Assets as to which a default or failure to comply might result in a
material adverse affect on the Assets or the Business. The Company has no
knowledge of any basis for assertion of any violation of the foregoing or for
any claim for compensation or damages or otherwise arising out of any violation
of the foregoing. The Company
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has not received any notification of any asserted present or past failure to
comply with any of the foregoing which has not been satisfactorily responded to
in the time period required thereunder.
(ii) Permits; Intellectual Property. Set forth on Schedule II(f) is a
complete and accurate list of all permits, licenses, approvals, franchises,
patents, registered and common law trademarks, service marks, tradenames,
copyrights (and applications for each of the foregoing), notices and
authorizations issued by governmental entities or other regulatory authorities,
federal, state or local (collectively the "Permits"), held by the Company in
connection with the Business. Except as set forth on Schedule II(f), the Permits
are all the Permits required for the conduct of the Business in its present
form. All the Permits set forth in Schedule II(f) are in full force and effect,
and neither the Company nor its shareholders have engaged in any activity which
would cause or permit revocation or suspension of any such Permit, and no action
or proceeding looking to or contemplating the revocation or suspension of any
such Permit is pending or threatened. There are no existing defaults or events
of default or event or state of facts which with notice or lapse of time or both
would constitute a default by the Company under any such Permit. The Company has
no knowledge of any default or claimed or purported or alleged default or state
of facts which with notice or lapse of time or both would constitute a default
on the part of any other party in the performance of any obligation to be
performed or paid by any other party under any Permit set forth in Schedule
II(f). The use by the Company of any proprietary rights relating to any Permits
does not involve any claimed infringement of such Permit or rights. The
consummation of the transactions contemplated hereby will in no way affect the
continuation, validity or effectiveness of the Permits set forth in Schedule
II(f) or require the consent of any person. Except as set forth on Schedule
II(f), the Company is not required to be licensed by, nor is it subject to the
regulation of, any governmental or regulatory body by reason of the conduct of
the Business in its present form.
(g) Inventories. The inventory of the Company related to the Business at
Closing will have an accounting value of at least $600,000 computed in
accordance with GAAP and will consist at Closing of usable raw materials and
supplies for which there are related purchase orders ("Useable Raw Materials
Inventory"), manufactured and purchased parts, work and goods in process, and
finished goods, all of which are fit for the purpose for which they were
procured or manufactured, and none of which is obsolete, or damaged, adjusted
for the passage of time through the Closing Date in accordance with the past
custom and practice of the Company, and GAAP. The finished goods inventory is
merchantable. Within ninety (90) days following the Closing Date, Ernst & Young
LLP ("E&Y") shall deliver to the Purchaser and to the Company, E&Y's
determination of the value of the inventory (the "Inventory Value") included in
the Assets purchased by Purchaser hereunder, as of the Closing Date, which
determination shall be made in accordance with generally accepted accounting
principles ("GAAP"). The Company shall have twenty days from the date of
delivery of the Inventory Value to dispute such value and on the twenty-first
day after the Inventory Value is delivered to the Company, the Inventory Value
shall be deemed accepted. The Company shall have the right to receive the
information upon which such determination was made, and shall, in the event of a
dispute as to the amount or method of calculation, have the right to review all
work papers relating to the determination. In the event the Company disputes
such determination, the Purchaser and the Company shall have the right to
designate an independent certified accountant, as mutually agreed, to review
such determination. Failing such agreement, the parties shall apply to the
American Arbitration Association for the designation of such accountant. The
final determination of such independent certified public accountant shall be
deemed conclusive. The costs and expenses of such independent certified public
accountant shall be paid fifty percent (50%) by the Purchaser and
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fifty percent (50%) by the Company. In the event that the Inventory Value is
less than Six Hundred Thousand Dollars ($600,000), the Purchase Price shall be
reduced by one dollar for each dollar that the Inventory Value is less than Six
Hundred Thousand Dollars ($600,000). In the event that the Inventory Value is
greater than Six Hundred Thousand Dollars ($600,000) (the inventory with a value
in excess of $600,000 shall be deemed to be the "Excess Inventory"), then the
Purchaser shall reimburse the Company for the Excess Inventory utilized by the
Purchaser during such ninety (90) day period at a price equal to the lower of
the book or market value of such utilized Excess Inventory. After such ninety
(90) day period, if there is any remaining Excess Inventory, Purchaser shall be
entitled to purchase all or any portion of such Excess Inventory at a price
equal to the lower of book or market value of such Excess Inventory. In the
event that Purchaser does not purchase such Excess Inventory, the Company shall
be entitled to sell such Excess Inventory to third parties.
(h) The Assigned Contracts and Other Agreements. Schedule II(h) hereto
contains an accurate and complete list of each material contract, agreement,
indenture, note, lease, or other instrument or commitment, written or oral, to
which the Company is a party or is bound or which relates to any of the Assets
or the consummation of the transactions contemplated by this Agreement (the
"Material Contracts"), which shall include without limitation all Material
Contracts included in the Assets and being assigned to the Purchaser at the
Closing (the "Assigned Contracts"), all of which are designated as "Assigned
Contracts" on Schedule II(h) hereto, Accurate and complete copies of all of the
Assigned Contracts have been furnished by the Company, or made available to
Purchaser prior to the date hereof. Except for the Material Contracts, there is
no contract, lease, license or other agreement, commitment or understanding that
is material to the Assets or the Business. Each of the Assigned Contracts is a
valid and binding obligation of The Company and, to the Company's knowledge, the
other parties thereto, enforceable in accordance with its terms, except as may
be affected by bankruptcy, insolvency, moratorium or similar laws affecting
creditors' rights generally and general principles of equity relating to the
availability of equitable remedies. There have not been any defaults by the
Company or, to the knowledge of the Company, defaults, claims of default or
claims of nonenforceability by the other party or parties under or with respect
to any of the Assigned Contracts which, individually or in the aggregate, have
had an adverse effect on the Business or any of the Assets, and to the Company's
knowledge there are no facts or conditions that have occurred or that are
anticipated to occur which, with the passage of time or the giving of notice, or
both, would constitute a default by the Company or by the other party or parties
under any of the Assigned Contracts or would cause the creation or imposition of
any Lien or Encumbrance upon any of the Assets or otherwise have an adverse
effect on the Business.
(i) Financial Statements. True and correct copies of the financial
statements of the Company are attached as Schedule II(i) hereto (the "Financial
Statements"). The Financial Statements were prepared in accordance with GAAP,
consistently applied, and fairly present the financial condition of the Company
and the results of its operations as at the relevant dates thereof and for the
respective periods covered thereby. Except as set forth on Schedule II(i), the
Company has no debts, obligations or liabilities, fixed or contingent, of a
nature that would be required, in accordance with GAAP, to be shown on a balance
sheet and that are not shown on the balance sheet as of September 30, 1998.
other than liabilities incurred after September 30, 1998 in the ordinary Course
of the Company's business and consistent with past practice.
(j) Litigation; Disputes. Except as set forth in Schedule II(j), there are
no claims, disputes, actions, suits, investigations or proceedings pending or
threatened against the Company,
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the Business or any of the Assets, which would hinder the ability of the Company
to consummate the transactions contemplated hereby, and, to the best of the
knowledge of the Company, there is no basis for any such claim, dispute, action,
suit, investigation or proceeding. The Company has no knowledge of any default
under any such action, suit or proceeding. Except as set forth in Schedule
II(h), the Company is not in default in respect of any judgment, order, writ,
injunction or decree of any court or of any federal, state, municipal or other
government department, commission, bureau, agency or instrumentality or any
arbitrator.
(k) Environmental and Safety Matters. Except as set forth in Schedule
II(k), the Company has complied with, and the operation of the Business and the
use of the Assets are in compliance with, in all material respects, all federal,
state, regional and local statutes, laws, ordinances, rules, regulations and
orders relating to the protection of human health and safety, natural resources
or the environment, including, but not limited to, air pollution, water
pollution, noise control, on-site or off-site hazardous substance discharge,
disposal or recovery, toxic or hazardous substances, training, information and
warning provisions relating to toxic or hazardous substances, and employee
safety relating to the Business or the Assets (collectively the "Environmental
Laws"): and no notice of violation of any Environmental Laws or of any permit,
license or other authorization relating thereto has been received or threatened
against the Company, and to the best knowledge of the Company, is there any
factual basis for the giving of any such notice. Except as set forth in Schedule
II(k), no underground or above-ground storage tanks or surface impoundments are
located on any of the real properties owned or leased in connection with the
Business and (i) except in compliance with applicable Environmental Laws and any
licenses or permits relating thereto, there has been no generation, use,
treatment, storage, transfer, disposal, release or threatened release in, at,
under, from, to or into, or on such properties of toxic or hazardous substances
during the occupancy thereof by the Company or, to the best knowledge of the
Company, prior to such occupancy, and (ii) in no event has there been any
generation, use, treatment, storage, transfer, disposal, release or threatened
release in, at, under, from, to or into, or on such properties of toxic or
hazardous substances that has resulted in or is reasonably likely to result in a
material adverse effect on the Business or on the Assets. The Company has not
received any notice or claim to the effect that the Company or the Business is
or may be liable to any governmental authority or private party as a result of
the release or threatened release of any toxic or hazardous substances in
connection with the conduct or operation of the Business, and none of the
operations of the Business or the Company and none of the Assets is the subject
of any federal, state or local investigation evaluating whether any remedial
action is needed to respond to a release or a threatened release of any toxic or
hazardous substances at any of the real properties owned or leased in connection
with the Business. For the purposes of this Section II(k), "toxic, or hazardous
substances" shall include any material, substance or waste that, because of its
quantity, concentration or physical or chemical characteristics, is deemed under
any federal, state, local or regional, statute, law, ordinance, regulation or
order, or by any governmental agency pursuant thereto, to pose a present or
potential hazard to human health or safety or the environment, including, but
not limited to, (i) any material, waste or substance which is defined as a
"hazardous substance" pursuant to the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 (42 U.S.C. sec. 9601. et seq.) as
amended, and its related state and local counterparts, (ii) asbestos and
asbestos containing materials and polychlorinated biphenyls and (iii) any
petroleum hydrocarbon including oil, gasoline (refined and unrefined) and their
respective constituents and any wastes associated with the exploration,
development or production of crude oil, natural gas or geothermal energy.
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(1) Disclosure. No representation or warranty made under any Section
hereof and none of the information furnished by the Company set forth herein, in
the exhibits hereto or in any document delivered by the Company to the
Purchaser, or any authorized representative of the Purchaser, pursuant to this
Agreement contains any untrue statement of a material fact or fails to state a
material fact necessary to make the statements herein or therein not misleading.
SECTION III
REPRESENTATIONS, WARRANTIES, COVENANTS AND
AGREEMENTS OF THE PURCHASER
The Purchaser represents and warrants to the Company that the
statements contained in this Section III are correct and complete as of the date
of this Agreement:
(a) Organization. The Purchaser is a corporation duly incorporated,
validly existing, and in good standing under the laws of the State of Delaware.
(b) Authorization of Transaction. The Purchaser has full corporate
power and authority to execute and deliver this Agreement and to perform its
obligations hereunder. This Agreement constitutes a valid and legal binding
obligation of the Purchaser, enforceable against it in accordance with its
terms. The Purchaser is not required to give any notice to, make any filing
with, or obtain any authorization, consent, or approval of any government or
governmental agency in order to consummate the transactions contemplated by this
Agreement.
(c) Non-Contravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(i) violate any constitution, statute, regulation, rule, injunction, judgment,
order decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which the Purchaser is subject or any provision
of its charter or by-laws, or (ii) conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in any party
the right to accelerate, terminate, modify, or cancel, or require any notice
under any agreement, contract, lease, license, instrument or other arrangement
to which the Purchaser is bound or to which any of its assets is subject.
SECTION IV
ADDITIONAL REPRESENTATIONS, WARRANTIES
AND COVENANTS OF THE COMPANY AND THE PURCHASER
(a) Post Closing Cooperation. In case at any time after the Closing
any further action is necessary or desirable to carry out the purposes of this
Agreement, each of the parties will take such further action (including the
execution and delivery of such further instruments and documents) as the other
may request, all at the sole cost and expense of the requesting party (unless
the requesting party is entitled to indemnification therefor under Section VII),
so long as such documents do not increase the liability or risk of liability of
the party of whom action is requested.
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(b) Discharge of Obligations. The Company covenants and agrees to pay
promptly and otherwise to fulfill and discharge all of the Liabilities of the
Company when due and payable and otherwise prior to the time at which any of
such Liabilities could in any way result in or give rise to a claim against the
Assets, the Business or the Purchaser, result in the imposition of any lien,
charge or encumbrance on any of the Assets, or adversely affect the Purchaser's
title to or use of any of the Assets.
(c) Access. The Company shall give to the Purchaser and its
representatives, from and after the date of execution of this Agreement, on
prior reasonable request therefor from the Purchaser or such representatives,
such access to the premises, employees, agents and consultants of the Company,
and such copies of the Financial Statements, books and records, and contracts
and leases and other documentation, so as to enable the Purchaser to inspect and
evaluate all aspects of the Business and operations, assets, operating results,
financial condition, capitalization, ownership, and legal affairs thereof. This
shall include the right of the purchaser to have Phase I environmental
evaluations conducted on the any real property owned or leased by the Company in
connection with the Business. The Purchaser agrees to conduct its review, and to
cause its representatives to conduct their review, in a manner designed to
minimize any disruption of the operations of the Company.
(d) Conduct of Business. From the date of this Agreement and until
the Closing or termination of this Agreement, whichever first occurs, the
Company shall use its commercially reasonable best efforts, consistent with
prior practice (a) to preserve intact the business organization and employees
and other business relationships relating to the Business, (b) to continue to
operate in the ordinary course of its business and to maintain its books,
records and accounts in accordance with GAAP and (c) to preserve and maintain
the Assets, ordinary wear and tear excepted.
(e) "No Shop". The Company agrees that during the period commencing
on the date hereof and ending on the Closing Date, or ending sixty (60) days
after the date hereof, whichever first occurs, if the Company receives a firm
offer to buy any of the Business and/or the Assets (other than sales of
inventory in the ordinary course of the Business), in whole or in part, the
Company shall promptly after receipt of a proposal advise the Purchaser of the
details of such proposal and submit copies of all pertinent documents to the
Purchaser. However, if the Purchaser enters into a commitment or agreement with
IBJ Schroeder Bank & Trust Co. ("Schroeder") to participate in the Schroeder
loans to Tanon Manufacturing, Inc. ("Tanon"), pursuant to the terms of Section
4(g) of the Letter of Intent among the Purchaser, on the one hand, and the
Company and Tanon, on the other hand (the "Tanon Letter of Intent"), the Company
will not, directly or indirectly, during the period commencing on the date
hereof and ending on the Closing Date, or ending sixty (60) days after the date
hereof, whichever first occurs: (a) offer or agree to sell any of the Business
and/or the Assets (other than sales of inventory in the ordinary course of the
Business), in whole or in part, (b) make or assist anyone else in making any
proposal to purchase any of the Business and/or the Assets (other than sales of
inventory in the ordinary course of the Business), (c) encourage, solicit or
initiate discussions or negotiations with or provide any information to any
corporation, partnership, person, entity or group, other than the Purchaser,
concerning any merger, consolidation, sale of assets, sale of securities or
acquisition of beneficial ownership with respect to the Business, or (d)
otherwise take any action which would prejudice the ability of the Purchaser to
complete the transactions described in this Agreement.
-9-
(f) Litigation Support and Accounts Receivable Collection. So long as
any party hereto is actively contesting or defending against any action, suit,
proceeding, hearing, investigation, charge, complaint, claim or demand in
connection with (i) any transaction contemplated under this Agreement or (ii)
any fact, situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act or transaction on or prior
to the Closing Date relating to this Agreement or the Business, the other party
will cooperate with him or it or his or its counsel in the contest or defense,
make available their personnel, and provide such testimony and access to their
books and records as shall be necessary in connection with the contest or
defense, all at the sole cost and expense of the contesting or defending party
(unless the contesting or defending party is entitled to indemnification
therefor under Section VII below). For a period of five years from the Closing
Date, the Purchaser shall use its commercially reasonable best efforts to retain
the books and records of the Business in substantially their condition at the
time of the Closing and no such books and records shall be destroyed without the
prior written approval of the Company or without first offering such books and
records to the Company.
The Purchaser shall deliver to the Company on a weekly basis any funds
and any checks, notes, drafts and other instruments for the payment of money,
duly endorsed to the Company, received by it (i) comprising payment of any of
the accounts receivable of the Business for periods on or before the Closing or
(ii) comprising payment of any amounts due from customers of the Business for
services rendered by the Business for periods on or before the Closing Date. The
Purchaser shall use its commercially reasonable best efforts to assist the
Company and its agents and representatives in collecting such accounts
receivable.
(g) Acknowledgement of Parties. The parties hereto acknowledge and
agree that the transactions contemplated herein, and the terms and conditions of
this Agreement, were negotiated by the parties in good faith and that the
Purchase Price being paid by the Purchaser hereunder for the Assets is not less
than the fair market value of such Purchased Assets.
SECTION V
CONDITIONS PRECEDENT
(a) Conditions Precedent to the Obligations of the Purchaser. The
obligation of the Purchaser to consummate the purchase of the Assets from the
Company shall be subject to the fulfillment, or the waiver by the Purchaser, at
or prior to the Closing, of each of the following conditions precedent:
(i) Representations and Warranties. The representations and
warranties made by the Company in this Agreement, including information set
forth on the Schedules hereto shall have been true and correct on the date
hereof, and shall also be true and correct at and as of the Closing Date with
the same force and effect as if made again at and as of that time.
(ii) Absence of Material Litigation. There shall be (i) no
pending or overtly threatened litigation (other than litigation which is
determined by the parties in good faith, after consulting their respective
attorneys, to be without legal or factual substance or merit), whether brought
against the Company or the Purchaser, that seeks to enjoin the consummation of
any of the transactions contemplated by this Agreement, (ii) no order that has
been issued by any court or governmental agency having jurisdiction that
restrains or prohibits the consummation of the
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purchase and sale of the Assets hereunder and no proceedings pending which are
reasonably likely to result in the issuance of such an order; and (iii) no
pending or overtly threatened litigation, which has had or is expected to have a
material adverse affect on the Business or the Assets.
(iii) Performance of Obligations. The Company shall have
performed and complied with all of its covenants required by this Agreement to
have been performed on or prior to the Closing.
(iv) No Material Adverse Change. Since October 31, 1998, there
shall not have been any change in or other event affecting the Business or the
condition (financial or other) or operating results of Company that has had or
is expected to have a material adverse effect on the Business or the Assets.
(v) Certificates. Receipt of a certificate executed by the
Company's President or Chief Financial Officer, dated as of the Closing Date and
reasonably satisfactory in form and substance to the Purchaser, certifying that
(i) each of the representations and warranties of the Company contained herein
was true and correct when made and is true and correct on and as of the Closing
Date with the same force and effect as if such representations and warranties
had been made on the Closing Date, (ii) the Company has performed and complied
with all of its covenants required to have been performed or complied with by it
pursuant hereto on or prior to the Closing Date, and (iii) all of the conditions
precedent to the Purchaser's obligations the satisfaction of which was the
responsibility of the Company has been satisfied, except to the extent waived by
the Purchaser.
(vi) Consents Obtained. All consents, waivers, approvals,
authorizations or orders required to be obtained by the Company and the
Purchaser for the authorization, execution and delivery of this Agreement and
the consummation by it by the transactions contemplated hereby shall have been
obtained by the Company or the Purchaser, as the case may be, including, without
limitation, all lease and equipment assignments and/or consents for the
assumption by, or assignment to, the Purchaser of the Assigned Contracts, in
form and substance acceptable to the Purchaser or the Purchaser's counsel in its
sole discretion.
(vii) Due Diligence: Phase I Evaluation. The results of the
Purchaser's business, legal and accounting due diligence with respect to the
Business shall be satisfactory to Purchaser in its sole discretion. Without
limiting the foregoing, the results of any Phase I environmental evaluation
conducted by the Purchaser on any of the real properties owned or leased by the
Company in connection with the Business shall be satisfactory to Purchaser in
its sole discretion.
(viii) Delivery of Additional Instruments. On the Closing Date,
unless waived in writing by Purchaser, the Company shall deliver, or cause to
be delivered to the Purchaser, the documents and instruments referenced in
Section VI(b)(ii), in form and substance satisfactory to Purchaser and its
counsel.
(ix) Board Approval. This Agreement and the transactions
contemplated hereby shall have been approved and adopted by the requisite vote
of the Board of Directors of the Purchaser.
(b) Conditions Precedent to the Obligations of the Company. The
obligation of the
-11-
Company to consummate the sale of the Assets to Purchaser shall be subject to
the fulfillment, or the waiver by the Company, at or prior to the Closing, of
each of the following conditions precedent:
(i) Representations and Warranties. The representations and
warranties made by the Purchaser in this Agreement hereto shall have been true
and correct on the date hereof, and also at and as of the Closing Date with the
same force and effect as if made again at and as of that time.
(ii) Absence of Material Litigation. There shall be (i) no
pending or overtly threatened litigation (other than litigation which is
determined by the parties in good faith, after consulting their respective
attorneys, to be without legal or factual substance or merit), whether brought
against the Company or the Purchaser that seeks to enjoin the consummation of
any of the transactions contemplated by this Agreement, and (ii) no order that
has been issued by any court or governmental agency having jurisdiction that
restrains or prohibits the consummation of the purchase and sale of the Assets
hereunder or any proceedings pending which are reasonably likely to result in
the issuance of such an order.
(iii) Performance of Obligations. The Purchaser shall have
performed and complied with all of its covenants required by this Agreement to
have been performed by it at or prior to the Closing.
(iv) Certificates. Receipt from the Purchaser of a certificate,
dated as of the Closing Date and signed by the President or the Chief Financial
Officer of the Purchaser, certifying that (i) each of its representations and
warranties contained herein was true and correct when made and is true and
correct on and as of the Closing Date with the same force and effect as if such
representations and warranties had been made on the Closing Date, and (ii) it
has performed and complied with all agreements, obligations, covenants and
conditions required to be performed or complied with by it pursuant hereto on or
prior to the Closing Date, except as may be waived in writing by the Company.
(v) Delivery of Additional Instruments. On the Closing Date,
unless waived in writing by Company, the Purchaser shall deliver, or cause to be
delivered to Company, the Purchase Price and the documents and instruments
referenced in Section VI(b)(i), in form and substance satisfactory to Company
and its counsel.
SECTION VI
CLOSING AND DELIVERIES
(a) Time and Place of Closing. The closing of the purchase and sale
of the Assets as set forth herein (the "Closing") shall be held at the offices
of the Business. The Closing shall commence at 2:00 p.m., local time on December
2, 1998 or such other date upon which the Purchaser and the Company shall agree
(the "Closing Date").
(b) Deliveries.
(i) At the Closing, the Purchaser shall deliver to the Company
the following:
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(A) A wire transfer for the Closing Date Payment of the
Purchase Price, as described and adjusted in accordance with Section l(b);
and
(B) Such certificates, instruments and other documents, in form
and substance satisfactory to the Company and its counsel, as they shall
have reasonably requested in connection with the transactions contemplated
hereby.
(ii) At the Closing, the Company shall deliver to the Purchaser,
as a condition to Closing, the following:
(A) A Bill of Sale in the form attached hereto as Exhibit
VI(b)(ii)(A), such other instruments of conveyance and transfer, and such
powers of attorney, as shall be effective to vest in the Purchaser title to
or other interest in, and the right to full custody and control of, the
Assets, free and clear of all Liens or Encumbrances whatsoever;
(B) The Assigned Contracts and the books and records of the
Company constituting a part of the Assets;
(C) Evidence that any and all sales or use taxes assessed in
connection with this transaction have been paid by the Company;
(D) Such certificates, instruments and other documents, in form
and substance satisfactory to the Purchaser and its counsel, as they shall
have reasonably requested in connection with the transactions contemplated
hereby;
(E) An opinion of Howard P. Kamins, Esq., counsel for the
Company, delivered to the Purchaser pursuant to the instructions of the
Company, substantially to the effect set forth in Exhibit VI(b)(ii)(E)
attached hereto; and
(F) All necessary consents of third parties under the Assigned
Contracts and other instruments of the Company to the consummation of the
transactions contemplated hereby, which consents shall not provide for the
acceleration of any liabilities or any other detriment to the Purchaser or
the Company.
(c) Other Inventory. At the Closing, the Company shall consign its rights
to the Other Inventory (as defined below) of the Business to the Purchaser for
a period of at least ninety (90) days from the Closing Date. During such period,
such Other Inventory shall remain on the Company's premises and the Purchaser
shall be entitled, but without obligation, and from time to time, to draw down
on the Other Inventory for sale and use in connection with the Business as and
where conducted by Purchaser. During such ninety (90) day period, the purchase
price to be paid by the Purchaser for such Other Inventory shall be the lower of
the Company's cost or the market price of such Other Inventory. On or prior to
the expiration of such ninety (90) day period, the Purchaser shall be entitled
to purchase all or part of the remaining Other Inventory in bulk for a price and
upon terms to be negotiated by the parties at such time. Payments by Purchaser
shall be within thirty (30) days of the draw down of any such Other Inventory.
Following the expiration of such ninety (90) days period, the Purchaser shall
be entitled to purchase all or part of the remaining Other Inventory at a price
and upon terms to be negotiated by the parties at such time; provided that, if
the parties are unable to negotiate a mutually acceptable price at which such
remaining Other Inventory may be
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purchased by the Purchaser, then the Company may sell any Other Inventory after
the expiration of such ninety (90) day period to any third party other than the
Purchaser. For purposes hereof, the term "Other Inventory" shall mean all
inventory other than the Useable Raw Materials Inventory included in the Assets.
SECTION VII
INDEMNIFICATION
(a) Indemnification by the Company. The Company shall indemnify and hold
harmless the Purchaser and its successors and assigns, directors, officers,
employees, agents and representatives, from and against any and all losses,
claims, assessments, actions, suits, claims, demands, debts, liabilities,
obligations, losses, damages, costs and expenses, including without limitation
the cost of investigation and reasonable attorney's fees and court costs,
arising out of, resulting from, related to, or caused by, directly or
indirectly, in whole or in part any or all of the following (hereinafter
referred to collectively as "Damages"):
(i) Damages based on, arising out of or attributable to the
Liabilities:
(ii) Damages based on, arising out of or attributable to any
inaccuracy in or breach or nonfulfillment of any of the representations,
warranties and covenants made by the Company in this Agreement, except for those
in Section II(g), the sole remedy for which is the adjustment mechanism Section
I(d)(ii)(A);
(iii) Damages arising out of or attributable from the failure of the
Company to comply with the provisions of the Uniform Commercial Code and/or any
"Bulk Sales" laws, in connection with the sale of the Assets to the Purchaser;
(iv) Damages arising out of or attributable to the presence on or in
or the discharge from any of the real properties owned or leased in connection
with the Business or any of the Assets, any toxic or hazardous substances (as
defined in Section II(k) above) that originated or took place prior to the
Closing Date, whether or not the same constitutes a breach of the
representations or warranties contained in Section II(k) hereof or is disclosed
in this Agreement or the Schedules hereto;
(v) Damages arising out of or attributable to the operations prior
to the Closing Date of the Company, and/or to the acts or omissions prior to the
Closing Date of any of its current or former shareholders, directors, officers,
employees or agents, including without limitation Damages arising out of claims
(a) for violation of federal or state insurance, antitrust, securities, unfair
trade practice or other laws, (b) personal injury claims, (c) claims of any
nature by past or present directors, officers, employees or agents of the
Company (including workers' compensation claims to the extent not fully insured
against and claims under federal or state employment statutes and judicial
decisions), (d) claims based on breach of warranty, products liability or
defective or omitted service, and (e) any other Liabilities. It is understood
and agreed that the acts, omissions or events for which Purchaser is entitled to
indemnification hereunder include, but are not limited to, claims asserted after
the Closing (whether such claims are tort claims, contract claims or otherwise)
which are based upon (1) alleged defects in products or services which were
either sold, delivered or
-14-
rendered by the Company on or before the Closing. (2) alleged defects in
products which were in the inventory of the Company at the time of the Closing
and sold or delivered thereafter by the Purchaser or (3) defects in services
which were rendered by the Company at or before the time of Closing and were
completed thereafter by the Purchaser. It is further understood and agreed that
the acts, omissions and events for which Purchaser is entitled to
indemnification hereunder include claims (whether tort. contract or otherwise)
which are based upon any injury to any Person or any damage to any property
which occurs after the Closing and which results in whole or in part from acts,
omissions and events which occurred at or before the Closing; the Company's lack
of knowledge of such act, omission or event, or the fact that such act, omission
or event was unknowable by such person, shall not be a defense to the claim for
indemnity.
(vi) any liability for taxes heretofore or hereafter imposed by any
taxing authority (including penalties and interest) owed by, relating to,
resulting from or attributable to the business or operations of the Company on
or before the Closing Date, including interest and penalties related to such
taxes.
(b) Indemnification by the Purchaser. The Purchaser shall indemnify
and hold harmless the Company from and against (i) any and all Damages sustained
or incurred by the Company by reason of the breach of any of the obligations,
covenants or provisions of, or the inaccuracy of any of the representations or
warranties made by, the Purchaser herein, (ii) Damages arising out of or
attributable to the operations after the Closing Date of the portion of the
Business which is purchased by the Purchaser. including without limitation
Damages arising out of claims (a) for violation of federal or state insurance.
antitrust, securities, unfair trade practice or other laws, (b) personal injury
claims, (c) claims of any nature by directors. officers, employees or agents of
the Purchaser based on occurrences after the Closing Date (including workers'
compensation claims to the extent not fully insured against and claims under
federal or state employment statutes and judicial decisions), and (d) claims
based on breach of warranty, products liability or defective or omitted service.
It is understood and agreed that the acts, omissions or events for which the
Company is entitled to indemnification hereunder include, but are not limited
to claims asserted after the Closing Date (whether such claims are tort claims,
contract claims or otherwise) which are based in whole upon alleged defects in
products or services which were either sold, delivered or rendered by the
Purchaser on or after the Closing Date; and (iii) any liability for taxes
heretofore or hereafter imposed by any taxing authority (including penalties and
interest) owed by, relating to, resulting from or attributable to the business
or operations of the portion of the Business which is purchased by the Purchaser
on or after the Closing Date, including interest and penalties related to such
taxes.
(c) Procedure for Indemnification. If a claim by a third party is
made against any party hereto, and such party (the "Indemnified Party") intends
to seek indemnity with respect to such claim under this Section VII such
Indemnified Party shall promptly notify the party from whom such indemnity may
be sought (the "Indemnifying Party") of such claim. The Indemnifying Party shall
have thirty (30) days after receipt of the above-mentioned notice to undertake,
conduct and control, through counsel of such party's own choosing (subject to
the consent of the Indemnified Party, such consent not to be unreasonably
withheld) and at such party's expense, the settlement or defense of it, and the
Indemnified Party shall cooperate with the Indemnifying Party in connection with
such efforts: provided that: (i) the Indemnifying Party shall not by this
Agreement permit to exist any lien, encumbrance or other adverse charge upon any
asset of any Indemnified Party, (ii) the Indemnifying Party shall permit the
Indemnified Party to participate in such settlement or defense
-15-
through counsel chosen by the Indemnified Party, provided that the fees and
expenses of such counsel shall be borne by the Indemnified Party, and (iii) the
Indemnifying Party shall agree promptly to reimburse the Indemnified Party for
the full amount of any loss resulting from such claim and all related expense
incurred by the Indemnified Party pursuant to this Section VII. So long as the
Indemnifying Party is reasonably contesting any such claim in good faith, the
Indemnified Party shall not pay or settle any such claim. If the Indemnified
Party does not notify the Indemnified Party within thirty (30) days after
receipt of the Indemnified Party's notice of a claim of indemnify under this
Section VI that such party elects to undertake the defense of such claim, the
Indemnified Party shall have the right to contest, settle or compromise the
claim in the exercise of the Indemnified Party's exclusive discretion at the
expense of the Indemnifying Party, and the Indemnifying Party shall within 30
days pay to the Indemnified Party the amount of expenses and damages as a result
of contesting, settling or compromising such claim. In the event that any party
hereto shall incur any Damages in respect of which indemnity may be sought by
such party pursuant to this Section VII. the Indemnifying Party shall be given
written notice thereof by the indemnified Party, which notice shall specify the
amount and nature of such Damages and include the request of the Indemnified
Party for indemnification of such amount. The Indemnifying party shall within 30
days pay to the Indemnified Party the amount of the Damages so specified.
(d) The amount of Damages payable to an Indemnified Party pursuant to
this Section VII shall be reduced by the actual amount of proceeds received by
such party from an insurance carrier on account of such Damages. The Indemnified
Party shall not be entitled to make a claim for indemnification hereunder, or to
withhold from the Holdback Amount, until the total amount of the Damages
suffered by the Purchaser exceeds $25,000. Once that threshold amount is
reached, such party may recover the full amount of its Damages, including the
threshold amount.
SECTION VIII
BROKERS AND FINDERS
(a) The Company's Obligation. Except as set forth in Schedule VIII(a)
hereto, the Purchaser shall not have any obligation to pay any fee or other
compensation to any person, firm or corporation engaged by the Company in
connection with this Agreement and the transactions contemplated hereby, and the
Company, hereby agrees to indemnify and save the Purchaser harmless from any
liability, damage, cost or expense arising from any claim for any such fee or
other compensation.
(b) The Purchaser's Obligation. Except as set forth in Schedule
VIII(b) hereto, the Company shall not have any obligation to pay any fee or
other compensation to any person, firm or corporation engaged by the Purchaser
in connection with this Agreement and the transactions contemplated hereby, and
the Purchaser hereby agrees to indemnify and save the Company harmless from any
liability, damage, cost or expense arising from any claim for any such fee or
other compensation.
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SECTION IX
TERMINATION
(a) This Agreement may be terminated and the transactions herein
contemplated may be abandoned at any time prior to the Closing:
(i) By mutual written consent of the Purchaser and the
Company:
(ii) By the Purchaser, if there has been a material breach by
the Company of any of its representations, warranties, agreements or covenants
set forth herein, or a failure of any condition to which the obligations of the
Purchaser are subject; or
(iii) By the Company, if there has been a material breach by
the purchaser of any of its representations, warranties, agreements or covenants
set forth herein, or a failure of any condition to which the obligations of the
Company is subject, or if the Closing does not occur on or before sixty (60)
days from the date hereof and there has been no material breach by the Company
of its obligations hereunder.
(b) Procedure Upon Termination. In the event of termination of this
Agreement by the Purchaser or the Company or by both the Purchaser and the
Company pursuant to Section IX(a) hereof, written notice thereof shall forthwith
be given to the other party or parties hereto and the transactions contemplated
herein shall be abandoned without further action by the Purchaser or the
Company. In addition, if this Agreement is terminated as provided herein:
(i) Each party will redeliver all documents, workpapers and
other material of any other party relating to the transactions contemplated
hereby, whether so obtained before or after the execution hereof, to the party
furnishing the same.
(ii) All information of a confidential nature received by any
party hereto with respect to the business of any other party (other than
information which is a matter of public knowledge or which has heretofore been
or is hereafter published in any publication for public distribution or filed as
public information with any governmental authority) shall continue to be kept
confidential for a period of two (2) years.
(iii) Upon any termination of this Agreement pursuant to this
Section IX(a) the respective obligations of the parties hereto under this
Agreement shall terminate and no party shall have any liability whatsoever to
any other party hereto by reason of such termination, irrespective of the cause
of such termination, except as expressly provided to the contrary in this
Section IX and in Section IV(e) above.
SECTION X
MISCELLANEOUS
(a) Notices. All notices, requests or instructions hereunder shall be
in writing and delivered personally, sent by telecopy or sent by registered or
certified mail, postage prepaid, as follows:
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If to the Purchaser: Smartflex Systems, Inc.
14312 Franklin Avenue
Tustin, California 92781
Attention: William L. Healey,
President and Chief Executive Officer
Facsimile No. (714) 838-8787
with copies to: Stradling Yocca Carlson & Rauth
660 Newport Center Drive, Suite 1600
Newport Beach, California 92660-6441
Attention: Nick E. Yocca, Esq.
Facsimile No. (949) 725-4100
If to the Company: EA Industries, Inc.
185 Monmouth Parkway
West Long Branch, NJ 07764
Attention: President
Telecopy No.: (732) 229-6162
Telephone No.: (732) 229-1100
with a copy to: Mesirov Gelman Jaffe Cramer & Jamieson
1735 Market Street
Philadelphia, PA 19103
Attention: Richard P. Jaffe, Esquire
Telecopy No.: (215) 994-1111
Telephone No.: (215) 994-1046
Any of the above addresses may be changed at any time by notice given as
provided above; provided, however, that any such notice of change of address
shall be effective only upon receipt. All notices, requests or instructions
given in accordance herewith shall be deemed received on the date of delivery,
if hand delivered or telecopied, and two business days after the date of
mailing, if mailed.
(b) Survival of Representations. Each representation, warranty, covenant
and agreement of the parties hereto herein contained shall survive closing,
notwithstanding any investigation at any time made by or on behalf of any party
hereto.
(c) Entire Agreement. This Agreement and the documents referred to herein
contain the entire agreement among the parties hereto with respect to the
transactions contemplated hereby, and no modification hereof shall be effective
unless in writing and signed by the party against which it is sought to be
enforced.
(d) Expenses. Each of the parties hereto shall bear such party's own
expenses in connection with this Agreement and the transactions contemplated
hereby.
(e) Arbitration. Any controversy or claim arising out of or relating to
this Agreement, or any breach hereof, shall be settled by arbitration in
accordance with the rules of the American
-18-
Arbitration Association then in effect and judgment upon the award rendered by
the arbitrator may be entered in any court having jurisdiction thereof. The
arbitration shall be held in Orange County, California.
(f) Invalidity. Should any provision of this Agreement be held by a court
or arbitration panel of competent jurisdiction to be enforceable only if
modified, such holding shall not affect the validity of the remainder of this
Agreement, the balance of which shall continue to be binding upon the parties
hereto with any such modification to become a part hereof and treated as though
originally set forth in this Agreement. The parties further agree that any such
court or arbitration panel is expressly authorized to modify any such
unenforceable provision of this Agreement in lieu of severing such unenforceable
provision from this Agreement in its entirety, whether by rewriting the
offending provision, deleting any or all of the offending provision, adding
additional language to this Agreement, or by making such other modifications as
it deems warranted to carry out the intent and agreement of the parties as
embodied herein to the maximum extent permitted by law. The parties expressly
agree that this Agreement as modified by the court or the arbitration panel
shall be binding upon and enforceable against each of them. In any event, should
one or more of the provisions of this Agreement be held to be invalid, illegal
or unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions hereof, and if such provision or
provisions are not modified as provided above, this Agreement shall be construed
as if such invalid, illegal or unenforceable provisions had never been set forth
herein.
(g) Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the successors and assigns of the Company and the Purchaser.
(h) Governing Law. The validity of this Agreement and of any of its terms
or provisions, as well as the rights and duties of the parties under this
Agreement, shall be construed pursuant to and in accordance with the laws of the
State of California, without regard to conflict of laws principles.
(i) Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which taken together shall
constitute one and the same instrument.
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IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
hereto as of the date first written above.
PURCHASER: METHUEN ACQUISITION CORP..
By: William L. Healey
------------------------------------
Name: William L. Healey
-------------------------------
Title: President
------------------------------
COMPANY: EA INDUSTRIES, INC.
By: Howard Hammins
------------------------------------
Name: Howard Hammins
-------------------------------
Title: Vice President
------------------------------
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SCHEDULE I(b)
PAYOUT AMOUNTS
[Download Table]
1. Promissory Note To the bank for Lease $400,000
2. Commissions to Sales Representatives 5,000
3. Benefit Premiums 40,000
4. Payroll Setup 5,000
5. ISO Certification 8,000
6. Retention Bonuses 50,000
7. Micro MRP License** 25,000
8. Payables to Customers** 49,000
**To be paid directly by the Company, and to be reimbursed to
the Company by the presentation of documentation reasonably
satisfactory to the Purchaser evidencing has been made. 582,000
Dates Referenced Herein
| Referenced-On Page |
|---|
| This ‘S-1’ Filing | | Date | | First | | Last | | | Other Filings |
|---|
| |  |
| Filed on: | | 3/29/00 | | | | | | | None on these Dates |
| | 1/31/99 | | 3 |
| | 12/2/98 | | 12 |
| | 10/31/98 | | 11 |
| | 9/30/98 | | 6 |
| List all Filings |
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