EXHIBIT 10.12
ASSET PURCHASE AGREEMENT
This AGREEMENT (the "Agreement") made as of this 4th day of
February, 1999, by and between MICRONETICS WIRELESS, INC., a
Delaware corporation whose principal place of business is 00
Xxxxxxxxx Xxxxx, Xxxxxx, XX 00000 ("Micronetics" or the
"Purchaser"), and VECTRONICS MICROWAVE CORPORATION, a New Jersey
corporation whose principal place of business is 000 Xxxxxxx
Xxxxxxxxx, Xxxxxxxxx, XX 00000 ("Vectronics").
1. Subject Matter of and Consideration for Sale.
1.1 Assets to be Transferred. Upon the terms and
subject to all of the conditions herein contained and upon the
performance by each of the parties hereto of its obligations
hereunder, Vectronics agrees on the Closing Date (as hereinafter
defined) to sell, transfer, assign, convey, set over and deliver to
Micronetics and Micronetics agrees that on the Closing Date it will
purchase, acquire and accept from Vectronics, all of the assets of
Vectronics as listed on a schedule furnished to Micronetics by
Vectronics dated August 10, 1998, attached hereto as Schedule 1.1,
the present phone and telecopier numbers of Vectronics (732-356-
2377 and 732-356-6782) (the "Assets"). Vectronics represents that
Schedule 1.1 includes all of the assets currently utilized by
Vectronics to design, manufacture and sell all of the products of
its business. The only other assets at the Premises (defined
below) are the corporate records of Vectronics which will be
segregated at closing and moved to a designated storage area and
removed by Vectronics within 45 days after the Closing Date.
1.2 Debts, Liabilities and Obligations;
Indemnification. On the Closing Date, Micronetics shall not assume
any of the debts, liabilities or obligations of Vectronics, other
than those set forth on Schedule 1.2 hereto. Schedule 1.2 shall
contain any open purchase orders of Vectronics and invoices
received by Vectronics for parts to be received after the Closing
that Micronetics agrees to assume. The liabilities of Vectronics
that Micronetics shall not assume, include, but are not limited to,
the following:
(a) Environmental Liabilities. Any and all liabilities and
obligations arising under Environmental Laws with respect to
Vectronics's conduct of its business prior to the Closing or any
other business conducted by Vectronics at any facility at which the
Assets are currently or have been previously located.
"Environmental Laws" shall mean the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, 42 U.S.C. 9601-
9657 and any amendments thereto ("CERCLA"), the Resource
Conservation and Recovery Act, 42 U.S.C. 6901-6987 and any
amendments thereto ("RCRA"), and any other federal, state or local
Environmental statute, regulation, ordinance, order or rule
relating to the generation, use, treatment, disposal, discharge,
ownership, operation, transportation, presence or storage of
Hazardous Materials. "Hazardous Material" shall mean any material,
waste or by products defined as "hazardous waste" or "solid waste"
under CERLA, RCRA or any other federal, state or local statute,
regulation, ordinance, order or rule, or any other unwholesome,
toxic or radioactive material;
(b) Product Liabilities. Any and all liabilities and
obligations relating to any personal injuries or property damage
(other than damage to products) caused or alleged to have been
caused by an product shipped or services rendered by Vectronics
prior to the Closing, including, but not limited to, any liability
for damages alleged to have been caused by design defects,
manufacturing defects, failure to warn or negligence;
(c) Government Contract Liabilities. Any and all
liabilities and obligations relating to (i) Vectronic's failure or
alleged failure to comply with applicable governmental procurement
laws, statute or regulations with respect to any contract, and (ii)
any claim by any government entity for any adjustment to the price
of any contract as a result of any disallowance of Vectronics'
overhead costs allocated to any contract or for recoupment of
development costs on any products shipped prior to the Closing;
(d) Product Warranties. Any and all product warranties of
Vectronics except as provided in Paragraph 2.10 hereof.
(e) Employee Liabilities. Any and all liabilities to
employees of Vectronics for severance, sick pay, vacation pay or
any other obligation.
Vectronics shall indemnify and hold Micronetics harmless from
and against any and all liabilities of Vectronics that are not
assumed by Micronetics pursuant to this Agreement. Micronetics
will be obligated to remove the Assets from the Premises (defined
below) at the termination of Micronetics' occupancy of the Premises
pursuant to the Occupancy Agreement, a form of which is set forth
as Exhibit 7(vi). The Premises means the facility located at 000
Xxxxxxx Xxxxxxxxx, Xxxxxxxxx, XX currently occupied by Vectronics.
1.3 Instruments of Transfer. The transfer of the
Assets shall be effected by bills of sale, assignments, drafts,
checks and other instruments of transfer and conveyance, in such
form as is reasonably satisfactory to Micronetics and Vectronics
and their respective counsel.
1.4 Consideration for Transfer. Micronetics, in
consideration for the purchase of the Assets and such other terms
and conditions hereof, shall pay Vectronics $225,000, of which
$13,650 shall be paid by crediting Micronetics with the advance
payment received on the P.E.I. purchase order (the "Advance"),
$121,350 shall be payable on the Closing Date (as hereinafter
defined) by wire transfer to the Trust Account of Xxxx and Xxxxxxx
or cashier's check (the "Cash Portion of the Purchase Price") and
the balance shall be payable pursuant to a two year 7% promissory
note payable in two annual payments of $45,000 on the next two
yearly anniversary dates of the Closing Date (the "Note"), a form
of which note is attached hereto as Exhibit 1.4 (the "Note Portion
of the Purchase Price") (the Advance, the Cash Portion of the
Purchase Price and the Note Portion of the Purchase Price are
collectively referred to as "the Purchase Price").
1.5 Closing Date. The closing under this Agreement (the
"Closing") shall take place at 9:30 A.M., on February 18, 1999 (the
"Closing Date"), at the offices of Xxxx and Xxxxxxx, Xxx Xxxxxxxx
Xxxx, Xxxxxxx, XX 00000, unless extended (a) by up to two weeks
upon the reasonable request of either party hereto or (b) by mutual
agreement of the parties hereto.
1.6 Allocation. The Purchase Price shall be
allocated as mutually agreed upon by the parties hereto.
2. Representations and Warranties of Vectronics.
Vectronics hereby warrants and represents to Micronetics as
follows:
2.1 Organization and Good Standing of Vectronics.
Vectronics is a corporation duly organized, validly existing and in
good standing under the laws of the State of New Jersey, and has
the full corporate power to carry on its business as now conducted.
Vectronics is entitled to own or lease and to operate the Assets
now owned or operated by it directly, and has the requisite power
and authority to consummate the transactions contemplated by this
Agreement. Vectronics is duly qualified to do business and is in
good standing under the laws of each jurisdiction in which its
ownership of property or assets or the nature of business conducted
therein requires such qualification, possesses all licenses and
franchises required under Federal, state or local law to conduct
its businesses in the manner in which it is presently conducted,
all of which are freely assignable to Micronetics without the
consent of any other party.
2.2 No Breach. Except as set forth on Schedule
2.2, neither the execution or delivery of this Agreement by
Vectronics, nor performance hereunder will result in a violation or
breach of any term or provision, or constitute a default under any
indenture, mortgage, deed of trust or other contract, agreement,
authorization or permit to which Vectronics is a party or is
subject.
2.3 Litigation and Claims; Compliance with
Applicable Law. (i) There is no litigation, claim, governmental
or other proceeding or investigation pending or, to the knowledge
of Vectronics, threatened or in prospect which will have an adverse
effect on (a) the Assets, (b) the subject matter of this Agreement
or (c) any action contemplated hereby or incidental hereto.
(ii) To the best of Vectronics' knowledge, Vectronics is not in
violation of any, and has been and will be as of the Closing Date
in compliance with, all provisions of any law, decree, order or
regulation applicable to the operation of its business, including,
without limitation those relating to environmental requirements
(such as air, water and noise pollution) and to employment
practices (such as discrimination, health and safety), nor is
Vectronics subject to any requirements to take remedial action by
reason of any violation (or to avoid in the future a violation) of
any such provision relating to the Assets.
2.4 Properties and Assets. Vectronics has good and
marketable title to the Assets subject to no liens or adverse
claims. Schedule 1.1 is a complete list of all tangible properties
and assets included within the Assets. Micronetics shall have the
right to inspect, at reasonable times, the Assets during the period
between execution of this Agreement and the Closing Date.
2.5 List of Customer Accounts. Schedule 2.5
contains a true, correct and complete list of all customers of
Vectronics.
2.6 No Defaults or Undisclosed Liabilities.
Vectronics is not in default with respect to any material
indebtedness or liability, and does not know of any event which has
occurred which, upon the passage of time, will result in any such
default. Any and all liabilities of Vectronics not disclosed in
this Agreement and listed on Schedule 2.15 for Micronetics to
assume shall be the sole and exclusive responsibility of
Vectronics. Except as provided herein, in a schedule attached
hereto or a document delivered hereunder, no consent of any party
to any agreement or document is required for the execution,
delivery, or performance of this Agreement, and the consummation of
the transactions contemplated hereby will not result in a breach of
or give rise to the right of cancellation of any such agreement or
document.
2.7 Insurance. Vectronics reasonably believes it
maintains adequate insurance on the Assets with respect to risks
normally insured against by companies similarly situated and
engaged in similar business with assets similar to the Assets. All
insurance policies maintained by Vectronics and the amounts of
coverage and deductible or co-insurance provisions provided in such
policies, are listed in Schedule 2.7 attached hereto, are currently
in full force and effect and are not in default and will be in
effect on the Closing Date. To Vectronics' knowledge, there has
been no failure to give any notice or present any claim under such
policies in timely fashion. Vectronics has not received any notice
providing for the termination of such insurance or that insurance
upon terms substantially the same as those currently in effect will
not be reoffered to it. No claim covered by such insurance
policies has arisen prior to the date hereof, the anticipated loss
from which is not adequately insured against (subject to any
applicable deductible or co-insurance provisions). If any of the
Assets are lost, stolen or damaged on or before Closing, which
loss, theft, damage or destruction is covered by insurance,
Vectronics will assign to Micronetics, at the Closing, the right to
receive such insurance proceeds, subject to a required prepayment
of any amounts owed to Vectronics.
2.8 Brokerage and Finder's Fees. Neither
Vectronics nor any affiliate of Vectronics has employed any broker,
finder or agent, nor has it otherwise dealt with or become in any
way obligated for any finder's, broker's, agent's or similar fee
with respect to the transactions referred to herein.
2.9 Material Misstatements or Omissions. No
representations or warranties by Vectronics in this Agreement nor
any document, statement, certificate or schedule furnished or to be
furnished to Micronetics pursuant hereto, or in connection with the
transactions contemplated hereby, contains or will contain any
untrue statement of a material fact, or omits or will omit to state
a material fact necessary to make the statements of facts contained
herein or therein not misleading.
2.10 Accounts Receivable of Vectronics; Warranty
Repairs. Schedule 2.10 attached hereto contains a true and correct
statement of the accounts receivable of Vectronics as of the date
hereof. The parties agree that the accounts receivable schedule
shall be updated on the Closing Date. The list of accounts
receivable is to be used to determine whether any customer payments
are owed to Vectronics. Any payment of a Vectronics invoice
received by Micronetics shall be promptly paid to Vectronics. Any
warranty repairs undertaken by Micronetics of products shipped by
Vectronics prior to the Closing Date shall be handled in accordance
with the provisions of Schedule 2.10(a) attached hereto.
2.11 Intangible Property. Schedule 2.11 attached
hereto contains a complete list of all of the patents, patent
licenses, patent applications, trademarks, trademark registrations,
and applications therefor, tradenames, copyrights and copyright
registrations and applications therefor of Vectronics included in
the Assets (the "Intangible Property"). Vectronics has not
received any notice of infringement or other complaint that its
operations traverse or infringe the rights of others under patents,
trademarks, tradenames, copyrights, or otherwise relating to the
Assets.
2.12 Conduct of the Business of Vectronics Prior to
the Closing Date. Vectronics agrees that at all times after the
date hereof and prior to the Closing Date:
(a) the business of Vectronics shall be conducted
in the ordinary course of business;
(b) Vectronics shall not (i) dispose of, encumber
or mortgage any assets or properties listed on Schedule 1.1; (ii)
waive, release, grant or transfer any rights of value or modify or
change in any material respect any existing license, lease,
contract or other document; or (iii) enter into any contract,
agreement, commitment or arrangement with respect to any of the
foregoing;
(c) Vectronics shall not (i) increase the
compensation payable or to become payable by it to any employee of
Vectronics, or (ii) pay or provide for any bonus, profit sharing,
stock option, pension, retirement, deferred compensation,
employment or other payment plan, agreement or arrangement for the
benefit of employees of Vectronics, except in the ordinary course
of the administration of its existing employment agreements and
benefit plans and;
(d) the Assets of Vectronics shall be maintained in
the same condition as they were on December 20, 1998, reasonable
wear and use excepted, and insurance on such properties and with
respect to the conduct of the business of Vectronics shall be
maintained in such amounts and of such kinds comparable to the
insurance in effect on the date hereof.
2.13 Representations and Warranties at Closing.
Unless expressly herein otherwise provided or contemplated, the
representations and warranties of Vectronics set forth in this
Agreement shall be true on and as of the Closing Date as though
such representations and warranties were made on and as of such
date and all such representations and warranties shall survive the
Closing. Nothing in this paragraph shall affect the obligations
and indemnities of the parties with respect to covenants and
agreements contained in this Agreement that are permitted or
required to be performed, in whole or in part, after the Closing
Date.
2.14 Indemnification. Subject to a limit of the
Purchase Price, and provided any such claim arises on or before one
year from the Closing Date, Vectronics agrees to indemnify, defend
and hold harmless Micronetics, its successors and legal
representatives, from all demands, claims, actions, or causes of
action, losses, damages, suits, judgments, costs and reasonable
attorneys' fees and expenses incurred by or asserted against
Micronetics by reason of any claims, obligations, debts, demands,
or liabilities arising from events occurring prior to the Closing
Date or a breach of any representations, warranties or covenants
contained in this Agreement.
2.15 Liabilities. Schedule 2.15 annexed hereto
contains a complete and accurate list of all of the liabilities of
Vectronics as of the date hereof which are to be assumed by
Micronetics pursuant to this Agreement. The parties agree that
Schedule 2.15 shall be updated on the Closing Date. This schedule
shall identify any leases (for real estate or capital equipment)
that currently are in place.
2.16 Inventory. Schedule 2.16 annexed hereto
contains a complete and substantially accurate list of all of the
inventory (raw material, work-in-process and finished goods) of
Vectronics as of the date hereof.
2.17 Backlog. Schedule 2.17 annexed hereto
contains a complete and accurate list of all open orders for
shipments remaining to be made. This schedule shall be updated as
of the Closing Date.
2.18 Employees. Schedule 2.18 annexed hereto
contains a complete and accurate list of all employees and their
current rate of pay and how much pay they received from Vectronics,
if any, in Vectronics' fiscal year ended December 31, 1998. It
shall also include how long such employee has been an employee and
their job descriptions. Vectronics shall be responsible for any
severance obligations it has to its employees. Vectronics has no
pension, profit-sharing, option or other incentive or employee
benefit plan (including obligations to or customary arrangements
with employees for incentive compensation, allowances, vacations,
severance pay or other benefits) except as listed in Exhibit 2.18.
Vectronics does not have, nor has it ever had, any pension plan
covering any of its employees.
2.19 Taxes. Except as set forth on Schedule 2.19,
Vectronics has paid all taxes that are due and filed all returns
that were required to be filed, and Vectronics has not received any
notice of nonpayment or audit with respect to any such taxes.
2.20 Environmental Requirements. Except as set
forth in Schedule 2.20, Vectronics is in compliance in all material
respects with all laws, governmental standards, rules and
regulations applicable to it or to any of its properties in respect
to occupational health and safety laws and environmental laws and
has obtained all governmental authorizations, kept all records and
made all filings required by applicable environmental laws with
respect to emissions or discharges into the environment and the
proper disposal of any hazardous wastes, hazardous substances, or
other hazardous or toxic materials as defined in the environmental
laws. Except as set forth in Schedule 2.20, none of the properties
occupied or used by Vectronics has been contaminated with any such
hazardous wastes, hazardous substances or other hazardous or toxic
materials as a result of actions of Vectronics or, to the knowledge
of Vectronics, as a result of actions of any other person or
entity. Except as set forth in Schedule 2.20, Vectronics has not
received any notices from the United States Environmental
Protection Agency that it is a potentially responsible party under
the Comprehensive Environmental Response, Compensation and
Liability Act ("Superfund Notices"), any citations from any
governmental authority for noncompliance with its requirements with
respect to air, water or environmental pollution, or the improper
storage, use or discharge of any hazardous waste, other waste or
other substance or material pertaining to its business
("Citations") or any written notice from any private party alleging
any such noncompliance or impropriety; and there are no pending or
unresolved Superfund Notices, Citations or written notices from
private parties alleging any such noncompliance or impropriety.
2.21 Subsidiaries, Joint Ventures, etc. Vectronics
has no subsidiaries and does not own or control any stock or other
interest in any enterprise (whether or not such enterprise is a
corporation). Xxxx X. Xxxxxx ("Xxxx") and Xxxx X. Xxxxxx ("Xxxx")
have no interest in any enterprise (whether or not such enterprise
is a corporation) competitive with that of Vectronics or
Micronetics other than less than 1% of the outstanding capital
stock of a publicly-held corporation except Xxxx and Xxxx own 82.2%
of Vectronics.
3. Representations and Warranties of Micronetics.
Micronetics hereby warrants and represents to and agrees with
Vectronics as follows:
3.1 Organization and Good Standing of Micronetics.
Micronetics is a corporation duly organized, existing and in good
standing under the laws of the State of Delaware.
3.2 Authority of Micronetics. Micronetics has
the full corporate authority to enter into the Agreement and to
carry out the terms of the Agreement. Neither the execution nor
delivery of the Agreement, by Micronetics, nor performance
thereunder will result in a violation or breach of any term or
provision nor constitute a default under any indenture, mortgage,
deed of trust or other contract or agreement to which Micronetics
is a party. Except as provided herein or in a schedule attached
hereto, no consent of any party to any such agreement or instrument
is required for the execution, delivery or performance of this
Agreement, and the consummation of the transactions contemplated
hereby will not result in a breach of, or give rise to a right of
cancellation of, any such agreement or instrument.
3.3 Material Misstatements or Omissions. No
representations or warranties by Micronetics in this Agreement, nor
any document, statement, certificate or schedule furnished or to be
furnished Vectronics pursuant hereto, or in connection with the
transactions contemplated hereby, contains or will contain any
untrue statement of a material fact, or omits or will omit to state
a material fact necessary to make the statement of facts contained
herein or therein nor misleading.
3.4 Brokerage and Finder's Fees. Micronetics has
engaged the services of Heath & Company with respect to the
transactions referred to herein whose fee shall be paid by
Micronetics.
3.5 Representations and Warranties at Closing.
Except as expressly herein otherwise provided or contemplated, the
representations and warranties of Micronetics as set forth in this
Agreement shall be true on and as of the Closing Date as though
such representations and warranties were made on and as of such
date and all such representations and warranties shall survive the
Closing. Nothing in this paragraph shall affect the obligations
and indemnities of the parties with respect to covenants and
agreements contained in this Agreement that are permitted or
required to be performed, in whole or in part, after the Closing
Date.
4. Covenants of Vectronics, Xxxx and Xxxx. Vectronics,
Xxxx and Xxxx hereby covenant to Micronetics as follows:
4.1 Non-Compete. Vectronics, Xxxx and Xxxx
covenant and agree that neither of them nor any person, firm or
corporation controlling, controlled by, or under common control
with any of them at any time during the period of two years from
and after the Closing Date within any of the states or countries in
which Vectronics is doing business on the Closing Date, directly or
indirectly, in any matter or under any circumstances or conditions
whatsoever, shall engage in any activity which is the same or is
directly competitive with the business of Vectronics on the Closing
Date.
4.2 Non-Disclosure. Vectronics, Xxxx and Xxxx each
covenant and agree that they and any person, firm or corporation
controlling, controlled by, or under common control with any of
them shall at all times hereafter keep secret and retain in
strictest confidence, and shall not to the detriment of Micronetics
knowingly use or disclose any Proprietary Information (as
hereinafter defined) directly or indirectly to any unauthorized
person, firm or corporation. Proprietary Information means any
information as to the business affairs or operations of Vectronics
or Micronetics, including, without limitation, all or part of any
"know-how", trade secrets, client lists, mailing operational
methods, marketing plans or strategies, project development,
acquisition or bidding techniques or plans, business acquisition
plans, new personnel acquisition plans, methods of construction,
technical processes, designs, design projects, inventions,
developments, improvements, statistical data and compilations,
trademarks, patents, formulae, other methods or processes, manuals,
and research projects (i) not generally known in the industry and
(ii) acquired, used or otherwise employed by Micronetics, or any
client, or sub-contractor, consultant, or any other person with
which Micronetics may do business, whether learned by Vectronics,
heretofore or hereafter.
4.3 Notification of Change. Vectronics, Xxxx and
Xxxx each shall promptly notify Micronetics, as soon as either of
them obtains knowledge thereof, of any fact, circumstances or
occurrences (including without limitation any actual or threatened
legal or other proceeding) which has materially adversely affected
or may materially adversely affect any of the Assets or which might
cause any of Vectronics's warranties and representations in this
Agreement to be or become untrue.
4.4 Consulting Agreement. On the Closing Date,
Vectronics shall enter into Consulting Agreements with Micronetics
providing for John's and Xxxxxx Xxxxxx'x services in the forms
annexed hereto as Exhibits 7(iv)(a) and (b) (the "Consulting
Agreements")
4.5 Occupancy Agreement. On the Closing Date,
Vectronics shall enter into an Occupancy Agreement in the form
annexed hereto as Exhibit 7(vi) (the "Occupancy Agreement").
4.6 Plating Training. After the public
announcement of this Agreement, for no additional consideration,
Vectronics agrees to train an employee of Micronetics on
Vectronic's plating processes before the Closing Date. If
Micronetics seeks such training, Micronetics agrees to provide
Vectronics with a Certificate of Insurance for Worker's
Compensation and other liability insurance that covers the employee
of Micronetics who will be trained on the plating process. The
plating process uses hazardous materials and Micronetis agrees to
assume all responsibility for its employee.
4.7 Change Name; Phone Numbers. After the Closing
Date, Vectronics agrees to change its name from Vectronics and to
change its phone and telecopier numbers; it also agrees to consent
to Micronetics' use of the name "Vectronics" and Vectronics' phone
and telecopier numbers.
4.8 Compliance with Bulk Sales Law. Vectronics
agrees to do all things and take all actions, if any, necessary to
comply with any Bulk Sales Law applicable to the transactions
contemplated by the terms of this Agreement.
4.9 Sales Tax. Vectronics agrees to promptly
remit all sales tax due, if any, to the appropriate governmental
authority.
5. Conditions Precedent to Micronetics'
Obligations.
5.1 The obligations of Micronetics to consummate
this Agreement shall be conditioned upon each of the following:
(i) Vectronics's representations and warranties
contained in this Agreement shall be true at the Closing Date as
though such representations and warranties were made at such time.
(ii) Vectronics shall have performed and complied
with all agreements, covenants and conditions required by this
Agreement to be performed or complied with prior to or at the
Closing, including furnishing the Schedules hereto.
(iii) The fulfillment by Vectronics of its
obligations under Section 5 required to be fulfilled on or before
the Closing Date.
5.2 Prior to the Closing until January 15, 1999,
(the "Inspection Period"), Micronetics shall have the right to
inspect the books and records of Vectronics relating to the Assets
being conveyed, transferred and delivered hereunder shall have the
right to confirm the existence and ownership of the Assets. This
inspection is not for the purpose of renegotiating the sales price
of the Assets. If, during the course of, or at the conclusion of,
this Inspection Period Micronetics determines there are facts,
conditions or other matters relative to the Assets that are
unacceptable to Micronetics, neither Vectronics nor Micronetics
will be obligated to proceed further. Micronetics agrees to use
its best efforts to conduct its on-site inspection during the week
of December 21, 1998. If the inspection cannot be performed during
that week the inspection must be performed outside regular working
hours.
5.3 Prior to the Closing, Vectronics shall use its
best efforts to obtain all consents necessary to consummate this
transaction and shall have taken all other action necessary to
transfer, assign, set over and convey to Micronetics all of the
Assets free and clear of any and all claims, liabilities, liens and
encumbrances of any kind. In addition, Vectronics agrees to use
its best efforts to transfer and assign to Micronetics at the
Closing all of the Customer-Owned Equipment maintained at the
Premises and identified on Schedule 5.3.
6. Vectronics' Obligations at Closing. At the Closing
or thereafter as herein required, Vectronics shall deliver to
Micronetics the following:
(i) Bills of sale, assignments, and such other
instruments of transfer and conveyance as may be necessary or
appropriate to the sale and delivery of the Assets pursuant to this
Agreement, all free and clear of any encumbrances.
(ii) At any time and from time to time at Micronetics'
request (whether at or after the Closing and without further
consideration) such further assignments, powers of attorney, and
other instruments of conveyance and transfer as may reasonably be
required; and Vectronics shall take such other action as
Micronetics may reasonably request to assign, grant, convey and
transfer more effectively to Micronetics any of the Assets to be
sold, conveyed, transferred and assigned to Micronetics hereunder.
(iii) an executed copy of the Consulting Agreements
in the forms annexed hereto as Exhibits 7(iv)(a) and (b).
(iv) an executed copy of the Occupancy Agreement in the
form annexed hereto as Exhibit 7(vi).
7. Micronetics' Obligations at Closing and Beyond.
(i) Micronetics shall deliver to Vectronics the
Cash Portion of the Purchase Price as specified in Paragraph 1.4.
above at the Closing.
(ii) Micronetices shall execute and deliver the Note
Portion of the Purchase Price to Vectronics at the Closing.
(iii) Micronetics shall reimburse Vectronics for
its payroll and all related expenses relating to the employment of
Vectronics' employees, working at the request of Micronetics, for
two weeks after the Closing unless any such employee terminates his
employment prior to that time. Vectronics shall agree to continue
its workmen's compensation insurance during this two week period.
In the event Micronetics desires the services of any current
employees of Vectronics after two weeks from the Closing,
Micronetics shall be required to hire these employees or otherwise
engage these employees.
(iv) Micronetics shall enter into the Consulting
Agreements with Vectronics substantially in the forms annexed
hereto as Exhibits 7(iv)(a) and (b).
(v) Micronetics shall be responsible for any
environmental matters that are the result of the actions of
Micronetics, including the removal of hazardous waste and filing of
necessary reports or obtaining of necessary permits while it is
occupying the Premises.
(vi) Micronetics shall enter into the Occupancy
Agreement with Vectronics substantially in the form annexed hereto
as Exhibit 7(vi).
(vii) Micronetics shall agree to honor Vectronics'
obligations to Alcatel pursuant to a letter from Vectronics to
Alcatel ITS Inc. dated July 21, 1997 attached hereto as Exhibit
7(vii).
(viii) At any time and from time to time at
Vectronics' reasonable request (whether at or after the Closing and
without further consideration) Micronetics shall take such further
acts as may be required to more fully implement any of the
provisions of this Agreement.
8. Fees and Expenses. Each party hereto shall pay all
fees and expenses incurred by it incident to the preparation of
this Agreement, carrying this Agreement into effect, and the
consummation of the transaction contemplated hereby.
9. Notices. Any notice or communication given pursuant
hereto by any party to any party hereto shall be in writing and
delivered or mailed by registered or certified mail, postage
prepaid, as follows:
If to Vectronics, a copy to the following address:
Vectronics Microwave Corporation
0 Xxxxx Xxxxx
Xxxxxxx Xxxxxxx, XX 00000
Attn: Xxxx X. Xxxxxx, President
with a copy to:
Xxxx & Xxxxxxx
0 Xxxxxxxx Xxxx
Xxxxxxx, XX 00000
Attn: Xxxxxxxx X. Xxxx, Esq.
If to Micronetics, a copy to the following:
Micronetics Wireless, Inc.
00 Xxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attn: President
with a copy to:
Xxxxxxx X. Xxxxx, Esq.
Xxxxx & Associates, P.C.
Xxx Xxxx Xxxxx, Xxxxx 0000
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
or at such other address as hereafter shall be furnished in writing
by either party to the other party hereto.
10. Entire Agreement. This Agreement and all schedules
and exhibits set forth herein, each of which is expressly
incorporated herein by this reference, constitutes the entire
agreement between the parties relating to the subject matter hereof
and supersedes and replaces all prior agreements or understandings,
whether written or oral, and sets forth all of the representations,
covenants and warranties upon which either party is relying in
entering into this transaction.
11. Original and Counterparts; Binding Effect. This
Agreement may be executed in counterparts, each of which shall be
deemed an original, and all of which together shall constitute one
and the same instrument and shall inure to the benefit of and be
binding upon the parties hereto and their respective legal
representatives, heirs, successors and assigns.
12. Applicable Law. This Agreement shall be construed
in accordance with the laws of the State of New Jersey.
13. Headings. The headings contained in this Agreement
are for reference purposes only and shall not affect the meaning or
interpretation of this Agreement.
14. Severability. If any provision of this Agreement is
found to be void or unenforceable by a court of competent
jurisdiction, the remaining provisions of this Agreement shall be
binding upon the parties with the same force and effect as though
the unenforceable part has been severed and deleted.
15. Survival. All statements contained in certificates
or other instruments delivered by or on behalf of the parties
hereto pursuant to this Agreement or in connection with the
transaction contemplated hereby shall be deemed to be
representations or warranties hereunder. The covenant contained
herein and all representations, warranties, covenants and
agreements made by the parties hereto in connection with the
Agreement shall survive the Closing until December 31, 2000, and
shall be unaffected by any investigations made by the Purchaser or
knowledge obtained as a result thereof or otherwise.
16. Arbitration. Other than injunctive relief or
specific performance as provided in Section 4, any controversy or
claim arising out of or relating to this Agreement, or the breach
thereof, shall be submitted to and settled by arbitration by the
American Arbitration Association in the State of New Jersey in
accordance with its Commercial Arbitration Rules, and judgment upon
the award rendered by the arbitrator(s) may be entered in any court
having jurisdiction thereof. Each party thereto shall separately
bear any costs incurred by its in connection with the prosecution
or defense of the arbitration.
17. Public Disclosure. No public announcement of this
Agreement shall be made prior to execution of this Agreement and
notification of Vectronics' employees provided Vectronics'
employees are notified on the date of execution of this Agreement.
Any public announcement made of this Agreement before the Closing
Date shall be subject to the approval of the parties hereto, which
approvals shall not be unreasonably withheld or delayed.
18. Assignment. This Agreement shall not be
assignable except that Micronetics shall have the right to assign
it rights under this agreement to a corporation wholly-owned by it.
19. Sales Representatives. Micronetics will be
responsible to Vectronics' sales representatives for commissions
owed for shipments from the Closing Date to the expiration of each
such representative's contract. Micronetics shall accept orders
from these representatives from the Closing Date until at least the
expiration of each such representative's contract.
IN WITNESS WHEREOF, the undersigned executed this agreement as
of the date first above written.
MICRONETICS WIRELESS, INC.
By:________________________________
Xxxxxxx X. Xxxxx, President
VECTRONICS MICROWAVE CORPORATION
By:
Xxxx X. Xxxxxx, President
Xxxx X. Xxxxxx (as to provisions of
Paragraph 4)
Xxxx X. Xxxxxx (as to provisions of
Paragraph 4)
N:\XXXX\MICRO\VEC.6
LIST OF SCHEDULES AND EXHIBITS
Schedule 1.1 List of Assets (other than inventory)
Schedule 1.2 List of Open Purchase Orders and Invoices to
be Assumed
Schedule 2.2 Violation or Breach
Schedule 2.5 List of Customers
Schedule 2.7 Insurance
Schedule 2.10 Accounts Receivable
Schedule 2.10(a) Warranty Repairs
Schedule 2.11 Intangible Property
Schedule 2.15 List of Liabilities to be Assumed by
Micronetics
Schedule 2.16 Inventory
Schedule 2.17 Lists of Backlog
Schedule 2.18 List of Employees
Schedule 2.19 Taxes
Schedule 2.20 Environmental Requirements
Schedule 5.3 List of Customer-Owned Equipment
Exhibit 1.4 Form of Promissory Note
Exhibit 7(iv)(a) Form of Consulting Agreement for the services
of Xxxx X. Xxxxxx
Exhibit 7(iv)(b) Form of Consulting Agreement for the services
of Xxxxxx Xxxxxx
Exhibit 7(vi) Form of Occupancy Agreement
Exhibit 7(vii) Letter from Vectronics to Alcatel dated July
21, 1997
N:\XXXX\MICRO\VEC.6
