Exhibit 10.9
ASSET PURCHASE AGREEMENT
This AGREEMENT (the "Agreement") made as of this 24th day of
December, 2002, by and between MICRONETICS, INC., a Delaware
corporation whose principal place of business is 00 Xxxxxxxxx
Xxxxx, Xxxxxx, XX 00000 or a wholly-owned subsidiary of
Micronetics, Inc. at the sole option of Micronetics, Inc.
("Micronetics" or the "Purchaser"), and MICROWAVE CONCEPTS, INC.,
a New Jersey corporation whose principal place of business is 00
Xxxx Xxxx, Xxxxxxxxx, XX 00000 ("MCI").
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, MCI 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 MCI, all of the assets of
MCI as listed on a schedule furnished to Micronetics by MCI and
attached hereto as Schedule 1.1, and its corporate name (which
MCI agrees to change after closing), and its present phone and
telecopier numbers of MCI (000-000-0000 and 000-000-0000) (the
"Assets"). MCI represents that Schedule 1.1 includes all of the
accounts receivable, inventory and other assets currently
utilized by MCI 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 MCI which will be
segregated at closing and moved to a designated storage area and
removed by MCI 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 MCI, other
than those set forth on Schedule 1.2 hereto. Schedule 1.2 shall
contain a list of all liabilities to be assured by Micronetics,
including any open purchase orders of MCI and invoices received
by MCI for parts to be received after the Closing that
Micronetics agrees to assume. The liabilities of MCI 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
MCI's conduct of its business prior to the Closing or any other
business conducted by MCI 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 MCI 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) MCI'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
charges previously paid to MCI prior to the Closing;
(d) Product Warranties. Any and all product warranties of
MCI except as provided in Paragraph 2.10 hereof.
(e) Employee Liabilities. Any and all liabilities to
employees or former employees of MCI for severance, sick pay,
vacation pay or any other obligation, except for wages of current
employees of MCI payable as stated on MCI's balance sheet at date
of closing.
(f) Loans. Any and all loans of MCI or Xxxxxxx Xxxxxxxxx
including, but not limited to:
(i) The loan from Xx. Xxxxxxxxx to MCI; and
(ii) Any amount due to Xxxxxxx Xxxxx or any assignee of
his for the purchase of his interest in MCI.
MCI shall indemnify and hold Micronetics harmless from and
against any and all liabilities of MCI that are not assumed by
Micronetics pursuant to this Agreement. The Premises means the
facility located at 00 Xxxx Xxxx, Xxxxxxxxx, XX currently
occupied by MCI.
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 MCI 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 MCI by assuming liabilities
identified on Schedule 1.2 hereof.
1.5 Closing Date. The closing under this
Agreement (the "Closing") shall take place at the offices of
MCI's counsel, on or about the first week of January, 2003 (the
"Closing Date"), 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 MCI. MCI hereby
warrants and represents to Micronetics as follows:
2.1 Organization and Good Standing of MCI. MCI
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.
MCI 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. The execution and delivery of the Agreement and the
performance of its obligations hereunder have been duly
authorized by all requisite corporate action on the part of MCI.
MCI 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 MCI,
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 MCI is a party or is subject.
2.3 Litigation and Claims; Compliance with
Applicable Law. (a) There is no litigation, claim, governmental
or other proceeding or investigation pending or, to the knowledge
of MCI, threatened or in prospect which will have an adverse
effect on (i) the Assets, (ii) the subject matter of this
Agreement or (iii) any action contemplated hereby or incidental
hereto.
(b) To the best of MCI's knowledge, MCI 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 MCI 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. Except as set forth
on Schedule 2.4 hereof, MCI 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
MCI.
2.6 No Defaults or Undisclosed Liabilities. MCI
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 MCI not disclosed in this Agreement
and listed on Schedule 2.15 for Micronetics to assume shall be
the sole and exclusive responsibility of MCI. 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. MCI 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 MCI 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 MCI's knowledge, there
has been no failure to give any notice or present any claim under
such policies in timely fashion. MCI 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, MCI
will assign to Micronetics, at the Closing, the right to receive
such insurance proceeds, subject to a required prepayment of any
amounts owed to MCI.
2.8 Brokerage and Finder's Fees. Neither MCI nor
any affiliate of MCI 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 MCI 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 MCI; Warranty Repairs.
Schedule 2.10 attached hereto contains a true and correct
statement of the accounts receivable of MCI as of the date
hereof. The parties agree that the accounts receivable schedule
shall be updated on the Closing Date. Any warranty repairs
undertaken by Micronetics of products shipped by MCI 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 and domain
names of MCI included in the Assets (the "Intangible Property").
MCI 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 MCI Prior to the
Closing Date. MCI agrees that at all times after the date hereof
and prior to the Closing Date:
(a) the business of MCI shall be conducted in the
ordinary course of business;
(b) MCI 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) MCI shall not (i) increase the compensation
payable or to become payable by it to any employee of MCI, 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 MCI, except in the ordinary course of the
administration of its existing employment agreements and benefit
plans and;
(d) the Assets of MCI shall be maintained in the
same condition as they were on September 30, 2002, reasonable
wear and use excepted, and insurance on such properties and with
respect to the conduct of the business of MCI shall be maintained
in such amounts and of such kinds comparable to the insurance in
effect on the date hereof.
(e) MCI shall cancel all MCI credit card accounts
and MCI or any of its affiliates shall not make any additional
charges on any such accounts.
2.13 Representations and Warranties at Closing.
Unless expressly herein otherwise provided or contemplated, the
representations and warranties of MCI 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, MCI 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. In addition, Xxxxxxxxx agrees to
indemnify Micronetics from any liabilities other than those
identified on Schedule 1.2 hereof. Micronetics shall have the
right to offset amounts due to Xxxxxxxxx to meet the obligations
of MCI.
2.15 Liabilities. Schedule 2.15 annexed hereto
contains a complete and accurate list of all of the liabilities
of MCI as of the date hereof. 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
MCI 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 MCI, if
any, in MCI' fiscal year ended December 31, 2002. It shall also
include how long such employee has been an employee and their job
descriptions. MCI shall be responsible for any severance
obligations it has to its employees. MCI 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. MCI 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, MCI has paid all taxes that are due and filed all returns
that were required to be filed, and MCI 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, MCI 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 MCI has been
contaminated with any such hazardous wastes, hazardous substances
or other hazardous or toxic materials as a result of actions of
MCI or, to the knowledge of MCI, as a result of actions of any
other person or entity. Except as set forth in Schedule 2.20,
MCI 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. MCI 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). Xx. Xxxxxxxxx has no interest in any enterprise
(whether or not such enterprise is a corporation) competitive
with that of MCI or Micronetics other than less than 1% of the
outstanding capital stock of a publicly-held corporation except
Xx. Xxxxxxxxx owns MCI.
2.22 Consents. Except as set forth on Schedule
2.22, no consent of or notice to any person is required of MCI in
connection with its execution and delivery of the Agreement or
the performance of its obligations hereunder.
3. Representations and Warranties of Micronetics.
Micronetics hereby warrants and represents to and agrees with MCI
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 MCI 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 MCI and Xx. Xxxxxxxxx. MCI and Xx.
Xxxxxxxxx hereby covenant to Micronetics as follows:
4.1 Non-Compete. MCI and Xx. Xxxxxxxxx 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 MCI 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 MCI on the
Closing Date.
4.2 Non-Disclosure. MCI and Xx. Xxxxxxxxx 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 MCI 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 MCI, heretofore
or hereafter.
4.3 Notification of Change. MCI and Xx.
Xxxxxxxxx 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 MCI's warranties
and representations in this Agreement to be or become untrue.
4.4 Employment Agreement. On the Closing Date,
Xxxxxxxxx shall enter into an Employment Agreement with
Micronetics in the form annexed hereto as Exhibit 4.4 (the
"Employment Agreement").
4.5 Change Name; Phone Numbers. After the
Closing Date, MCI agrees to change its name from MCI and to
change its phone and telecopier numbers; it also agrees to
consent to Micronetics' use of the name "MCI" and MCI's phone and
telecopier numbers.
4.6 Compliance with Bulk Sales Law. MCI
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.
4.7 Sales Tax. MCI 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:
(a) MCI'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.
(b) MCI 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.
(c) The fulfillment by MCI of its obligations
under Section 5 required to be fulfilled on or before the Closing
Date.
(d) At the Closing, the Adjusted Assets of MCI
shall exceed the Adjusted Liabilities of MCI. For purposes of
this provision, the following terms shall apply:
(i) Adjusted Assets shall mean the assets of
MCI after reducing the account receivable component by 5% and
after reducing the inventory component by 50%.
(ii) Adjusted Liabilities shall mean the
liabilities of MCI as set forth in Schedule 1.2 hereof.
Agreements for creditors to settle their outstanding claims shall
have no impact on the Adjusted Liabilities.
5.2 For sixty (60) days prior to the Closing,
(the "Inspection Period"), Micronetics shall have the right to
inspect the books and records of MCI 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 MCI nor
Micronetics will be obligated to proceed further. The schedules
included with this Agreement upon execution shall be
substantially accurate and shall be updated at the Closing when
they shall deemed final.
5.3 Prior to the Closing, MCI shall 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.
6. MCI's Obligations at Closing. At the Closing or
thereafter as herein required, MCI 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 MCI 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 Employment Agreement in
the form annexed hereto as Exhibit 4.4.
7. Micronetics' Obligations at Closing and Beyond.
(i) Micronetics shall assume the obligations
identified on Schedule 1.2.
(ii) Micronetics shall enter into the Employment
Agreement with Xx. Xxxxxxxxx substantially in the form annexed
hereto as Exhibit 4.4.
(iii) At any time and from time to time at MCI'
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.
(iv) Micronetics shall use its best efforts to
payoff the liabilities set forth on Schedule 1.2. In no event
shall the payoff be less than the minimum balances due on MCI's
credit card liabilities and line of credit.
(v) Micronetics agrees to pay at or prior to the
Closing any outstanding receivables it may owe to MCI provided
the condition set forth in Section 5.1(d) hereof is met.
(vi) Micronetics agrees to pay MCI any collection
of the accounts receivable of JDS Uniphase in the amount of
$52,714.34 upon receipt provided the condition set forth in
Section 5.1(d) hereof is met.
8. Micronetics' Option to Terminate.
(i) For 92 days after the Closing, in the event
the transfer of assets contemplated pursuant to Paragraph 1.1
hereof either does not occur, is reversed or there exists a
legal action of any kind that calls for the reversal of such
transfer for any reason, including the failure to obtain any
necessary consents, then Micronetics shall have the right to not
assume any of the liabilities of MCI as identified on Schedule
1.2 and to withdraw from this Agreement with no further
obligations on its part other than to retransfer any of the
Assets previously assigned to it.
9. 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.
10. 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 MCI, a copy to the following address:
Microwave Concepts, Inc.
00 Xxxx Xxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxxxxx, President
with a copy to:
Xxx Xxxxxxxxx, Esq.
000 Xxxxxxxx Xxxxxxxx, Xxxxx 0000
Xxxxxxx Xxxx, XX 00000
(000) 000-0000 x 000
(000) 000-0000 (f)
Xxx@XxxXxxxxxxxx.xxx
If to Micronetics, a copy to the following:
Micronetics, Inc.
00 Xxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attn: President
with a copy to:
Xxxxxxx X. Xxxxx, Esq.
Xxxxx & Associates, P.C.
000 Xxxxxx Xxxxxx, Xxxxx 000
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.
11. 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.
12. 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.
13. Applicable Law. This Agreement shall be construed
in accordance with the laws of the State of New Jersey.
14. Headings. The headings contained in this
Agreement are for reference purposes only and shall not affect
the meaning or interpretation of this Agreement.
15. 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.
16. 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, 2005, and
shall be unaffected by any investigations made by the Purchaser
or knowledge obtained as a result thereof or otherwise.
17. 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 Hampshire 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.
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.
IN WITNESS WHEREOF, the undersigned executed this agreement
as of the date first above written.
MICRONETICS, INC.
By:________________________________
Xxxxxxx X. Xxxxx, President
MICROWAVE CONCEPTS, INC.
By:________________________________
Xxxxxxx Xxxxxxxxx, President
___________________________________
Xxxxxxx Xxxxxxxxx (as to provisions
of Paragraphs 4 and 2.14)
