UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 3)*
BOONTON ELECTRONICS CORPORATION
(Name of Issuer)
Common Stock, par value $0.10 per share
(Title of Class of Securities)
099257107
(CUSIP Number)
Daniel Auzan
G.E.M. USA, Inc.
c/o Robert P. Regimbal, Esq.
Graham, Curtin & Sheridan, A Professional Association
4 Headquarters Plaza
Morristown, NJ 07962-1991
(973) 292-1700
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications)
January 19, 1998
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition which is the subject of this Schedule
13D, and is filing this schedule because of Rule 13d-1(b)(3) or
(4), check the following box / /.
Check the following box if a fee is being paid with the statement
/ /. (A fee is not required only if the reporting person: (1)
has a previous statement on file reporting beneficial ownership of
more than five percent of the class of securities described in Item
1; and (2) has filed no amendment subsequent thereto reporting
beneficial ownership of five percent or less of such class). (See
Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should
be filed with the Commission. See Rule 13d-1(a) for other parties
to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to the
subject class of securities, and for any subsequent amendment
containing information which would alter disclosures provided in a
prior cover page.
The information required on the remainder of this cover page shall
not be deemed to be "filed" for the purpose of Section 18 of the
Securities Exchange Act of 1934 ("Act") or otherwise subject to the
liabilities of that section of the Act but shall be subject to all
other provisions of the Act (however, see the Notes).
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SCHEDULE 13D
CUSIP No. 099257107
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
G.E.M. USA, Inc.
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) / /
(b) / /
3. SEC USE ONLY
4. SOURCE OF FUNDS
WC
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED / /
PURSUANT TO ITEMS 2(d) or 2(e)
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF 7. SOLE VOTING POWER
SHARES 374,266
BENEFICIALLY -----------------------------------------
OWNED BY 8. SHARED VOTING POWER
EACH REPORTING None
------------------------------------------
9. SOLE DISPOSITIVE POWER
374,266
------------------------------------------
10. SHARED DISPOSITIVE POWER
None
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
374,266
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES / /
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
22.76%
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14. TYPE OF REPORTING PERSON
CO
SCHEDULE 13D
CUSIP NO. 099257107
JANUARY 19, 1998
Item 1. Security and Issuer.
Common stock, par value $0.10 per share
Boonton Electronics Corporation
25 Eastmans Road
Parsippany, New Jersey 07054
Item 2. Identity and background.
(a) G.E.M. USA, Inc. ("GEM")
(b) c/o General Electronique Mesure, S.A.
8/10 rue Nieuport
78140 Velizy, France
(c) N/A
(d) No
(e) No
(f) Delaware - U.S.A.
(a) General Electronique Mesure, S.A. ("GEMSA")
(b) 8/10 rue Nieuport
78140 Velizy, France
(c) N/A
(d) No
(e) No
(f) France
(a) GEM Technologies S.A. ("GEMT")
(b) 8/10 rue Nieuport
78140 Velizy, France
(c) N/A
(d) No
(e) No
(f) France
(a) Henri Triebel
(b) 8/10 rue Nieuport
78140 Velizy, France
(c) Chairman and CEO of GEMSA and GEMT, and President of GEM
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(d) No
(e) No
(f) France
(a) Victor Tolan
(b) 1031 Segovia Circle
Placentia, CA 92870
(c) Vice President of GEM
(d) No
(e) No
(f) U.S.A.
Item 3. Source and Amount of Funds.
$212,500.00 from working capital of G.E.M. USA, Inc.
Item 4. Purpose of Transaction.
The securities are being acquired from a former
employee of the issuer as part of the settlement
of a civil action brought by the former employee
against the issuer to induce the former employee
to dismiss the action and to release all claims
against the issuer.
(a) G.E.M. USA, Inc. has purchased an
additional 106,250 shares of
common stock in Boonton Electronics
Corporation pursuant to Section 9 of that
certain Stock Purchase and Settlement
Agreement dated January 19, 1998 (a copy of
which is attached hereto as Exhibit A).
(b) None.
(c) None.
(d) None.
(e) None.
(f) None.
(g) None.
(h) None.
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(i) None.
(j) None.
Item 5. Interest in Securities of the Issuer.
(a) 374,266 shares of common stock owned by
G.E.M. USA, Inc., representing
approximately 22.76% of the outstanding
stock of Boonton Electronics Corporation,
with the option to acquire an additional
435,984 shares of common stock
representing, after the issuance
thereof, approximately 49.28% of the
outstanding stock of Boonton Electronics
Corporation.
(b) 374,266 direct.
(c) None.
(d) None.
(e) N/A.
Item 6. Contracts, Agreements, Understandings, etc.
Reference is hereby made to (i) the
Subscription and Option Agreement dated
February 23, 1996 (a copy of which was filed
with the original Schedule 13D), (ii) the
Subscription and Option Agreement dated
October 21, 1996 (a copy of which was filed with the
first amendment to Schedule 13D, (iii) the
Subscription and Option Agreement dated October 2,
1997 (a copy of which was filed with the second
amendment to Schedule 13D), and (iv) the Stock
Purchase and Settlement Agreement dated January 19,
1998 attached hereto as Exhibit A.
Item 7. Exhibits.
Stock Purchase and Settlement Agreement dated January
19, 1998 by and between Holmes Bailey, Judith Bailey,
Boonton Electronics Corporation, G.E.M. USA, Inc.,
and Abel Sheng.
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After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement
is true, complete and correct.
G.E.M. USA, Inc.
By: /s/ Henri Triebel
-----------------------
Henri Triebel, President
DATED: March 19th, 1998
STOCK PURCHASE AND SETTLEMENT AGREEMENT
This Stock Purchase and Settlement Agreement (hereinafter
the "Agreement") is made this 19th day of January, 1998, by and
among, HOLMES BAILEY, individually; JUDITH BAILEY, individually,
(hereinafter Holmes Bailey and Judith Bailey shall be
collectively referred to as the "BAILEYS"); BOONTON ELECTRONICS
CORPORATION, a company incorporated under the laws of the State
of New Jersey, U.S.A. (hereinafter referred to as "BEC" or
"COMPANY;" together with the BAILEYS hereinafter referred to
collectively as the "LITIGANTS"); G.E.M. USA, INC., a company
incorporated under the laws of the State of Delaware, U.S.A.
(hereinafter referred to as "GEM"); and ABEL SHENG, individually
(hereinafter referred to as "SHENG") (collectively "SHENG,"
"GEM," the "LITIGANTS," and the "BAILEYS," shall be referred to
as "the Parties").
WITNESSETH
WHEREAS, LITIGANTS are parties to that certain action
pending in the Superior Court of New Jersey, Chancery Division,
Essex County, captioned Holmes Bailey v. Boonton Electronics
Corporation, et al., Docket No. C-101-96 (the "Action"); and
WHEREAS, the LITIGANTS desire to settle and forever release
any claim or causes of action each may have against the other,
whether known or unknown, including all claims asserted in the
Action, as provided herein; and
WHEREAS, the BAILEYS are willing to dismiss the Action with
prejudice and enter into this Agreement on the condition, among
others, that GEM and SHENG agree to purchase all shares of
capital stock owned by them in BEC as provided herein; and
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WHEREAS, In order to induce GEM and SHENG to purchase their
shares of capital stock in BEC as provided herein, the BAILEYS
have agreed to discharge and forever release SHENG, BEC and GEM,
and their respective directors, officers, shareholders, agents,
employees and successors and assigns, from and against any and
all claims, whether known or unknown, as provided herein; and
WHEREAS, GEM and SHENG are willing to enter into this
Agreement and to purchase the shares of capital stock owned by
the BAILEYS in BEC as provided herein on the condition, among
others, that the BAILEYS dismiss the Action with prejudice and
discharge and forever release SHENG, BEC and GEM and their
respective directors, officers, shareholders, agents, employees
and successors and assigns from and against any and all employees
and successors and assigns from and against any and all claims,
whether known or unknown, as provided herein.
NOW, THEREFORE, in consideration of the mutual covenants and
premises hereinabove and hereinafter set forth, the Parties have
agreed to enter into and be bound by the terms of this Agreement.
1. NO ADMISSION OF LIABILITY.
It is understood and agreed that this Agreement shall not in
any way be construed as an admission by the COMPANY or any
subsidiary of the COMPANY, or any of its officers, directors,
employees, agents and/or representatives of any liability for any
wrongdoing whatsoever against the BAILEYS or any other person(s),
and the COMPANY specifically denies any liability to the BAILEYS.
It is further understood and agreed that this Agreement shall not
in any way be construed as an admission by the BAILEYS of any
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liability for any wrongdoing whatsoever against the COMPANY or
any subsidiary of the COMPANY, or any of its officers, directors,
employees, agents and/or representatives or any other person(s),
and the BAILEYS specifically deny any liability to the COMPANY.
The LITIGANTS agree that they are entering into this Agreement
freely and voluntarily, for the purpose of resolving all of their
disputes, including but not limited to any and all claims arising
under or in connection with the Action and for attorneys fees and
costs.
2. CONFIDENTIALITY.
The BAILEYS represent and agree that they have kept and will
keep the terms, amount and fact of this Agreement completely
confidential and that they will not hereafter disclose any
information concerning this Agreement to anyone, including but
not limited to past, present or future employees of the COMPANY,
but excluding immediate family members and professional
representatives, unless compelled to do so by compulsory court
process or as required by the Internal Revenue Service or any
other governmental agency. The BAILEYS, however, shall have the
right to file all reports required by the Securities and Exchange
Commission, NASD, NASDAQ, or any other securities regulatory
agency and shall have the right to (a) provide and disclose
information relative to the alleged claims and the terms and
conditions of the within Agreement and (b) furnish an executed
copy of the within Agreement, to any federal and/or state agency
which shall conduct any investigation or inquiry which either in
whole or in part shall involve the rights and obligations which
are established under the provisions of the within Agreement and
such federal and/or state agencies shall include, but shall not
be limited to the New Jersey Division of Taxation and the
Internal Revenue Service.
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3. RELEASE BY BAILEYS.
As a material inducement to the COMPANY to enter into this
Agreement, and, in consideration of the sums and benefits
described in this Agreement, the BAILEYS do hereby forever
discharge and release the COMPANY, SHENG and GEM and their
respective subsidiaries, agents, officers, directors,
shareholders, employees, successors and assigns, from and against
any and all claims, demands, causes of action, damages, charges,
complaints, expenses and compensation which they now have or may
in the future have on account of or arising out of any matter or
thing which has happened, developed or occurred before the date
of this Agreement (excluding, however, the obligations of SHENG
under this Agreement and GEM arising out of the obligations under
the Promissory Note of GEM to the BAILEYS), including, without
limitation, all claims, demands, causes of action, damages,
charges, complaints, expenses and compensation arising from the
Action, HOLMES BAILEY's employment with the COMPANY, the
termination of his employment from the COMPANY, and the BAILEYS
capacity and/or status as shareholders of the Company, and the
BAILEYS hereby forever waive and release any and all such claims,
causes of action, demands, damages, charges, complaints, expenses
and compensation of any type or description that the BAILEYS have
or might have, whether known or unknown, against SHENG, GEM and
the COMPANY, and their respective subsidiaries, agents, officers,
directors, shareholders, employees, successors and assigns. This
release, discharge and waiver includes, but is not limited to the
following:
(a) Any and all claims or liabilities arising out of,
resulting from, or related to claims and counterclaims contained
in the Action. In the event, however, GEM shall default in the
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payment of any amounts required to be paid as set forth in
paragraph 9.A. below, which default is not cured within the cure
period provided for in the Promissory Note made by GEM in the
form attached as Exhibits A, HOLMES BAILEY's right to assert
claims against the defendants named in the Action shall be
restored without regard to any statute of limitation or similar
restriction, provided, however, that in the event any such
payment default is subsequently cured or satisfied by whatever
means or from whatever source, including without limitation as a
result of the exercise by HOLMES BAILEY of any right or
privilege, then HOLMES BAILEY's right to restore and maintain the
Action shall cease and HOLMES BAILEY shall immediately cause to
be dismissed with prejudice any such pending action or claim; and
(b) Any claim, demand, cause of action, damage,
charge, complaint, expense or compensation arising out of or
under the Federal Age Discrimination in Employment Act of 1967,
as amended, 42 U.S.C. 1981, as amended, the Federal Equal Pay
Act of 1963, as may be amended, the Federal Employee Retirement
Income Security Act of 1974, as amended, the Americans with
Disabilities Act, as amended, the New Jersey Revised Statutes, as
amended, as well as any claim, demand, cause of action, damage,
charge, complaint, expense or compensation arising out of or
under any Federal, State or local law or rule, regulation,
executive order or guideline, including but not limited to, those
laws specifically described above; and
(c) Any and all claims, causes of action, demands,
damages, charges, complaints, expenses and compensation of any
type or description that the BAILEYS have or might have, whether
known or unknown, against the COMPANY with respect to any act or
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omission by the COMPANY in connection with the operation of its
business, including but not limited to, any environmental issues
and/or claims.
HOLMES BAILEY understands that there are various
state and federal laws that prohibit employment discrimination on
the basis of age, sex, race, color, national origin, religion,
disability or other categories, and that these laws are enforced
by various courts and governmental agencies. HOLMES BAILEY
intends to give up any rights he may have under these laws or any
other laws with respect to his employment with the Company or the
termination of that employment. HOLMES BAILEY further agrees not
to seek any form of unemployment compensation from the State of
New Jersey or any subdivision thereof with respect to his
employment by the Company.
Notwithstanding the foregoing, if an action is
brought against Holmes Bailey by any person and/or entity not a
party to this Agreement or not a party to the Action, arising out
of his duties as an officer and/or director of the COMPANY, in
defense of that action he shall retain all rights to seek
indemnification/contribution from the COMPANY. No such
indemnity/contribution shall be paid by the COMPANY to HOLMES
BAILEY:
(a) on account of any claim against HOLMES BAILEY for
an accounting of profits made from the purchase or sale by him of
securities of the COMPANY pursuant to the provisions of Section
16(b) of the Securities Exchange Act of 1934 and amendments
thereto or similar provisions of any federal, state, or local
statutory law;
(b) on account of HOLMES BAILEY'S conduct that was
knowingly fraudulent or deliberately dishonest or that
constituted willful misconduct;
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(c) on account of HOLMES BAILEY'S conduct that
constituted a breach of his duty of loyalty to the COMPANY or
resulted in any personal profit or advantage to which he was not
legally entitled;
(d) for which payment is actually made to HOLMES
BAILEY under a valid and collectible insurance policy or under a
valid and enforceable indemnity clause, bylaw or agreement,
except in respect of any excess beyond payment under such
insurance, clause, bylaw, or agreement;
(e) if indemnification is not lawful (and, in this
respect, both the COMPANY and HOLMES BAILEY have been advised
that the Securities and Exchange Commission believes that
indemnification for liabilities arising under the federal
securities laws is against public policy and is, therefore,
unenforceable and that claims for indemnification should be
submitted to appropriate courts for adjudication); or
(f) in connection with any proceeding (or part
thereof) initiated by Holmes Bailey, or any proceeding by HOLMES
BAILEY against the COMPANY or its directors, officers, employees
or other agents, unless (i) such indemnification is expressly
required to be made by law; (ii) the proceeding was authorized by
the Board of Directors of the COMPANY; (iii) such indemnification
is provided by the COMPANY, in its sole discretion, pursuant to
the powers vested in the COMPANY under the New Jersey Business
Corporation Act, as amended.
4. Review Period/Termination of Agreement. HOLMES BAILEY
acknowledges and agrees that he is entitled to at least twenty-
one (21) days from the date of his execution of this Agreement
(the "Effective Date") within which to consider this Agreement
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and that the Company has advised him to consult an attorney prior
to executing this Agreement. HOLMES BAILEY'S waiver of claims
alleging a violation of the Age Discrimination in Employment Act
of 1967, as amended, and the provisions of this Agreement shall
become effective and enforceable on the 8th day after execution
of this Agreement by HOLMES BAILEY. The Parties understand and
agree that HOLMES BAILEY may revoke his waiver of claims under
the Age Discrimination in Employment Act of 1967, as amended,
after having executed this Agreement by so advising the Company
in writing provided such writing is received by the Company at
the address listed in Section 16 of this Agreement no later than
11:59 p.m. on the 7th day after HOLMES BAILEY's execution of this
Agreement.
In the event HOLMES BAILEY revokes such waiver as provided
herein or revokes this Agreement prior to the Effective Date,
this Agreement shall terminate and be of no further force and
effect and none of the Parties shall have any liability to the
others arising out of or in connection with this Agreement.
5. Dismissal of Action. On the Effective Date, the LITIGANTS
shall dismiss the Action and shall cause to be filed such
stipulation of dismissal as may be necessary to give effect
thereto. Upon full payment of all obligations hereunder the
action shall be dismissed with prejudice.
6. Advice of Counsel. THE BAILEYS ACKNOWLEDGE AND AGREE THAT
THEY HAVE READ AND FULLY UNDERSTAND THE MEANING OF EACH PROVISION
OF THIS AGREEMENT, INCLUDING SPECIFICALLY THE RELEASES CONTAINED
HEREIN. THE BAILEYS FURTHER ACKNOWLEDGE AND AGREE THAT THEY HAVE
BEEN ADVISED IN WRITING BY THE COMPANY TO CONSULT COUNSEL AND
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THAT THEY HAVE HAD THE OPPORTUNITY TO CONSULT WITH AN ATTORNEY
CONCERNING THIS AGREEMENT AND THAT THEY ARE FREELY AND
VOLUNTARILY ENTERING INTO THIS AGREEMENT.
7. Release by Company, SHENG and GEM. As a material inducement
to the BAILEYS to enter into this Agreement, and, in
consideration of the promises, covenants, and benefits described
in this Agreement, the COMPANY, SHENG and GEM do hereby forever
discharge and release the BAILEYS, their heirs, successors and
assigns from any and all claims, demands, causes of action,
damages, charges, complaints, expenses and compensation of any
kind or nature which the COMPANY, SHENG and/or GEM now has or may
in the future have on account of or arising out of any matter or
thing which has happened, developed or occurred before the date
of this Agreement, including, without limitation, all claims,
demands, causes of action, damages, charges, complaints, expenses
and compensation arising from HOLMES BAILEY's employment with the
COMPANY and the termination of HOLMES BAILEY's employment from
the COMPANY, and the COMPANY, SHENG and GEM hereby waive any and
all such claims, causes of action, demands, damages, charges,
complaints, expenses and compensation of any type or description
that the COMPANY, SHENG and/or GEM has or might have against
HOLMES BAILEY. This release, discharge and waiver includes, but
is not limited to the following:
(a) Any and all claims or liabilities arising out of,
resulting from, or related to claims and counterclaims contained
in or which could have been asserted in the Action provided,
however, that in the event the Action is reinstituted as
permitted in Section 3(a) above, the right of the defendants
named in the Action to assert defenses, claims and counterclaims
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against HOLMES BAILEY shall be restored without regard to any
statute of limitations or similar restriction; and
(b) Any claim, demand, cause of action, damage, charge,
complaint, expense or compensation of any type or description
arising out of HOLMES BAILEY's employment by the COMPANY or due
to HOLMES BAILEY's position or service in his capacity as a
shareholder, officer, director, employee, agent, assign or
representative of the COMPANY, including any claim, demand, cause
of action, damage, charge, complaint, expense or compensation of
any type or description against the COMPANY arising out of or
under any Federal, State or local law or rule, regulation,
executive order or guideline.
8. Consistency of Settlement. The Litigants agree that they
will not at any time subsequent to the date of this Agreement,
adopt, express or assume any statement, position or other
communication which shall be inconsistent or in conflict with the
allocation of the settlement that is made pursuant to the
provisions of this agreement and more specifically, but not by
way of limitation, the Litigants agree that they will not adopt,
express or assume any such inconsistent position for insurance
purposes, retirement plan purposes and/or federal or state income
tax purposes.
9. Sale of Stock. The BAILEYS hereby represent that they own
Two Hundred Twelve Thousand Five Hundred (212,500) shares of
common stock, par value $.10 each, of the COMPANY (the "BAILEY
STOCK"). In consideration of the mutual premises and covenants
contained in this Agreement, the BAILEYS agree to sell, transfer,
convey and assign unto GEM and SHENG, and GEM and SHENG do hereby
agree to purchase from the BAILEYS on the Effective Date,
provided this Agreement has not been terminated, Fifty Percent
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each of the BAILEY STOCK, free and clear of all liens, security
interests, restrictions and encumbrances under the following
terms and conditions:
A. On the Effective Date, GEM shall purchase from the
BAILEYS, and the BAILEYS shall sell to GEM, 106,250 shares of
common stock of the COMPANY representing one-half (1/2) of the
BAILEY STOCK at a price of Two ($2.00) Dollars per share.
The total purchase price for the 106,250 shares of common
stock of the COMPANY representing one-half (1/2) of the BAILEY
STOCK is Two Hundred Twelve Thousand Five Hundred ($212,500)
Dollars, payable in the following manner: (i) at the closing, on
the Effective Date, GEM shall pay to the BAILEYS the sum of Fifty
Thousand ($50,000) Dollars, in United States currency, by bank or
certified check; (ii) at the closing, GEM shall execute a
Promissory Note to the BAILEYS in the sum of One Hundred Sixty
Two Thousand Five Hundred ($162,500) Dollars. The Promissory Note
shall be paid in thirty six (36) successive equal monthly
installments, each inclusive of principal with interest at an
annual rate of seven (7%) percent. Said installments shall be
paid within ten (10) days of the nineteenth day in each month,
commencing with the nineteenth day of February, 1998. The
obligation of GEM to acquire the 106,250 shares of common stock
of the COMPANY representing one-half (1/2) of the BAILEY STOCK from
the BAILEYS in accordance with the provisions of this Agreement
shall be expressed by a Promissory Note providing for payments in
accordance with the provisions of this paragraph, a copy of which
is attached hereto and made a part hereof as Exhibit "A". As
security for the full and prompt payment and performance of any
and all obligations of GEM pursuant to the aforestated Promissory
Note, the 106,250 shares of common stock of the COMPANY
representing one-half (1/2) of the BAILEY STOCK acquired by GEM
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from the BAILEYS as described above shall be held in escrow
pursuant to a Stock Escrow Agreement, by and between the parties,
until such time as the Promissory Note is paid in full. The Stock
Escrow Agreement shall provide that GEM shall have the full right
to vote its shares of common stock of the COMPANY held in escrow
pursuant to the Stock Escrow Agreement. A copy of the Stock
Escrow Agreement, which is incorporated in and made a part of
this Agreement, is attached hereto as Exhibit "B".
B. On the Effective Date, SHENG shall purchase from
the BAILEYS, and the BAILEYS shall sell to SHENG, 106,250 shares
of common stock of the COMPANY representing the remaining one-
half (1/2) of the BAILEY STOCK at a price of 1.9011 Dollars per
share.
The total purchase price for the 106,250 shares of common
stock of The COMPANY representing the remaining one-half (1/2) of
the BAILEY STOCK is Two Hundred Two Thousand ($202,000) Dollars,
payable in full by cashier's or certified check at the Closing on
January 19, 1998.
C. If during the one (1) year period commencing on
the Effective Date and ending twelve months thereafter, GEM
and/or SHENG shall sell the BAILEY STOCK acquired in accordance
with paragraphs 9.A. and 9.B above to a third party or to a third
party for resale within the one (1) year period, for a profit
then GEM and/or SHENG shall be required to pay to the BAILEYS an
amount equal to such profit or profits from their respective sale
of the BAILEY STOCK.
10. So long as SHENG shall make full payment for the Bailey
Stock, and/or GEM, shall not commit an event of default,
including but not limited to failing to make any payment within
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ten (10) days after the due date thereof and such failure is not
cured within seven (7) days after written notice thereof, under
the terms of this Agreement, HOLMES BAILEY and JUDITH BAILEY, or
any entity controlled by HOLMES BAILEY and/or JUDITH BAILEY,
shall be forever prohibited from purchasing, acquiring, or
obtaining beneficial ownership of any shares of any class of
stock of the COMPANY or any other form of securities, debt
instrument, note, or legal obligation of the COMPANY of any kind,
either in a public or private transaction or which may be issued
from time to time by the COMPANY.
11. Representation, Warranties and Covenants of the
BAILEYS. The BAILEYS hereby represent, warrant and covenant to
the COMPANY, GEM, and SHENG as follows:
A. The BAILEYS own the BAILEY STOCK free and clear of
all liens, security interests, restrictions, agreements, claims
or encumbrances whatsoever and the BAILEY STOCK is validly
issued, fully paid and non-assessable.
B. There are no option agreements, contracts,
conversion rights or any other rights to purchase or acquire any
shares constituting the BAILEY STOCK.
C. The BAILEYS are not involved in any proceedings by
or against either of them under the Bankruptcy Act.
D. The BAILEYS have good and marketable title to the
BAILEY STOCK, with full rights (including voting rights), power,
authority and capacity to enter into this Agreement and perform
all of their obligations under this Agreement to sell, transfer
and deliver the BAILEY STOCK to GEM and SHENG, respectively, at
closing, and such delivery will convey to each of SHENG and GEM
good and marketable title to the Bailey Stock, free and clear of
any liens, claims, encumbrances, agreements or rights of others.
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This Agreement does not conflict with any other obligations of
the BAILEYS nor will it cause a breach, cancellation,
acceleration or termination of any contract or agreement to which
the BAILEYS are a party. There are no agreements or
understandings, written or oral, restricting the transfer of the
BAILEY STOCK.
E. HOLMES BAILEY acknowledges that the payments and
consideration made hereunder are not part of an exit incentive or
other employment termination program offered to a group or class
of employees.
F. The BAILEYS are not currently involved, directly
or indirectly, in any legal or administrative proceedings against
one another, and have not engaged in any efforts, plans or
preparation to become so involved in the future except for the
Action. The BAILEYS will not cooperate with, or assist or act as
a consultant to, any person or entity with respect to any
litigation or derivative suit against the COMPANY and its
subsidiaries, its agents, officers, directors, shareholders,
employees, successors and/or assigns, except if HOLMES BAILEY
and/or JUDITH BAILEY is served with a subpoena with respect to
any such litigation or derivative suit. In the event that HOLMES
BAILEY and/or JUDITH BAILEY shall be served with a subpoena in
connection with any such litigation or derivative suit, HOLMES
BAILEY and/or JUDITH BAILEY shall be required to immediately
notify the COMPANY, in writing, that one or both of them have
been served with a subpoena and to allow the COMPANY to contest
the issuance of the subpoena.
G. The execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby
constitutes the legal, valid and binding obligation of the
BAILEYS, enforceable against each of them in accordance with its
terms.
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<PAGE>
H. There is no lawsuit or proceeding pending or, to
the knowledge of the BAILEYS, threatened against them or any
pending investigation which might question the validity or
propriety of this Agreement or the consummation of any of the
transactions contemplated hereby and no consent, approval,
licenses or authorizations of any governmental authority or of
any person is required in connection with the execution and
delivery of this Agreement or the consummation of any of the
transactions contemplated hereby or the validity and
enforceability of this Agreement.
I. Neither of the BAILEYS has granted to any person
or entity, nor has any person or entity acquired or obtained an
interest in the BAILEY Stock. Without limiting the generality of
the foregoing, and by way of illustration only, the BAILEYS
hereby further represent and warrant to the COMPANY, GEM and
SHENG that:
(1) The BAILEY Stock does not serve as security
or collateral for the repayment of any loan or obligation due by
any of the BAILEYS to any other person or entity;
(2) Neither of the BAILEYS is a party to any
agreement wherein he/she has agreed to transfer all or any part
of the BAILEY Stock or whereby he/she is restricted from
transferring any interest in his/her assets;
(3) Neither of the BAILEYS is insolvent or has
been declared insolvent by any court or governmental agency, or
instituted insolvency proceedings, nor has anyone commenced
insolvency proceedings against either of them;
(4) Neither of the BAILEYS has transferred any
interest in the BAILEY Stock by gift to any person or entity or
into a trust for the benefit of any person or entity;
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<PAGE>
(5) Neither of the BAILEYS has entered into any
voting agreement or trust with any other person or entity with
respect to the BAILEY Stock;
(6) No one has obtained a judgment against either
of the BAILEYS relating to the BAILEY Stock or commenced or
threatened a proceeding in connection therewith, or as a result
of which they may seek to take possession of the BAILEY Stock;
(7) No one has questioned the BAILEYS exclusive
ownership of the BAILEY Stock;
(8) There is no claim, proceeding or action,
pending or threatened, which if decided against either of the
BAILEYS, would result in any of the foregoing representation to
be untrue or which would present the BAILEYS from selling the
BAILEY Stock.
12. Confidentiality and Technology. In consideration of the
payments and other benefits described herein, the BAILEYS agree
not to disclose hereafter to any other person or legal entity any
proprietary or Confidential Information relating to the business
activities of the COMPANY acquired by HOLMES BAILEY during his
actual period of employment by the COMPANY and/or its
subsidiaries.
"Confidential Information" shall mean all information,
materials, data and computer programs, data, discs, codes and
algorithms in whatever form which are trade secrets of or
confidential or proprietary to the COMPANY and/or its
subsidiaries, affiliates or joint ventures and/or the COMPANY's
customers and all information and materials in whatever form
(whether written or oral) which HOLMES BAILEY developed or may
develop or of which HOLMES BAILEY obtained or may obtain
knowledge or had or have access through or as a result of his
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<PAGE>
relationship with the COMPANY and/or its subsidiaries, affiliates
or joint ventures and/or the COMPANY's customers, whether made by
the COMPANY or by any of its subsidiaries, affiliates or joint
ventures and/or the COMPANY's customers or by HOLMES BAILEY or
others, and includes, without limitation, Technology and
Inventions.
"Technology and Inventions" shall mean all technology,
inventions, improvements, machines, appliances, processes,
products, data, discoveries and know-how, whether patentable or
not, which HOLMES BAILEY invented, conceived, developed, made,
produced or reduced to practice and/or may invent, conceive,
develop, make, produce or reduce to practice, either solely or
jointly with others, at any time (whether or not during working
hours) during the term of HOLMES BAILEY's employment with the
COMPANY and/or which HOLMES BAILEY acquired or may acquire from
others during the term of his employment with the COMPANY.
HOLMES BAILEY agrees that he will hold in confidence and
will not hereafter directly or indirectly reveal, make available,
report, publish, disclose or transfer any Confidential
Information to any person or entity, or use any Confidential
Information for the benefit of any person or entity other than
the COMPANY and its subsidiaries, affiliates and joint ventures.
Information publicly known that is generally employed by the
trade at or after the time first learned, in the course of
similar employment or work elsewhere in the trade shall not be
deemed part of the Confidential Information, provided, however,
that notwithstanding the applicability of the foregoing exception
in no event shall HOLMES BAILEY hereafter confirm to any third
party the accuracy or inaccuracy of such information or the
relationship of same to the COMPANY and/or its subsidiaries,
affiliates or joint ventures.
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<PAGE>
All confidential Information shall be the sole and exclusive
property of the COMPANY. HOLMES BAILEY shall surrender and turn
over to the COMPANY all Confidential Information and all written
and physical materials in any way incorporating or reflecting any
of the confidential Information, and all copies thereof,
simultaneous with his signing of this Agreement.
All Technology and Inventions shall be the sole and
exclusive property of the COMPANY or its nominee, free from any
claim or retention of rights thereto on HOLMES BAILEY's part or
any other person.
13. Use of Agreement. The Parties agree that the terms and
the fact of the existence of this Agreement may be pled as a
defense (as applicable) to any suit or other legal proceeding
that may be filed or instituted by or on behalf of any party and
may not be used in any other proceeding except as necessary to
enforce the terms contained herein, unless required by any
governmental agency or unit or as otherwise specified herein.
14. Entire Agreement. This Agreement sets forth the entire
agreement between the parties and fully supersedes any and all
prior agreements or understandings except as referred to herein
or incorporated by reference or appended hereto as exhibits.
15. Modification. This Agreement may not be amended or
modified except upon mutual agreement in writing signed by the
BAILEYS, the COMPANY, GEM, and SHENG and no amendments or
modifications are contemplated at this time.
16. Notices. Any notices or other communications required
or permitted hereunder, shall be sufficiently given if in writing
and delivered or sent by internationally recognized
overnight express courier service or by fax transmittal, as
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<PAGE>
follows or to such other address or fax transmittal number as the
parties shall have given notice of pursuant to the foregoing
terms:
As to the BAILEYS:
Holmes Bailey
280 The Orchard at Heath Village
Schooley's Mountain Road
Hackettstown, New Jersey 07840, U.S.A.
With a copy to:
Howard M. Davis, Esq.
743 Northfield Avenue
West Orange, New Jersey 07052, U.S.A.
Fax Number: (973) 325-1159
If to the COMPANY to:
Boonton Electronics Corporation
25 Eastmans Road
Parsippany, New Jersey 07054, U.S.A.
Attn: President
Fax Number: (973) 386-9191
With a Copy to:
Gregory P. Luhn, Esq.
Lentz & Gengaro
443 Northfield Avenue
West Orange, New Jersey 07052, U.S.A.
Attention: Gregory P. Luhn, Esq.
Fax Number: (973) 669-8960
If to GEM to:
G.E.M. USA, Inc.
c/o General Electronique Measure
16 Rue Joseph Cugnot
Zi De Bracheux
60000 Beauvais
Attention: Daniel Auzan
Fax Number: 011 33 3 44 05 2904
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<PAGE>
With a copy to:
Graham, Curtin & Sheridan
4 Headquarters Plaza
Morristown, New Jersey 07962, U.S.A.
Attention: Joseph Lamastra, Esq.
Fax Number: (973) 898-0107
If to Abel Sheng to:
Mr. Abel Sheng
270 Sylvan Avenue
Englewood Cliffs, New Jersey 07632, U.S.A.
Fax Number: (201) 567-8862
With a copy to:
Gregory P. Luhn, Esq.
Lentz & Gengaro
443 Northfield Avenue
West Orange, New Jersey 07052, U.S.A.
Fax Number: (973) 669-8960
17. Savings Clause. If any part or provision of this
Agreement is determined to be invalid, unenforceable or contrary
to public policy under an applicable statute or rule of law, the
parties agree to ratify the agreement with the affected part or
provision (and only that part or provision) considered to be
omitted from the Agreement.
18. Cost of Material Breach. The parties agree that in the
event of a material breach of this Agreement, the nonbreaching
party or any officer, director, employer, successor, assign,
heir, executor, administrator, agent or representative of the
nonbreaching party may commence an action at law or in equity to
enjoin or recover any loss, cost, damage
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<PAGE>
or expense occasioned by the material breach, including, without
limitation, an attorneys' fees incurred reasonably and in good
faith.
19. Successors Bound. This Agreement shall be binding upon
and shall inure to the benefit of all parties hereto and their
heirs, legal representatives, successors or assigns.
20. Governing Law. This Agreement shall be governed by and
construed under the laws of the State of New Jersey, United
States. Should any provision of this Agreement require judicial
interpretation, it is agreed that the court interpreting or
considering such provision shall not apply the presumption that
the terms hereof shall be more strictly construed against a party
by reason of the rule or conclusion that a document should be
construed more strictly against the party who itself or through
its agent prepared the same. It is agreed and stipulated that all
parties hereto have participated equally in the preparation of
this Agreement and that legal counsel was consulted by each party
before the execution of this Agreement.
WITNESS:
/s/ Holmes Bailey
- ------------------------ ---------------------------
Dated: 1-19-98 HOLMES BAILEY, INDIVIDUALLY
WITNESS: JUDITH BAILEY, INDIVIDUALLY
BY: /s/ Holmes Bailey
- ---------------------------- ----------------------------
Dated: 1-19-98 HOLMES BAILEY, UNDER POWER
OF ATTORNEY
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ATTEST: BOONTON ELECTRONICS
CORPORATION
By: /s/ Yves Guyomar
- ---------------------------- ---------------------------
Secretary YVES GUYOMAR, President
and CEO
ATTEST: G.E.M. USA, INC.
By: /s/ Daniel Auzan
- ---------------------------- ---------------------------
Secretary DANIEL AUZAN, President
WITNESS:
/s/ Abel Sheng
- ----------------------------- ------------------------------
Dated: 1-19-98 ABEL SHENG, INDIVIDUALLY
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