<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20594
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT of 1934
September 30, 1997
(Date of earliest event reported)
UNIDYNE CORPORATION
(Exact name of small business issuer
as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE
(State or other jurisdiction 0-10372 23-2154902
of incorporation or organization) (Commission File No.) (IRS Employer Identification No.)
</TABLE>
118 PICKERING WAY, SUITE 104, EXTON, PENNSYLVANIA 19341
(Address of principal executive offices)
(610) 363-8237
(Issuer's telephone number)
<PAGE> 2
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On September 30, 1997, Registrant acquired all of the issued and
outstanding shares of the common stock of Sabina Industries, Incorporated, a
California corporation ("Sabina") in exchange for 500,000 newly issued shares
of Registrant's common stock, $.001 par value.
Sabina manufactures and sells DC electric motors, drives and controls to
industrial customers in the automotive, materials handling, plastic, printing,
textile and wire and cable industries. Sabina employs approximately 90 people
at facilities in Anaheim, California.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
It is impracticable to provide financial statements for the business
operation acquired by Registrant as of the date hereof. Such financial
statements will be filed as an amendment to this Form 8-K.
EXHIBIT No.
10.1* Agreement and Plan of Reorganization dated September 30, 1997
between UNIDYNE Corporation and Lester K. TJELMELAND and KATHERINE
TJELMELAND as Trustees of the TJELMELAND Trust dated August 2, 1991
who are the Stockholders of Sabina Industries, Incorporated, a
California corporation.
- ------------
* Filed herewith.
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: October 13, 1997 /s/ C. EUGENE HUTCHESON
--------------------------------
C. Eugene Hutcheson
Chairman, Chief Executive Officer
and President
<PAGE> 1
EXHIBIT 10.1
AGREEMENT AND PLAN OF REORGANIZATION
BETWEEN
UNIDYNE Corporation,
a Delaware corporation
AND
LESTER E. TJELMELAND and
KATHERINE TJELMELAND,
as Trustees of the Tjelmeland Trust
dated August 2, 1991 who are
the Stockholders of
SABINA INDUSTRIES, INCORPORATED
a California corporation
September 30, 1997
Agreement entered into on September 30, 1997 by and between
UNIDYNE Corporation, a Delaware corporation ("UNIDYNE"), and Lester E.
Tjelmeland and Katherine Tjelmeland as Trustees of the Tjelmeland Trust dated
August 2, 1991 which is the owner of all the issued and outstanding capital
stock (the "Stockholders") of Sabina Industries, Incorporated, a California
corporation doing business as Sabina Electric and Engineering ("Sabina").
UNIDYNE and the Stockholders are referred to collectively herein as the
"Parties."
This Agreement contemplates the tax-free exchange of 100% of
the issued and outstanding shares of common stock of Sabina with UNIDYNE solely
for voting shares of common stock of UNIDYNE in a reorganization pursuant to
Internal Revenue Code Section 368(a)(1)(B).
Now, therefore, in consideration of the premises and the
mutual promises herein made, and in consideration of the representations,
warranties, and covenants herein contained, the Parties agree as follows:
1. Definitions.
"Closing" has the meaning set forth in Section 2(b) below.
"Confidential Information" means any information concerning
the businesses and affairs of Sabina that is not already generally available to
the public.
"Delaware Corporation Law" means the General Corporation Law
of the State of Delaware, as amended.
<PAGE> 2
"Disclosure Schedule" has the meaning set forth in Section 3
below.
"Effective Time" means the Closing as set forth in Section 2(b)
below.
"Exchange " has the meaning set forth in Section 2(a) below.
"GAAP" means United States generally accepted accounting
principles as in effect from time to time.
"IRS" means the Internal Revenue Service.
"Knowledge" means actual knowledge after reasonable
investigation.
"Ordinary Course of Business" means the ordinary course of
business consistent with past custom and practice (including with respect to
quantity and frequency).
"Party" has the meaning set forth in the preface above.
"Person" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization, or a governmental entity (or any department, agency, or political
subdivision thereof).
"Requisite UNIDYNE Approval" means the affirmative vote of a
majority of the members of the parent's Board of Directors in favor of this
Agreement and the Exchange.
"Sabina" has the meaning set forth in the preface above.
"Sabina Share" means any share of the common stock, $0.01 par
value per share, of Sabina.
"Sabina Stockholder" or "Stockholder" means any Person who or
which holds any Sabina Shares.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Interest" means any mortgage, pledge, lien,
encumbrance, charge, or other security interest, other than (a) mechanic's,
materialmen's, and similar liens, (b) liens for taxes not yet due and payable or
for taxes that the taxpayer is contesting in good faith through appropriate
proceedings, (c) purchase money liens and liens securing rental payments under
capital lease arrangements, and (d) other liens arising in the Ordinary Course
of Business and not incurred in connection with the borrowing of money.
2
<PAGE> 3
"UNIDYNE Share" means a share of the common stock, $0.001 par
value per share, of UNIDYNE Corporation.
2. Basic Transaction.
(a) The Exchange. UNIDYNE and the Sabina Stockholders agree
that the 4,400,000 issued and outstanding shares, $0.01 par value, of Sabina
common stock shall be exchanged with UNIDYNE for 500,000 shares of UNIDYNE's
$0.001 par value, common stock. The following numbers of UNIDYNE shares will,
at Closing, be delivered to individual Sabina Stockholders in exchange for
their Sabina shares as herein set forth:
<TABLE>
<CAPTION>
Stockholder No. of Sabina No. of UNIDYNE
shares shares
------ ------
<S> <C> <C>
LESTER E. TJELMELAND and 4,400,000 500,000
KATHERINE TJELMELAND,
as Trustees of the
Tjelmeland Trust
dated August 2, 1991
</TABLE>
(b) The Closing. The closing of the transactions contemplated
by this Agreement (the "Closing") shall take place at the offices of Sabina in
Anaheim, California commencing at 10:00 a.m. local time on September 30, 1997.
(c) Actions at the Closing. At the Closing, (i) the Sabina
Stockholders will deliver to UNIDYNE the certificates evidencing the shares of
Sabina common stock to be exchanged, along with the instruments, and documents
referred to in '6(a) below, and (ii) UNIDYNE will deliver to Sabina the various
instruments, and documents referred to in '6(b) below. UNIDYNE will furnish to
each of Sabina's stockholders a stock certificate issued in such stockholder's
name representing that number of UNIDYNE Shares equal to the number of UNIDYNE
shares to which such Sabina stockholder is entitled pursuant to this Agreement.
The rights of each Sabina stockholder with respect to such shares shall be as
set forth in UNIDYNE's Articles of Incorporation as amended and in the
undertaking of UNIDYNE attached hereto as Exhibit A.
(d) Effect of Exchange.
(i) General. The Exchange shall become effective upon
consummation of the Closing (the "Effective Time").
(ii) Directors,Employees and Officers. The directors
and officers of Sabina in office at and as of the Effective
Time will resign. UNIDYNE will, as of the Effective Time,
elect Lester E. Tjelmeland as President and a Director and
hire Vincent E. Tjelmeland as Sales Manager of Sabina. Unidyne
further agrees to enter into mutually agreeable employment
3
<PAGE> 4
agreements for a minimum of two years' employment for each of
such individuals at compensation levels not less than the
compensation level at which they are currently being
compensated.
(e) Unidyne further agrees to indemnify and hold the Sabina
Stockholders harmless with respect to Sabina"s indebtedness to the California
United Bank and further agrees to obtain the release by the California United
Bank of the personal guaranties by Lester E. and Katherine Tjelmeland not
later than December 31, 1997.
3. Representations and Warranties of the Stockholders of Sabina. Sabina
Stockholders represent and warrant to UNIDYNE that the statements contained in
this Section 3 are correct and complete as of the date of this Agreement,
except as set forth in writing by the Stockholders in the disclosure schedule
accompanying this Agreement and initialed by the Parties (the "Disclosure
Schedule"). The Disclosure Schedule will be arranged in paragraphs
corresponding to the lettered and numbered paragraphs contained in this
Section 3.
(a) Organization, Qualification, and Corporate Power. Sabina
is a corporation duly organized, validly existing, and in good standing under
the laws of California. Sabina has no subsidiaries and is duly authorized to
conduct business and is in good standing under the laws of each jurisdiction
where such qualification is required. Sabina has full corporate power and
authority to carry on the businesses in which it is engaged and to own and use
the properties owned and used by it.
(b) Capitalization. The entire authorized capital stock of
Sabina consists of 10,000,000 shares of $0.01 par value common stock, of which
4,400,000 shares are issued and outstanding and none are held in treasury. All
of the issued and outstanding Sabina Shares have been duly authorized and are
validly issued, fully paid, and nonassessable. There are no other shares of
capital stock issued or outstanding, other than the shares of common stock held
by the Stockholders, nor are there any outstanding or authorized options,
warrants, purchase rights, subscription rights, conversion rights, exchange
rights, or other contracts or commitments that could require Sabina to issue,
sell, or otherwise cause to become outstanding any of its capital stock.
There are no outstanding or authorized stock appreciation, phantom stock, profit
participation, or similar rights with respect to Sabina. The Stockholders own
100% of the issued and outstanding shares of Sabina's common stock free and
clear of any encumbrance of any nature whatsoever.
(c) Authorization of Transaction. Each Sabina Stockholder has
full power and authority to execute and deliver this Agreement and to perform
its obligations hereunder. This Agreement constitutes
4
<PAGE> 5
the valid and legally binding obligation of Sabina Stockholders, enforceable
in accordance with its terms and conditions.
(d) Noncontravention. The execution and the delivery of this
Agreement, and the consummation of the transactions contemplated hereby, will
not (i) violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction of any
government, governmental agency, or court to which any of Sabina or its
Stockholders are subject or any provision of its articles of incorporation or
bylaws of Sabina; or (ii) except for the loan agreements with the California
United Bank, conflict with, result in a breach of, constitute a default under,
result in the acceleration of, create in any party the right to accelerate,
terminate, modify, or cancel, or require any notice under any agreement,
contract, lease, license, instrument or other arrangement to which Sabina is a
party or by which it is bound or to which any of its assets is subject (or
result in the imposition of any Security Interest upon any of its assets).
Neither Sabina nor its Stockholders need to give any notice to, make any filing
with, or obtain any authorization, consent, or approval of any government or
governmental agency in order for the Parties to consummate the transactions
contemplated by this Agreement.
(e) Financial Statements. Sabina's financial statements for
the fiscal period ended July 31, 1997 and for the fiscal year ended March 31,
1997 (including the related notes and schedules) have been prepared in
accordance with GAAP applied on a consistent basis throughout the periods
covered thereby, present fairly the financial condition of Sabina as of the
indicated dates and the results of operations of Sabina for the indicated
periods, are correct and complete in all respects, and are consistent with the
books and records of Sabina,except that inventories have not been adjusted for
all events and transactions since March 31, 1997 in that overhead allocations
have not been calculated for that time period; provided, however, that the
interim statements are subject to normal year-end adjustments.
(f) Events Subsequent to July 31, 1997. Since July 31, 1997,
there has not been any material adverse change in the business, financial
condition, operations, results of operations, or future prospects Sabina taken
as a whole.
(g) Undisclosed Liabilities. To the Stockholders Knowledge,
Sabina has no material liability (whether asserted or unasserted, whether
absolute or contingent, whether accrued or unaccrued, whether liquidated or
unliquidated, and whether due or to become due), including any liability for
taxes, except for (i) liabilities set forth on the face of the balance sheet
dated as of the most recent fiscal period end (rather than in any notes
thereto) and (ii) liabilities which have arisen in the Ordinary Course of
Business (none of which results from, arises out of, relates to, is in the
nature of, or was caused by any breach of contract, breach
5
<PAGE> 6
of warranty, tort, infringement, or violation of law).
(h) Brokers' Fees. Neither Sabina nor Sabina's Stockholders
have any liability or obligation to pay any fees or commissions to any broker,
finder, or agent with respect to the transactions contemplated by this
Agreement.
(i) Continuity of Business Enterprise. Sabina operates at
least one significant historic business line or owns at least a significant
portion of its historic business assets, in each case within the meaning of
Reg. Section 1.368-1(d).
(j) Non-Disclosure. The information provided to UNIDYNE by
Sabina or its Stockholders with respect to Sabina will not contain any untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements made therein, in the light of the circumstances
under which they will be made, not misleading.
4. Representations and Warranties of UNIDYNE. UNIDYNE
represents and warrants to the Sabina Stockholders that the statements
contained in this Section 4 are correct and complete as of the date of this
Agreement, except as may be set forth in writing by UNIDYNE in any accompanying
Disclosure Schedule. The Disclosure Schedule will be arranged in paragraphs
corresponding to the numbered and lettered paragraphs contained in this
Section 4.
(a) Organization. UNIDYNE is a corporation duly organized,
validly existing, and in good standing under the laws of the jurisdiction of
its incorporation. UNIDYNE and its subsidiaries are duly authorized to conduct
business and are in good standing under the laws of each jurisdiction where
such qualification is required. UNIDYNE and its subsidiaries have full
corporate power and authority to carry on the businesses in which it is engaged
and to own and use the properties owned and used by it.
(b) Capitalization. The entire authorized capital stock of the
UNIDYNE consists of 50,000,000 UNIDYNE Shares, of which 8,685,351 were issued
and outstanding as of June 30, 1997 and 20,000,000 shares of Preferred Stock of
which 500,000 were issued and outstanding as Class B Convertible Preferred
Stock as of June 30, 1997. Such shares are convertible on a one-for-one basis
into UNIDYNE shares. All of the UNIDYNE Shares to be issued in the Exchange
have been duly authorized and, upon consummation of the Exchange, will be
validly issued, fully paid, and nonassessable.
(c) Authorization of Transaction. UNIDYNE has full power and
authority (including full corporate power and authority) to execute and deliver
this Agreement and to perform its obligations hereunder. This Agreement
constitutes the valid and legally binding obligation of UNIDYNE, enforceable
in accordance with its terms and conditions.
6
<PAGE> 7
(d) Noncontravention. Neither the execution and the delivery
of this Agreement, nor the consummation of the transactions contemplated
hereby, will (i) violate any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge, or other restriction of
any government, governmental agency, or court to which UNIDYNE is subject or
any provision of the charter or bylaws of UNIDYNE; or (ii) conflict with,
result in a breach of, constitute a default under, result in the acceleration
of, create in any party the right to accelerate, terminate, modify, or cancel,
or require any notice under any agreement, contract, lease, license, instrument
or other arrangement to which UNIDYNE is a party or by which it is bound or to
which any of its assets is subject, except where the violation, conflict,
breach, default, acceleration, termination, modification, cancellation, or
failure to give notice would not have a material adverse effect on the ability
of the Parties to consummate the transactions contemplated by this Agreement.
UNIDYNE does not need to give any notice to, make any filing with, or obtain
any authorization, consent, or approval of any government or governmental
agency in order for the Parties to consummate the transactions contemplated by
this Agreement, except where the failure to give notice, to file, or to obtain
any authorization, consent, or approval would not have a material adverse
effect on the ability of the Parties to consummate the transactions
contemplated by this Agreement.
(e) Financial Statements. UNIDYNE's financial statements for
the fiscal period ended June 30, 1997 and for the fiscal year ended December
31, 1997 (including the related notes and schedules) have been prepared in
accordance with GAAP applied on a consistent basis throughout the periods
covered thereby, present fairly the financial condition of UNIDYNE as of the
indicated dates and the results of operations of UNIDYNE for the indicated
periods, are correct and complete in all respects, and are consistent with the
books and records of UNIDYNE; provided, however, that the interim statements
are subject to normal year-end adjustments.
(f) Events Subsequent to Most Recent Fiscal Period End. Since
the most recent fiscal period end, there has not been any material adverse
change in the business, financial condition, operations, results of operations,
or future prospects UNIDYNE taken as a whole.
(g) Undisclosed Liabilities. UNIDYNE has no material
liability (whether asserted or unasserted, whether absolute or contingent,
whether accrued or unaccrued, whether liquidated or unliquidated, and whether
due or to become due), including any liability for taxes, except for (i)
liabilities set forth on the face of the balance sheet dated as of the most
recent fiscal period end (rather than in any notes thereto) and (ii)
liabilities which have arisen in the Ordinary Course of Business (none of which
results from, arises out of, relates to, is in the nature of, or was caused by
any breach of contract, breach of warranty, tort,
7
<PAGE> 8
infringement, or violation of law).
(h) Brokers' Fees. UNIDYNE does not have any liability or
obligation to pay any fees or commissions to any broker, finder, or agent with
respect to the transactions contemplated by this Agreement for which any of the
Sabina Stockholders could become liable or obligated.
(i) Continuity of Business Enterprise. UNIDYNE will continue
the historic business lines of Sabina, and will use Sabina's historic business
assets in such business, in each case within the meaning of Reg. '1.368-1(d).
(j) Disclosure. The UNIDYNE Proxy Statement for the June 11,
1997 Annual Meeting of Stockholders, UNIDYNE's Form 10-KSB for the year ended
December 31, 1996, Form 10-QSB for the quarter ended March 31, 1997, and Form
10-QSB for the quarter ended June 30, 1997 comply with the Securities Act and
the Securities Exchange Act in all material respects. Such UNIDYNE materials
and the information provided to Stockholders about UNIDYNE do not contain any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements made therein, in the light of the circumstances
under which they will be made, not misleading.
5. Covenants. The Parties agree as follows with respect to the
period from and after the execution of this Agreement.
(a) General. Each of the Parties will use its best efforts to
take all action and to do all things necessary, proper, or advisable in order
to consummate and make effective the transactions contemplated by this
Agreement (including satisfaction, but not waiver, of the closing conditions
set forth in Section 6 below).
(b) Regulatory Matters and Approvals. Each of the Parties will
give any notices to, make any filings with, and use its best efforts to obtain
any authorizations, consents, and approvals of governments and governmental
agencies in connection with the matters referred to in Section 3(d) and
Section 4(d) above.
(c) Operation of Business. The Sabina Stockholders will cause
Sabina not to engage in any practice, take any action, or enter into any
transaction outside the Ordinary Course of Business. Without limiting the
generality of the foregoing:
(i) Sabina will not authorize or effect any change
in its charter or bylaws;
(ii) Sabina will not grant any options, warrants, or
other rights to purchase or obtain any of its capital stock or
issue, sell, or otherwise dispose of any of its capital stock
8
<PAGE> 9
(except upon the conversion or exercise of options, warrants,
and other rights currently outstanding);
(iii) Sabina will not declare, set aside, or pay any
dividend or distribution with respect to its capital stock
(whether in cash or in kind), or redeem, repurchase, or
otherwise acquire any of its capital stock in either case
outside the Ordinary Course of Business;
(iv) Sabina will not issue any note, bond, or other
debt security or create, incur, assume, or guarantee any
indebtedness for borrowed money or capitalized lease
obligation outside the Ordinary Course of Business;
(v) Sabina will not impose any Security Interest
upon any of its assets outside the Ordinary Course of
Business;
(vi) Sabina will not make any capital investment in,
make any loan to, or acquire the securities or assets of any
other Person outside the Ordinary Course of Business;
(vii) Sabina will not make any change in employment
terms for any of its directors, officers, and employees
outside the Ordinary Course of Business; and
(viii) Sabina will not commit to any of the
foregoing.
(d) Full Access. The Sabina Stockholders will cause Sabina to
permit representatives of UNIDYNE to have full access to all premises,
properties, personnel, books, records (including tax records), contracts,
and documents of or pertaining to Sabina. UNIDYNE will treat and
hold as such any Confidential Information it receives from Sabina in the
course of the reviews contemplated by this Section 5(d), will not use any of
the Confidential Information except in connection with this Agreement, and, if
this Agreement is terminated for any reason whatsoever, agrees to return to
Sabina all tangible embodiments (and all copies) thereof which are in its
agents and its advisors possession.
(e) Notice of Developments. Each Party will give prompt
written notice to the other of any material adverse development causing a
breach of any of its own representations and warranties in Section 3 and
Section 4 above. No disclosure by any Party pursuant to this Section 5(e),
however, shall be deemed to amend or supplement the Disclosure Schedule or to
prevent or cure any misrepresentation, breach of warranty, or breach of
covenant.
(f) Exclusivity. The Stockholders and Sabina will not solicit,
initiate, or encourage the submission of any proposal or offer from any Person
relating to the acquisition of all or substantially all of the capital stock or
assets of Sabina (including any acquisition structured as a stock exchange,
consolidation, or merger);
9
<PAGE> 10
provided, however, that Sabina and their directors and officers will remain
free to participate in any discussions or negotiations regarding, furnish any
information with respect to, assist or participate in, or facilitate in any
other manner any effort or attempt by any Person to do or seek any of the
foregoing to the extent their fiduciary duties may require. Sabina shall notify
UNIDYNE immediately if any Person makes any proposal, offer, inquiry, or
contact with respect to any of the foregoing.
(g) Insurance and Indemnification. UNIDYNE will observe any
indemnification provisions now existing in the Articles of Incorporation,
Bylaws or resolution of the Board of Directors of Sabina for the benefit of any
individual who served as a director or officer of Sabina at any time prior to
the Effective Time.
6. Conditions to Obligation to Close.
(a) Conditions to Obligation of UNIDYNE. The obligation of
UNIDYNE to consummate the transactions to be performed by it in connection with
the Closing is subject to satisfaction of the following conditions:
(i) the representations and warranties set forth in
Section 3 above shall be true and correct in all material
respects at and as of the Closing Date;
(ii) Sabina Stockholders shall have performed and
complied with all of their covenants hereunder in all material
respects through the Closing including making the deliveries
required at Closing;
(iii) no action, suit, or proceeding shall be pending
or threatened before any court or quasi-judicial or
administrative agency of any federal, state, local, or foreign
jurisdiction or before any arbitrator wherein an unfavorable
injunction, judgment, order, decree, ruling, or charge would
(A) prevent consummation of the transactions contemplated by
this Agreement, (B) cause any of the transactions contemplated
by this Agreement to be rescinded following consummation, (C)
affect adversely Sabina's right to own its assets, to operate
its businesses;
(iv) Sabina Stockholders shall have delivered to
UNIDYNE a certificate to the effect that each of the
conditions specified above in Section 6(a)(i)-(iii) is
satisfied in all respects;
(v) this Agreement shall be executed by 100% of
Sabina Stockholders;
(vi) UNIDYNE shall have received from counsel to
Sabina and the Stockholders an opinion in form and substance
as set
10
<PAGE> 11
forth in Exhibit B attached hereto, addressed to
UNIDYNE, and dated as of the Closing Date; and
(vii) UNIDYNE shall have received the resignations,
effective as of the Closing, of each director and officer of
Sabina.
UNIDYNE may waive any condition specified in this Section 6(a)
if it executes a writing so stating at or prior to the Closing.
(b) Conditions to Obligation of Sabina Stockholders. The
obligation of Sabina Stockholders to consummate the transactions to be
performed by them in connection with the Closing is subject to satisfaction of
the following conditions:
(i) the representations and warranties set forth in
Section 4 above shall be true and correct in all material
respects at and as of the Closing Date;
(ii) UNIDYNE shall have performed and complied with
all of its covenants hereunder in all material respects
through the Closing including making the deliveries required
at Closing;
(iii) UNIDYNE shall have delivered to Sabina a
certificate to the effect that each of the conditions
specified above in Section 6(b)(i)-(ii) is satisfied in all
respects; and
(iv) the Sabina Stockholders shall have received from
counsel to UNIDYNE an opinion in form and substance as set
forth in Exhibit C attached hereto, addressed to Sabina, and
dated as of the Closing Date.
Sabina may waive any condition specified in this Section 6(b)
if it executes a writing so stating at or prior to the Closing.
7. Termination.
(a) Termination of Agreement. Either of the Parties may
terminate this Agreement by mutual written consent at any time prior to the
Effective Time;
(b) Effect of Termination. If either Party terminates this
Agreement pursuant to Section 7(a) above, all rights and obligations of the
Parties hereunder shall terminate without any liability of any Party to any
other Party (except for any liability of any Party then in breach); provided,
however, that the confidentiality provisions contained in Section 5(d) above
shall survive any such termination.
8. Miscellaneous.
11
<PAGE> 12
(a) Survival. The representations, warranties, and
covenants of the Parties will survive the Effective Time for a period of three
years from the Effective Time.
(b) Press Releases and Public Announcements. Neither Party
shall issue any press release or make any public announcement relating to the
subject matter of this Agreement without the prior written approval of the
other Party; provided, however, that any Party may make any public disclosure
it believes in good faith is required by applicable law or any listing or
trading agreement concerning its publicly-traded securities (in which case the
disclosing Party will use its reasonable best efforts to advise the other Party
prior to making the disclosure).
(c) No Third Party Beneficiaries. This Agreement shall not
confer any rights or remedies upon any Person other than the Parties and their
respective successors and permitted assigns; provided, however, that the
provisions in Section 5(g) above concerning insurance and indemnification are
intended for the benefit of the individuals specified therein and their
respective legal representatives.
(d) Entire Agreement. This Agreement (including the documents
referred to herein) constitutes the entire agreement between the Parties and
supersedes any prior understandings, agreements, or representations by or
between the Parties, written or oral, to the extent they related in any way to
the subject matter hereof.
(e) Succession and Assignment. This Agreement shall be binding
upon and inure to the benefit of the Parties named herein and their respective
successors and permitted assigns. No Party may assign either this Agreement or
any of its rights, interests, or obligations hereunder without the prior
written approval of the other Party.
(f) Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(g) Headings. The section headings contained in this Agreement
are inserted for convenience only and shall not affect in any way the meaning
or interpretation of this Agreement.
(h) Notices. All notices, requests, demands, claims, and
other communications hereunder will be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly given if (and then
two business days after) it is sent by registered or certified mail, return
receipt requested, postage prepaid, and addressed to the intended recipient as
set forth below:
If to Sabina Stockholders:
12
<PAGE> 13
Lester E. Tjelmeland and
Katherine Tjelmeland, Trustees
18621 Arc Way
Yorba Linda, CA 92686
Telephone: (714) 956-0480
Facsimile: (714) 758-9508
THIS PAGE INTENTIONALLY LEFT BLANK
13
<PAGE> 14
Copy to:
Martineau & Knudson
2001 Wilshire Boulevard
Suite 325
Santa Monica, CA 90403
Attention: John R. Martineau
Telephone: (310) 829-0282
Facsimile: (310) 829-0537
If to UNIDYNE:
UNIDYNE Corporation
118 Pickering Way
Suite 104
Exton, PA 19341
Attention: C. Eugene Hutcheson
Telephone: (610) 363-8237
Facsimile: (610) 524-8715
Copy to:
Lison & Griffin, P.C.
200 West Adams Street
Suite 2000
Chicago, IL 60606
Attention: John M. Lison
Telephone: (312) 606-2000
Facsimile: (312) 606-2002
Any Party may send any notice, request, demand, claim, or
other communication hereunder to the intended recipient at the address set
forth above using any other means (including personal delivery, expedited
courier, messenger service, telecopy, telex, ordinary mail, or electronic
mail), but no such notice, request, demand, claim, or other communication
shall be deemed to have been duly given unless and until it actually is
received by the intended recipient. Any Party may change the address to which
notices, requests, demands, claims, and other communications hereunder are to
be delivered by giving the other Party notice in the manner herein set forth.
(i) Governing Law. This Agreement shall be governed by and
14
<PAGE> 15
construed in accordance with the domestic laws of the State of Delaware without
giving effect to any choice or conflict of law provision or rule (whether of
the State of Delaware or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of Delaware.
(j) Amendments and Waivers. No amendment of any provision of
this Agreement shall be valid unless the same shall be in writing and signed by
both of the Parties. No waiver by either Party of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.
(k) Severability. Any term or provision of this Agreement
that is invalid or unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or provision in
any other situation or in any other jurisdiction.
(l) Expenses. Each of the Parties will bear its own costs and
expenses (including legal fees and expenses) incurred in connection with this
Agreement and the transactions contemplated hereby.
(m) Construction. The Parties have participated jointly in
the negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof
shall arise favoring or disfavoring any Party by virtue of the authorship of
any of the provisions of this Agreement. Any reference to any federal, state,
local, or foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context otherwise requires. The
word "including" shall mean including without limitation.
(n) Incorporation of Exhibits and Schedules. The Exhibits and
Schedules identified in this Agreement are incorporated herein by reference and
made a part hereof.
15
<PAGE> 16
IN WITNESS WHEREOF, the Parties hereto have executed this
Agreement on the date first above written.
UNIDYNE Corporation
By: /s/ C. EUGENE HUTCHESON
----------------------------
Title: Chairman, CEO
-------------------------
LESTER E. TJELMELAND and
KATHERINE TJELMELAND,
as Trustees of the Tjelmeland Trust
dated August 2, 1991
/s/ LESTER E. TJELMELAND
- --------------------------------
Lester E. Tjelmeland
/s/ KATHERINE TJELMELAND
- --------------------------------
Katherine Tjelmeland
