<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1 TO
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)*
Sentex Sensing Technology, Inc.
- --------------------------------------------------------------------------------
(Name of Issuer)
Common stock, no par value
- --------------------------------------------------------------------------------
(Title of Class of Securities)
817268-10-5
--------------
(CUSIP Number)
William Appleton, Esq., Baker & Hostetler LLP, 3200 National City Center,
Cleveland, OH 44114 (216)621-0200
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
April 3, 1997
-------------------------------------------------------
(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 3d-(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).
Page 1 of 19 Pages
Exhibit Index appears on Page 12.
<PAGE> 2
<TABLE>
<CAPTION>
- --------------------------------------------- --------------------------------------------
CUSIP NO.817268-10-1 13D PAGE 2 OF 19 PAGES
- --------------------------------------------- --------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
CPS Capital, Ltd.
- ------------------------------------------------------------------------------------------------------------------------------------
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 ITEM 2(d) or 2(e) / /
- ------------------------------------------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Ohio
- ------------------------------------------------------------------------------------------------------------------------------------
7 SOLE VOTING POWER
27,095,665
NUMBER OF -------------------------------------------------------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY -0-
EACH -------------------------------------------------------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH
19,706,461
-------------------------------------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
- ------------------------------------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
27,095,665
- ------------------------------------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / /
- ------------------------------------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
34.33
- ------------------------------------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
OO (Limited Liability Company)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*SEE INSTRUCTIONS BEFORE FILLING OUT!
CUSIP NO.
Page 2 of 19 Pages
<PAGE> 3
AMENDMENT NO. 1 TO
------------------
SCHEDULE 13D
------------
The initial Schedule 13D for this reporting person was filed on paper. This
Amendment No. 1 is the first Schedule 13D being filed by EDGAR.
Accordingly, in accordance with Rule 13d-2, this Amendment No. 1 includes,
in addition to the information required pursuant to this Amendment No. 1,
all the original text of the initial paper filing, with the exception of
the exhibits filed thereunder.
Item 1. Security and Issuer.
- ------- --------------------
This Schedule 13D relates to Common Stock, without par value ("Common
Stock"), of Sentex Sensing Technology, Inc., a New Jersey corporation
("Sentex"), the principal executive offices of which are located at 553 Broad
Avenue, Ridgefield, New Jersey 07657.
Item 2. Identity and Background.
- ------- ------------------------
The reporting person, CPS Capital, Ltd. ("CPS"), an Ohio limited
liability company, is in the business of acquiring control of other companies
with the intent of increasing the value of the acquiree. Its business address is
1801 East 9th Street, Cleveland, Ohio 44114. Its principal office is located at
the same address.
The information required by Item 2 with respect to the executive
officers and controlling persons of CPS is as follows:
(i) Robert S. Kendall ("Kendall") is the Chairman and President of CPS.
(ii) James G. Few is the Vice President and Chief Financial Officer of
CPS.
(iii) Julius L. Hess is the Assistant Vice President of CPS.
Page 3 of 19 Pages
<PAGE> 4
All of the persons named above are citizens of the United States.
None of the persons named above has been convicted of any criminal
offense (excluding traffic violations or similar misdemeanors) during the past
five years.
None of the persons named above has been a party during the past five
years to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding been or is subject to a
judgment, decree or final order finding violations of or enjoining future
violations of or prohibiting or mandating activities subject to federal or state
securities laws.
Item 3. Source and Amount of Funds or Other Consideration.
- ------- --------------------------------------------------
On March 1, 1996, CPS consummated the purchase of 17,606,461 shares of
Common Stock of Sentex (the "Shares"), for a total aggregate purchase price of
$1,338,091 (the "Stock Purchase"), pursuant to four separate stock purchase
agreements (the "Stock Purchase Agreements") dated October 18, 1995, by and
between, CPS and each of (i) Amos Linenberg, a former director and past
president of Sentex ("Linenberg"), (ii) Joanne Bianco, the former interim
president of Sentex ("Bianco"), (iii) Maxine Garner as Trustee of the Daniele
Linenberg Trust, and (iv) Salvatore Bianco and The Estate of Marie Bianco
(collectively the "Stockholders"). The funds used to purchase the Shares were
provided from the working capital of CPS.
On April 3, 1997, CPS consummated the purchase of 2,000,000 Common
Shares of Sentex (the "Put Shares"), for a total aggregate purchase price of
$152,000 (the "Second Stock
-2-
Page 4 of 19 Pages
<PAGE> 5
Purchase"), pursuant to a Second Stock Purchase Agreement, dated April 3, 1997,
by and between CPS and Amos Linenberg (the "Second Stock Purchase Agreement").
The funds used to purchase the Put Shares were provided from the working capital
of CPS.
Item 4. Purpose of Transaction.
- ------- -----------------------
The Stock Purchase, together with the other events described herein,
was undertaken for the purpose of giving CPS effective control of Sentex.
Upon consummation of the Stock Purchase, Joseph Bianco (Bianco's
brother), Allan Esrine, Matthew Keshishian and Linenberg resigned as directors
of Sentex. Bianco, the sole remaining director, then appointed Mr. Kendall, Mr.
Few, Mr. Hess and Ronald Lipson, an attorney who has served as legal counsel
with respect to certain companies controlled by Mr. Kendall, as new directors of
Sentex. At a meeting of the new Board of Directors on March 1, 1996, Mr. Kendall
was elected Chairman of the Board and President and Mr. Few was elected Chief
Financial Officer of Sentex.
In connection with the Stock Purchase, CPS entered into a shareholder
agreement with each of Linenberg and Bianco (the "Shareholder Agreements").
Pursuant to the Shareholder Agreement between CPS and Linenberg (the
"Linenberg Shareholder Agreement"), CPS has agreed to allow Linenberg, from
March 1, 1996 through February 28, 2001, the right to participate in either (i)
a private sale of the Common Stock of Sentex or (ii) a public offering of such
Common Stock, each on a pro rata basis with CPS and Bianco (if Bianco
-3-
Page 5 of 19 Pages
<PAGE> 6
elects or is eligible to participate), and each on the same terms and conditions
available to CPS.
From March 1, 1996 through February 28, 1997, pursuant to the Linenberg
Shareholder Agreement, Linenberg can require CPS to purchase up to 2,000,000
shares of his Common Stock at $.076 per share. In addition, from September 1,
1997 through February 28, 2001, Linenberg can require CPS to purchase up to
8,389,204 of his shares of Common Stock at $.05 per share, so long as he has not
had the opportunity at any time after March 1, 1996 to sell at least 5,000,000
of his shares of Common Stock in an underwritten public offering at a gross
price equal to or greater than $.05 per share,
Pursuant to the Linenberg Shareholder Agreement, Linenberg has agreed
not to sell any of his shares of Common Stock from March 1, 1996 through
February 28, 1998 without the consent of CPS. From March 1, 1998 through
February 28, 2001, Linenberg must give CPS the right to buy his shares of Common
Stock before he can sell any of such shares. If Linenberg provides CPS notice (a
"Notice") of his intent to sell any of his shares of Common Stock (the
"Committed Shares"), then CPS must notify Linenberg within 15 days that it
desires to exercise its right to buy the Committed Shares. If the Notice
indicates that the Committed Shares are to be sold privately, then CPS must pay
Linenberg the price at which Linenberg was to sell the Committed Shares to the
private party. If the Notice indicates that Linenberg desires to sell the
Committed Shares in the public market, then CPS must pay to Linenberg a price
equal to the market price of the Common Stock on the day before CPS received
-4-
Page 6 of 19 Pages
<PAGE> 7
the Notice relating to the Committed Shares. If CPS does not elect to purchase
the Committed Shares, Linenberg can sell such Committed Shares for a period of
180 days to any third party.
Linenberg has provided CPS with an irrevocable proxy with respect to
all shares of Common Stock held by him during the term of the Linenberg
Shareholder Agreement. As of March 1, 1996, following consummation of the Stock
Purchase, Linenberg owned 8,389,204 shares of Common Stock. The Linenberg
Shareholder Agreement will terminate on the earlier of February 28, 2001 or the
date Kendall ceases to have effective control of Sentex.
The Shareholder Agreement between CPS and Bianco (the "Bianco
Shareholder Agreement") is similar to the Linenberg Shareholder Agreement, but
has a termination date of February 28, 1998 and does not provide CPS any right
to buy or Bianco any right to require CPS to buy any of Bianco's shares of
Common Stock. Pursuant to the Bianco Shareholder Agreement, Bianco has agreed
not to sell any of her shares of Common Stock without the consent of CPS through
February 28, 1998 and has the right to participate in (i) a private sale or (ii)
a public offering, on a pro rata basis with CPS and Linenberg (if he elects or
is eligible to participate) through February 28, 1998. Bianco has also provided
CPS with an irrevocable proxy with respect to all shares of Common Stock held by
her during the term of the Bianco Shareholder Agreement. As of March 1, 1996,
following consummation of the Stock Purchase, Bianco owned 1,000,000 shares of
Common Stock. The Bianco Shareholder Agreement will terminate
-5-
Page 7 of 19 Pages
<PAGE> 8
on the earlier of February 28, 1998 or the date Kendall ceases to have effective
control of Sentex.
Upon consummation of the Stock Purchase, Sentex entered into an
employment agreement with Linenberg (the "Employment Agreement") and a
consulting agreement with Bianco (the "Consulting Agreement").
Pursuant to the Employment Agreement, Linenberg will serve as the
Executive Vice President of Sentex and as the President of Sentex Systems, Inc.,
a wholly owned operating subsidiary of Sentex, through February 28, 2000.
Pursuant to the Consulting Agreement, Bianco will be retained as a
part-time consultant to Sentex through February 28, 1998.
Except to the extent as set forth above, CPS has no plans or proposals
which would result in: (a) the acquisition by any person of additional
securities of Sentex, or disposition of the securities of Sentex; (b) a merger,
sale of substantially all the assets, reorganization or liquidation of Sentex or
any of its subsidiaries; (c) any change to the capitalization or the dividend
policy of Sentex; (d) any change in the business structure of Sentex; (e) any
change to Sentex's certificate of incorporation, bylaws or other instruments
that may impede the acquisition of control of Sentex by any person; (f)
delisting of the Common Stock of Sentex on Nasdaq; (g) termination of
registration of the Common Stock of Sentex pursuant to Section 12(g)(4) of the
Securities and Exchange Act of 1934; or (h) any action similar to the foregoing.
-6-
Page 8 of 19 Pages
<PAGE> 9
The Second Stock Purchase on April 3, 1997 was undertaken for the
purpose of complying with the terms of the Linenberg Shareholder Agreement.
Pursuant to the terms of the Linenberg Shareholder Agreement, Linenberg required
CPS to purchase up to 2,000,000 shares of his Common Stock at $.076 per share.
Item 5. Interest in Securities of the Issuer.
- ------- -------------------------------------
(a)(i) As of March 1, 1996, CPS beneficially owned 27,095,665 shares of
Common Stock of Sentex, which represents 40.2% of the outstanding shares of
Common Stock of Sentex as of November 30, 1995, based on 67,360,081 shares of
Common Stock then outstanding. As of March 1, 1996, none of the other persons
named in Item 2 of this Schedule 13D beneficially owned any shares of Common
Stock.
(ii) As of April 3, 1977 CPS beneficially owned 27,095,665 shares of
Common Stock of Sentex, which represents 34.33% of the outstanding shares of
Common Stock of Sentex as of November 30, 1996, based on 78,919,762 shares of
Common Stock then outstanding. As of April 3, 1997, none of the other persons
named in Item 2 of this Schedule 13D beneficially owned any Common Shares.
(b)(i) As of March 1, 1996, CPS had the sole voting and dispositive
power with respect to 17,706,461 of such shares and the sole power to direct the
vote with respect to the remaining 9,389,204 of such shares.
(ii) As of April 3, 1997, CPS had the sole voting and dispositive power
with respect to 19,706,461 of such shares and the sole power to direct the vote
with respect to the remaining 7,389,204 of such shares.
-7-
Page 9 of 19 Pages
<PAGE> 10
(c) On or about August 31, 1995 and September 8, 1995, Kendall
purchased 60,000 and 40,000 shares of Common Stock of Sentex, respectively, at
$.0575 per share on the open market. Pursuant to an agreement with Sentex,
Kendall has contributed these shares to Sentex without cost to Sentex.
(d) Other than the purchases reported on herein, none of the persons
named in Item 2 of this Schedule 13D has effected during the past 60 days any
transaction in the Common Stock of Sentex.
Item 6. Contracts, Arrangements, Understandings or
- ------- ------------------------------------------
Relationships with Respect to Securities of the Issuer.
-------------------------------------------------------
CPS has entered into Shareholder Agreements with Linenberg and Bianco.
The terms of these Shareholder Agreements are described in Item 4.
Other than the agreements disclosed herein, there are no contracts,
arrangements, understandings, relationships or agreements between CPS and any
other person with respect to shares of Common Stock.
Item 7. Material to be Filed as Exhibits.
- ------- ---------------------------------
Each of the Stock Purchase Agreements, the Linenberg Shareholder
Agreement and the Bianco Shareholder Agreement were previously filed on paper as
Exhibits. The Second Stock Purchase Agreement has been filed as an Exhibit
hereto.
-8-
Page 10 of 19 Pages
<PAGE> 11
After reasonable inquiry and to the best of its knowledge and belief,
the undersigned certifies that the information set forth in this statement is
true, complete and correct.
CPS CAPITAL, LTD.
BY: Robert S. Kendall
Chairman and President
/s/ William Appleton
----------------------------------
William Appleton, Attorney-in-fact
Date: April 14, 1997
-9-
Page 11 of 19 Pages
<PAGE> 12
EXHIBIT INDEX
Exhibit Description Page No.
- ------- ----------- --------
Exhibit A Stock Purchase Agreement dated October 18, 1995 *
between CPS Capital, Ltd and Mr. Amos Linenberg
Exhibit B Stock Purchase Agreement dated October 18, 1995 *
between CPS Capital, Ltd and Ms. Joanne Bianco
Exhibit C Stock Purchase Agreement dated October 18, 1995 *
between CPS Capital, Ltd and Ms. Maxine Ganer,
as Trustee of the Daniele Linenberg Trust
Exhibit D Stock Purchase Agreement dated October 18, 1995 *
among CPS Capital, Ltd, Mr. Salvatore Bianco and
the Estate of Mrs. Marie Bianco
Exhibit E The Linenberg Shareholder Agreement dated March *
1, 1996 between Amos Linenberg and CPS Capital, Ltd.
Exhibit F The Bianco Shareholder Agreement dated March 1, 1996 *
between Joanne Bianco and CPS Capital, Ltd.
Exhibit G The Second Stock Purchase Agreement dated April 3, 13
1997, between Amons Linenberg and CPS Capital, Ltd.
* Exhibit filed as an exhibit to initial Schedule 13D and not restated herein
pursuant to Rule 13d-2.
Page 12 of 19 Pages
<PAGE> 1
EXHIBIT G
SHARE PURCHASE AGREEMENT
------------------------
THIS AGREEMENT is made and entered into this 3rd day of April,
1997, by and between CPS CAPITAL, LTD., an Ohio limited liability company
("Buyer"), and DR. AMOS LINENBERG ("Seller").
W I T N E S S E T H:
--------------------
WHEREAS, Seller is the record owner of nine million three
hundred eighty eight thousand two hundred and four (8,389,204) outstanding
common shares of Sentex Sensing Technology, Inc., a New Jersey corporation (the
"Company"), and Seller desires to sell to Buyer and Buyer desires to purchase
from Seller two million (2,000,000) of such shares on the terms and subject to
the conditions hereinafter stated (such 2,000,000 shares being referred to as
the "Seller Shares");
WHEREAS, the Seller Shares are being offered and purchased
pursuant to Section 6(a) of the Shareholders Agreement, dated March 1, 1996, by
and between the Buyer and Seller (the "Shareholders Agreement").
NOW, THEREFORE, in consideration of the premises and the
mutual promises herein contained, the parties hereto agree as follows:
ARTICLE I
SALE AND PURCHASE
-----------------
1.1 TRANSFER OF SHARES. Seller hereby sells, assigns,
transfers and delivers to Buyer the Seller Shares, which represents two million
(2,000,000) common shares of the Company under a stock power duly endorsed with
the signature guaranteed in a manner satisfactory to Continental Stock Transfer
& Trust Company (the "Transfer Agent"). Except for such limitations imposed by
the Shareholders Agreement, Seller has transferred the Seller Shares to Buyer
free and clear of all liens, security interests, encumbrances, pledges, charges,
claims, voting trusts and restrictions on transfer of any nature whatsoever
other than statutory restrictions imposed by federal or state securities laws.
1.2 PURCHASE PRICE. Buyer hereby pays to Seller by wire
transfer or certified check an aggregate purchase price (the "Purchase Price")
in an amount equal to One Hundred Fifty Two Thousand Dollars ($152,000).
Page 13 of 19 Pages
<PAGE> 2
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF BUYER
---------------------------------------
Buyer hereby represents and warrants to Seller that:
2.1 CORPORATE ORGANIZATION. Buyer is a limited liability
company duly organized, validly existing and in good standing under the laws of
the State of Ohio, and has all requisite power and authority to enter into this
Agreement perform its obligations hereunder and consummate the transactions
contemplated hereby.
2.2 AUTHORIZATION. All necessary and appropriate action has
been taken by Buyer with respect to the execution and delivery of this Agreement
and the performance of its obligations hereunder, and this Agreement constitutes
valid and binding obligations of Buyer enforceable in accordance with its terms.
The consummation of the transaction contemplated by this Agreement does not
conflict with any applicable federal, state or local law, rule, regulation,
writ, decree or order to which Buyer is subject, nor does it conflict with or
violate any term, provision or covenant of any mortgage, indenture, contract,
agreement, instrument or judgment applicable to Buyer.
2.3 CONSENTS AND APPROVALS. No consent, approval, order or
authorization of, or registration, declaration or filing with, any governmental
authority is required in connection with Buyer's execution and delivery of this
Agreement or its performance of the terms hereof.
2.4 INVESTMENT INTENT. Buyer is acquiring the Seller Shares
for the purpose of investment only and not with a view to, or for sale in
connection with, the distribution thereof within the meaning of the Securities
Act of 1933, as amended.
2.5 BROKERS. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of Buyer.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
----------------------------------------
3.1 Authority.
----------
(a) This Agreement has been duly executed and delivered by
Seller and constitutes the legal, valid and binding obligation of Seller
enforceable against Seller in accordance with its terms (except as such
enforceability may be limited by bankruptcy,
-2-
Page 14 of 19 Pages
<PAGE> 3
insolvency, reorganization or other similar laws of general application
affecting the enforcement of creditors' rights or by general principles of
equity limiting the availability of equitable remedies).
(b) The consummation of the transaction contemplated by this
Agreement does not conflict with any applicable federal, state or local law,
rule, regulation, writ, decree or order to which Seller is subject, nor does it
conflict with or violate any term, provision or covenant of any mortgage,
indenture, contract, agreement, instrument or judgment applicable to Seller.
3.2 CONSENTS AND APPROVALS OF GOVERNMENTAL AUTHORITIES. No
consent, approval, authorization or waiver of, or declaration, filing or
registration with, or notification to, any governmental or regulatory authority
is required in connection with the execution, delivery and performance by Seller
of this Agreement and the consummation by Seller of the transactions
contemplated hereby.
3.3 SELLER SHARES. Except as otherwise limited by the
Shareholders Agreement, Seller is the lawful owner of all the Seller Shares and
has full legal and equitable title to such shares and the absolute right to
sell, assign, transfer and deliver the same to Buyer, free and clear of all
liens, charges, pledges, encumbrances, options and rights of first refusal.
Consummation of the purchase and sale provided for in this except as otherwise
limited by the Shareholders Agreement, Seller has delivered to Buyer full legal
and equitable title to all the Seller Shares, free and clear of all liens,
charges, pledges, encumbrances, options and rights of first refusal and such
shares are fully paid and nonassessable.
3.4 BROKERS. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of Seller.
ARTICLE IV
COVENANTS
---------
4.1 SECURITIES FILINGS. Buyer and Seller shall each file at
its or his own expense, all reports and forms required by the Securities and
Exchange Commission, including without limitations and Form 4s or 5s and
amendments to Schedule 13D.
4.2 Buyer shall forward Seller's stock certificate, together
with the stock powers deliver herewith to the Transfer Agent for issuance to
Buyer and Seller of new certificates with all appropriate legends affixed
thereto.
-3-
Page 15 of 19 Pages
<PAGE> 4
ARTICLE V
INDEMNIFICATION
---------------
5.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. All
representations, warranties, covenants and agreements of Buyer or Seller in this
Agreement shall survive without limitation.
5.2 INDEMNIFICATION.
(a) Seller hereby covenants and agrees to indemnify and hold
harmless Buyer from and against any and all losses, liabilities, damages,
demands, claims, suits, actions, judgments or causes of action, assessments,
reasonable costs and expenses, including, without limitation, interest,
penalties, attorneys' fees, any and all expenses incurred in investigating,
preparing or defending against any litigation, commenced or threatened, or any
claim whatsoever, and any and all amounts paid in settlement of any claim or
litigation (collectively, "Damages"), asserted against, resulting from, imposed
on or incurred or suffered by Buyer, directly or indirectly, as a result of or
arising from any inaccuracy in or breach or nonfulfillment of any of the
representations, warranties, covenants or agreements made by Seller in this
Agreement or any facts or circumstances constituting such an inaccuracy, breach
or nonfulfillment (collectively "Indemnifiable Claims" when used in the context
of Buyer as the party seeking indemnification (the "Indemnified Party").
(b) Buyer hereby covenants and agrees to indemnify and hold
harmless Seller from and against any and all Damages asserted against, resulting
from, imposed on or incurred or suffered by Seller, directly or indirectly, as a
result of or arising from any inaccuracy in or breach or nonfulfillment of any
of the representations, warranties, covenants or agreements made by Buyer in
this Agreement or any facts or circumstances constituting such an inaccuracy,
breach or nonfulfillment (collectively, "Indemnifiable Claims" when used in the
context of Seller as the Indemnified Party).
Notwithstanding anything in this Agreement to the contrary,
Buyer's sole remedy (both at law and equity) for Damages shall be
indemnification by Seller as set forth in Section 5.2(a) and Buyer hereby waives
its right to pursue any other remedy at law or in equity. Notwithstanding
anything in this Agreement to the contrary, Seller's sole remedy (both at law
and equity) for Damages shall be indemnification by Buyer as set forth in
Section 5.2(b) and Seller hereby waives all right to pursue any other remedy at
law or in equity.
5.3 PROCEDURE FOR INDEMNIFICATION. In the event that the
Indemnified Party asserts the existence of a claim giving rise to Damages
(excluding claims resulting from the assertion of liability), it shall give
written notice to the Indemnifying Party specifying the nature and amount of the
claim asserted. If the Indemnifying Party, within 30 days after
-4-
Page 16 of 19 Pages
<PAGE> 5
receipt of such notice from the Indemnified Party, shall not give written notice
to the Indemnified Party announcing its intent to contest such assertion of the
Indemnified Party, such assertion by the Indemnified Party shall be deemed
accepted and agreed to by the party who is to be indemnified (the "Indemnifying
Party"). In the event, however, that the Indemnifying Party contests the
assertion of a claim by giving such written notice to the Indemnified Party
within said period, then if the parties hereto, acting in good faith, cannot
reach agreement with respect to such claim within 30 days after the date of such
notice from the Indemnifying Party either party may commence legal proceedings
to resolve the dispute.
ARTICLE VI
MISCELLANEOUS PROVISIONS
------------------------
6.1 NOTICE. All notices, requests, demands and other
communications required or permitted under this Agreement, including, without
limitation, all notices required pursuant to Article VIII of this Agreement,
shall be deemed to have been duly given and made if in writing and served either
by personal delivery (which shall include delivery by Federal Express or similar
services) to the party for whom it is intended or by being deposited postage
prepaid, certified or registered mail, return receipt requested (or such form of
mail as may be substituted therefor by postal authorities), in the United States
mail (in which case it will be deemed delivered five days after being so
mailed), bearing the address shown in this Agreement for, or such other address
as may be designated in writing hereafter by such party:
If to Seller: Amos Linenberg
Sentex Systems, Inc.
553 Broad Avenue
Ridgefield, NJ 07657
If to Buyer: CPS Capital, Ltd.
1801 East Ninth Street
Cleveland, OH 44114
With a copy to: William M. Toomajian
Baker & Hostetler LLP
3200 National City Center
1900 East 9th Street
Cleveland, OH 44114-3485
6.2 ENTIRE AGREEMENT. This Agreement embodies the entire
agreement and understanding of the parties hereto with respect to the subject
matter hereof, and supersede all prior and contemporaneous agreements and
understanding relative to said subject matter.
-5-
Page 17 of 19 Pages
<PAGE> 6
6.3 BINDING EFFECT; ASSIGNMENT. This Agreement and the various
rights and obligations arising hereunder shall inure to the benefit of and be
binding upon Buyer, its legal representatives, successors and assigns, and
Seller, his legal representatives, successors and assigns. Neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
transferred or assigned (by operation of law or otherwise) by any party hereto
without the prior written consent of the other party.
6.4 NO THIRD PARTY BENEFICIARIES. Subject to Section 9.3
hereof, nothing herein, expressed or implied, is intended or shall be construed
to confer upon or give to any person, firm, corporation or legal entity, other
than the parties hereto, any rights, remedies or other benefits under or by
reason of this Agreement.
6.5 COUNTERPARTS. This Agreement may be executed
simultaneously in multiple counterparts, each of which shall be deemed an
original, but all of which taken together shall constitute one and the same
instrument.
6.6 CAPTIONS. The article and section headings of this
Agreement are inserted for convenience only and shall not constitute a part of
this Agreement in construing or interpreting any provision hereof.
6.7 EXPENSES AND TRANSACTIONS. Each of Seller and Buyer
covenants and agrees that it shall be responsible for and shall pay all of its
respective costs and expenses heretofore or hereafter paid or incurred in
connection with this Agreement and the transactions contemplated hereby,
including, without limitation, legal and accounting fees, except that the
Company may pay any fees associated with the issuing of certificates or any
opinions required by the Transfer Agent.
6.8 WAIVER; CONSENT. This Agreement may not be changed,
amended, terminated, augmented, rescinded or discharged (other than in
accordance with its terms), in whole or in part, except by a writing executed by
the parties hereto, and no waiver of any of the provisions or conditions of this
Agreement or any of the rights of a party hereto shall be effective or binding
unless such waiver shall be in writing and signed by the party claimed to have
given or consented thereto.
6.9 OTHER AND FURTHER COVENANTS. The parties shall, in good
faith, execute such other and further instruments, assignments or documents as
may be necessary for the consummation of the transactions contemplated by this
Agreement, and shall assist and cooperate with each other in connection with
these activities.
6.10 GENDER. Whenever the context requires, words used in the
singular shall be construed to mean or include the plural and vice versa, and
pronouns of any gender shall be deemed to include and designate the masculine,
feminine or neuter gender.
-6-
Page 18 of 19 Pages
<PAGE> 7
6.11 GOVERNING LAW. This Agreement shall in all respects be
construed in accordance with and governed by the laws of the State of New Jersey
(without regard to principles of conflicts of laws). The federal and state
courts of Bergen County, New Jersey shall have exclusive jurisdiction with
respect to any dispute relating to such agreement.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement or caused this Agreement to be executed as of the day and year first
above written.
CPS CAPITAL, LTD.
By: /s/ Robert S. Kendall
---------------------------
Robert S. Kendall
Chairman and President
/s/ Amos Linenberg
---------------------------
Amos Linenberg
-7-
Page 19 of 19 Pages
