SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) July 1, 1996
------------------
AIRSENSORS, INC.
------------------
(Exact name of registrant as specified in its charter)
Delaware
------------------------
(State of Incorporation)
0-16115 91-1039211
------------------------ -----------------------
(Commission File Number) (IRS Employer I.D. No.)
16804 Gridley Place, Cerritos, CA 90703
-------------------------------------- ----------
Address of principal executive offices (Zip Code)
Registrant's telephone number, including area code: (310) 860-6666
<PAGE>1
ITEM 2. ACQUISITION OF ASSETS
Effective July 1, 1996, the Registrant acquired certain assets of the Gas
Division of Ateco Automotive Pty. Ltd. ("Ateco") for cash in the amount of
approximately $6,500,000. Ateco, a private company in Australia, has
distributed the Company's gaseous fuel carburetion systems and related
devices for use with internal combustion engines since approximately 1969.
In order to effectuate the transaction and conduct business in Australia,
IMPCO Technologies Inc. ("IMPCO") a wholly owned subsidiary of the
Registrant, established a new Australian operating company, IMPCO
Technologies Pty. Limited ("IMPCO Ltd."). The assets, which were acquired by
IMPCO Ltd., consist primarily of receivables, inventory, equipment, a note,
business goodwill, distribution rights in Australia, and a 50% interest in
Ateco's sub-distributor. The amount of the consideration was determined
through negotiations between Ateco and IMPCO Ltd.
The purchase price was primarily financed through term loans provided by Bank
of America NT&SA and its Sydney, Australia branch. The loans of
approximately $4,000,000 are three-year loans with five-year amortization
schedules with interest at market rates. In addition, accounts receivables
due to IMPCO from Ateco, totaling $1,852,000, were offset against the
purchase price. The balance of the purchase price was financed by IMPCO's
existing line of credit with Bank of America NT&SA.
Impco Ltd. plans to continue the current business of marketing and
distributing IMPCO's gaseous fuel carburetion systems and related devices in
Australia and may engage in other related businesses in the future.
<PAGE>2
ITEM 7. Financial Statements and Exhibits
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED Page
----------------------------------------- ----
Audited financial statements for Gas Division of
Ateco Automotive Pty. Ltd.
Report of independent auditors 6
Balance sheet at June 30, 1996 7
Statement of operations and division equity
for the year ended June 30, 1996 8
Statement of cash flow
for the year ended June 30, 1996 9
Notes to financial statements 10
(b) PRO FORMA FINANCIAL INFORMATION (UNAUDITED)
-------------------------------------------
Pro forma condensed combined balance sheet of AirSensors,
Inc. and subsidiaries and Gas Division of Ateco Automotive
Pty. Ltd. and subsidiary as of April 30, 1996 and
June 30, 1996, respectively 14
Pro forma condensed combined income statements of AirSensors,
Inc. and subsidiaries and the Gas Division of Ateco Automotive
Pty. Ltd. and subsidiary for the fiscal year ended
April 30, 1996 and June 30, 1996, respectively 16
Notes to the pro forma condensed combined financial statements 17
<PAGE>3
(c) EXHIBITS
--------
2.5 Deed of Sale of Business by and among IMPCO Technologies Pty
Limited, as buyer, and Ateco Automotive Pty Limited, as seller,
dated as of July 1, 1996.
2.6 Deed of Release by and among IMPCO Technologies, Inc. and
Ateco Automotive Pty Limited dated as of July 1, 1996.
2.7 Shareholders Agreement for Gas Parts (NSW) Pty Limited by
and among IMPCO Technologies Pty Limited, Gas Parts Pty Limited,
and Gas Parts (NSW) Pty Limited, dated as of July 4, 1996.
2.8 Loan Agreement for IMPCO Technologies, Inc., as borrower,
AirSensors, Inc., as Guarantor, and Bank of America National
Trust and Savings Association, as lendor, dated as of
June 25, 1996.
2.9 Loan Agreement for IMPCO Technologies Pty Limited as borrower and
Bank of America Pty Limited. as lendor, dated as of June 27, 1996.
23.1 Consent of Ernst & Young dated September 12, 1996.
SIGNATURES
Pursuant to the requirement of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
AirSensors, Inc.
Date: September 16, 1996 By/s/Thomas M. Costales
-----------------------------
Thomas M. Costales
Chief Financial Officer
and Treasurer
<PAGE>4
GAS DIVISION OF ATECO AUTOMOTIVE PTY. LTD.
AUDITED FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 1996
<PAGE>5
REPORT OF ERNST & YOUNG, INDEPENDENT AUDITOR
Board of Directors
Impco Technologies Pty. Ltd.
We have audited the accompanying balance sheet of the Gas Division of Ateco
Automotive Pty. Ltd. as of June 30, 1996 and the related statements of
operations and division equity and cash flows for the year then ended.
These financial statements are the responsibility of the Division's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Gas Division of Ateco
Automotive Pty. Ltd. at June 30, 1996 and the results of its operations and
its cash flows for the year then ended in conformity with generally accepted
accounting principles.
/s/ Ernst & Young
Melbourne, Australia
September 12, 1996
<PAGE>6
GAS DIVISION OF ATECO AUTOMOTIVE PTY. LTD.
BALANCE SHEET
AT JUNE 30, 1996
ASSETS
- ------
CURRENT ASSETS
Cash $ 132,356
Net accounts receivable, less allowance for
doubtful accounts of $54,259 1,149,617
Finished goods inventory 3,158,520
Prepaid expenses and other current assets 49,802
-----------
TOTAL CURRENT ASSETS 4,490,295
-----------
INVESTMENTS
Investment in associated company 32,899
-----------
PROPERTY, PLANT & EQUIPMENT
Plant and machinery 40,185
Office equipment 57,131
Motor vehicles 148,737
-----------
246,053
Less: Accumulated depreciation (98,088)
-----------
147,965
-----------
TOTAL ASSETS $4,671,159
===========
LIABILITIES AND DIVISION EQUITY
- -------------------------------
CURRENT LIABILITIES
Accounts payable $1,944,650
Accrued and other liabilities 115,852
-----------
TOTAL CURRENT LIABILITIES 2,060,502
-----------
DIVISION EQUITY 2,610,657
-----------
TOTAL LIABILITIES AND DIVISION EQUITY $4,671,159
===========
The accompanying notes form part of these financial statements.
<PAGE>7
GAS DIVISION OF ATECO AUTOMOTIVE PTY. LTD.
STATEMENT OF OPERATIONS AND DIVISION EQUITY
YEAR ENDED JUNE 30, 1996
Sales $ 6,359,813
Cost and expenses:
Cost of sales (4,686,568)
Selling, general and administrative expenses (903,831)
------------
(5,590,399)
------------
INCOME BEFORE CORPORATE CHARGES & INCOME TAX 769,414
Corporate charges: (Note 2)
Head office administrative expense (242,000)
------------
527,414
Share of income from associated company 23,975
------------
INCOME BEFORE INCOME TAXES 551,389
Income tax expense (Note 2) (190,888)
------------
NET INCOME 360,501
Cash transfers to Ateco Automotive Pty. Ltd. (649,078)
Division equity at beginning of year 2,899,234
------------
DIVISION EQUITY AT END OF YEAR $ 2,610,657
============
The accompanying notes form part of these financial statements.
<PAGE>8
GAS DIVISION OF ATECO AUTOMOTIVE PTY. LTD.
STATEMENT OF CASH FLOW
YEAR ENDED JUNE 30, 1996
OPERATING ACTIVITIES
- --------------------
Net income $ 360,501
Adjustments to reconcile net income to net cash provided
by operating activities:-
Depreciation and amortization 28,416
Share of income from associated company (23,975)
Provision for decline in inventory value 49,713
Changes in operating assets and liabilities:
Increase in accounts receivable (376,133)
Increase in inventories (795,316)
Decrease in prepaid expenses and other
current assets 84,420
Increase in accounts payable 1,780,394
Decrease in accrued expenses and other liabilities (50,747)
-----------
NET CASH PROVIDED BY OPERATING ACTIVITIES 1,057,273
INVESTING ACTIVITIES
- --------------------
Payment for property, plant and equipment (46,421)
Process from sale of property, plant and equipment 24,404
-----------
NET CASH USED BY INVESTING ACTIVITIES (22,017)
FINANCING ACTIVITIES
- --------------------
Cash transfers to Ateco Automotive Pty. Ltd. (649,078)
-----------
NET CASH USED BY FINANCING ACTIVITIES (649,078)
INCREASE IN CASH 386,178
-----------
Overdraft at beginning of year (253,822)
-----------
CASH AT END OF YEAR $ 132,356
===========
The accompanying notes form part of these financial statements.
<PAGE>9
GAS DIVISION OF ATECO AUTOMOTIVE PTY. LTD.
NOTES TO FINANCIAL STATEMENTS
AT JUNE 30, 1996
NOTE 1: PRINCIPAL ACTIVITY
- ---------------------------
The principal activity of the Ateco Automotive Pty. Ltd. Gas Division (the
Division) during the financial year was the distribution of gas conversion
kits and associated accessories. The Division's business occurs throughout
Australia and their office is located in Melbourne, Australia.
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
- ---------------------------------------------------
The financial statements have been prepared in accordance with United States
(U.S.) generally accepted accounting principles and are presented in U.S.
dollars.
(a) Depreciation
Property, plant and equipment is stated on the basis of cost.
Depreciation is calculated on a straight line basis to write off the
cost of each item of property, plant and equipment over its expected
useful life.
(b) Income Tax
Notional income tax attributable to the Division income has been
reflected in the accompanying statement of operations based on the
Australian income tax rate. The results of the Division are included in
Ateco Automotive Pty. Ltd.'s income tax return. The effective income
tax rate approximates the Australian statutory rate. There are no
significant deferred tax assets or liabilities at June 30, 1996.
Income tax payable has been adjusted through the divisional equity
account in the accompanying balance sheet as the Division is not a
separate taxable entity.
(c) Inventories
Inventories are stated at lower of cost or net realizable value. Cost
has been determined under the average cost method.
(d) Corporate Charges
The Division is provided with working capital on an as needed basis with
excess cash remitted to Ateco Automotive Pty. Ltd. on a monthly basis.
Group administrative expenses are allocated to the Division based on a
corporate interest charge of eight percent of the Division's monthly
inventory and debtor balance to compensate Ateco Automotive Pty. Ltd.
for group management services, legal and other administrative services
provided. Management believes this basis of cost allocation is a
reasonable estimate of services provided. If the Division were a
separate entity, the operating results and financial position might be
significantly different than presented herein.
Notes to and forming part of the financial statements.
<PAGE>10
GAS DIVISION OF ATECO AUTOMOTIVE PTY. LTD.
NOTES TO FINANCIAL STATEMENTS
AT JUNE 30, 1996
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)
- -------------------------------------------------------------
(e) Use of Estimates
Financial statements prepared in accordance with generally accepted
accounting principles require management to make estimates and judgments
that affect amounts and disclosures reported in the financial
statements. Actual results could differ from those estimates, although
management does not believe that any differences would materially affect
its financial position or reported results.
(f) Equity Accounting
The initial amount of the investment in Gas Parts (NSW) Pty. Ltd.("Gas
Parts"), an associated company, is stated at cost. The current balance
has been adjusted for the Division's share of Gas Part's earnings and
distributions.
NOTE 3: EXPENDITURE COMMITMENTS
- --------------------------------
Lease expenditure commitments
Operating Leases
- -not later than one year $36,093
=======
The term of the lease on the Division's premises ceases on June 1, 1997 with
a two year renewal option.
Notes to and forming part of the financial statements.
<PAGE>11
GAS DIVISION OF ATECO AUTOMOTIVE PTY. LTD.
NOTES TO FINANCIAL STATEMENTS
AT JUNE 30, 1996
NOTE 4: RELATED PARTY TRANSACTIONS
- -----------------------------------
The following related party transactions occurred during the financial year.
1. Sales made under normal commercial terms and conditions to an associated
company, Gas Parts (NSW) Pty. Ltd. aggregating $887,459 were included
in sales revenue of the Gas Division of Ateco Automotive Pty. Ltd.
2. An amount of $345,724 was owed to Gas Division of Ateco Automotive Pty.
Ltd. by Gas Parts (NSW) Pty. Ltd. at balance sheet date. This amount was
included in accounts receivable.
3. Ateco Automotive Pty. Ltd. has a note receivable of $157,500 payable on
demand from Gas Parts (NSW) Pty. Ltd.
NOTE 5: SUBSEQUENT EVENTS
- --------------------------
Ateco Automotive Pty. Ltd. entered into an agreement dated July 1, 1996 to
sell substantially all the assets and liabilities of the Division to another
corporation.
Notes to and forming part of the financial statements.
<PAGE>12
AIRSENSORS, INC. AND SUBSIDIARIES
AND
GAS DIVISION OF ATECO AUTOMOTIVE PTY LTD AND SUBSIDIARY
PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS (UNAUDITED)
Effective July 1, 1996, the registrant acquired certain assets of the Gas
Division of Ateco Automotive Pty. Ltd. ("Ateco") for cash in the amount of
approximately $6,500,000. In order to effectuate the transaction, IMPCO
Technologies Inc. ("IMPCO Inc.") a wholly owned subsidiary of the Registrant,
established a wholly owned subsidiary in Australia, IMPCO Technologies Pty.
Limited ("IMPCO Ltd."). The assets, which were acquired by IMPCO Ltd.,
consist primarily of receivables, inventory, equipment, a note, business
goodwill, distribution rights in Australia, and a 50% interest in Ateco's
sub-distributor.
The purchase price was financed through approximately $4,000,000 of term
loans provided by Bank of America NT&SA and its Sydney Australia branch.
The term loans are both three-year loans with a five-year amortization
schedule with interest at market rates. In addition, accounts receivables due
to IMPCO Inc. by Ateco, totaling approximately $1,852,000, were also offset
against the purchase price. The balance of the purchase price was paid
with proceeds from IMPCO Inc.'s existing line of credit with Bank of
America NT&SA.
The following pro forma statements have been prepared to illustrate the
effect of the acquisition, which is being accounted for as a purchase.
The unaudited pro forma condensed balance sheets combine the balance sheets
of AirSensors, Inc. and its subsidiaries as of April 30, 1996 and Ateco as of
June 30, 1996. The unaudited pro forma condensed income statements combine
the income statements of AirSensors Inc. and its subsidiaries for the year
ended April 30, 1996 and Ateco for the year ended June 30, 1996. The pro
forma information is based upon the historical financial statements of the
respective entities while the pro forma adjustments on which they are based
are described in the accompanying notes.
The AirSensors, Inc. unaudited pro forma condensed combined financial
statements are presented for illustrative purposes only and are not
necessarily indicative of the consolidated financial position or consolidated
results of operations of AirSensors, Inc. that would have been reported had
the Acquisition occurred on the dates indicated, nor do they represent a
forecast of the consolidated financial position of AirSensors, Inc. at any
future date or the consolidated results of operations of AirSensors, Inc. at
any future period. Amounts allocated to assets purchased from Ateco by IMPCO
Ltd. are based on estimated fair values derived from information currently
available. The purchase price allocation is preliminary and based on
management's best estimate.
The unaudited pro forma condensed combined financial statements should be
read in conjunction with the related notes thereto and the historical
consolidated financial statements of AirSensors, Inc. and subsidiaries and
the historical Ateco financial statements.
<PAGE>13
<TABLE>
<CAPTION>
AIRSENSORS, INC. AND SUBSIDIARIES
AND
GAS DIVISION OF ATECO AUTOMOTIVE PTY LTD AND SUBSIDIARY
PRO FORMA CONDENSED COMBINED BALANCE SHEETS (UNAUDITED)
AS OF APRIL 30, AND JUNE 30, 1996
(Dollars in thousands)
Historical Pro Forma Adjustments
---------------------- --------------------------
ASSETS AirSensors Ateco Pro Forma
April 30, June 30, DR CR Combined
---------- ---------- ------------ ------------ ----------
<S> <C> <C> <C> <C> <C>
Current assets:
Cash and cash equivalents $ 811 $ 132 $ 9(a) 132(a) $ 820
Net accounts receivable 9,514 1,150 517(a) 3,002(a)(b) 8,179
Total inventories 11,438 3,159 416(a) 903(a) 14,110
Other current assets 2,815 50 270(a) 197(a)(b) 2,938
---------- ---------- ------------ ------------ ----------
Total current assets 24,578 4,491 1,212 4,234 26,047
Net equipment and leasehold improvements 6,478 148 94(a) 103(a) 6,617
Investment in subsidiary - 33 33(a) -
Intangibles arising from acquisitions 5,226 - 3,585(a) 8,811
Other assets 1,446 - 1,446
---------- ---------- ------------ ------------ ----------
Total assets $ 37,728 $ 4,672 $ 4,891 $ 4,370 $ 42,921
========== ========== ============ ============ ==========
</TABLE>
(See accompanying notes)
<PAGE>14
<TABLE>
<CAPTION>
AIRSENSORS, INC. AND SUBSIDIARIES
AND
GAS DIVISION OF ATECO AUTOMOTIVE PTY LTD AND SUBSIDIARY
PRO FORMA CONDENSED COMBINED BALANCE SHEETS (UNAUDITED)
AS OF APRIL 30, AND JUNE 30, 1996
(Dollars in thousands)
Historical Pro Forma Adjustments
---------------------- --------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY AirSensors Ateco Pro Forma
April 30, June 30, DR CR Combined
---------- ---------- ------------ ------------ ----------
<S> <C> <C> <C> <C> <C>
Current liabilities:
Notes payable 541 - 541
Accounts payable 3,532 1,945 2,342(a)(b) 894(a) 4,029
Accrued payroll obligations 1,701 1,701
Accrued warranty obligations 470 470
Income taxes payable 706 706
Other accrued expenses 1,598 116 256(a)(b) 328(a) 1,786
Current portion of term loans 718 - 794(a) 1,512
---------- ---------- ------------ ------------ ---------
Total current liabilities 9,266 2,061 2,598 2,016 10,745
Line of credit 3,400 - 528(a) 3,928
Term loan - Bank of America NT&SA 1,435 - 3,175(a) 4,610
Term loan - DEPA Holding B.V. 2,821 - 2,821
Other long-term liabilities 1,167 - 6(a) 1,173
Minority interest 383 - 32(a) 415
Commitments and contingencies - - -
Stockholders' equity:
1993 Series 1 preferred stock, $.01 par
value, 5,950 shares authorized, issued
and outstanding, $5,950,000 liquidation
value 5,650 - 5,650
Common stock, $.001 par value, authorized
25,000,000 shares; 5,654,568 issued and
outstanding at April 30, 1996 6 6
Additional paid-in capital relating to
common stock 28,747 - 28,747
Retained earnings(deficit) (15,112) 2,611 2,676(a) 65(a) (15,112)
Accumulated translation adjustment (35) 27(b) (62)
---------- ---------- ------------ ------------ ---------
Total stockholders' equity 19,256 2,611 2,703 65 19,229
Total liabilities and
stockholders' equity $ 37,728 $ 4,672 $ 5,301 $ 5,822 $ 42,921
========== ========== ============ ============ =========
(See accompanying notes)
</TABLE>
<PAGE>15
<TABLE>
<CAPTION>
AIRSENSORS, INC. AND SUBSIDIARIES
AND
GAS DIVISION OF ATECO AUTOMOTIVE PTY LTD AND SUBSIDIARY
PRO FORMA CONDENSED COMBINED INCOME STATEMENTS (UNAUDITED)
FISCAL YEAR ENDED APRIL 30, AND JUNE 30, 1996
(In thousands, except net income per share amounts)
Historical Pro Forma Adjustments
---------------------- --------------------------
AirSensors Ateco Pro Forma
April 30, June 30, DR CR Combined
---------- ---------- ------------ ------------ ----------
<S> <C> <C> <C> <C> <C>
Net revenues $ 51,575 $ 6,360 $ 4,636(a)(b) 3,254(a) $ 56,553
Costs and expenses:
Cost of sales 32,011 4,687 2,914(a)(b) 4,636(a)(b) 34,976
Research & development expense 7,171 - 7,171
Selling, general & administrative 8,261 1,146 667(a)(c) 165(a) 9,909
---------- ---------- ------------ ------------ ----------
Total costs and expenses 47,443 5,833 3,581 4,801 52,056
---------- ---------- ------------ ------------ ----------
Operating income 4,132 527 8,217 8,055 4,497
Financing charges 504 - 604(c) 1,108
---------- ---------- ------------ ------------ ----------
Income before income taxes and
minority interest in income of
consolidated subsidiary 3,628 527 8,821 8,055 3,389
Provision (benefit) for income taxes (1,349) 191 27(a) 154(c) (1,285)
Income from associated company - (24) 24(a) -
Minority interest in earnings 306 - 24(a) 330
---------- ---------- ------------ ------------ ----------
Net income 4,671 360 8,896 8,209 4,344
Dividends on preferred stock 610 - 610
---------- ---------- ------------ ------------ ----------
Net income applicable to common stock $ 4,061 $ 360 $ 8,896 $ 8,209 $ 3,734
========== ========== ============ ============ ==========
Net income per share:
Primary $ .65 $ .60
======= =======
Fully diluted $ .63 .59
======= =======
Shares used in per share calculation:
Primary 6,648 6,648
======= =======
Fully diluted 7,771 7,771
======= =======
(See accompanying notes)
</TABLE>
<PAGE>16
AIRSENSORS, INC. AND SUBSIDIARIES
AND
GAS DIVISION OF ATECO AUTOMOTIVE PTY LTD. AND SUBSIDIARY
PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
(UNAUDITED)
1. Basis of Presentation
---------------------
The accompanying pro forma condensed combined financial statements
present the combined financial position and results of operations of
AirSensors, Inc. and the Gas Division of Ateco Automotive Ltd.
and its subsidiary ("Ateco"). The acquisition is accounted for as a
purchase and, accordingly, the purchase price will be allocated to the
assets and liabilities of Ateco based on their fair values at the
date of acquisition.
2. Pro forma adjustments
---------------------
The pro forma condensed combined financial statements give effect
to the following adjustments:
a. To reflect the acquisition of certain assets and liabilities
of Ateco.
b. To record the elimination of intercompany sales, accounts
payable, accounts receivable, and other intercompany adjustments
between AirSensors, Inc. and Ateco.
c. To reflect AirSensors, Inc. amortization of acquisition related
costs over twenty years, increased interest expense and the effect
of pro forma adjustments on provision for taxes based on income
due to the acquisition.
<PAGE>17
doc
DATED 1st JULY 1996
-------------------
BETWEEN
ATECO AUTOMOTIVE PTY LIMITED
(A.C.N. 000 486 706)
AND
IMPCO TECHNOLOGIES PTY LIMITED
(074 106 880)
========================================
DEED OF SALE OF BUSINESS
========================================
DUNHILL
MADDEN
BUTLER
Solicitors
Sydney
16 Barrack Street, Sydney 2000
New South Wales, Australia
GPO Box 427, Sydney 2001
DX 254 SYDNEY
Telephone: (02) 295 9999
International: 612 295 9999
Fax: (02) 295 9990
E-mail: 100252.1033 at compuserve.com
Ref: MTB
SYDNEY MELBOURNE BRISBANE
<PAGE>COVER
DEED OF SALE OF BUSINESS
THIS DEED is made the 1st day of July, 1996
BETWEEN ATECO AUTOMOTIVE PTY LIMITED (ACN 000 486 706) of 634-726 Princess
Highway Tempe NSW (hereinafter called "the Vendor") of the one part AND IMPCO
TECHNOLOGIES PTY LIMITED (ACN 074 106 880) of Level 5, 16 Barrack Street,
Sydney NSW (hereinafter called "the Purchaser") of the other part
WHEREAS: -
A. The Vendor has since prior to 1969 carried on the business of
distributing throughout Australia "Impco" automotive gas equipment
and parts and since 1991 pursuant to a Distribution Agreement dated
26 August 1991 between Impco Technologies Inc ("Impco") and the Vendor
(hereinafter called "the Business").
B. The Purchaser is a subsidiary of Impco.
C. The Vendor has agreed to sell and the Purchaser has agreed to purchase
the Business and the assets hereinafter referred to, with effect from
the close of business on June 30, 1996 upon and subject to the terms
and conditions hereinafter appearing.
NOW THIS AGREEMENT WITNESSETH:
1. (DEFINITION)
Wherever herein used the expression: -
"ASSOCIATE" has the meaning given to that term in sub-section
26AAB(14) of the Income Tax Assessment Act 1936 (Cth) as amended
on the basis that a reference to the "taxpayer" in that sub-section
is a reference to the relevant person or entity.
"BUSINESS DAY" means a day on which trading banks are open for
Business in Sydney other than a Saturday or Sunday.
"COMPLETION" means the point in time at which the parties have duly
fulfilled such or their respective obligations as are required to
be performed by them on or prior to the Completion Date.
"CUSTOMERS OF THE BUSINESS" means all persons and entities who at
any time prior to Completion purchased any item from the Vendor in
relation to the Business or in respect of whom a file was opened.
"CUSTOMER INFORMATION" means all information and records relating
to the Customers of the Business in machine readable or printed
form.
"ENVIRONMENTAL LAW" means any law, whether statute or common law,
concerning environmental matters, including but not limited to law
concerning land use, development, pollution, waste disposal, toxic
and hazardous substances, conservation of natural or cultural
resources and resource allocation including any law relating to
exploration for, or development or exploitation of, any natural
resource.
"ENVIRONMENTAL LIABILITY" means any obligation expense penalty or
fine under Environmental Law which would or could be imposed upon
the Purchaser or any occupier of any property the subject of the
leases of premises specified in Schedule 3 as a result of
activities carried on during the ownership or occupation of the
property by the Vendor or by the Vendor's predecessors in title or
by any current or previous owner or occupier of such property.
"INTANGIBLE ASSETS" means all trade names (other than trade names
registered or unregistered which include the word "Ateco"), copy
rights, inventions, and applications therefore, all licences and
permits of any kind, trade secrets and proprietary information,
shop rights, research and development data, computer programmes
developed or acquired by the Vendor used or to be used in the
Business that are loaded on the computer included in the Plant,
plans, specifications, blue prints, engineering calculations, and
all other intangible property rights relating to the Business.
"SECURITY AMOUNT" means the amount of one hundred thousand dollars
($100,000.00).
"THE COMPLETION DATE" means 1 July 1996 or such later date as the
Vendor and the Purchaser agree in writing.
"THE EFFECTIVE DATE" means the Completion Date.
<PAGE>1
"TAX" includes any tax, levy, impost, deduction, charge, rate,
duty, compulsory loan or withholding tax which is levied or
imposed by a government or governmental agency and any related
interest, penalty, charge, fee or other amount.
"THIRD PARTY CLAIMS" means in respect of any person body corporate
or other entity, any and all accounts, actions, claims, demands,
damages, losses, proceedings or suits which may arise out of or
result (directly or indirectly) from any claim or action or demand
asserted against that person by another person, body corporate or
other entity, and any and all liabilities and amounts payable to a
third party including but not limited to or in respect of any Tax
or by reason of any mortgage, pledge, loan, option, charge or
encumbrance.
2. (SALE OF ASSETS)
The Vendor as legal and beneficial owner hereby agrees to sell and the
Purchaser hereby agrees to purchase free from all Third Party Claims and
on an unencumbered basis, for the price and on the terms and conditions
herein set forth the Business and the following assets used in
connection with or belonging to the Business subject to any limitations
referred to below, in each case, namely: -
(a) The full benefit of the Distribution Agreement a copy of which is
annexed hereto and marked "A".
(b) All the plant, machinery, office furniture, fittings, motor
vehicles, office supplies, machines and equipment set out in
Schedule 1 (hereinafter called "the Plant") and situated at the
premises specified in Schedule 3.
(c) All stock in trade on hand or in transit and outstanding orders with
suppliers, and all inventories, raw materials, work in progress
components, parts, finished goods, literature and packing material
and in each case only to the extent that they are, at Completion,
of good and merchantable quality and useable for the purposes of
the Purchaser and saleable in the ordinary course of business and
owned by the Vendor and acquired for the Business or contracted for
in the ordinary course of business but not delivered prior to the
Effective Date (hereinafter called "the Stock").
(d) The full benefit of all orders for goods placed with Impco which
have not been delivered to the Vendor and are not included in the
Stock.
(e) The full benefit of all unfilled orders received by the Vendor in
connection with the Business and all other contracts, agreements,
engagements or commitments (as set out in Schedule 2) to which the
Vendor is entitled in connection with the Business.
(f) The full benefit of the leases of premises specified in Schedule 3
a copy of which is annexed hereto and marked "B".
(g) The goodwill of the Business and all Intangible Assets,
distribution rights in relation to the Business, correspondence,
sales records, rights under contracts agreements or arrangements
with Customers of the Business and customer prospects, lists of
customers, recipes, formula, plans, specifications, transferable
licences and permits, product certifications, supplier lists,
computer data files in relation to the matters referred to in
clause 14(a), technical and other information necessary or
desirable to enable or assist the Purchaser to carry on the
Business and the exclusive right for the Purchaser to represent
itself as carrying on the Business (hereinafter called "the
Goodwill").
(h) The share held by the Vendor in Gas Parts (NSW) Pty Limited (ACN
068 319 237) (hereinafter called "the Company") being one ordinary
share of one dollar ($1.00) fully paid representing fifty per cent
(50%) of the issued capital of the Company.
(i) The debt of two hundred thousand dollars ($200,000.00) due by the
Company to the Vendor.
EXCLUDED from the purchase and sale of the Business are all of the
Vendor's accounts receivable and other book debts existing at
Completion.
<PAGE>2
3. (PRICES)
The price for the Business and the assets to be sold by the Vendor to
the Purchaser shall be calculated as follows: -
(a) The price for the Plant shall be fifty-six thousand seven hundred
and thirty-seven dollars ($56,737.00) apportioned in the manner
referred to in Schedule 1.
(b) The price for the Stock shall be determined in accordance with
Condition 4. On completion the Vendor shall pay to the Purchaser
on account of the price for stock an amount equal to 95% of the
estimated value of stock referred to in Condition 4(b).
(c) The price for the share referred to in clause 2(h) shall be one
dollar ($1.00).
(d) The price for the debt referred to in clause 2(i) shall be two
hundred thousand dollars ($200,000.00).
(e) The price for the Goodwill and other assets shall be three million
four hundred and ninety nine thousand nine hundred and ninety nine
dollars ($3,499,999.00).
the aggregate being the base price ("the Base Purchase Price") less the
price reduction provided for in Condition 10 the resulting amount being
the price ("the Purchase Price").
4. (SATISFACTION OF PRICE)
(a) The Purchase Price shall subject to clause 25 and the other
provisions of this document be paid on Completion by the Purchaser
to the Vendor by telegraphic transfer to the Sydney bank account of
the Vendor nominated in writing by the Vendor to the Purchaser such
nomination being at least two (2) Business Days prior to the
Completion Date.
(b) There shall be retained from the Purchase Price in addition to the
Security Amount, an amount equal to five per centum (5%) of the
estimated value of the Stock. Such estimate shall be agreed by the
Vendor and the Purchaser prior to the Completion Date. Such
estimate shall not be less than three million dollars
($3,000,000.00).
(c) At the beginning of the first Business Day immediately following
Completion representatives of the Vendor and Purchaser respectively
shall carry out a stock-take of the Stock. The Vendor and the
Purchaser shall each bear their own costs in relation to the said
stock-take.
(d) The price for the Stock shall be the aggregate of the invoice cost
plus customs duty freight and associated costs in relation to each
item of Stock calculated on a first in first out basis. Within
thirty (30) days after completion of the stocktake referred to in
clause 4(c) the Vendor will notify the Purchaser in writing of its
assessment of the price for the Stock. During the period of 30
days after such notice is given the Purchaser may by notice in
writing to the Vendor dispute the price for the Stock as assessed
by the Vendor and within 7 days after the giving of such a notice
the parties will comply with clause 4(e) in respect of the stock
the value of which is not disputed. If within 7 days after the
delivery of the Purchaser's notice disputing the price for the
Stock the dispute is not resolved by agreement between the Vendor
and the Purchaser the dispute resolution procedure set out in
Condition 25(b) of this Agreement shall, mutatis mutandis, apply to
the resolution of such dispute.
(e) If following the stock-take referred to in clause 4(c) and after
allowing, as appropriate, for any adjustments on account made in
accordance with clause 4(d), the amount payable for the Stock
(calculated in accordance with clause 4(d) and the stock-take
referred to in clause 4(c)) shall be:
(i) less than 95% of the estimated value of the stock referred to
in clause 4(b), then the Vendor shall forthwith pay to the
Purchaser such difference;
(ii) more than 95% of the estimated value of the stock referred to
in clause 4(b) then the Purchaser shall forthwith pay such
difference to the Vendor by telegraphic transfer to the
<PAGE>3
Sydney bank account of the Vendor nominated in writing by the
Vendor to the Purchaser as referred to clause 4(a);
(f) The Vendor and Purchaser acknowledge having identified on or prior
to the date hereof slow moving and obsolete items and to the extent
to which they are included in the Stock have agreed upon an amount
which the Purchaser is to pay the Vendor in respect of same. The
Vendor and the Purchaser also acknowledge that any slow moving and
obsolete items which have been agreed to be excluded from the Stock
(which are all listed in Schedule 4) are to be retained by the
Vendor and may be sold by the Vendor to third parties.
5. (COMPLETION)
(a) Completion shall take place on the Completion Date at the office of
the solicitors for the Vendor and on Completion the Purchaser shall
be entitled to the full benefit of the Business and the assets
hereby agreed to be sold with retrospective effect to the Effective
Date AND on Completion:
(i) the Plant and the Stock shall be deemed delivered to the
Purchaser in situ and the property therein and the risk
thereof shall thereupon pass to the Purchaser on Completion;
(ii) the Vendor shall deliver to the Purchaser all Customer
Information and all other assets hereby agreed to be sold and
shall execute and deliver such other transfers assignments
or assurances as may be necessary convenient or expedient for
transferring to the Purchaser the Business, assets, property
and rights hereby agreed to be sold by the Vendor to the
Purchaser (including but not limited to those contained in
clauses 8 and 9);
(iii) the Vendor shall deliver to the Purchaser a copy of the
releases and discharges referred to in Condition 5(b)(ii) and
(iii);
(iv) the Vendor shall procure and cause:
(A) a directors' meeting of the Company to be held on
Completion at which the transfer and registration of
transfer to the Purchaser of the one (1) ordinary share
referred to in clause 2(h) shall, subject to due
stamping and to due execution thereof by the Purchaser
(if required), be approved;
(B) a directors' meeting of the Company to be held on
Completion at which time Mr Robert Stemmler and Mr Todd
Schock shall be appointed directors of the Company and
such of the directors and secretary of the Company as
exist at Completion shall resign from their respective
offices (other than Bill Campbell) without any payment
as compensation for loss of office by written
resignation in the form annexed hereto and marked "D";
(C) to be delivered to the Purchaser a duly executed
Transfer of the Share referred to in Condition 2(h) in
properly registrable form (subject to it being duly
stamped at the expense of the Purchaser) in favour of
the Purchaser together with the appropriate Share
Certificate therefor and any other documents which may
required to vest in the Purchaser the full legal and
beneficial ownership of such share; and
(D) to be delivered on Completion to those of the directors
of the Company as are present at Completion, all
constituent documents, certificates of incorporation,
common and official seals, registers, cheque books,
accounting and financial books and records and all other
records documents certificates papers books and indicia
of titles in relation to the Company or any assets of
the Company in the possession of or under the control of
the Vendor;
(v) the Purchaser shall cause the Company to be placed in
sufficient funds so that the Company or the Purchaser on
behalf of the Company pays to the Vendor the amount payable
by the Company to the Vendor in respect of goods purchased
<PAGE>4
prior to Completion by the Company from the Vendor to a
maximum of six hundred thousand dollars ($600,000.00); and
(vi) the Purchaser shall deliver to the Vendor a letter from the
Purchaser's solicitors confirming that they hold the Security
Amount.
(b) Completion is subject to and conditional upon the Vendor procuring
no later than immediately prior to the Completion Date:
(i) the written consent of each of the lessors of leases of
premises to the sublease to the Purchaser of the premises the
subject of such leases or a new lease to the Purchaser of the
premises the subject of such leases, as the case may be, in
each case as contemplated by clause 6;
(ii) the Bank of New South Wales to in writing release and
discharge the Business and the assets hereby agreed to be
sold from the charge held by that bank, registered number
348885, subject to Completion occurring; and
(iii) Westpac Banking Corporation to in writing release and
discharge the Business and the assets hereby agreed to be
sold from the charge held by that bank, registered number
348886, subject to Completion occurring.
6. (LEASES OF PREMISES)
The Vendor shall prior to Completion, with effect from Completion:
(a) procure the written consent of the lessors of the leases of
premises specified in Schedule 3 to the grant of the sublease
referred to in clause 6(b);
(b) have granted to the Purchaser a sublease of the premises specified
in Schedule 3 upon the same terms and conditions (including
options) as the leases by the Vendor of such premises less the last
day of the lease and the option with a licence to continue to
occupy on those days.
7. (DEPOSIT)
(a) On or before the date of this document the Purchaser shall pay by
cheque or by telegraphic transfer five hundred thousand dollars
($500,000.00) as a deposit and in part payment of the Purchase
Price to the solicitor for the Vendor to be held as stakeholder.
(b) (i) The stakeholder shall invest the deposit in the Westpac
Banking Corporation up to Completion or the termination or
rescission of this Agreement.
(ii) After Completion the interest earned on the deposit shall be
divided equally between the Vendor and the Purchaser.
(iii) If this Agreement is validly terminated or rescinded, the
interest earned on the deposit and the deposit shall be paid
to:
(A) the Purchaser;
(B) except if this Agreement is validly terminated by the
Vendor upon the Purchaser's default, when the interest
and the deposit shall be paid to the Vendor.
<PAGE>5
(c) On Completion the deposit shall vest in the Vendor by virtue of
Completion and the stakeholder shall account to the Vendor for the
deposit.
8. (CONTRACTS WITH SUPPLIERS)
On Completion and with effect from Completion the Vendor shall assign to
the Purchaser all contracts and engagements of the Vendor contained in
Schedule 6 and referred to in clause 8(b) for the supply of goods which
have not been delivered to the Vendor and are not included in the Stock
on the Effective Date. The Purchaser agrees to complete each such
contract so far as the same may remain uncompleted and accept delivery
of the goods the subject thereof and to indemnify the Vendor in relation
thereto. The Vendor hereby indemnifies and shall keep indemnified and
save harmless the Purchaser against all liabilities costs and expenses
under or in respect of all such contracts and engagements in relation to
every act matter thing or omission prior to Completion. The Vendor
represents and warrants:
(a) that Schedule 6 contains a full and complete list and details of
all contracts and engagements of the Vendor for the supply of goods
which have not been delivered to the Vendor as at the date of this
document and would not be included in the Stock; and
(b) that the Vendor will not on or after the date hereof enter into any
contracts or engagements for the supply of goods in excess of
$5,000.00 in aggregate in respect of any one supplier without the
prior written consent of the Purchaser which consent shall not be
unreasonably withheld.
9. (CONTRACTS WITH CUSTOMERS)
On Completion the Vendor shall assign to the Purchaser all contracts
and engagements of the Vendor with customers of the Business to the
extent that such contracts have not been fulfilled by the Vendor
contained in Part A of Schedule 2 prior to the date of this document.
Any material changes to Schedule 2 shall be disclosed by the Vendor to
the Purchaser on the Completion Date and in this regard the following
provisions shall apply:
(a) Intentionally deleted.
(b) Prior to the Effective Date the Vendor shall invoice each customer
direct for all goods supplied by it to such customer down to the
Effective Date.
(c) The Vendor shall, subject to Condition 15(b), continue to be
responsible to the customers of the Vendor for all claims in
relation to all goods supplied by the Vendor prior to the Effective
Date and matters arising under contracts with customers prior to
the date hereof.
The Vendor represents and warrants that Part A of Schedule 2 contains a
full and complete list and details of all contracts and engagements of
the Vendor with customers of the Business to the extent that such
contracts have not been fulfilled by the Vendor as at the date of this
document.
10. (EMPLOYEES)
(a) Prior to Completion the Purchaser shall offer to all of such
persons who work in the Business (other than Mr Wilson) and who are
named in Schedule 5, employment with the Purchaser from and
conditional on Completion on terms and conditions no worse than the
terms referred to in Schedule 5. Particulars of persons who work
in the Business as at the Completion Date (including their
respective wage rates, long service, holiday, sick leave,
superannuation contributions, and applicable industrial awards and
the date they commenced employment in the Business) are included in
Schedule 5. The Vendor warrants to the Purchaser that such
particulars are and will as at the Completion Date (as hereinafter
defined) be true and correct in all respects and are the full
details of all the terms and conditions of employment of the
persons named in Schedule 5. The Vendor further warrants to the
Purchaser that the services of each such employee may be terminated
in accordance with the industrial awards applicable to any person
named in Schedule 5 is as set out opposite the name of such person.
<PAGE>6
(b) The Purchaser shall make any offer of employment referred to in
clause 10(a), at any time on or after the date of this document.
(c) At all times on and from the date of this document, representatives
of the Purchaser may meet and communicate with each person who
works in the Business.
(d) Prior to Completion, the Vendor shall ensure that the employment of
any person who works in the Business is not terminated by the
Vendor or varied without the prior written consent of the
Purchaser.
(e) The Vendor shall use its best endeavours to ensure that each offer
referred to in clause 10(a) is promptly accepted.
(f) In respect of any person to whom an offer is made pursuant to
clause 10(a):
(i) The Purchaser shall reimburse the Vendor for all wages,
holiday pay and other benefits (including superannuation and
provident fund contributions) paid in the normal course of
the Business and prior to Completion to or in respect of each
employee who accepts employment with the Purchaser pursuant
to the offer referred to in clause 10(a) but reimbursement
only in respect of any period commencing after Completion.
(ii) The Vendor shall allow the Purchaser in reduction of the
Purchase Price 64% of the following amounts calculated as at
Completion:-
(A) the amount lawfully payable by the Vendor in respect of
the accrued annual holiday entitlement (including
loadings if applicable) of such employee LESS any amount
prepaid by the Vendor to such employee in respect of any
period of holidays after Completion; and
(B) if such employee has served 5 years or more the amount
of provision for long service leave in respect of such
employee calculated on the basis that such employee has
become entitled to a pro rata proportion of his ultimate
long service leave entitlement and whether or not he is
at Completion legally entitled to long service leave.
AND THEREAFTER (with effect from Completion) the Purchaser shall
assume the liability of the Vendor for and indemnify the Vendor
from and against all claims and demands of any such employee in
respect of annual holiday, long service leave and other benefits to
the extent so allowed and in addition the Purchaser shall reimburse
to the Vendor amounts allowed to the Purchaser pursuant to clause
10(f)(ii) in respect of each employee of the Vendor (other than Mr
Wilson) who does not accept employment with the Purchaser.
(g) Every person to whom an offer is made pursuant to clause 10(a) and
who does not accept such an offer and every person who works in the
Business to whom an offer is not made by the Purchaser shall have
and the Vendor shall ensure that they shall have their employment
terminated on and from Completion or shall be retained by or become
employees of the Vendor. The Vendor shall be solely responsible
for each such person and the termination of their employment and
entitlements arising therefrom (including but not limited to
redundancy entitlements and payments) and in the case of such
persons whose employment is terminated, the Vendor shall solely
bear and pay on Completion all amounts due to such persons
including without limitation accrued salary, wages, bonuses,
superannuation entitlements, annual leave, sick leave, long service
leave and redundancy and other termination payments.
(h) Without limiting the generality of the foregoing the Vendor shall
be solely responsible for all salary, wages, bonuses, sick leave
entitlements, superannuation entitlements and all other benefits in
respect of each person who works in the Business or who is named in
Schedule 5, such responsibility relating to entitlements of each
such person up to and including Completion, and the Vendor hereby
indemnifies and shall keep indemnified the Purchaser in relation to
all accounts actions claims costs demands liabilities and judgments
incurred by or against the Purchaser in relation to all of those
matters the responsibility of the Vendor as aforesaid.
<PAGE>7
(i) On and from Completion until the expiration of three (3) months
from Completion, the Vendor shall provide to the Purchaser on a
full or part time basis (as nominated at any time and from time to
time by the Purchaser to the Vendor) the services of Mr Wilson, the
manager of the Business, at such time or times within business
hours as the Purchaser may from time to time nominate upon
reasonable notice to the Vendor. The Purchaser shall only pay to
the Vendor for the provision of such services the amount necessary
to reimburse the Vendor for the direct employee cost incurred by
the Vendor to the extent of the time Mr Wilson is provided to the
Purchaser as requested. Such payments by the Purchaser shall be
made monthly in arrears. The Vendor acknowledges that for all
purposes Mr Wilson shall be an employee of the Vendor and not of
the Purchaser and the Vendor shall direct Mr Wilson to carry out
all lawful instructions as a senior executive of the Purchaser
shall reasonably require. The Vendor shall not be under any
obligation under this clause 10(i) if its employment of Mr Wilson
terminates for reasons beyond its control.
11. (BOOK DEBTS)
No trade or other book debts are included in the sale and the Vendor
shall be entitled to collect and receive any money owing to it in
connection with the Business as at the Effective Date ("the Debts")
AND: -
(a) the Purchaser shall account to the Vendor promptly after their
receipt for any moneys that may be paid to the Purchaser after the
Completion Date on account of the Debts;
(b) in respect of Conversion Services the Purchaser agrees to assist
the Vendor to collect the amount outstanding to the Vendor so that
all payments received from Conversion Services of Adelaide, South
Australia to a maximum of seventy five thousand dollars
($75,000.00) will be applied first in satisfaction of the amount
owing to the Vendor; and
(c) the Purchaser shall for 3 months after the Completion Date and
without cost to the Vendor for utilising the employees of the
Purchaser use all reasonable endeavours in the ordinary course of
its conduct of the Business to assist in the collection of the
Debts and during such 3 months will provide all such information
as the Vendor may reasonably require of the amounts received by the
Purchaser on account of the Debts.
12. (NOTICES AND SERVICES)
(a) The Vendor and the Purchaser shall on the Completion Date each sign
and promptly lodge such notices as may be required to be signed as
required under any Act relating to factories, shops and industry or
any other Act, Ordinance or Regulation applying to the Business.
(b) All existing electricity, gas, telephone, waste disposal, security,
fire protection and other services to the premises specified in
Schedule 3 shall with the consent of the suppliers thereof be
transferred to the Purchaser on the Completion Date upon and
subject to such terms and conditions as may be arranged between the
Purchaser and the suppliers of such services and prior to
Completion with effect from Completion the Vendor shall use its
best endeavours to assist the Purchaser to obtain such transfers.
(c) At the signing hereof the Vendor shall furnish to the Purchaser
full details of the notices required to be signed under clause
12(a) and the services referred to in clause 12(b).
13. (ADJUSTMENT OF OUTGOINGS)
All periodical or recurring outgoings in connection with the Business
and the property and assets agreed to be sold as disclosed in writing to
the Purchaser on the signing hereof shall be apportioned as between the
Vendor and the Purchaser as at Completion and appropriate allowances
shall be made. Despite anything contained in clauses 2, 5(a)(v), 10(f),
10(h) and this clause 13 all references in those clauses to Completion
shall be deemed to refer to the close of business on 30 June 1996.
<PAGE>8
14. (BOOKS AND RECORDS)
(a) The Purchaser on the Completion Date shall be entitled to and the
Vendor shall deliver to the Purchaser:
(i) in situ at the premises occupied by the Business all drawings
plans manuals and other documents relating to the Business
and all invoices, contracts, agreements, lists of customers
and suppliers of stock, records of purchase and other
documentation or information related to the Business or any
of the assets agreed to be sold and necessary or convenient
for the working of the same; and
(ii) on computer storage media in machine readable form, such
documents, records, invoices, contracts, agreements, lists of
customers and suppliers of stock, records of purchase and
other documentation or information related to the Business or
any of the assets agreed to be sold as may be stored in that
form.
(b) The Purchaser shall also be entitled to inspect the history records
of employees who join the Purchaser and all books and records
relating to the Business or any of the assets hereby agreed to be
sold at all reasonable times in each case up to the fifth
anniversary of Completion. The Vendor must preserve all such
records, books and records until at least the fifth anniversary of
Completion. The Purchaser shall not be entitled to receive or
inspect any other books or records of the Vendor.
(c) The Vendor shall have the right for a period of 7 years from
Completion to inspect during usual business hours and make copies
at the cost of the Vendor of all items delivered to the Purchaser
as required for its income tax or accounting purposes.
15. (SATISFACTION OF LIABILITIES)
(a) The Vendor shall be solely responsible for and will pay, satisfy
and discharge, all Taxes, mortgage debts, liens, charges, trade or
other debts charged on or relating to all or any of the Business,
assets and property hereby agreed to be sold and the Vendor shall
indemnify and keep indemnified the Purchaser from and against all
liabilities costs expenses claims and demands in respect thereof.
(b) The Purchaser shall not assume any liability of the Vendor in
respect of defects in goods sold by the Vendor PROVIDED ALWAYS
that, subject to clause 15(c), in respect of goods sold by the
Vendor prior to the Effective Date the Vendor hereby indemnifies
and shall keep indemnified and save harmless the Purchaser from and
against all claims demands costs and expenses in relation thereto
and shall forthwith upon demand of the Purchaser pay to the
Purchaser the cost and expense of all work and materials required
to remedy such defect and/or satisfy any warranty approved of by
the manufacturer of the goods and the Purchaser shall be entitled
to receive and retain all payments and allowances by the
manufacturer in respect of work so performed by the Purchaser.
The Purchaser will not take any steps to rectify a defect without
first advising the Vendor and allowing the Vendor a reasonable time
having regard to the nature of the defect, any dispute involved and
the requirements of the customer to rectify the defect or resolve
the dispute of its own expense.
(c) The indemnity and obligation to pay upon the Vendor as contained in
clause 15(b) shall not apply to the extent that the claim demand
cost and expense referred to in that clause is by reason of a
defect in a component supplied by Impco where the Vendor would have
otherwise been entitled to claim against Impco had the Vendor
continued to conduct the Business.
(d) For the period of three (3) years following Completion the Vendor
will use its best endeavours to obtain and maintain recall
insurance on comparable terms and conditions, as nearly as
practicable as those contained in the annexure hereto and marked
"E" and having regard to the fact it will be a roll-over policy
from September 1996, while the Purchaser will use its best
<PAGE>9
endeavours to obtain and maintain product liability insurance on
comparable terms and conditions, as nearly as practicable to those
contained in the annexure herto and marked "F".
16. (WARRANTIES)
The Vendor represents and warrants to the Purchaser with effect on the
date hereof and up to and including Completion that:-
(a) the Business and all the assets, property and rights hereby agreed
to be sold ("the Assets") shall be the sole and absolute property
of the Vendor legally and beneficially and no money shall be owing
to any person in respect of the purchase or upon the security of
the same and that at Completion the same shall become the property
of the Purchaser freed and discharged from all Third Party claims,
mortgages, bills of sale, hire purchase agreements and other
encumbrances, liens, interests and charges either registered or
unregistered or either oral or in writing or of whatsoever nature
and description;
(b) no summons for the winding up of the Vendor being a corporation
will have been presented and on order made or resolution passed for
the winding up of the Vendor;
(c) no receiver or receiver and manager or administrator or inspector
of the undertaking of the Vendor being a corporation or of any of
the Assets or any part thereof will have been appointed;
(d) the Vendor being a natural person is not bankrupt or insolvent nor
has he or she entered into any arrangement for the benefit of
creditors;
(e) no judgment will have been obtained or execution or process of any
Court or other authority been issued, levied or enforced upon the
Vendor partly or wholly in respect of the Assets or the Business or
any part thereof;
(f) there will not be any litigation, arbitration proceedings, claim or
demand threatened or pending against the Vendor in respect of the
Assets nor will there then exist or have occurred any matter or
circumstances likely to give rise to any such litigation,
arbitration proceedings, claim or demand;
(g) to the best of its knowledge, information and belief it holds all
necessary business registrations, permits, consents and authorities
(none of which is subject to any onerous conditions which have not
been notified or disclosed to the Purchaser) to enable the Vendor
to conduct the Business in the manner in which it is being
conducted.
(h) to the best of its knowledge, information and belief none of the
products manufactured or sold by the Business nor the method of
manufacture thereof nor the equipment used by the Business
infringes any Australian patent or design;
(i) the Assets are all of the assets owned by the Vendor and used in or
in connection with the Business and such assets together with the
assets the subject of the leases and the leases of premises
constitute all of the assets used in or in connection with and
necessary for the continuing conduct of the Business;
(j) there are no contracts or rights or privileges in relation to the
Business which will or may be terminated or prejudicially affected
as a result of the sale under this document or of compliance with
any other provision of this document;
(k) there are no contracts which are material to the Business which are
unduly onerous or restrictive on the ability of the Vendor to
conduct the Business;
(l) there is no litigation pending or threatened in connection with or
arising out of any contract which is to be taken over by the
Purchaser nor has any event occurred nor is there any dispute,
claim or demand in connection with or arising out of them or any of
them which may give rise to litigation;
<PAGE>10
(m) the use of all of the premises used by the Vendor for the purpose
of the Business is permitted unconditionally under the relevant
planning statutes and regulations and any relevant consents and
there has been no contravention of any provision of those statutes
or regulations or arising under any relevant consents;
(n) all statutory requirements relating to the Business have been
complied with and there are no outstanding requirements of any
governmental or semi-governmental authority in relation to the
plant, equipment, premises or operations of the Business;
(o) during the interval between the date of this document and the
Completion Date the Vendor will have, except as agreed in writing
with the Purchaser, carried on and maintained the Business in the
same manner as hitherto and in the ordinary course and will not
have done anything to the detriment of the Business or without the
written consent of the Purchaser:-
(i) varied the level of staffing or (except as required by law)
varied the level of remuneration of the employees of the
Business;
(ii) except in relation to slow moving and obsolete items listed
in Schedule 4 varied the present price list or made sales
below the present price list or existing offerings or vary
the terms of trade in relation to products sold by the
Business;
(iii) placed any significant orders or entered into any new
undertakings in relation to the Business;
(p) the share referred to in clause 2(h) (hereinafter called the "Sale
Share") comprises one-half (1/2) of the issued share capital of the
Company;
(q) the Sale Share has been duly issued and allotted and is fully paid
up;
(r) the Vendor is the sole legal and beneficial owner of the Sale
Share;
(s) the Sale Share is free from all Third Party Claims and the Vendor
is entitled and competent to sell and transfer the Sale Share
subject to the rights of Bill Campbell as described in paragraph 10
of the letter dated 8 March 1995 from the Vendor to Mr Bill
Campbell without the consent of any person or authority whatsoever;
(t) there is no agreement undertaking or arrangement in force which
calls or will or may call for the issue of or accords or will or
may accord to any person the right to call for the issue of any
shares or options or rights in or of the Company or in respect of
issued or un-issued shares of or in the Company;
(u) the Company has not gone into liquidation or passed any resolution
to be wound up and no application for the winding up of the Company
has been presented and there is no writ of execution in existence
against the Company nor has a receiver, receiver and manager,
administrator or agent for a mortgagee been appointed over the
whole or any part of the undertaking or any of the assets of the
Company;
(v) the net tangible assets of the Company on the Completion Date will
be not less than $1.00 and the tangible assets of the Company as at
Completion will be sufficient to pay all actual and contingent
liabilities of the Company as at Completion;
(w) except as described in Schedule 7 neither the Company nor any
person whose acts or defaults the Company may be vicariously liable
is involved in any civil criminal or arbitration proceedings and
there is no fact or circumstances which might give rise to any such
proceedings and no such proceedings are pending or threatened
against the Company or any such person;
(x) to the best of the knowledge information and belief of the Vendor
there is no Environmental Liability and there is not and will not
on Completion be any Environmental Liability occasioned by the
occupation of the premises of the Vendor;
<PAGE>11
(y) on the Completion Date the Vendor will have fully complied with its
obligations to pay all Taxes due and payable on or before the
Completion Date (including but not limited to group tax, payroll
tax and fringe benefits tax) and make any superannuation
contribution in respect of its employees or in relation to any
activity of any of its employees, other than to the extent of the
adjustment contemplated by clause 10(f)(ii);
(z) prior to the Completion Date the Vendor will have fully complied
with its obligations to pay all Taxes due and payable on or before
the Completion Date (including but not limited to stamp duties and
Tax on assessable income) in respect of the Business and each of
the assets hereby agreed to be sold and all documents in relation
to or relevant for the Business or to be provided to the Purchaser
pursuant to the terms hereunder;
(aa) during the year on and from 1 July 1995 the Company has not
declared or paid a dividend and will not do so up to and including
Completion;
(ab) the books and records of the Company are up to date and disclose
that no monies are, on Completion, owing to or by the Company by or
to the Vendor or any Associate of the Vendor or any Associate of
such Associate other than the debt referred to in clause 2(i) and
other than any amounts due by the Company to the Vendor by reason
of the sale of goods by the Vendor to the Company in the ordinary
course of business; and
(ac) all other material contracts agreements engagements or commitments
to which the Vendor is entitled in connection with the Business are
as set out in Schedules 2,
AND the Vendor will indemnify and keep indemnified the Purchaser from
and against all accounts actions claims costs charges demands damages
expenses liabilities and obligations incurred in connection with any
warranty or representation being materially untrue materially inaccurate
materially misleading or arising out of or in connection with any
material breach of any provision of this document by the Vendor.
17. (WALK IN WALK OUT)
The Plant and the Stock is sold on a walk in walk out basis as at
Completion and while the Vendor will maintain such assets in sound order
and condition (having regard to the order and condition thereof at the
date of this document) fair wear and tear excepted down to Completion
the Vendor gives no representation, undertaking or warranty as to the
condition of such assets at the date of this document their
merchantability, serviceability or suitability to the Purchaser for any
purpose whatsoever other than as referred to in this document.
18. (FURTHER ASSURANCE)
From and after Completion the Vendor shall execute and do such
assurances acts matters and things for vesting the absolute ownership
free from encumbrances of the Business, assets and property agreed to be
sold to the Purchaser and giving to the Purchaser the full benefit of
this document and the said Business, assets and property as the
Purchaser may reasonably require.
19. (COSTS)
The costs of and incidental to this Agreement and to all matters arising
hereout shall be paid and discharged by the Vendor and the Purchaser on
the basis that each party shall be responsible for its own costs and
disbursements to the exclusion of the other of them, and in particular
without limiting the generality of the foregoing the Purchaser will pay
and hereby indemnifies the Vendor against any liability for all and any
stamp duty payable in respect of this Agreement and any further
assurance given pursuant to this Agreement, other than in respect of the
termination of the lease which is in favour of the Vendor as referred to
in clause 6.
20. (NOTICES)
Any notice or demand given hereunder shall be deemed to be duly given
only if in writing and delivered to or sent by prepaid security post
addressed to the other party at its registered office or such other
<PAGE>12
address as may be notified to the other by the party concerned AND if so
given shall be deemed to have been duly served, in the case of delivery
at the time of delivery, in the case of security post at the time of
receipt.
21. (SUCCESSORS IN TITLE)
Any obligations or rights arising under this Agreement shall bind and
enure for the benefit of the legal personal representatives and
successors in title of any party hereto.
22. (GOVERNING LAW)
This document shall be governed and construed in accordance with the
laws of the State of New South Wales and the parties hereby submit to
the jurisdiction of the Courts of that State.
23. (AGREEMENTS TO SURVIVE COMPLETION)
Each provision of this document shall continue in full force and effect
after Completion despite Completion and any assignment or transfer at
Completion unless such provision has been fully performed on or before
Completion.
24. (RESTRAINT OF TRADE)
(a) For a period of three (3) years from Completion, the Vendor shall
not and shall procure that its Associates and Associates of such
Associates shall not, in each case in Australia either directly or
indirectly and whether as principal joint venturer partner director
agent consultant manager employee assistant shareholder unitholder
beneficiary or otherwise howsoever:
(i) carry out or engage be concerned involved participate or be
interested in or carry on any business or undertaking which
is or may compete with or is similar to the distribution,
importing, sale or maintenance of automotive gas equipment or
parts or any part of the Business;
(ii) accept any business or solicit any business which is or may
compete with or is similar to the distribution, importing,
sale or maintenance of automotive gas equipment or parts or
any part of the Business for any person who is or was a
Customer of the Business or any part of it;
(iii) employ, solicit or entice away from the Business any person
(other than Mr Wilson, the manager of the Business or any
other person retained by the Vendor in accordance with clause
10(g)) who worked in the Business or any part of it or employ
any person who worked in the Business or any part of it
within the period of six (6) months prior to Completion
whether or not such person works in the Business as at the
date of this document; or
(iv) use or disclose Customer Information insofar as it relates to
the Business.
(b) The Vendor agrees that the restrictions contained in clause 24(a)
are not greater than would be required to protect the value of the
Business and the assets purchased by the Purchaser.
(c) If any obligation under clause 24(a) is or may be breached, then
without prejudice to any other remedies which the Purchaser may
have, the Purchaser shall be entitled to seek and obtain injunctive
relief from any Court of competent jurisdiction.
(d) The Purchaser acknowledges that clause 24(a) shall not apply to
slow moving or obsolete items referred to in clause 4(f) which have
been agreed by the Vendor and the Purchaser prior to the date
hereof not to be included in the Stock and which may be sold by the
Vendor without further reference to the Purchaser.
<PAGE>13
25. (RETENTION FROM PRICE)
(a) Despite anything else contained in this document the Purchaser
shall retain from the Purchase Price, the Security Amount, to be
retained in accordance with this clause 25, as security for the
performance by the Vendor of its obligations and satisfaction of
its indemnities contained in this document and any claims by the
Purchaser for breach of any part of this document by the Vendor,
upon the following basis:
(i) the Purchaser is entitled at any time and from time to time
to deduct for its own purposes from the Security Amount an
amount equal to the amount the Purchaser assesses as the
amount then considered to be referrable to failure by the
Vendor to perform any obligation or satisfy any indemnity or
referrable to any claim by the Purchaser for breach by the
Vendor of any part of this document provided that the
Purchaser has complied with clause 25(f).
(ii) If the Vendor fails to perform the obligation of the Vendor
the subject of the notice referred to in clause 25(f) or
fails to satisfy the indemnity referred to in such clause or
fails to satisfy any claim by the Purchaser referred to in
such clause or fails to dispute the extent of any deduction
in the manner referred to in clause 25(a)(iii), in each case
within thirty (30) days of notification to it under
clause 25(f), the Vendor shall be deemed to have accepted the
appropriateness of the deduction and the reason for same and
the Vendor shall not be entitled thereafter to dispute the
entitlement of the Purchaser to the amount deducted.
(iii) If the Vendor disputes the extent of any deduction it shall
notify in writing the Purchaser within thirty (30) days of
notification to the Vendor under clause 25(f) of the nature
of and reasons for such dispute giving those reasons in full
and complete detail and if the Vendor undertakes the
aforesaid then clause 25(b) shall apply and the Purchaser
shall only be permitted to make the deduction to the extent
to which it is not covered by the aforesaid notice of dispute
by the Vendor.
(iv) Any deduction by the Purchaser shall not be or be deemed to
be a waiver or reduction of any of its rights powers or
remedies.
(v) Following Completion the Security Amount shall be dealt with
in accordance with clause 25(e).
(b) (i) Any dispute of the Vendor under clause 25(a) shall first be
the subject of alternative dispute resolution ("ADR")
process, to be conducted in accordance with clause 25(b).
(ii) Unless the Vendor has complied with clauses 25(b) it may not
commence court proceedings or arbitration relating to the
dispute.
(iii) If the Vendor shall comply with clause 25(a)(iii), it shall
give written notice to the Purchaser with the notice under
clause 25(a)(iii) designating as its representative in
negotiations relating to the dispute a person with authority
to settle the dispute and the Purchaser shall not later than
fourteen (14) days after service of that notice, give notice
in writing to the Vendor designating as its representative in
negotiations relating to the dispute a person with authority
to settle the dispute.
(iv) Following designation of the representatives referred to in
clause 25(b)(iii), the dispute shall be submitted to
mediation, administered by the Alternate Commercial Dispute
Centre ("ACDC") (or if such body has ceased to exist then a
body or person as then serves substantially the same objects
as the said Centre) and the mediation shall be conducted in
accordance with the ACDC mediation guidelines which terms are
hereby deemed incorporated with the representatives
designated in clause 25(b)(iii) representing the parties to
the dispute. The mediator shall be agreed between the Vendor
and the Purchaser from a panel put forward by ACDC, or
failing agreement a mediator appointed by the Secretary
General of ACDC. Subject to the foregoing, mediation shall
be conducted and held in accordance with and subject to the
laws of the State of New South Wales.
<PAGE>14
(v) All meetings between the Vendor and the Purchaser pursuant to
clause 25(b)(v) and all mediation proceedings shall be held
in Sydney.
(c) Any part of the Security Amount remaining undeducted and in respect
of which there is no dispute, on the first anniversary of
Completion, shall be paid to the Vendor.
(d) Release by the Purchaser to the Vendor of the whole or any part of
the Security Amount shall not be or be deemed to be or imply either
an acknowledgment by the Purchaser that the Purchaser waives any
of the rights of the Purchaser against the Vendor.
(e) (i) On Completion the Purchaser shall pay by cheque or by
telegraphic transfer the Security Amount to the solicitor for
the Purchaser to be held as stakeholder.
(ii) The stakeholder shall invest the Security Amount in the
Advance Bank to be dealt with in accordance with this clause
25.
(iii) The interest earned on the Security Amount shall be
accumulated and dealt with as if it form part of the
Security Amount.
(f) (i) On each occasion upon which the Purchaser wishes to deduct an
amount from the Security Amount, the Purchaser shall give
written notice thereof to the Vendor specifying to the Vendor
the obligation which the Purchaser considers the Vendor has
not performed and/or the indemnity which the Purchaser
considers the Vendor has not satisfied and/or the claims by
the Purchaser which the Purchaser considers arise by reason
of breach of any part of this document by the Vendor.
(ii) The Purchaser shall not be entitled to give written notice as
contemplated by clause 25(f)(i) unless the Purchaser
reasonably considers that the extent of the Vendor's failure
to perform and satisfy the relevant indemnity and the extent
of the claims to be the subject of such notice exceed in
aggregate ten thousand dollars ($10,000.00) or in respect of
any particular item is at least five thousand dollars
($5,000.00).
(iii) The Purchaser shall not be entitled to give such a notice or
otherwise resort to the Security Amount in any case which is
a warranty claim where the claim relates to or arises from a
defect in a component supplied by Impco that the Vendor would
have otherwise been entitled to claim against Impco had the
Vendor continued to conduct the Business.
26. (RELEASE BY VENDOR OF IMPCO)
The Vendor shall enter into a deed with Impco with effect on Completion
such deed being in the terms of annexure "C" hereto. The Vendor shall
deliver such deed duly executed by the Vendor to the Purchaser at
Completion and the Purchaser shall deliver to the Vendor such deed duly
executed by or on behalf of Impco.
27. (NO DISADVANTAGE BY DRAFTING)
No rule of construction applies to the disadvantage of a party because
that party was responsible for the preparation of the relevant clause or
part thereof.
28. (ACCESS AND ASSISTANCE)
(a) Within 7 days after the signing of this document the Vendor must
deliver to the Purchaser, only such of the Customer Information
detailing where in the Vendor's possession or under its control the
name address telephone number and last transaction of each Customer
of the Business and where the Customer of the Business is a body
corporate, also the contact name of the Customer of the Business.
(b) After Completion and for a period of up to 3 months the Vendor will
permit representatives of the Purchaser's auditors, Messrs Ernst &
Young ("the Auditors"), access to the premises, books and records
<PAGE>15
and executives of the Vendor. The sole purpose of this access is
to enable the Auditors at the expense of the Purchaser to
ascertain, audit and prepare audited financial statements as at
30 June 1996 from the following financial information in relation
to the Business and the assets hereby sold and to ascertain and
prepare unaudited financial statements at 30 June 1995 from such
financial information:
(i) Cash on hand balances as at 30 June;
(ii) Listing of debtor balances summarised by ageing totals as at
30 June;
(iii) Stock status reports as at 30 June;
(iv) Listing of any prepaid expenses and any other assets related
to the Business as at 30 June;
(v) Amounts of trade and other liabilities as at 30 June;
(vi) Provisions for employee benefits as at 30 June; and
(vii) Any other material assets and liabilities not included in
items 1 through 6 above,
on the following conditions:
(A) Such financial information shall be used by the
Purchaser and its Associates for the sole purpose of
enabling the Purchaser's ultimate holding company to
prepare financial statements in respect of the Business
as required by the Securities and Exchange Commission of
the United States of America and for no other purpose.
(B) Such access by the Auditors to be at such times as are
reasonably convenient to both the Vendor and the
Auditors.
(C) Such access is conditional on the Auditors first
delivering to the Vendor an undertaking in writing that
the Auditors will and will ensure that each
representative of the Auditors having access shall keep
all information gained confidential and not use it for
any purpose other than that described in paragraph (A);
and
(D) In the first instance all requests for explanations
shall be made to the senior executive(s) of the Vendor
designated to the Auditors at the commencement of
access.
29. (CONFIDENTIALITY)
(a) Prior to the Completion Date, the parties must maintain absolute
confidentiality concerning the existence and terms of this document
and no public announcement or communication relating to the
negotiations of the parties or existence, subject matter or terms
of this document may be made or authorised by or on behalf of a
party without the prior written approval of the other parties
except that the Purchaser may make any announcements communications
and disclosures as provided in clause 29(b) and a party may make
such disclosures in relation to this document as it may in its
absolute discretion think necessary.
(i) to its professional advisers, bankers, financial advisers and
financiers or to any person whose consent is required under
this document or for a transaction contemplated by it upon
those persons undertaking to keep confidential any
information so disclosed; or
(ii) to comply with any applicable law or the requirement of any
regulatory body (including any relevant stock exchange),
(b) At any time following Completion, the Purchaser shall be at liberty
to make any announcement communication and disclosure concerning
its acquisition of the Business and/or the assets agreed to be sold
<PAGE>16
pursuant to this document other than any public announcement
communication or disclosure in Australia in relation to the amounts
payable by the Purchaser to the Vendor under this document.
30. (COUNTERPARTS)
This document may be executed by any number of counterparts and all of
those counterparts taken together constitute one and the same document.
31. (TERMINATION)
(a) The Vendor or the Purchaser may at any time prior to Completion
immediately terminate this Agreement by notice effective
immediately on receipt by the other party if:
(i) an order is made or a resolution is passed for the winding up
of the other party except for the purpose of reconstruction
or amalgamation;
(ii) the other party is insolvent;
(iii) the other party enters into an arrangement, reconstruction,
or composition with its creditors;
(iv) a receiver or receiver and manager or administrator or agent
for a mortgage is appointed to or in relation to the other
party;
(v) the other party is placed under official management or an
inspector is appointed to investigate the affairs of the
other party; or
(vi) default is made by the other party in performance or
observance of any provision of this Agreement and such
default is not remedied within seven (7) days after notice
specifying such default and requiring the other party to
remedy the same has been given by the terminating party to
the defaulting party.
(b) In the event the Vendor defaults in the due or timely performance
with clause 5(b), or the Vendor does not provide reasonable
documentation, the Purchaser may at any time give notice of
termination of this Agreement, which shall be effective
immediately.
(c) Where a notice is given under clause 31(a)(vi) time shall be of the
essence under this document.
(d) Termination of this Agreement shall not affect any right of action
which may have accrued to any party in respect of any breach prior
to the date of such termination.
32. (SET-OFF)
The Purchaser may set-off against the amounts payable by the Purchaser
to the Vendor at Completion the amount of Two million three hundred and
forty-three thousand four hundred and eighty-five dollars and forty-two
cents ($2,343,485.42) being amounts payable to Impco by the Vendor
provided that at or prior to Completion the Purchaser delivers to the
Vendor a document on behalf of Impco acknowledging that to the extent
that the Purchaser undertakes such set-off the amount payable by the
Vendor to Impco shall be reduced.
IN WITNESS WHEREOF the parties have hereunto set their hands and seals on the
day and year first hereinbefore mentioned.
<PAGE>17
/s/Neville A. Chrichton
THE COMMON SEAL of ATECO ) -----------------------
AUTOMOTIVE PTY LIMITED (ACN 000 ) Director
486 706) was hereunto afficed by )
authority of the Board of Directors ) /s/Kenneth S. Scarra
and in the presence of: ) -----------------------
Secretary
/s/Todd Schock
THE COMMON SEAL of IMPCO ) -----------------------
TECHNOLOGIES PTY LIMITED (ACN 074 ) Director
106 880) was hereunto affixed by )
authority of the Board of Directors ) /s/Michael Binetter
and in the presence of: ) -----------------------
Secretary
<PAGE>18
doc
DATED 1 JULY 1996
-----------------
BETWEEN
IMPCO TECHNOLOGIES INC.
AND
ATECO AUTOMOTIVE PTY LIMITED
(A.C.N. 000 486 706)
========================================
DEED OF RELEASE
========================================
DUNHILL
MADDEN
BUTLER
Solicitors
Sydney
16 Barrack Street, Sydney 2000
New South Wales, Australia
GPO Box 427, Sydney 2001
DX 254 SYDNEY
Telephone: (02) 295 9999
International: 612 295 9999
Fax: (02) 295 9990
E-mail: 100252.1033 at compuserve.com
Ref: MTB
SYDNEY MELBOURNE BRISBANE
<PAGE>COVER
DEED OF RELEASE
THIS DEED is made the 1st day of July, 1996
BETWEEN IMPCO TECHNOLOGIES INC. a United States of America corporation
having its principal office in the United States of America at
16804 Gridley Place, Cerritos, California (hereinafter called
"IMPCO") of the one part
AND ATECO AUTOMOTIVE PTY LIMITED (ACN 000 486 706) of 634 726 Princess
Highway, Tempe in the State of New South Wales in the Commonwealth
of Australia (hereinafter called "ATECO") of the other part
WHEREAS:-
A. ATECO has since prior to 1969 carried on the business of distributing
throughout Australia "Impco" automotive gas equipment and parts and
since
1991 pursuant to a Distribution Agreement dated 26 August 1991 between
the parties hereto (hereinafter called "the Business").
B. ATECO has agreed to sell to a subsidiary of IMPCO the Business and
certain assets including the full benefit of the Distribution Agreement
dated 26 August 1991 between the parties hereto (hereinafter called the
"Distribution Agreement").
C. The parties desire to bring to an end all matters between them and to
that end to give the releases hereinafter provided upon the terms and
conditions hereinafter provided
<PAGE>1
NOW THIS DEED WITNESSES and the parties AGREE AND DECLARE as follows:
1. INTERPRETATION
1.1 Construction
In this document, unless the context otherwise requires:
(a) words importing:
(i) the singular include the plural and vice versa;
(ii) any gender include the other genders;
(b) any covenant or obligation:
(i) shall bind a party and that party's legal personal
representatives and successors;
(ii) shall enure for the benefit of a party and that party's legal
personal representatives, successors and assigns.
(c) if a word or phrase is defined cognate words and phrases have
corresponding definitions;
(d) a reference to:
(i) a person includes a body corporate and bodies politic;
(ii) a person includes the legal personal representatives,
successors and assigns of that person;
(iii) a statute, ordinance, code or other law includes regulations
<PAGE>2
and other statutory instruments under it and consolidations,
amendments, re-enactments or replacements of any of them made
by any legislative authority;
(iv) this or any other document includes the document as varied or
replaced and notwithstanding any change in the identity of
the
parties; and
(v) a right includes a remedy, authority or power;
(d) where time is to be reckoned by reference to a day or event, that
day or the day of that event shall be excluded.
1.2 HEADINGS
Headings shall be ignored in construing this document.
2. RELEASES
2.1 In consideration of the mutual releases hereby given between the parties
hereto and in consideration of this deed each of the parties hereto (the
"Releasor") as separate and severable and independent obligations (to
the
intent that if any one or more of them shall be void, unenforceable or
otherwise of no effect the enforceability of each other thereof shall
not
be thereby prejudiced or affected), subject to Clause 2.2 hereof, hereby
releases and forever discharges the other of them (the "Releasee") from
all actions claims demands rights and suits whatsoever which the
Releasor
may have or which apart from this instrument the Releasor might have had
against the Releasee in each case arising out of in relation to or
concerning:
(a) any negotiations, understandings, representations, warranties,
memoranda or commitments between the parties hereto or on their
behalf; and
(b) the Distribution Agreement.
<PAGE>3
2.2 Nothing in this deed shall affect the right of ATECO to make or enforce
any claim against IMPCO which but for this deed ATECO would have had
against IMPCO in relation to a defect in a component supplied by IMPCO
to
ATECO prior to the date hereof.
3. MISCELLANEOUS
3.1 AMENDMENT
This document may only be varied, supplemented or replaced by a document
in writing duly executed by the parties.
3.2 WAIVER AND EXERCISE OF RIGHTS
(a) A single or partial exercise or waiver of a right relating to this
document will not prevent any other exercise of that right or the
exercise of any other right.
(b) A party will not be liable for any loss, cost or expense of any
other party caused or contributed to by the waiver, exercise,
attempted exercise, failure to exercise or delay in the exercise of
a right.
3.3 RIGHTS CUMULATIVE
Subject to any express provision in this document to the contrary, the
rights of a party under this document are cumulative and are in addition
to any other rights of that party.
<PAGE>4
3.4 FURTHER ASSURANCE
Each party shall promptly execute all documents and do all things that
another party from time to time reasonably requires of it to effect,
perfect or complete the provisions of this document and transactions
contemplated by it.
3.5 SEVERANCE
Each provision of this document is severable from the others and no
severance of a provision shall affect any other provision.
3.6 GOVERNING LAW
This document is governed by and shall be construed in accordance with
the laws governing the Distribution Agreement.
3.7 COUNTERPARTS
This document may consist of a number of counterparts and if so the
counterparts taken together constitute one and the same instrument.
3.8 ENTIRE UNDERSTANDING
(a) This document embodies the entire understanding and agreement
between the parties as to the subject matter of this document.
(b) All previous negotiations, understandings, representations,
warranties, memoranda or commitments in relation to, or in any way
affecting, the subject matter of this document are merged in and
superseded by this document and shall be of no force or effect
whatever and no party shall be liable to any other party in respect
of those matters.
(c) No oral explanation or information provided by any party to another
shall:
<PAGE>5
(i) affect the meaning or interpretation of this document; or
(ii) constitute any collateral agreement, warranty or
understanding
between any of the parties.
3.9 LEGAL COSTS
Each party shall pay their own legal costs relating directly or
indirectly to the preparation of and the performance of their
obligations
under this document and each shall be equally responsible for all stamp
duty chargeable on this document.
3.10 INDEPENDENT LEGAL ADVICE
The parties acknowledge and covenant that:
(a) this instrument has been duly authorised and executed by each of
them and is a legal valid and binding instrument of each of them
enforceable against each of them in accordance with the terms
hereof;
(b) they have sought and obtained independent legal advice in relation
to this instrument and their respective obligations pursuant and
incidental hereto and they acknowledge to each other that prior to
the execution of this instrument they were fully aware of their
rights and obligations pursuant to and incidental to this
instrument
and every matter referred to or implied herein; and
(c) each party could negotiate for the alteration of or rejection of
any
provision of this instrument and there was no inequality of
bargaining power.
3.11 NO COMMUNICATION
The parties agree and covenant that they will not disclose the terms of
this instrument nor communicate the circumstances which are the subject
of the agreement found in this instrument to any person (other than
their
shareholders and advisers).
<PAGE>6
3.12 DENIAL OF LIABILITY AND BAR TO SUIT
The parties acknowledge that:
(a) the consideration set out in Clause 2 is given with an express
denial of liability and solely for the purpose of obtaining the
releasing; and
(b) this instrument may be pleaded by any party in bar to any
proceedings, suit, claim, demand, indemnity or other proceeding now
or hereafter commenced arising out of or in connection with the
circumstances which are the subject matter of or are within the
ambit of the releases hereby given.
AS WITNESS the parties have hereunto set their hands on the day and year
first hereinbefore mentioned.
<PAGE>7
THE CORPORATE SEAL of IMPCO )
TECHNOLOGIES INC. was herunto )
affixed by authority of the directors )
in presence of: )
/s/ Todd Schock /s/ Michael Binetter
- ------------------------------------ -----------------------------------
Signature of Director/Secretary Signature of Director/Secretary
Todd Alan Schock Michael Binetter
- ------------------------------------ -----------------------------------
Full Name of Signatory Full Name of Signatory
THE COMMON SEAL of ATECO )
AUTOMOTIVE PTY LIMITED )
(A.C.N. 000 486 706) was hereunto )
affixed by authority of the directors )
in presence of: )
/s/ Neville Crichton /s/ Kenneth S. Scarra
- ------------------------------------ -----------------------------------
Signature of Director/Secretary Signature of Director/Secretary
Neville Alexander Crichton Kenneth Stephen Scarra
- ------------------------------------ -----------------------------------
Full Name of Signatory Full Name of Signatory
<PAGE>8
DATED 4th day of JULY 1996
--------------------------
BETWEEN
IMPCO TECHNOLOGIES PTY LIMITED
(A.C.N. 074 106 880) of the first part
AND
GAS PARTS PTY LIMITED
(A.C.N. 052 993 594) of the second part
AND
GAS PARTS (NSW) PTY LIMITED
(A.C.N. 068 319 237) of the last part
========================================
SHAREHOLDERS AGREEMENT
========================================
DUNHILL
MADDEN
BUTLER
Solicitors
Sydney
16 Barrack Street, Sydney 2000
New South Wales, Australia
GPO Box 427, Sydney 2001
DX 254 SYDNEY
Telephone: (02) 295 9999
International: 612 295 9999
Fax: (02) 295 9990
E-mail: 100252.1033 at compuserve.com
Ref: MTB
SYDNEY MELBOURNE BRISBANE
<PAGE>COVER
SHAREHOLDERS AGREEMENT
THIS DEED is made the 4th day of July, 1996
BETWEEN IMPCO TECHNOLOGIES PTY LIMITED (A.C.N. 074 106 880) of Level 5,
16 Barrack Street, Sydney in the State of New South Wales
(hereinafter referred to as "Impco") of the first part
GAS PARTS PTY LIMITED (A.C.N. 052 993 594) of 10 Rawson Road,
Guildford in the State of New South Wales (hereinafter referred
to as "GP") of the second part
(the parties of the first and second parts and their respective
successors and assigns being hereinafter collectively referred to
as the "Shareholders")
GAS PARTS (NSW) PTY LIMITED (A.C.N. 068 319 237) of 10 Rawson
Road, Guildford in the State of New South Wales (hereinafter
referred to as the "Company") of the last part
WHEREAS
A. The Company is a private company limited by shares and at the date
hereof has an authorised share capital of one million dollars
($1,000,000.00) divided into one million shares of one dollar ($1.00)
each comprising nine hundred and eighty thousand (980,000) ordinary
shares of one dollar ($1.00) each and ten thousand (10,000) "A" class
shares of one dollar ($1.00) each and ten thousand (10,000) "B" class
shares of one dollar ($1.00) each of which two ordinary (2) shares
have been issued and are fully paid and are held by the members
identified in Schedule 1 hereto in the numbers classes and percentages
of the total issue of shares in the Company specified therein.
B. The parties of the first and second parts are binding themselves to
the provisions of this instrument in their capacities as members of
the Company.
C. The parties hereto desire to promote their mutual interests by
imposing certain restrictions and obligations with respect to the
shares that the Shareholders now or hereafter will hold in the Company
and are desirous of setting out in writing the terms of such
restrictions and obligations.
NOW THIS DEED WITNESSES that in consideration of these premises the parties
hereto HEREBY AGREE COVENANT AND DECLARE one with the other that
notwithstanding anything contained in the articles of association of the
Company the parties hereto agree covenant and declare as follows:
1. BUSINESS ACTIVITIES AND MANAGEMENT OF THE COMPANY
1.1 (a) The parties agree that the Company has the following busines
objectives:
(i) provide a quality product and services to its
customers;
(ii) assemble complete turn-key systems solutions for motor
vehicles;
(iii) distribute and supply gaseous fuel systems;
(iv) annual sales growth while improving the Company's
profitability; and
<PAGE>1
(v) Future expansion of IMPCO's product line and products
throughout the State of New South Wales (hereinafter
called the "Territory"),
(hereinafter, subject to clause 1.1(b), to be collectively
called the "Business").
(b) For the avoidance of doubt, it is expressly understood that
any existing or new manufacturing rights or manufacturing
activities and any licensing rights to manufacturing that IMPCO
may have, develop or acquire in the Territory are not included in
the Business.
1.2 In order to implement the Business the Company shall enter into a
Distribution Agreement in the form of that described in Annexure B
hereto.
1.3 The principal place of business of the Company shall be located at 10
Rawson Road, Guildford in the State of New South Wales.
2. MANAGEMENT
2.1 The daily management of the Company shall be entrusted to a Managing
Director. The initial Managing Director is Mr Bill Campbell. The
Managing Director shall render his services pursuant to a written
agreement between the Company and Mr Bill Campbell in the form of
that contained in Annexure C hereto, on the basis of which Mr Bill
Campbell will make available his services to the Company on the terms
and conditions agree upon in that agreement.
2.1 The Managing Director shall have full authority to operate the
Business on a day-to-day basis to meet the Business objectives set out
in clause 1.1 and in this clause 2. The Managing Director shall be
responsible for developing the market in the Territory and for
accomplishing and negotiating sales, subject to limitations imposed by
the board of Directors of the Company (hereinafter called the "Board
of Directors"). Furthermore, he shall be responsible for the
profitable operations of the Company and for the Company's overall
results, within the Company's business plan, hereinafter referred to
as the Company's "Operating Plan". The Operating Plan, under which
the Company will operate, will be approved by the Board of Directors
whereby the Operating Plan shall govern the business and operational
activities of the Company. The Operating Plan shall consist of the
following:
(a) MARKETING PLANS. Establishing the implementing an annual
marketing plan for the sale of industrial products or making any
material change to such a plan previously approved by the Board
of Directors. Such strategic plans shall include, but are not
limited to, terms and conditions of sale, product support,
warranty commitments, training, and price discounts and plans.
(b) FINANCIAL BUDGETS. Establishment of, or any revisions to, and
adhering to, an annual operating budget and business forecast.
Such detailed financial budgets shall include income statements,
balance sheets, detailed sales projections, headcount plans,
capital equipment plans and related assumptions.
2.3 The Managing Director shall be responsible for keeping the Board of
Directors fully informed of the status and progress of the Operating
Plan and for bringing to the attention of the Board of Directors items
requiring its attention and action of a timely basis. The Managing
Director shall provide the Board of Directors with all information and
documents as required to properly implement its duties and
responsibilities.
<PAGE>2
2.4 Notwithstanding the provisions of the Memorandum and the Articles of
Association of the Company, the following resolutions and/or actions
of the Managing Director shall require the prior approval of the Board
of Directors:
(a) CHANGES IN TYPE OF BUSINESS. Make any substantial change in the
character of the Business or the establishment of subsidiaries,
branches or places of establishment of the Joint Company;
(b) OUTSIDE INDEBTEDNESS. Create, incur, assume or permit to exist any
indebtedness for borrowed moneys in excess of ten thousand dollars
($10,000.00) other than in the ordinary course of business, or as
approved by the Operating Plan;
(c) LIENS AND ENCUMBRANCES. Create, incur or assume any mortgage, pledge,
encumbrance, lien or charge of any kind upon any property or other
asset of the Joint Company;
(d) LOANS, INVESTMENTS, SECONDARY LIABILITIES. Make any loans or advances
to any person or other entity other than in the ordinary and normal
course of its business as conducted, or make any investment in the
security of any party or guarantee or otherwise become liable upon the
obligation of any person or other entity, by endorsement of negotiable
instruments for deposit or collection in the ordinary and normal
course of its business;
(e) ACQUISITION OR SALE OF BUSINESS; MERGER OR CONSOLIDATION. Purchase or
otherwise acquire the assets or business of any person or other
entity; or liquidate, dissolve, merge or consolidate, or commence any
proceedings therefor; or sell any assets except in the ordinary and
normal course of the Business or sell, lease, assign or transfer any
substantial part of its business or fixed assets, or any property or
other assets necessary for the continuance of the Business including
without limitation the selling of any property or other asset
accompanied by the leasing back of the same;
(f) CAPITAL EXPENDITURES. Make or incur obligations for capital
expenditures in excess of the amount approved in the Operating Plan;
(g) LEASE LIABILITY. Incur rental liability under leases of property of
any kind for payment in any one fiscal year of rental or other
obligation in any aggregate amount in excess of ten thousand dollars
($10,000.00) provided that the liability under leases shall be
calculated without giving effect to tax escalation clauses, except for
those approved in the Operating Plan;
(h) EMPLOYMENT CONTRACTS. Make any appointment or removal of officers or
management employees, or establish or alter any of their salaries or
fringe benefits or enter into or assume any employment or consulting
contracts for officers or other management employees, or amend or
modify existing employment or consulting contracts in any manner which
will increase employee benefits thereunder, except for those approved
in the Operating Plan;
(i) DISTRIBUTOR AGREEMENTS. Appoint or terminate any material distributor
or material dealer or materially revise any distributor's or dealer's
contract;
(j) MAJOR CONTRACTS. Enter into or amend any contract that may have a
material effect on the business or financial status of the Joint
Company;
<PAGE>3
(k) OTHER ACTIONS. Other actions requiring approval of the Board of
Directors which a Shareholder may request with the consent of the
other Shareholder, which consent shall not unreasonably be withheld.
2.5 GP shall take all appropriate action to cause the Managing Director to
observe and adhere to the stipulations set out in this clause 2.
3. TRANSFER OF SHARES
3.1 Notwithstanding anything contained herein (other than clause 4 hereof)
no Shareholder shall transfer any share or shares or any interest
therein (whether legal or beneficial) to which it is entitled to any
other Person (in this clause 3.1 referred to as the "Transferee")
whether beneficially or otherwise unless on or prior thereto it has
procured that the Transferee has entered into an instrument with the
Company and the then registered members in the same terms as this
instrument (as modified varied or amended as provided in clause
22.1(d) hereof) except that the reference in such instrument to the
Shareholder shall include the Transferee.
4. PRE-EMPTIVE RIGHTS
4.1 GP shall have the right:
(a) until the 30th day of April 1998 (time being of the essence), to
purchase Impco's share in which event Impco shall sell such share to
GP for a price of one dollar ($1.00) and an amount equal to one half
of the retained earnings of the Company and at the time of transfer of
the share to GP, GP shall in addition to paying Impco for its share
procure the Company to repay by bank cheque to Impco all amounts then
due and payable by the Company to Impco; and
(b) to receive the proceeds from the sale prior to 30th day of April
1998 of the goodwill of the Company if an arms length third party
enters into and completes prior to 30th day of April 1998 (time being
of the essence) a contract for the purchase of the business and all
the assets of the Company in circumstances where Impco has not, within
30.days of receipt of a written notice from GP requesting Impco to
consider acquiring such business and assets upon the same terms as
such arms length third party (which notice shall have attached to it a
copy of the aforesaid contract for purchase signed by such arms length
third party), served upon GP notice that Impco will acquire such
business and assets upon the same terms and conditions as such arms
length third party. Any such contract for purchase with such arms
length third party shall be subject to the right of Impco to acquire
such business and assets as referred to in clause 4.1(b) and if Impco
exercises such rights within the aforesaid 30 days such contract for
purchase with such arms length third party shall provide that it shall
rescind ab initio.
4.2 On the first day of May 1998 and every anniversary thereafter, time
being of the essence, either Shareholder (the "Offeror") may offer
(the "Offer") by written notice (an "Offer Notice") to the other (the
"Offeree") a price (the "Offer Price") at which the Offeror is ready
willing and able to:
(a) sell to the Offeree all of the Offeror's shares; or
(b) purchase from the Offeree all of the Offeree's shares.
<PAGE>4
An Offer Notice must specify the Offer in both sale and purchase
alternatives referred to above.
4.3 The Offeree shall then have a period of one month after receipt of an
Offer Notice in which to elect, by written notice (an "Acceptance
Notice") to the Offeror, either to:
(a) purchase all of the Offeror's shares at the Offer Price; or
(b) sell all of the Offeree's shares at the Offer Price.
4.4 If the Offeree fails to deliver an Acceptance Notice to the Offeror
within the said one month period, then the Offer under that Offering
Notice shall lapse and clause 4.6 shall apply.
4.5 Once an Offer has been made, no party may make a counter or different
offer until the original Offer has been accepted or has lapsed.
4.6 If an Offer has lapsed then the Offeror may within three (3) months of
the Offer having lapsed, be at liberty to sell the shares of the
Offeror at a price and on terms no more favourable than were offered
to the Offeree, to any respectable responsible and financially solvent
person.
5. DIRECTORS OF THE COMPANY AND MEETINGS OF DIRECTORS
5.1 MEMBERS OF THE BOARD APPOINTED BY IMPCO
For so long as Impco is a shareholder of the Company Impco is entitled
to appoint:
(a) two Directors to the board of the Company; and
(b) may appoint a Director to replace any Director removed from
office.
5.2 MEMBERS OF THE BOARD APPOINTED BY GP
For as long as GP is a shareholder of the Company GP is entitled to
appoint:
(a) one Director to the board of the Company; and
(b) may appoint a Director to replace any Director removed from
office.
5.3 FIRST IMPCO DIRECTORS
The first Directors appointed by Impco to the board of the Company are
Mr R M Stemmler and Mr T Schock.
5.4 FIRST GP DIRECTORS
The first Director appointed by GP to the board of the Company is Mr
Bill Campbell.
5.5 CLAUSE 5 PARAMOUNT
A person may not be appointed or removed as a Director except in
accordance with this Clause 5.7 and 5.8.
<PAGE>5
5.6 MAXIMUM NUMBERS OF DIRECTORS
The maximum number of Directors is three unless the Company resolves
otherwise in general meeting by unanimous resolution.
5.7 REMOVAL OF IMPCO DIRECTOR
An Impco Director will be deemed to have been removed from the office
of Director if and when:
(a) the Company and GP receives a notice in writing from Impco
notifying of his removal;
(b) he ceases, by force of law, to hold office as a Director;
(c) he resigns as a Director by notice in writing to the Company;
(d) he becomes of unsound mind or a person whose person or estate is
liable to be dealt with in any way under the law relating to
mental health;
(e) he is directly or indirectly interested in any material contract
or proposed material contract and fails to declare the nature of
his interest as required by the Corporations Law.
If an Impco Director is deemed to have been removed from office of
Director in accordance with this clause 5.7, Impco will be entitled to
appoint another Person as an Impco Director in his place only in
accordance with clause 5.1.
5.8 REMOVAL OF GP DIRECTOR
A GP Director will be deemed to have been removed from the office of
Director if and when:
(a) the Company and Impco receives a notice in writing from GP
notifying of his removal;
(b) he ceases, by force of law, to hold office as a Director;
(c) he resigns as a Director by notice in writing to the Company;
(d) he becomes of unsound mind or a person whose person or estate is
liable to be dealt with in any way under the law relating to
mental health;
(e) he is directly or indirectly interested in any material contract
or proposed material contract and fails to declare the nature of
his interest as required by the Corporations Law.
If a GP Director is deemed to have been removed from office of
Director in accordance with this clause 5.8, GP will be entitled to
appoint another Person as a GP Director in his place only in
accordance with clause 5.2.
5.9 CONVENING OF DIRECTORS MEETING
(a) Any Director may convene a meeting of Directors at any time
(subject to clause 5.12) by giving proper and reasonable notice
to that effect to the secretary of the Company.
<PAGE>6
(b) Without limiting clause 5.9(a):
(i) a meeting of Directors must be held not less than twice in
each calendar year;
(ii) each meeting of Directors must set the date for the next
meeting and (for all purposes including clause 5.9(a)) the
setting of that date will be deemed to be due notice to all
Directors present at that meeting of the convening of that
next meeting.
5.10 VOTING
(a) Questions arising at a meeting of Directors will be decided by a
simple majority of votes of the Directors present at that meeting
who are entitled to vote. Any such decision shall for all
purposes be deemed a decision of the board of Directors.
(b) At any meeting of the board of the Directors each Director will
be entitled to one vote.
(c) Subject to the Corporations Law, a Director may vote in respect
of any matter or any contract or arrangement or proposed contract
or arrangement notwithstanding that in relation to such matter,
contract, arrangement, proposed contract or proposed arrangement
the Director may have duties or interests (including in the case
of any Director who is an Impco Director or a GP Director duties
or interests to or in respect of his nominating shareholder)
which may conflict with his duties or interests as a Director.
5.11 QUORUM
(a) A quorum for a meeting of the board of Directors will be, subject
to clause 5.11(b), one Impco Director and one GP Director
(present in person or by their alternates by audio (including by
telephone) or audio-visual communication) who are entitled to
vote at a meeting of the board of the Directors provided notice
of the meeting has been given to all Directors pursuant to clause
5.9. Any meeting by audio or audio-visual communication with the
necessary quorum shall be deemed a meeting of the board of
Directors.
(b) If at a proposed meeting of the board of Directors referred to in
clause 5.11(a) a quorum is not present within 15 minutes of the
time appointed for such meeting, the meeting shall stand
adjourned to the same day in the next week and at the same time
and place as was proposed for that meeting and a quorum at such
adjourned meeting will be any two Directors (present in person
or by their alternates by audio (including by telephone) or
audio-visual communication) who are entitled to vote at a meeting
of the board of the Directors. Any meeting by audio or audio
visual communication with the necessary quorum shall be deemed a
meeting of the board of Directors.
5.12 BOARD PAPERS
(a) The papers for each meeting of the board of Directors must
include an agenda setting out the significant items of business
to be dealt with at the relevant meeting.
<PAGE7
(b) The papers referred to in clause 5.12(a) must be delivered to the
last nominated address of each of the Directors not less than 48
hours before the relevant meeting. Any Director may at any time
and from time to time waive this requirement insofar as it
applies to that Director.
(c) A meeting of the board of Directors may not deal with any
significant item of business which has not been set out in the
papers referred to in clause 5.12(a) circulated to the Directors
in relation to that meeting unless all the Directors present at
the meeting agree to deal with that item of business at that
meeting.
6. PAYMENT OF DIVIDENDS
6.1 A payment of dividends by the Company will only be made upon a
unanimous decision of the Directors followed by approval by simple
majority of the votes of the members of the Company.
7. TERMINATION WITHOUT PREJUDICE TO PRIOR RIGHTS
The termination of a party's rights and obligations under this
instrument shall be without prejudice to any rights of any other party
which may have arise in connection with such termination or from any
breach of any part of this instrument by that party.
8. BANK ACCOUNT OF TRUST
8.1 The bank account of the Company shall be with the Australia & New
Zealand Banking Group Limited, Guildford branch in Sydney.
8.2 The signatories to any cheque bill of exchange promissory note or
other negotiable instrument of the Company shall be as determined from
time to time by the Directors.
9. YEAR END
Unless otherwise determined by the Directors, the last day of the
financial period for the Company shall be 30 April in each year.
10. TRUST
10.1 GP represents and warrants that it holds its share in the Company as
trustee of The Campbell Family Trust No. 1 being a trust constituted
by instrument (in this clause 10.1 called "Trust Deed") dated the 3rd
day of March 1986 between Robert William John Cowan as the settlor and
Rostmar Pty Limited as the trustee (hereinafter referred to as the
"Trust") and will not:
(a) appoint the Vesting Day (as that term is understood for the
purposes of the Trust);
(b) exercise the power of appointment in clause 4 of the Trust Deed
or any power in clause 8 or 9 of the Trust Deed in relation to
the shares in the Company held by or on behalf of GP or the
Trust;
(c) exercise any power in clause 19 or 20 of the Trust Deed.
10.2 GP represents and warrants to Impco that:
(a) it is empowered by the trust deed constituting the Trust to
execute this deed and to do all things required by this deed and
there are no restrictions or conditions upon such activity by it,
<PAGE>8
and all necessary meetings have been held, all necessary
resolutions have been passed and all consents and other
procedural matters have been obtained or attended to as required
by the trust deed constituting the Trust or otherwise prior to
executing this deed in order to render this deed fully binding on
it;
(b) it is the present sole trustee of the Trust, no new or additional
trustee or trustees of the Trust has or have been appointed and
no action has been taken to remove it as trustee of the Trust;
(c) the Trust has not been terminated nor has the date for vesting of
the assets of the Trust occured;
(d) its right of indemnity out of, and its lien over, the assets of
the Trust have not been limited in any way;
(e) the property which it holds on trust under the trust deed
constituting the Trust is sufficient to satisfy that right of
indemnity;
(f) it and its directors and other officers have complied with their
obligations in connection with the Trust; and
(g) Impco's rights under this deed rank in priority to the interests
of the beneficiaries of the Trust.
10.3 GP covenants with Impco that it shall not, without the prior written
consent of Impco:
(a) do anything which facilitates:
(i) the alteration, variation, amendment or revocation of the
trust deed constituting the Trust;
(ii) its resignation or removal as trustee of the Trust;
(iii) the resettlement of the Trust fund; or
(iv) the termination of the Trust;
(b) do anything which could restrict its right of indemnity from the
Trust fund in respect of obligations is incurred by it under this
deed;
(c) do anything which could restrict or impair its ability to observe
its obligations under this deed;
(d) do anything which could result in the Trust fund being mixed with
other property; or
(e) permit consent or in any way assist a transfer of any interest in
the Trust such that any person or persons who between them
beneficially hold or control directly or indirectly at the date
of this deed more than fifty per cent of the Trust, cease to hold
or control directly or indirectly more than fifty per cent of the
Trust.
10.4 GP further covenants with Impco that:
(a) it shall not default in its duties as trustee of the Trust;
<PAGE>9
(b) it shall, at its own expense, at Impco's request:
(i) execute and cause its successors to execute any documents
and do everything necessary or appropriate to bind it and
its successors under this deed; and
(ii) use its best endeavours to cause relevant third parties to
do likewise; and
(c) at Impco's request, it shall exercise its right of indemnity from
the Trust fund and the beneficiaries of the Trust in respect of
obligations incurred by it under this deed.
10.5 GP acknowledges that this deed is binding on it in its own capacity
and in its capacity as trustee of the Trust.
11. EXCLUSION OF IMPLIED RELATIONSHIPS
11.1 Nothing contained in this instrument shall or be deemed or construed
to constitute any party a partner, agent or representative or any
other party, or to create any trust or commercial partnership. No
party shall have the authority to act for or to incur any obligation
on behalf of any other party except as expressly provided for in this
instrument.
12. NOTICES
12.1 (a) A notice may be given to any member either by serving it on him
personally or by sending it by post to him at his address as
shown in the register of members or the address supplied by him
to the Company for the giving of notices to him or by sending it
by facsimile transmission to the facsimile number (if any)
supplied by him to the Company for the purpose of service of
notices to him.
(b) Where a notice is sent by post, service of the notice shall be
deemed to be effected by properly addressing, prepaying and
posting a letter containing the notice, and to have been
effected, in the case of a notice of a meeting, on the day after
the date of its posting and, in any other case, at the time at
which the letter would be delivered in the ordinary course of
post. Where a notice is sent by facsimile transmission service
shall be deemed to have been effected at the time immediately
following transmission.
(c) A notice may be given by the Company to a Person entitled to a
share by giving the notice to the joint holder first named in the
register of members in respect of the share.
(d) A notice may be given by the Company to a Person entitled to a
share in consequence of the death bankruptcy or lunacy of a
member by serving it on him personally or by sending it to him by
post addressed to him by name, or by the title of representative
of the deceased or assignee of the bankrupt or lunatic, or by any
like description, at the address (if any) within the State
supplied by the purpose by the Person or, if such an address has
not been supplied, at the address to which the notice might have
been sent if the death bankruptcy or lunacy had not occurred or
by sending it by facsimile transmission to the facsimile number
(if any) supplied by him to the Company for the purpose of
service of notices to him.
<PAGE>10
(e) If the Directors shall so determine a notice may be given by
means of telegram cablegram telex or radiogram and if the
telegram cablegram telex or radiogram is properly addressed paid
for and lodged for transmission with a competent authority or
body service of such notice shall be deemed to have been effected
at the time at which in the ordinary course the telegram
cablegram telex or radiogram would be delivered.
13. TERM OF AGREEMENT
13.1 Subject to clause 7, the rights and obligations of a member (who is a
party hereto) under clauses 3, 4 and 5 of this instrument shall
terminate upon the earlier of the written agreement of the parties
hereto and the Company and the date upon which that party ceases
(other than as a consequence of breach of this instrument to be
recorded in the register of members as a holder of a share.
14. VOLUNTARY LIQUIDATION
14.1 The Company may only be liquidated voluntarily with the prior written
consent of members holding not less than fifty-one percent (51%) of
the issued capital of the Company.
15. THIS INSTRUMENT TO OVERRIDE ARTICLES
15.1 As between the parties hereto to the extent of any inconsistency
between any of the provisions of this instrument or any part hereof
and any provision in the Articles or any part thereof the provisions
of this instrument shall prevail and the parties thereto shall if
necessary or desirable do and execute such acts matters things and
documents in order to amend the articles such that following such
amendment the offending inconsistency shall no longer exist and that
in any particular case where required or desirable the Articles permit
or empower what is agreed by this instrument.
16. LEGEND ON SHARE CERTIFICATES
16.1 Each certificate in respect of a share shall be reissued with the
following legend:
"The shares referred to in this certificate may not be transferred
except in accordance with the terms of the articles of association of
the Company unless the provisions of the Shareholders Agreement dated
the 4th day of July 1996 between Impco Technologies Pty Limited
(A.C.N. 074 106 880) Gas Parts Pty Limited (A.C.N. 052 993 594) and
Gas Parts (NSW) Pty Limited (A.C.N. 068 319 237) which is available
for inspection at the registered office of Gas Parts (NSW) Pty Limited
(A.C.N. 068 319 237)".
17. PROPER LAW
17.1 This instrument shall be governed by and interpreted in accordance
with the laws of the State of New South Wales and the Commonwealth of
Australia and the parties hereto hereby irrevocably submit to the
jurisdiction of the courts of New South Wales and the Commonwealth of
Australia to which courts there shall be submitted for determination
any dispute claim or demand of any nature whatsoever arising out of
pursuant to or in connection with this instrument or anything done in
pursuance or purported pursuance hereof.
<PAGE>11
18. NO ASSIGNMENT OF BENEFIT
18.1 No party hereto shall assign or attempt to assign its rights or
interests under this instrument.
19. SEVERABILITY
19.1 In the event that any of the provisions of this instrument, or any
part hereof is held to be illegal, invalid, void or voidable by any
court of competent jurisdiction or by any statute the legality and
validity of the remaining provisions or parts hereof and of this
instrument shall not be affected thereby and shall be interpreted and
enforced to the greatest extent permitted by law so as to give effect
to the original intent of the parties hereto and the illegal invalid
void or voidable provision or part thereof, as the case may be, shall
be deemed deleted herefrom to the same extent and effect as if never
incorporated herein.
20. NO WAIVER
20.1 No waiver by any party hereto of any one or more defaults by any other
party hereto in the performance or observance of the provisions herein
contained shall either be of any force or effect unless in writing and
executed by the parties hereto in their relevant capacities or operate
or be construed as a waiver of any future default or defaults by that
party whether of a like or of a different character.
21. BETTER ASSURANCE
21.1 The parties hereto shall promptly exercise all powers are as available
to them and execute and do all such other acts things matters and
documents as may be necessary or desirable to give full and prompt
effect to the provisions of this instrument and the matters herein
referred to.
22. ENTIRE AGREEMENT
22.1 (a) Apart from the provisions contained in the Articles this
instrument embodies the entire agreement and understanding
between the parties hereto in respect of the subject matter
hereof.
(b) Except for any provisions contained in the Articles which are not
consistent with the provisions of this instrument all covenants
conditions agreements arrangement understandings representations
warranties promises or inducements whether written or oral
relating to or in any way affecting the matters the subject
hereof not expressed herein shall be deemed negatived and shall
be absolutely null and void and of no effect whatsoever and shall
not affect change restrict or modify the operation of this
instrument or bind any of the parties hereto it being the
intention and covenant of all parties hereto that other than any
provisions contained in the Articles which are not inconsistent
with the provisions of this instrument this instrument supersedes
all previous discussions correspondence and writings between any
party to any other or others of them and/or between their
respective legal and other advisers in respect of the matters
herein referred to.
(c) Except as expressly set out herein there are no terms of
obligations conditions warranties promises or representations
written or oral express or implied in relation to the subject
matter hereof.
<PAGE>12
(d) No modification variation or amendment of this instrument shall
be of any force or effect unless in writing and executed by the
parties hereto.
23. AUTHORITY AND INDEPENDENT LEGAL ADVICE
23.1 Each party hereto hereby warrants and represents to each other party
that:
(a) this instrument has been duly authorised and executed by it and
is a legal valid and binding instrument of it enforceable against
it in accordance with the terms hereof; and
(b) it has sought and obtained or had the opportunity to seek and
obtain independent legal advice in relation to this instrument
and its respective obligations pursuant and incidental hereto and
its rights hereunder and it acknowledges to the other parties
hereto that prior to the execution of this instrument is was
fully aware of its rights and obligations pursuant to and
incident to this instrument and every matter referred to or
implied herein.
24. CONFIDENTIALITY
24.1 No notice publicity announcement or other communication relating to
the negotiations of the parties hereto, the subject matter hereof, the
terms of this instrument, the transactions contemplated by this
instrument shall be made released or authorised by or on behalf of any
party thereto without the prior approval of the Directors.
25. COUNTERPARTS
25.1 This instrument may be executed in any number of counterparts and all
such counterparts taken together shall be deemed to constitute one and
the same instrument.
26. INTERPRETATION
26.1 In this instrument:
"Articles" means the articles of association for the time being of the
Company;
"Associate" has the same meaning as is ascribed to the term
"associate" in subsection 26AAB(14) of the Income Tax Assessment Act
1936 of the Commonwealth of Australia on the basis that a reference to
the "taxpayer" in the subsection is a reference to the relevant
Person;
"Corporations Law" shall mean the Corporations Law set out in Section
82 of the Corporations Act 1989 (Commonwealth) or as applied by the
appropriate corresponding legislation of the State of New South Wales
as a law thereof or any statutory modification amendment or re
enactment thereof, for the time being in force;
"Director" means a director for the time being of the Company;
"Impco Director" means a Director appointed by Impco pursuant to
clause 5.1;
"GP Director" means a Director appointed by GP pursuant to clause 5.2;
"member" means a member for the time being of the Company;
"Person" includes a natural person, a body corporate, a body
unincorporated, society, trust, association or other entity;
<PAGE>13
"secretary" means any Person appointed to perform the duties of a
secretary of the Company;
"share" means a share in the capital of the Company;
"Shareholders" means the parties of the first and second parts
inclusive and their respective successors and assigns;
"State" means the State of New South Wales;
Reference to the singular number shall be deemed to include the
plural
number and vice versa.
Reference to any Act or Law or the provisions thereof shall mean
and
included that Act or Law or any Act or Law in substitution
therefore
as for the time being amended and in force.
Reference to any agreement deed instrument or other document shall
mean and include that agreement deed instrument or other document
as
for the time being amended.
Reference to an act of the Directors shall mean an act of the
Directors pursuant to a resolution by a simple majority of the
Directors passes at a meeting of Directors duly convened and held
and
reference to a decision of the Directors shall be a reference to a
resolution passed by a simple majority as aforesaid.
Words importing any gender shall include all other genders.
Covenants and agreements on the part of more than one Person shall
bind and extend to all of them jointly and each of them severally.
All headings subheadings bold typing and underlinings throughout
this
instrument have been inserted for the purpose of ease of reference
only and shall not define limit or affect the meaning or
interpretation of this instrument or any part thereof or of any
instrument created pursuant hereto or in accordance herewith.
<PAGE>14
SCHEDULE 1
NAME OF SHAREHOLDER NO OF SHARES HELD CLASS OF SHARES PERCENTAGE
OF
TOTAL
ISSUED
SHARES
Impco Technologies one (1) following Ordinary 50%
Pty Limited transfer from Ateco
Automotive Pty
Limited (A.C.N. 000
486 706)
Gas Parts Pty one (1) Ordinary 50%
Limited
<PAGE>15
AS WITNESS the parties hereto have hereunto set their hands and seals
the day and year first hereinbefore writt
en.
THE CORPORATE SEAL of IMPCO )
TECHNOLOGIES PTY LIMITED )
(A.C.N. 074 106 880) was herunto )
affixed by authority of the directors )
in the presence of: )
/s/ Todd Schock /s/ Michael Binetter
- ------------------------------------ -----------------------------------
Signature of Director/Secretary Signature of Director
Todd A. Schock Michael Binetter
- ------------------------------------ -----------------------------------
Full Name of Signatory Full Name of Signatory
THE COMMON SEAL of GAS )
PARTS PTY LIMITED (A.C.N. 052 )
993 594) was hereunto affixed by )
authority of the directors )
in the presence of: )
/s/ Bill R. Campbell /s/ Christine T. Campbell
- ------------------------------------ -----------------------------------
Signature of Director/Secretary Signature of Director/Secretary
Bill Ross Campbell Christine T. Campbell
- ------------------------------------ -----------------------------------
Full Name of Signatory Full Name of Signatory
<PAGE>16
THE COMMON SEAL of GAS )
PARTS (NSW) LIMITED (A.C.N. )
068 319 237) was hereunto affixed by )
authority of the directors )
in the presence of: )
/s/ Todd A. Schock /s/ Bill Campbell
- ------------------------------------ -----------------------------------
Signature of Director/Secretary Signature of Director/Secretary
Todd A. Schock Bill Campbell
- ------------------------------------ -----------------------------------
Full Name of Signatory Full Name of Signatory
<PAGE>17
BANK OF AMERICA
1996
BUSINESS LOAN
AGREEMENT
Dated June 25, 1996
IMPCO Technologies, Inc.
16804 Gridley Place
Cerritos, CA 90701
<PAGE>COVER
BUSINESS LOAN AGREEMENT
This Agreement dated as of 25 June, 1996, is between Bank of America
National Trust and Savings Association (the "Bank"), IMPCO Technologies, Inc.
(the "Borrower"), and AirSensors, Inc. (the "Guarantor").
1. FACILITY NO. 1: LINE OF CREDIT AMOUNT AND TERMS
1.1 LINE OF CREDIT AMOUNT.
(a) During the availability period described below, the Bank
will provide a line of credit ("Facility No. 1") to the Borrower. The
amount of the line of credit (the "Facility No. 1 Commitment") is Eight
Million Dollars ($8,000,000).
(b) This is a revolving line of credit with a within line
facility for letters of credit. During the availability period, the
Borrower may repay principal amounts and reborrow them.
(c) The Borrower agrees not to permit the outstanding
principal balance of the line of credit plus the outstanding amounts of
any letters of credit, including amounts drawn on letters of credit and
not yet reimbursed, to exceed the Facility No. 1 Commitment.
1.2 AVAILABILITY PERIOD. The line of credit is available between
the date of this Agreement and August 31, 1998 (the "Expiration Date") unless
the Borrower is in default.
1.3 INTEREST RATE.
(a) Unless the Borrower elects an optional interest rate as
described below, the interest rate is the Bank's Reference Rate.
(b) The Reference Rate is the rate of interest publicly
announced from time to time by the Bank in San Francisco, California,
as its Reference Rate. The Reference Rate is set by the Bank based on
various factors, including the Bank's costs and desired return, general
economic conditions and other factors, and is used as a reference point
for pricing some loans. The Bank may price loans to its customers at,
above, or below the Reference Rate. Any change in the Reference Rate
shall take effect at the opening of business on the day specified in
the public announcement of a change in the Bank's Reference Rate.
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<PAGE>
1.4 REPAYMENT TERMS.
(a) The Borrower will pay interest on June 30, 1996, and
then monthly thereafter until payment in full of any principal
outstanding under this line of credit.
(b) The Borrower will repay in full all principal and any
unpaid interest or other charges outstanding under this line of credit
no later than the Expiration Date. Any amount bearing interest at an
optional interest rate (as described below) may be repaid at the end of
the applicable interest period, which shall be no later than the
Expiration Date.
1.5 OPTIONAL INTEREST RATE. Instead of the interest rate based
on the Bank's Reference Rate, the Borrower may elect the optional interest
rate listed below for this Facility No. 1 during interest periods agreed to by
the Bank and the Borrower. The optional interest rate shall be subject to the
terms and conditions described later in this Agreement. Any principal amount
bearing interest at an optional rate under this Agreement is referred to as a
"Portion." The optional interest rate available is the Cayman Rate plus 1.75
percentage points.
1.6 LETTERS OF CREDIT. This line of credit may be used for
financing:
(i) commercial letters of credit with a maximum maturity of
180 days but not to extend more than 90 days beyond the Expiration Date.
Each commercial letter of credit will require drafts payable at sight.
(ii) standby letters of credit with a maximum maturity of
five (5) years but not to extend beyond April 30, 2001.
(iii) The amount of the letters of credit outstanding at any
one time (including amounts drawn on letters of credit and not yet
reimbursed) may not exceed Two Million Dollars ($2,000,000) for
commercial letters of credit and Seven Hundred Fifty Thousand Dollars
($750,000) for standby letters of credit.
(iv) The following letter of credit is outstanding from the
Bank for the account of the Borrower:
Letter of Credit Number Amount
----------------------- ------
LASB #227940 $375,000
As of the date of this Agreement, this letter of credit shall be deemed
to be outstanding under this Agreement, and shall be subject to all the
terms and conditions stated in this Agreement.
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<PAGE>
The Borrower agrees:
(a) any sum drawn under a letter of credit may, at the
option of the Bank, be added to the principal amount outstanding under
this Agreement. The amount will bear interest and be due as described
elsewhere in this Agreement.
(b) if there is a default under this Agreement, to
immediately prepay and make the Bank whole for any outstanding letters
of credit.
(c) the issuance of any letter of credit and any amendment
to a letter of credit is subject to the Bank's written approval and must
be in form and content satisfactory to the Bank and in favor of a
beneficiary acceptable to the Bank.
Commercial Letter of Credit or Application and Agreement for
Standby Letter of Credit.
(e) to pay any issuance and/or other fees that the Bank
notifies the Borrower will be charged for issuing and processing letters
of credit for the Borrower.
(f) to allow the Bank to automatically charge its checking
account for applicable fees, discounts, and other charges.
(g) to pay the Bank a non-refundable fee equal to 1.5% per
annum of the outstanding undrawn amount of each standby letter of
credit, payable annually in advance, calculated on the basis of the face
amount outstanding on the day the fee is calculated.
2. FACILITY NO. 2: EXISTING TERM LOAN
2.1 OUTSTANDING TERM LOAN. There is outstanding from the Bank to
the Borrower a term loan in the original principal amount of $2,050,000. This
term loan is currently subject to the terms and conditions of Facility No. 2
of the Business Loan Agreement dated as of September 28, 1994. As of the date
of this Agreement, the term loan shall be deemed to be outstanding as Facility
No. 2 under this Agreement, and shall be subject to all the terms and
conditions stated in this Agreement.
2.2 INTEREST RATE.
(a) Unless the Borrower elects an optional interest rate as
described below, the interest rate is the Bank's Reference Rate.
-3-
<PAGE>
(b) The Borrower may prepay the loan in full or in part at
any time. The prepayment will be applied to the most remote installment
of principal due under this Agreement.
2.3 REPAYMENT TERMS.
(a) The Borrower will pay all accrued but unpaid interest
on June 30, 1996 and then monthly thereafter until payment in full of
the principal of this loan.
(b) The Borrower will repay the principal amount of
Facility No. 2 in seventeen (17) equal successive quarterly installments
of One Hundred Two Thousand Five Hundred Dollars ($102,500) each,
starting August 31, 1996. On August 31, 2000, the Borrower will repay
the remaining principal balance plus any interest then due.
2.4 OPTIONAL INTEREST RATES. Instead of the interest rate based
on the Bank's Reference Rate, the Borrower may elect the optional interest
rates listed below for this Facility No. 2 during interest periods agreed to
by the Bank and the Borrower. The optional interest rates shall be subject to
the terms and conditions described later in this Agreement. Any principal
amount bearing interest at an optional rate under this Agreement is referred
to as a "Portion." The following optional interest rates are available:
(a) the Cayman Rate plus 1.50 percentage points.
(b) the LIBOR Rate plus 1.50 percentage points
3. FACILITY NO. 3: NEW TERM LOAN
3.1 LOAN AMOUNT. The Bank agrees to provide a term loan
("Facility No. 3") to the Borrower in the amount of Two Million Dollars
($2,000,000) (the "Facility No. 3 Commitment").
3.2 AVAILABILITY PERIOD. The loan is available in one
disbursement from the Bank between the date of this Agreement and July 31,
1996 unless the Borrower is in default.
3.3 INTEREST RATE.
(a) Unless the Borrower elects an optional interest rate as
described below, the interest rate is the Bank's Reference Rate.
(b) The Borrower may prepay the loan in full or in part at
any time. The prepayment will be applied to the most remote installment
of principal due under this Agreement.
-4-
<PAGE>
3.4 REPAYMENT TERMS.
(a) The Borrower will pay all accrued but unpaid interest
on July 31, 1996 and then monthly thereafter and upon payment in full
of the principal of the loan.
(b) The Borrower will repay principal in eleven (11) equal
successive quarterly installments of One Hundred Thousand Dollars
($100,000) starting October 31, 1996. On July 31, 1999 the Borrower
will repay the remaining principal balance plus any interest then due.
3.5 OPTIONAL INTEREST RATE. Instead of the interest rate based
on the Bank's Reference Rate, the Borrower may elect the optional interest
rate listed below for this Facility No. 3 during interest periods agreed to by
the Bank and the Borrower. The optional interest rate shall be subject to the
terms and conditions described later in this Agreement. Any principal amount
bearing interest at an optional rate under this Agreement is referred to as a
"Portion." The optional interest rate available is the Cayman Rate plus 2.10
percentage points.
4. OPTIONAL INTEREST RATES
4.1 OPTIONAL RATES. Each optional interest rate is a rate per
year. Interest will be paid on the last day of each interest period, and on
the last day of each month during the interest period. At the end of any
interest period, the interest rate will revert to the rate based on the
Reference Rate, unless the Borrower has designated another optional interest
rate for the Portion. No Portion will be converted to a different interest
rate during the applicable interest period. Upon the occurrence of an event
of default under this Agreement, the Bank may terminate the availability of
optional interest rates for interest periods commencing after the default
occurs.
4.2 CAYMAN RATE. The election of Cayman Rates shall be subject
to the following terms and requirements:
(a) The interest period during which the Cayman Rate will
be in effect will be no shorter than 30 days and no longer than one
year. The last day of the interest period will be determined by the
Bank using the practices of the offshore dollar inter-bank market.
(b) Each Cayman Rate Portion will be for an amount not less
than Five Hundred Thousand Dollars ($500,000).
(c) The Borrower may not elect a Cayman Rate with respect
to any principal amount which is scheduled to be repaid before the last
day of the applicable interest period.
-5-
<PAGE>
(d) The "Cayman Rate" means the interest rate determined by
the following formula, rounded upward to the nearest 1/100 of one
percent. (All amounts in the calculation will be determined by the Bank
as of the first day of the interest period.)
Cayman Rate = Cayman Base Rate
---------------------------
(1.00 - Reserve Percentage)
Where,
(i) "Cayman Base Rate" means the interest rate at
which the Bank's Grand Cayman Branch, Grand Cayman, British West
Indies, would offer U.S. dollar deposits for the applicable
interest period to other major banks in the offshore dollar inter-
bank market.
(ii) "Reserve Percentage" means the total of the
maximum reserve percentages for determining the reserves to be
maintained by member banks of the Federal Reserve System for
Eurocurrency Liabilities, as defined in Federal Reserve Board
Regulation D, rounded upward to the nearest 1/100 of one percent.
The percentage will be expressed as a decimal, and will include,
but not be limited to, marginal, emergency, supplemental, special,
and other reserve percentages.
(e) Each prepayment of a Cayman Rate Portion, whether voluntary,
by reason of acceleration or otherwise, will be accompanied by the
amount of accrued interest on the amount prepaid, and a prepayment fee
as described below. A "prepayment" is a payment of an amount on a date
earlier than the scheduled payment date for such amount as required by
this Agreement. The prepayment fee shall be equal to the amount (if
any) by which:
(i) the additional interest which would have been
payable during the interest period on the amount prepaid had it
not been prepaid, exceeds
(ii) the interest which would have been recoverable by
the Bank by placing the amount prepaid on deposit in the domestic
certificate of deposit market, the eurodollar deposit market, or
other appropriate money market selected by the Bank for a period
starting on the date on which it was prepaid and ending on the
last day of the interest period for such Portion (or the scheduled
payment date for the amount prepaid, if earlier).
(f) The Bank will have no obligation to accept an election for a
Cayman Rate Portion if any of the following described events has
occurred and is continuing:
-6-
<PAGE>
(i) Dollar deposits in the principal amount, and for
periods equal to the interest period, of a Cayman Rate Portion are not
available in the offshore Dollar inter-bank market; or
(ii) the Cayman Rate does not accurately reflect the
cost of a Cayman Rate Portion.
4.3 LIBOR RATE. The election of LIBOR Rates shall be subject to
the following terms and requirements:
(a) The interest period during which the LIBOR Rate will be
in effect will be one, two, three, four, five, six, seven, eight, nine,
ten, eleven, or twelve months. The first day of the interest period must
be a day other than a Saturday or a Sunday on which the Bank is open for
business in California, New York and London and dealing in offshore
dollars (a "LIBOR Banking Day"). The last day of the interest period and
the actual number of days during the interest period will be determined
by the Bank using the practices of the London inter-bank market.
(b) Each LIBOR Rate portion will be for an amount not less
than Five Hundred Thousand Dollars ($500,000).
(c) The "LIBOR Rate" means the interest rate determined by
the following formula, rounded upward to the nearest 1/100 of one
percent. (All amounts in the calculation will be determined by the Bank
as of the first day of the interest period.)
LIBOR Rate = London Inter-Bank Offered Rate
------------------------------
(1.00 - Reserve Percentage)
Where,
(i) "London Inter-Bank Offered Rate" means the interest
rate at which the Bank's London Branch, London, Great Britain, would
offer U.S. dollar deposits for the applicable interest period to
other major banks in the London inter-bank market at approximately
11:00 a.m. London time two (2) London Banking Days before the
commencement of the interest period. A "London Banking Day" is a
day on which the Bank's London Branch is open for business and
dealing in offshore dollars.
(ii) "Reserve Percentage" means the total of the maximum
reserve percentages for determining the reserves to be maintained by
member banks of the Federal Reserve System for Eurocurrency
Liabilities, as defined in Federal Reserve Board Regulation D,
rounded upward to the nearest 1/100 of one percent. The percentage
will be expressed as a decimal, and will include, but not be
-7-
<PAGE>
limited to, marginal, emergency, supplemental, special, and other
reserve percentages.
(d) The Borrower shall irrevocably request a LIBOR Rate
portion no later than 12:00 noon San Francisco time on the LIBOR Banking
Day preceding the day on which the London Inter-Bank Offered Rate will be
set, as specified above.
(e) The Borrower may not elect a LIBOR Rate with respect to
any principal amount which is scheduled to be repaid before the last day
of the applicable interest period.
(f) Any portion of the principal balance already bearing
interest at the LIBOR Rate will not be converted to a different rate
during its interest period.
(g) Each prepayment of a LIBOR Rate portion, whether
voluntary, by reason of acceleration or otherwise, will be accompanied by
the amount of accrued interest on the amount prepaid and a prepayment fee
as described below. A "prepayment" is a payment of an amount on a date
earlier than the scheduled payment date for such amount as required by
this Agreement. The prepayment fee shall be equal to the amount (if any)
by which:
(i) the additional interest which would have been
payable during the interest period on the amount prepaid had it not
been prepaid, exceeds
(ii) the interest which would have been recoverable by
the Bank by placing the amount prepaid on deposit in the domestic
certificate of deposit market, the eurodollar deposit market, or
other appropriate money market selected by the Bank, for a period
starting on the date on which it was prepaid and ending on the last
day of the interest period for such portion (or the scheduled
payment date for the amount prepaid, if earlier).
(h) The Bank will have no obligation to accept an election
for a LIBOR Rate portion if any of the following described events has
occurred and is continuing:
(i) Dollar deposits in the principal amount, and for
periods equal to the interest period, of a LIBOR Rate portion are
not available in the London inter-bank market; or
(ii) the LIBOR Rate does not accurately reflect the cost
of a LIBOR Rate portion.
-8-
<PAGE>
5. FEES, EXPENSES AND COSTS
5.1 UNUSED COMMITMENT FEE. The Borrower agrees to pay a fee on any
difference between the Facility No. 1 Commitment and the amount of credit it
actually uses, determined by the weighted average credit outstanding during
the specified period. The fee will be calculated at 0.1875% per year on a
calendar quarter basis. The calculation of credit outstanding shall include
the undrawn amount of letters of credit.
This fee is due on 10 days from the Bank's billing date for each such period.
5.2 EXPENSES. The Borrower agrees to immediately repay the Bank
for expenses that include, but are not limited to, filing, recording and
search fees, appraisal fees, title report fees, and documentation fees.
5.3 REIMBURSEMENT COSTS.
(a) The Borrower and the Guarantor agree to reimburse the
Bank for any expenses it incurs in the preparation of this Agreement and
any agreement or instrument required by this Agreement. Expenses
include, but are not limited to, reasonable attorneys' fees, including
any allocated costs of the Bank's in-house counsel.
(b) The Borrower and the Guarantor agree to reimburse the
Bank for the cost of periodic audits and appraisals of the personal
property collateral securing this Agreement, at such intervals as the
Bank may reasonably require. The audits and appraisals may be performed
by employees of the Bank or by independent appraisers.
6. COLLATERAL
6.1 PERSONAL PROPERTY. The Borrower's obligations to the Bank
under this Agreement will be secured by personal property the Borrower now
owns or will own in the future as listed below. The collateral is further
defined in security agreement(s) executed by the Borrower. In addition, all
personal property collateral securing this Agreement shall also secure all
other present and future obligations of the Borrower to the Bank (excluding
any consumer credit covered by the federal Truth in Lending law, unless the
Borrower has otherwise agreed in writing). All personal property collateral
securing any other present or future obligations of the Borrower to the Bank
shall also secure this Agreement.
(a) Machinery, equipment, and fixtures.
(b) Inventory.
-9-
<PAGE>
(c) Receivables.
(d) Patents, trademarks and other general intangibles.
6.2 LENT COLLATERAL. The Borrower's obligations to the Bank under
this Agreement will be secured by personal property now owned or owned in the
future by the Guarantor as listed below. The collateral is further defined in
security agreement(s) executed by the Guarantor.
(a) Machinery, equipment, and fixtures.
(b) Inventory.
(c) Receivables.
(d) Patents, trademarks and other general intangibles.
7. DISBURSEMENTS, PAYMENTS AND COSTS
7.1 REQUESTS FOR CREDIT. Each request for an extension of credit
will be made in writing in a manner acceptable to the Bank, or by another
means acceptable to the Bank.
7.2 DISBURSEMENTS AND PAYMENTS. Each disbursement by the Bank and
each payment by the Borrower will be:
(a) made at the Bank's branch (or other location) selected
by the Bank from time to time;
(b) made for the account of the Bank's branch selected by
the Bank from time to time;
(c) made in immediately available funds, or such other type
of funds selected by the Bank;
(d) evidenced by records kept by the Bank. In addition, the
Bank may, at its discretion, require the Borrower to sign one or more
promissory notes.
7.3 TELEPHONE AND TELEFAX AUTHORIZATION.
(a) The Bank may honor telephone or telefax instructions for
advances or repayments or for the designation of optional interest rates
and telefax requests for the issuance of letters of credit given by any
one of the individuals authorized to sign loan agreements on behalf of
the Borrower, or any other individual designated by any one of such
authorized signers.
-10-
<PAGE>
(b) Advances will be deposited in and repayments will be
withdrawn from the Borrower's account number 12331-16650, or such other
of the Borrower's accounts with the Bank as designated in writing by the
Borrower.
(c) The Borrower indemnifies and excuses the Bank (including
its officers, employees, and agents) from all liability, loss, and costs
in connection with any act resulting from telephone or telefax
instructions it reasonably believes are made by any individual authorized
by the Borrower to give such instructions. This indemnity and excuse
will survive this Agreement's termination.
7.4 DIRECT DEBIT (PRE-BILLING).
(a) The Borrower agrees that the Bank will debit the
Borrower's deposit account number 12331-16650, or such other of the
Borrower's accounts with the Bank as designated in writing by the
Borrower (the "Designated Account") on the date each payment of principal
and interest and any fees from the Borrower becomes due (the "Due Date").
If the Due Date is not a banking day, the Designated Account will be
debited on the next banking day.
(b) Approximately 10 days prior to each Due Date, the Bank
will mail to the Borrower a statement of the amounts that will be due on
that Due Date (the "Billed Amount"). The calculation will be made on the
assumption that no new extensions of credit or payments will be made
between the date of the billing statement and the Due Date, and that
there will be no changes in the applicable interest rate.
(c) The Bank will debit the Designated Account for the
Billed Amount, regardless of the actual amount due on that date (the
"Accrued Amount"). If the Billed Amount debited to the Designated
Account differs from the Accrued Amount, the discrepancy will be treated
as follows:
(i) If the Billed Amount is less than the Accrued
Amount, the Billed Amount for the following Due Date will be
increased by the amount of the discrepancy. The Borrower will not
be in default by reason of any such discrepancy.
(ii) If the Billed Amount is more than the Accrued
Amount, the Billed Amount for the following Due Date will be
decreased by the amount of the discrepancy.
Regardless of any such discrepancy, interest will continue to accrue
based on the actual amount of principal outstanding without compounding.
The Bank will not pay the Borrower interest on any overpayment.
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(d) The Borrower will maintain sufficient funds in the
Designated Account to cover each debit. If there are insufficient funds
in the Designated Account on the date the Bank enters any debit
authorized by this Agreement, the debit will be reversed.
7.5 BANKING DAYS. Unless otherwise provided in this Agreement, a
banking day is a day other than a Saturday or a Sunday on which the Bank is
open for business in California. For amounts bearing interest at an offshore
rate (if any), a banking day is a day other than a Saturday or a Sunday on
which the Bank is open for business in California and dealing in offshore
dollars. All payments and disbursements which would be due on a day which is
not a banking day will be due on the next banking day. All payments received
on a day which is not a banking day will be applied to the credit on the next
banking day. For amounts bearing interest at a LIBOR Rate, a banking day is a
day other than a Saturday or a Sunday on which the Bank is open for business
in California, New York and London and dealing in offshore dollars.
7.6 TAXES. If any payments to the Bank under this Agreement are
made from outside the United States, the Borrower will not deduct any foreign
taxes from any payments it makes to the Bank. If any such taxes are imposed
on any payments made by the Borrower (including payments under this
paragraph), the Borrower will pay the taxes and will also pay to the Bank, at
the time interest is paid, any additional amount which the Bank specifies as
necessary to preserve the after-tax yield the Bank would have received if such
taxes had not been imposed. The Borrower will confirm that it has paid the
taxes by giving the Bank official tax receipts (or notarized copies) within 30
days after the due date.
7.7 ADDITIONAL COSTS. The Borrower will pay the Bank, on demand,
for the Bank's costs or losses arising from any statute or regulation, or any
request or requirement of a regulatory agency which is applicable to all
national banks or a class of all national banks. The costs and losses will be
allocated to the loan in a manner determined by the Bank, using any reasonable
method. The costs include the following:
(a) any reserve or deposit requirements; and
(b) any capital requirements relating to the Bank's assets
and commitments for credit.
7.8 INTEREST CALCULATION. Except as otherwise stated in this
Agreement, all interest and fees, if any, will be computed on the basis of a
360-day year and the actual number of days elapsed. This results in more
interest or a higher fee than if a 365-day year is used.
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7.9 DEFAULT RATE. Upon the occurrence and during the continuation
of any default under this Agreement, principal amounts outstanding under this
Agreement will at the option of the Bank bear interest at a rate which is two
and one-half (2.50) percentage points higher than the rate of interest
otherwise provided under this Agreement. This will not constitute a waiver of
any default. Installments of principal which are not paid when due under this
Agreement shall continue to bear interest until paid. Any interest, fees or
costs which are not paid when due shall bear interest at the Bank's Reference
Rate plus three (3.0) percentage points. This may result in compounding of
interest.
8. CONDITIONS
The Bank must receive the following items, in form and content
acceptable to the Bank, before it is required to extend any credit to the
Borrower under this Agreement:
8.1 AUTHORIZATIONS. Evidence that the execution, delivery and
performance by the Borrower and the Guarantor of this Agreement and any
instrument or agreement required under this Agreement have been duly
authorized.
8.2 SECURITY AGREEMENTS. Signed original security agreements,
assignments, financing statements and fixture filings (together with
collateral in which the Bank requires a possessory security interest), which
the Bank requires.
8.3 EVIDENCE OF PRIORITY. Evidence that security interests and
liens in favor of the Bank are valid, enforceable, and prior to all others'
rights and interests, except those the Bank consents to in writing.
8.4 INSURANCE. Evidence of insurance coverage, as required in the
"Covenants" section of this Agreement.
8.5 GUARANTIES. Guaranties signed by the Borrower with respect to
indebtedness of IMPCO Technologies Pty Limited ("ITPL"), in the amount of Two
Million Dollars ($2,000,000) and by the Guarantor with respect to all
indebtedness of the Borrower to the Bank, in the amount of Fourteen Million
Dollars ($14,000,000).
8.6 CONDITION TO FACILITY NO. 3. Before the funding of Facility
No. 3, evidence satisfactory to the Bank that the Bank's Sydney, Australia
branch is prepared to fund a loan to ITPL in Australian dollars equivalent to
Two Million U.S. Dollars ($2,000,000).
8.7 OTHER ITEMS. Any other items that the Bank reasonably
requires.
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9. REPRESENTATIONS AND WARRANTIES OF THE BORROWER
When the Borrower signs this Agreement, and until the Bank is repaid
in full, the Borrower makes the following representations and warranties.
Each request for an extension of credit constitutes a renewed representation:
9.1 ORGANIZATION OF BORROWER. The Borrower is a corporation duly
formed and existing under the laws of the state where organized.
9.2 AUTHORIZATION. This Agreement, and any instrument or agreement
required hereunder, are within the Borrower's powers, have been duly
authorized, and do not conflict with any of its organizational papers.
9.3 ENFORCEABLE AGREEMENT. This Agreement is a legal, valid and
binding agreement of the Borrower, enforceable against the Borrower in
accordance with its terms, and any instrument or agreement required hereunder,
when executed and delivered, will be similarly legal, valid, binding and
enforceable.
9.4 GOOD STANDING. In each state in which the Borrower does
business, it is properly licensed, in good standing, and, where required, in
compliance with fictitious name statutes.
9.5 NO CONFLICTS. This Agreement does not conflict with any law,
agreement, or obligation by which the Borrower is bound.
9.6 FINANCIAL INFORMATION. All financial and other information
that has been or will be supplied to the Bank is:
(a) sufficiently complete to give the Bank accurate
knowledge of the Borrower's financial condition.
(b) in compliance with all government regulations that
apply.
9.7 LAWSUITS. There is no lawsuit, tax claim or other dispute
pending or threatened against the Borrower which, if lost, would impair the
Borrower's financial condition or ability to repay the loan, except as have
been disclosed in writing to the Bank.
9.8 COLLATERAL. All collateral required in this Agreement is owned
by the grantor of the security interest free of any title defects or any liens
or interests of others, other than security interests of BA Leasing & Capital
Group in certain equipment.
9.9 PERMITS, FRANCHISES. The Borrower possesses all permits,
memberships, franchises, contracts and licenses required and all trademark
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rights, trade name rights, patent rights and fictitious name rights necessary
to enable it to conduct the business in which it is now engaged.
9.10 OTHER OBLIGATIONS. The Borrower is not in default on any
obligation for borrowed money, any purchase money obligation or any other
material lease, commitment, contract, instrument or obligation.
9.11 INCOME TAX RETURNS. The Borrower has no knowledge of any
pending assessments or adjustments of its income tax for any year.
9.12 NO EVENT OF DEFAULT. There is no event which is, or with
notice or lapse of time or both would be, a default under this Agreement.
9.13 LOCATION OF BORROWER. The Borrower's place of business (or,
if the Borrower has more than one place of business, its chief executive
office) is located at the address listed under the Borrower's signature on
this Agreement.
10. REPRESENTATIONS AND WARRANTIES OF THE GUARANTOR
When the Guarantor signs this Agreement, and until the Bank is
repaid in full, the Guarantor makes the following representations and
warranties. Each request for an extension of credit constitutes a renewed
representation:
10.1 ORGANIZATION OF GUARANTOR. Guarantor is a corporation duly
formed and existing under the laws of the state where organized.
10.2 AUTHORIZATION. This Agreement, and any instrument or
agreement required hereunder, are within the Guarantor's powers, have been
duly authorized, and do not conflict with any of its organizational papers.
10.3 ENFORCEABLE AGREEMENT. This Agreement is a legal, valid and
binding agreement of the Guarantor, enforceable against the Guarantor in
accordance with its terms, and any instrument or agreement required hereunder,
when executed and delivered, will be similarly legal, valid, binding and
enforceable.
10.4 GOOD STANDING. In each state in which the Guarantor does
business, it is properly licensed, in good standing, and, where required, in
compliance with fictitious name statutes.
10.5 NO CONFLICTS. This Agreement does not conflict with any law,
agreement, or obligation by which the Guarantor is bound.
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10.6 FINANCIAL INFORMATION. All financial and other information
that has been or will be supplied to the Bank is:
(a) sufficiently complete to give the Bank accurate
knowledge of the Guarantor's financial condition.
(b) in form and content requires by the Bank.
(b) in compliance with all government regulations that
apply.
10.7 LAWSUITS. There is no lawsuit, tax claim or other dispute
pending or threatened against the Guarantor which, if lost, would impair the
Guarantor's financial condition or ability to repay the loan, except as have
been disclosed in writing to the Bank.
10.8 COLLATERAL. All collateral required in this Agreement is
owned by the grantor of the security interest free of any title defects or any
liens or interests of others, other than security interests of BA Leasing &
Capital Group in certain equipment.
10.9 PERMITS, FRANCHISES. The Guarantor possesses all permits,
memberships, franchises, contracts and licenses required and all trademark
rights, trade name rights, patent rights and fictitious name rights necessary
to enable it to conduct the business in which it is now engaged.
10.10 OTHER OBLIGATIONS. The Guarantor is not in default on any
obligation for borrowed money, any purchase money obligation or any other
material lease, commitment, contract, instrument or obligation.
10.11 INCOME TAX RETURNS. The Guarantor has no knowledge of any
pending assessments or adjustments of its income tax for any year.
10.12 NO EVENT OF DEFAULT. There is no event which is, or with
notice or lapse of time or both would be, a default under this Agreement.
10.13 LOCATION OF GUARANTOR. The Guarantor's place of business
(or, if the Guarantor has more than one place of business, its chief executive
office) is located at the address listed under the Guarantor's signature on
this Agreement.
11. COVENANTS
The Borrower and the Guarantor agree, so long as credit is available
under this Agreement and until the Bank is repaid in full:
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11. USE OF PROCEEDS. To use the proceeds of (i) Facility No. 1
only for the Borrower's working capital and other general corporate purposes;
(ii) Facility No. 2 only for the Borrower's acquisition of a 51% ownership in
Technisch Bureau Media BV and related acquisition costs; and (iii) Facility
No. 3 only for ITPL's acquisition of the assets of Ateco Equipment Pty Limited
("AEPL") and related acquisition costs.
11.2 FINANCIAL INFORMATION. To provide the following financial
information and statements in form and content acceptable to the Bank, and
such additional information as requested by the Bank from time to time:
(a) Within 90 days of the fiscal year end, the Guarantor's
annual financial statements. These financial statements must be audited
by a Certified Public Accountant acceptable to the Bank. The statements
shall be prepared on a consolidated and consolidating basis.
(b) Within 30 days of the period's end, the Borrower's and
the Guarantor's quarterly financial statements. These financial
statements may be Borrower prepared. The statements shall be prepared on
a consolidated and consolidating basis.
(c) Within 30 days after the end of each fiscal quarter,
statements showing an aging of the Borrower's receivables.
(d) Within 30 days after the end of each fiscal quarter,
statements showing an aging of the Borrower's accounts payable.
11.3 QUICK RATIO. With respect to the Guarantor, to maintain on a
consolidated basis a ratio of quick assets to current liabilities of at least
0.65:1.0.
"Quick assets" means cash, short-term cash investments, net trade
receivables and marketable securities not classified as long-term
investments. This covenant will be calculated on a quarterly basis.
11.4 TANGIBLE NET WORTH. With respect to the Guarantor, to
maintain on a consolidated basis tangible net worth equal to Ten Million Seven
Hundred Fifty Thousand Dollars ($10,750,000), plus, as of each April 30,
commencing April 30, 1997, an amount equal to 50% of the Guarantor's net
income after income taxes (without subtracting losses) earned in the preceding
12 month period.
"Tangible net worth" means the gross book value of the Guarantor's assets
(excluding goodwill, patents, trademarks, trade names, organization
expense, treasury stock, unamortized debt discount and expense, deferred
research and development costs, deferred marketing
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expenses, and other like intangibles, less total liabilities, including
but not limited to accrued and deferred income taxes, and any reserves
against assets. This covenant will be calculated on a quarterly basis.
11.5 TOTAL LIABILITIES TO TANGIBLE NET WORTH. With respect to the
Guarantor, to maintain on a consolidated basis a ratio of total liabilities to
tangible net worth not exceeding the ratios indicated for each period
specified below:
PERIOD RATIO
------ -----
From the date of this Agreement
through October 31, 1996 2.00:1.0
From November 1, 1996 through
July 30, 1997 1.80:1.0
From July 31, 1997 through
April 30, 1998 1.50:1.0
From May 1, 1998, and
thereafter 1.30:1.0
"Total liabilities" means the sum of current liabilities plus long term
liabilities. This covenant will be calculated on a quarterly basis.
11.6 CASH FLOW RATIO. With respect to the Guarantor, to maintain
on a consolidated basis a cash flow ratio of at least 1.50:1.0.
"Cash flow ratio" means the ratio of cash flow to the current portion of
long term liabilities. "Cash flow" is defined as net income from
operations and investments, plus interest expense, depreciation,
amortization and other non-cash charges, less dividends and unfinanced
capital expenditures, divided by the sum of interest expense plus current
portion of long term debt. This ratio will be calculated at the end of
each fiscal quarter, using the results of that quarter and each of the 3
immediately preceding quarters. The current portion of long term
liabilities will be measured as of the last day of the preceding fiscal
year.
11.7 OTHER DEBTS. Not to have outstanding or incur any direct or
contingent liabilities (other than those to the Bank), or become liable for
the liabilities of others without the Bank's written consent. This does not
prohibit:
(a) Acquiring goods, supplies, or merchandise on normal
trade credit, and incurring indebtedness for services rendered, similar
in
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nature and amount to such indebtedness incurred by the Borrower in the
past.
(b) Endorsing negotiable instruments received in the usual
course of business.
(c) Obtaining surety bonds in the usual course of business.
(d) Liabilities in existence on the date of this Agreement
disclosed in writing to the Bank.
(e) Additional debts for purchase money transactions
including capital leases, conditional sales or other title retention
contracts with respect to property used or acquired, which do not exceed
a total principal amount of Three Hundred Thousand Dollars ($300,000) for
each annual accounting period.
(f) Lease transactions between the Guarantor and BA Leasing
& Capital Group.
11.8 OTHER LIENS. Not to create, assume, or allow any security
interest or lien (including judicial liens) on property the Borrower now or
later owns, except:
(a) Deeds of trust and security agreements in favor of the
Bank.
(b) Liens for taxes not yet due.
(c) Additional purchase money security interests and similar
liens in property acquired after the date of this Agreement, to secure
transactions permitted under Paragraph 11.7(e).
(d) Security interests in favor of BA Leasing & Capital
Group.
11.9 MAXIMUM ADVANCES OUTSTANDING. To reduce the outstanding
principal balance of Facility No. 1 to an amount not exceeding Three Million
Five Hundred Thousand Dollars ($3,500,000) for a period of at least 30
consecutive days in each line-year. "Line-year" means the period between the
date of this Agreement and August 31, 1997, and each subsequent one-year
period (if any). For purposes of this paragraph, "advances" does not include
undrawn amounts of outstanding letters of credit.
11.10 NOTICES TO BANK. To promptly notify the Bank in writing of:
(a) any lawsuit over One Hundred Thousand Dollars
($100,000) against the Borrower or the Guarantor.
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(b) any substantial dispute between the Borrower or the
Guarantor and any government authority.
(c) any failure to comply with this Agreement.
(d) any material adverse change in the Borrower's or the
Guarantor's business condition (financial or otherwise), operations,
properties or prospects, or ability to repay the credit.
(e) any change in the Borrower's or the Guarantor's name,
legal structure, place of business, or chief executive office if the
Borrower or the Guarantor has more than one place of business.
11.11 BOOKS AND RECORDS. To maintain adequate books and records.
11.12 AUDITS. To allow the Bank and its agents to inspect the
Borrower's or the Guarantor's properties and examine, audit and make copies of
books and records at any reasonable time. If any of the Borrower's
properties, books or records are in the possession of a third party, the
Borrower and the Guarantor each authorize that third party to permit the Bank
or its agents to have access to perform inspections or audits and to respond
to the Bank's requests for information concerning such properties, books and
records.
11.13 COMPLIANCE WITH LAWS. To comply with the laws (including any
fictitious name statute), regulations, and orders of any government body with
authority over the Borrower's or the Guarantor's business.
11.14 PRESERVATION OF RIGHTS. To maintain and preserve all rights,
privileges, and franchises the Borrower or the Guarantor now has.
11.15 MAINTENANCE OF PROPERTIES. To make any repairs, renewals, or
replacements to keep the Borrower's and the Guarantor's properties in good
working condition.
11.16 PERFECTION OF LIENS. To help the Bank perfect and protect
its security interests and liens, and reimburse it for related costs it incurs
to protect its security interests and liens.
11.17 COOPERATION. To take any action reasonably requested by the
Bank to carry out the intent of this Agreement.
11.18 INSURANCE.
(a) INSURANCE COVERING COLLATERAL. To maintain all risk
property damage insurance policies covering the tangible property
comprising the collateral. Each insurance policy must be in an amount
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acceptable to the Bank. The insurance must be issued by an insurance
company acceptable to the Bank and must include a lender's loss payable
endorsement in favor of the Bank in a form acceptable to the Bank.
(b) GENERAL BUSINESS INSURANCE. To maintain insurance
satisfactory to the Bank as to amount, nature and carrier covering
property damage (including loss of use and occupancy) to any of the
Borrower's or the Guarantor's properties, public liability insurance
including coverage for contractual liability, product liability and
workers' compensation, and any other insurance which is usual for the
Borrower's or the Guarantor's business.
(c) EVIDENCE OF INSURANCE. Upon the request of the Bank, to
deliver to the Bank a copy of each insurance policy, or, if permitted by
the Bank, a certificate of insurance listing all insurance in force.
11.19 ADDITIONAL NEGATIVE COVENANTS. Not to, without the Bank's
written consent:
(a) engage in any business activities substantially
different from the Borrower's or the Guarantor's present business.
(b) liquidate or dissolve the Borrower's or the Guarantor's
business.
(c) enter into any consolidation, merger, or other
combination, or become a partner in a partnership, a member of a joint
venture, or a member of a limited liability company, except for ITPL's
acquisition of AEPL's assets.
(d) sell, lease, transfer or dispose of all or a substantial
part of the Borrower's or the Guarantor's business or the Borrower's or
the Guarantor's assets except in an aggregate amount not exceeding Two
Hundred Thousand Dollars ($200,000) in any fiscal year.
(e) acquire or purchase a business or its assets for a
consideration, including assumption of debt, except for ITPL's
acquisition of AEPL's assets.
(f) sell, assign, lease, transfer or otherwise dispose of
any assets for less than fair market value, or enter into any agreement
to do so.
(g) enter into any sale and leaseback agreement covering any
of its fixed or capital assets.
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(h) voluntarily suspend its business for more than 7 days in
any 30 day period.
12. HAZARDOUS WASTE INDEMNIFICATION
The Borrower and the Guarantor will indemnify and hold harmless the
Bank from any loss or liability directly or indirectly arising out of the use,
generation, manufacture, production, storage, release, threatened release,
discharge, disposal or presence of a hazardous substance. This indemnity will
apply whether the hazardous substance is on, under or about the Borrower's or
the Guarantor's property or operations or property leased to the Borrower or
the Guarantor. The indemnity includes but is not limited to attorneys' fees
(including the reasonable estimate of the allocated cost of in-house counsel
and staff). The indemnity extends to the Bank, its parent, subsidiaries and
all of their directors, officers, employees, agents, successors, attorneys and
assigns. For these purposes, the term "hazardous substances" means any
substance which is or becomes designated as "hazardous" or "toxic" under any
federal, state or local law. This indemnity will survive repayment of the
Borrower's and the Guarantor's obligations to the Bank.
13. DEFAULT
If any of the following events occurs, the Bank may do one or more
of the following: declare the Borrower in default, stop making any additional
credit available to the Borrower, and require the Borrower to repay its entire
debt immediately and without prior notice. If an event of default occurs
under the paragraph entitled "Bankruptcy," below, with respect to the
Borrower or the Guarantor, then the entire debt outstanding under this
Agreement will automatically be due immediately.
13.1 FAILURE TO PAY. The Borrower fails to make a payment under
this Agreement within 10 days after the date when due.
13.2 LIEN PRIORITY. The Bank fails to have an enforceable first
lien (except for any prior liens to which the Bank has consented in writing)
on or security interest in any property given as security for this loan.
13.3 FALSE INFORMATION. The Borrower has given the Bank false or
misleading information or representations.
13.4 BANKRUPTCY. The Borrower or the Guarantor files a bankruptcy
petition, a bankruptcy petition is filed against the Borrower or the Guarantor
or the Borrower or the Guarantor makes a general assignment for the benefit of
creditors. The default will be deemed cured if any bankruptcy petition filed
against the Borrower or the Guarantor is dismissed within a period of 60 days
after the filing; provided, however, that the Bank will not
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be obligated to extend any additional credit to the Borrower during that
period.
13.5 RECEIVERS. A receiver or similar official is appointed for
the Borrower's or the Guarantor's business, or the business is terminated.
13.6 LAWSUITS. Any lawsuit or lawsuits are filed on behalf of one
or more trade creditors against the Borrower or the Guarantor in an aggregate
amount of Two Hundred Fifty Thousand Dollars ($250,000) or more in excess of
any insurance coverage.
13.7 JUDGMENTS. Any judgments or arbitration awards are entered
against the Borrower or the Guarantor, or the Borrower or the Guarantor enters
into any settlement agreements with respect to any litigation or arbitration,
in an aggregate amount of Two Hundred Fifty Thousand Dollars ($250,000) or
more in excess of any insurance coverage.
13.8 GOVERNMENT ACTION. Any government authority takes action that
the Bank believes materially adversely affects the Borrower's or the
Guarantor's financial condition or ability to repay.
13.9 MATERIAL ADVERSE CHANGE. A material adverse change occurs in
the Borrower's or the Guarantor's business condition (financial or otherwise),
operations, properties or prospects, or ability to repay the credit.
13.10 CROSS-DEFAULT. Any default occurs under any agreement in
connection with any credit the Borrower or the Guarantor has obtained from
anyone else or which the Borrower or the Guarantor has guaranteed and such
default is not cured or waived within any cure period applicable thereto.
13.11 DEFAULT UNDER RELATED DOCUMENTS. Any guaranty, subordination
agreement, security agreement, or other document required by this Agreement is
violated or no longer in effect.
13.12 OTHER BANK AGREEMENTS. The Borrower or the Guarantor fails
to meet the conditions of, or fails to perform any obligation under any other
agreement the Borrower or the Guarantor has with the Bank or any affiliate of
the Bank, including without limitation BA Leasing & Capital Group.
13.13 OTHER BREACH UNDER AGREEMENT. The Borrower fails to meet the
conditions of, or fails to perform any obligation under, any term of this
Agreement not specifically referred to in this Article. This includes any
failure or anticipated failure by the Borrower to comply with any financial
covenants set forth in this Agreement, whether such failure is evidenced by
financial statements delivered to the Bank or is otherwise known to the
Borrower or the Bank. If, in the Bank's opinion, the breach is capable of
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being remedied, the breach will not be considered an event of default under
this Agreement for a period of thirty (30) days after the date on which the
Bank gives written notice of the breach to the Borrower; provided, however,
that the Bank will not be obligated to extend any additional credit to the
Borrower during that period.
14. ENFORCING THIS AGREEMENT; MISCELLANEOUS
14.1 GAAP. Except as otherwise stated in this Agreement, all
financial information provided to the Bank and all financial covenants will be
made under generally accepted accounting principles, consistently applied.
14.2 CALIFORNIA LAW. This Agreement is governed by California law.
14.3 SUCCESSORS AND ASSIGNS. This Agreement is binding on the
Borrower's, the Guarantor's and the Bank's successors and assignees. The
Borrower and the Guarantor each agree that it may not assign this Agreement
without the Bank's prior consent. The Bank may sell participations in or
assign this loan, and may exchange financial information about the Borrower
and the Guarantor with actual or potential participants or assignees. If a
participation is sold or the loan is assigned, the purchaser will have the
right of set-off against the Borrower.
14.4 ARBITRATION.
(a) This paragraph concerns the resolution of any
controversies or claims between the Borrower and the Bank, including but
not limited to those that arise from:
(i) This Agreement (including any renewals, extensions
or modifications of this Agreement);
(ii) Any document, agreement or procedure related to or
delivered in connection with this Agreement;
(iii) Any violation of this Agreement; or
(iv) Any claims for damages resulting from any business
conducted between the Borrower and the Bank, including claims for
injury to persons, property or business interests (torts).
(b) At the request of the Borrower or the Bank, any such
controversies or claims will be settled by arbitration in accordance with
the United States Arbitration Act. The United States Arbitration Act
will apply even though this Agreement provides that it is governed by
California law.
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(c) Arbitration proceedings will be administered by the
American Arbitration Association and will be subject to its commercial
rules of arbitration.
(d) For purposes of the application of the statute of
limitations, the filing of an arbitration pursuant to this paragraph is
the equivalent of the filing of a lawsuit, and any claim or controversy
which may be arbitrated under this paragraph is subject to any applicable
statute of limitations. The arbitrators will have the authority to
decide whether any such claim or controversy is barred by the statute of
limitations and, if so, to dismiss the arbitration on that basis.
(e) If there is a dispute as to whether an issue is
arbitrable, the arbitrators will have the authority to resolve any such
dispute.
(f) The decision that results from an arbitration proceeding
may be submitted to any authorized court of law to be confirmed and
enforced.
(g) The procedure described above will not apply if the
controversy or claim, at the time of the proposed submission to
arbitration, arises from or relates to an obligation to the Bank secured
by real property located in California. In this case, both the Borrower
and the Bank must consent to submission of the claim or controversy to
arbitration. If both parties do not consent to arbitration, the
controversy or claim will be settled as follows:
(i) The Borrower and the Bank will designate a referee
(or a panel of referees) selected under the auspices of the American
Arbitration Association in the same manner as arbitrators are
selected in Association-sponsored proceedings;
(ii) The designated referee (or the panel of referees)
will be appointed by a court as provided in California Code of Civil
Procedure Section 638 and the following related sections;
(iii) The referee (or the presiding referee of the panel)
will be an active attorney or a retired judge; and
(iv) The award that results from the decision of the
referee (or the panel) will be entered as a judgment in the court
that appointed the referee, in accordance with the provisions of
California Code of Civil Procedure Sections 644 and 645.
(h) This provision does not limit the right of the Borrower
or the Bank to:
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(i) exercise self-help remedies such as setoff;
(ii) foreclose against or sell any real or personal
property collateral; or
(iii) act in a court of law, before, during or after the
arbitration proceeding to obtain:
(A) an interim remedy; and/or
(B) additional or supplementary remedies.
(i) The pursuit of or a successful action for interim,
additional or supplementary remedies, or the filing of a court action,
does not constitute a waiver of the right of the Borrower or the Bank,
including the suing party, to submit the controversy or claim to
arbitration if the other party contests the lawsuit. However, if the
controversy or claim arises from or relates to an obligation to the Bank
which is secured by real property located in California at the time of
the proposed submission to arbitration, this right is limited according
to the provision above requiring the consent of both the Borrower and the
Bank to seek resolution through arbitration.
(j) If the Bank forecloses against any real property
securing this Agreement, the Bank has the option to exercise the power of
sale under the deed of trust or mortgage, or to proceed by judicial
foreclosure.
14.5 SEVERABILITY; WAIVERS. If any part of this Agreement is not
enforceable, the rest of the Agreement may be enforced. The Bank retains all
rights, even if it makes a loan after default. If the Bank waives a default,
it may enforce a later default. Any consent or waiver under this Agreement
must be in writing.
14.6 ADMINISTRATION COSTS. The Borrower and the Guarantor shall
pay the Bank for all reasonable costs incurred by the Bank in connection with
administering this Agreement.
14.7 ATTORNEYS' FEES. The Borrower and the Guarantor shall
reimburse the Bank for any reasonable costs and attorneys' fees incurred by
the Bank in connection with the enforcement or preservation of any rights or
remedies under this Agreement and any other documents executed in connection
with this Agreement, and including any amendment, waiver, "workout" or
restructuring under this Agreement. In the event of a lawsuit or arbitration
proceeding, the prevailing party is entitled to recover costs and reasonable
attorneys' fees incurred in connection with the lawsuit or arbitration
proceeding, as determined by the court or arbitrator. In the event that any
-26-
<PAGE>
case is commenced by or against the Borrower under the Bankruptcy Code (Title
11, United States Code) or any similar or successor statute, the Bank is
entitled to recover costs and reasonable attorneys' fees incurred by the Bank
related to the preservation, protection, or enforcement of any rights of the
Bank in such a case. As used in this paragraph, "attorneys' fees" includes
the allocated costs of the Bank's in-house counsel.
14.8 ONE AGREEMENT. This Agreement and any related security or
other agreements required by this Agreement, collectively:
(a) represent the sum of the understandings and agreements
between the Bank and the Borrower concerning this credit;
(b) replace any prior oral or written agreements between the
Bank and the Borrower concerning this credit; and
(c) are intended by the Bank and the Borrower as the final,
complete and exclusive statement of the terms agreed to by them.
In the event of any conflict between this Agreement and any other agreements
required by this Agreement, this Agreement will prevail.
14.9 INDEMNIFICATION. The Borrower and the Guarantor will
indemnify and hold the Bank harmless from any loss, liability, damages,
judgments, and costs of any kind relating to or arising directly or indirectly
out of (a) this Agreement or any document required hereunder, (b) any credit
extended or committed by the Bank to the Borrower hereunder, and (c) any
litigation or proceeding related to or arising out of this Agreement, any such
document, or any such credit. This indemnity includes but is not limited to
attorneys' fees (including the allocated cost of in-house counsel). This
indemnity extends to the Bank, its parent, subsidiaries and all of their
directors, officers, employees, agents, successors, attorneys, and assigns.
This indemnity will survive repayment of the Borrower's and the Guarantor's
obligations to the Bank. All sums due to the Bank hereunder shall be
obligations of the Borrower and the Guarantor, due and payable immediately
without demand.
14.10 NOTICES. All notices required under this Agreement shall be
personally delivered or sent by first class mail, postage prepaid, to the
addresses on the signature page of this Agreement, or to such other addresses
as the Bank, the Guarantor or the Borrower may specify from time to time in
writing.
14.11 HEADINGS. Article and paragraph headings are for reference
only and shall not affect the interpretation or meaning of any provisions of
this Agreement.
-27-
<PAGE>
14.12 COUNTERPARTS. This Agreement may be executed in as many
counterparts as necessary or convenient, and by the different parties on
separate counterparts each of which, when so executed, shall be deemed an
original but all such counterparts shall constitute but one and the same
agreement.
14.13 PRIOR AGREEMENT SUPERSEDED. This Agreement supersedes the
Business Loan Agreement entered into as of September 28, 1994 among the Bank,
the Borrower, and the Guarantor, and any credit outstanding thereunder shall
be deemed to be outstanding under this Agreement.
This Agreement is executed as of the date stated at the top of the first page.
BANK OF AMERICA NATIONAL TRUST BORROWER
AND SAVINGS ASSOCIATION
IMPCO TECHNOLOGIES, INC.
By: /s/Karim Teymourtache
-------------------------
Karim Teymourtache By: /s/Robert M. Stemmler
Title: Vice President ----------------------
Title: President & CEO
Address where notices to the
Bank are to be sent: By: /s/Thomas M. Costales
----------------------
525 S. Flower Street, Title: CFO & Treasurer
Mezzanine Level
Los Angeles, CA 90071
GUARANTOR
AIRSENSORS, INC.
By: /s/Robert M. Stemmler
----------------------
Title: President & CEO
By: /s/Thomas M. Costales
----------------------
Title: CFO & Treasurer
Address where noticces to the
Borrower and the Guarantor are
to be sent:
16804 Gridley Place
Cerritos, CA 90701-1792
-28-
<PAGE>
BANK OF AMERICA,
SYDNEY BRANCH
1996 TERM LOAN
AGREEMENT
Dated June 27, 1996
IMPCO Technologies, Inc.
16804 Gridley Place
Cerritos, CA 90701
<PAGE>COVER
[ LOGO ]
BANK OF AMERICA
AGREEMENT made at Sydney on June 27, 1996
BETWEEN IMPCO TECHNOLOGIES PTY LIMITED ACN 074 106 880, of 1/3 Taunton
Drive, Cheltenham, Victoria 3192 (the "BORROWER")
AND BANK OF AMERICA NATIONAL TRUST & SAVINGS ASSOCIATION, ARBN
064 874 531, of Level 18, 135 King street, Sydney, New South
Wales, 2000 (the "BANK")
THE PARTIES AGREE:
1. THE FACILITIES
Subject to the terms and conditions of this Agreement the Bank agrees
to make available to the Borrower the following facility (the
"FACILITY") on the annexed "GENERAL TERMS AND CONDITIONS":
a Term Loan Facility as detailed in Appendix A;
and each Facility within the limit referred to in its Appendix so
long as the total use of all the Facilities shall not exceed the
"OVERALL LIMIT" which shall reflect the Facility Limit in accordance
with Clause 1 of Appendix A.
2. APPENDICES
Each Appendix and the General Terms and Conditions shall apply as if
set out in this document so that "THIS AGREEMENT" shall refer to the
totality. If the Bank agrees that the Borrower may use any additional
facility, its terms and conditions shall be treated as contained in a further
appendix set out in this document and that facility shall be one of "THE
FACILITIES".
3. CONDITIONS PRECEDENT AND ACCOUNT OPERATING AUTHORITIES
The Borrower may use each Facility if;
(a) the Bank has received:
(i) the power of attorney used to sign this Agreement on the
Borrower's behalf;
(ii) a certified Authorised Signatory List by the Borrower's
corporate secretary for the Borrower's signatories to Notices of Drawing and
witnesses to the affixing of the Borrower's seal to the power of attorney;
(iii) a Certificate of Incumbency by the Borrower's corporate
secretary concerning the identity of its signatories to Notices of Drawing
and the witnesses to the affixing of the Borrower's seal to the power of
attorney.
<PAGE>1
(iv) multicurrency continuing guarantees from both AirSensors,
Inc. and IMPCO Technologies, Inc. in a form and content satisfactory to the
Bank and the power of attorney/relevant authority used to sign the document;
(b) no Event of Default or Potential Event of Default has occurred
and is continuing.
4. PAYMENT ARRANGEMENTS
The moneys payable by the Bank under the Facilities will only be paid
to the following bank account unless the Bank agrees otherwise:
Bank: Bank of America NT & SA
Branch: 135 King Street, Sydney 2000
BSB No.: 232-001
Account No.: 12918 016
5. PURPOSE OF FACILITIES
Moneys raised through the Facilities will be used by the Borrower for
the acquisition of Australia assets of Ateco Automotive Pty. Ltd.
<PAGE>2
SIGNED as an agreement.
SIGNED for and on behalf of )
IMPCO TECHNOLOGIES PTY. LTD. )
by Todd Schock ) /s/Todd Schock
its Attorney under a Power of Attorney dated ) ------------------------
and who decalares that he has not received any ) (Signature)
notice of the revocation of such Power of )
Attorney in the presence of: )
/s/Karen V. Peter
- --------------------------------
(Signature of Witness)
Karen V. Peter
- ---------------------------------
(Name of Witness in Full)
SIGNED for and on behalf of
BANK OF AMERICA NT & SA, SYDNEY
BRANCH (ARBN 064 874 531)
/s/Adam Cougle
- --------------------------------
(Signature)
Adam Cougle, Vice President
- --------------------------------
(Name and Title)
/s/Geoffrey Robb
- --------------------------------
(Signature)
Geoffrey Robb, Vice President
- --------------------------------
(Name and Title)
<PAGE>3
ANNEXURE
GENERAL TERMS AND CONDITIONS
1. DEFINITIONS
1.1 In this Agreement (including its Appendices) the following expressions
shall have the following meanings unless the context otherwise
requires:
"BANKING DAY" means a day the Lending Office is open for business.
"BILL" means a bill of exchange as defined in the Bills of Exchange
Act 1909 (Commonwealth). References to the drawing, acceptance,
endorsement of, or other dealing with, a bill of exchange or to any
party to a bill of exchange have the meaning under that Act.
"COMPANY" means the Borrower, and any corporation which is from time
to time a Subsidiary of the Borrower or, except in the case of clauses
3 and 4 of this Annexure, a Subsidiary of a Surety.
"CORPORATIONS LAW" means the Corporations Law applying in Australia.
"CUSTOMER INFORMATION" means all information in connection with this
Agreement or other information respecting the Borrower and/or its
accounts and business with the Bank, provided to the Bank by the
Borrower.
"ENCUMBRANCE" means any mortgage, charge (whether fixed or floating)
pledge, lien, title retention, preferential right or trust
arrangement, contractual set-off, flawed deposit, hypothecation or
other security interest or security arrangement of any kind.
"ENVIRONMENT" includes the natural physical surroundings of mankind
(whether affecting individuals or groupings of individuals) and all
man-made changes to them.
"ENVIRONMENTAL AUTHORISATION" includes:
(a) any consent, authorisation, registration, filing, lodgement,
agreement, notarisation, certificate, permission, licence,
approval, authority or exemption from, by or with a Governmental
Agency; or
(b) In relation to anything which will be fully or partly prohibited
or restricted by law if a Governmental Agency intervenes or acts
in any way within a specified period after lodgement, filing,
registration or notification, the expiry of that period without
intervention or action.
"ENVIRONMENTAL LAW" means a provision or a law which provision or law
relates to an aspect of Planning, the Environment or Health.
"EVENT OF DEFAULT" means any one of the events referred to in clause 7
of this Annexure.
"FACE VALUE" of a Bill means the amount in words appearing on the face
of the Bill.
<PAGE>4
"FINANCIAL STATEMENTS" means financial statements prepared in
accordance with Generally Accepted Accounting Principles applied
consistently from period to period.
"GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" means accounting principles
(based upon the historical cost convention) generally accepted in the
State or Territory in which the Company and Surety is incorporated.
"GOVERNMENTAL AGENCY" means any government or any governmental,
semi-governmental or judicial entity or authority, including local
government and statutory organisations. It also includes any
self-regulatory organisation established under statute, and any stock
exchange.
"HEALTH" means the health, safety and welfare of humans individually
and collectively.
"HOLDING COMPANY" has the meaning in the Corporations Law.
"LENDING OFFICE" means in relation to any transaction the Bank's office
referred to in this Agreement or any office designated by the Bank by
notice to the Borrower as its "lending office" for the purposes of
that transaction or a class of transaction which includes it.
"MATERIAL ADVERSE EFFECT" means effect on the financial condition or
trading or prospects of any Company and Surety which materially
adversely affects either the ability of the Borrower or any Surety to
perform this Agreement or any Support or the Bank's interest as
creditor under this Agreement or any Support.
"PLANNING" includes any obligation or requirement to apply for, renew,
hold or comply with any Environmental Authorisations, as the case may
be, relating to the conduct of any activity in or the use of any part
of the Environment or any restrictions on such activity or use.
"POTENTIAL EVENT OF DEFAULT" means an event which, with time or notice
or the performance of this Agreement, could become an Event of
Default.
"PRIME LENDING RATE" means the variable rate per cent per annum set by
the Bank from time to time as the Bank's Prime Lending Rate in respect
of the currency concerned.
"RELATED CORPORATION" has the meaning in the Corporations Law.
"SUBSIDIARY" has the meaning in the Corporations Law.
"SUPPORT" means any Encumbrance, guarantee, letter of responsibility,
letter of credit, cash deposit or other form of security (whether or
not similar to the foregoing) held at any time by the Bank whether
from the Borrower or any other party for the purpose of aiding or
better securing the recovery by the Bank of any moneys at any time
owing by the Borrower under this Agreement.
"SURETY" means any person (whether as guarantor or mortgagor or
otherwise and whether alone or with any other person) who has given
or is intended to give any Support.
"TRADING BANK" means any bank authorised to carry on general banking
business in Australia pursuant to the Banking Act 1959 or under the
Commonwealth Bank Act 1959 or any bank owned by a State of Australia.
<PAGE>5
1.2 A reference in this Agreement to any Act of Parliament or to any
section or provision of any Act shall be read to include a reference
to any statutory modification or reenactment of that Act and any
statutory provision substituted for that Act.
1.3 Words and phrases defined in an Appendix to this Agreement and used in
any other Appendix to this Agreement or in this Annexure, but not
defined in that other Appendix or this Annexure, shall have the
meaning used in the Appendix in which they are defined.
1.4 Words importing the singular include the plural and vice versa; words
importing individuals include corporations and vice versa; references
to any gender include a reference to all genders; references to "the
Bank" include its successors and assigns; headings do not affect
interpretation of this Agreement; and the currency of account and
currency of payment are Australian currency unless otherwise specified
by the Bank.
2. PAYMENTS
2.1 PAYMENTS BY THE BORROWER OR A SURETY
All payments by the Borrower or a Surety to the Bank shall be made at
the Lending Office in immediately available funds during banking hours
on the date on which payment is due unless the Bank otherwise directs.
2.2 NON-BANKING DAY
If no other rule in any Appendix operates to modify a payment date and
the day a payment is due to be made is not a Banking Day the payment
shall be made on the next succeeding Banking Day and interest and fees
shall be adjusted accordingly.
2.3 PAYMENTS TO BE CLEAR OF ALL TAXES
All sums payable by the Borrower to the Bank shall be paid in full
without set-off or counterclaim and free and clear of and without
deduction of or withholding for or on account of any present or future
taxes, duties or other charges (other than taxes on the overall net
income of the Bank which the Bank is obliged to pay to a taxation
authority). If the Borrower is required by law to make any of those
deductions or withholdings, it will simultaneously pay to the Bank an
additional amount so that the Bank receives a net amount equal to the
full amount which the Bank would have received had no deduction or
withholding been required. The Borrower shall provide the Bank with
evidence that those taxes, duties, or other charges have been paid by
forwarding to the Bank official receipts within 30 days of payment.
<PAGE>6
3. REPRESENTATIONS AND WARRANTIES
3.1 The Borrower represents and warrants to the Bank that:
(a) the Financial Statements of each Company and Surety provided to
the Bank at any time were prepared in accordance with Generally
Accepted Accounting Principles;
(b) there has been no change in the affairs of any Company and Surety
since the balance date of the most recent Financial Statement
provided to the Bank which has had a Material Adverse Effect;
(c) no Event of Default or Potential Event of Default has occurred
and is continuing;
(d) nothing has occurred which is having or could have a Material
Adverse Effect and no proceeding before or of any judicial,
administrative, governmental or other authority is taking place,
pending or, to the best of the knowledge and belief of the
Borrower, threatened against any Company and Surety or any of
its assets which is having or could have a Material Adverse
Effect;
(e) no Company and Surety is, or by the execution or performance of
this Agreement would be, in default under, or has done or omitted
to do anything which, with the giving of notice or lapse of time
or both, might constitute a default under, any law, regulation or
other provision enforceable at law, or under any order or award
of any judicial, administrative, governmental or other authority.
3.2 Each representation and warranty shall be treated as repeated on each
occasion the Borrower requests the Bank to provide any accommodation
under this Agreement.
4. POSITIVE UNDERTAKINGS
Until the full and payment of all moneys payable under this Agreement
the Borrower will:
(a) maintain and comply with and procure that every other Company and
Surety similarly maintains and complies with all authorisations
(if any) from Government Agencies necessary to enable it to carry
on its businesses or to perform its obligations under this
Agreement or any Support or necessary for the validity or
enforceability of this Agreement or any Support;
(b) deliver to the Bank in form and detail satisfactory to the Bank:
(i) audited annual Financial Statements for the Borrower and
consolidated Financial Statements for each of the Companies
within 180 days after the end of each of the Company's
financial years;
(ii) a copy of each document which the Borrower and its
Subsidiaries is obliged by or entitled under any law to
forward to any of its shareholders at the same time as the
document is forwarded to the shareholder;
(iii) a copy of each document the Borrower and its Subsidiaries
is obliged to or entitled to lodge at the Australian
Securities Commission;
<PAGE>7
(iv) as and when requested by the Bank, such information
regarding the business operations and financial condition
of any Company and Surety or its Related Corporations as
the Bank may reasonably require;
(v) all licences and approvals required from the Environmental
Protection Agency for the operation of the Borrower's
business.
(c) notify the Bank:
(i) of any Event of Default, within 24 hours of the Borrower
becoming aware of its occurrence;
(ii) of the cessation of the employment or the change in the
authority of any of its authorised signatories;
(iii) of any person who becomes entitled (within the meaning of
section 609 of the Corporations Law) to 20% or more of the
capital of the Borrower or any Surety promptly upon the
Borrower becoming aware of the entitlement; and
(iv) of any event which is having or could have a Material
Adverse Effect.
5. NEGATIVE UNDERTAKINGS
Except with the prior written consent of the Bank, which consent shall
not be unreasonably withheld, no Company and Surety will:
(a) dispose of all or a substantial part of its business or assets,
whether by way of merger, amalgamation, reorganisation, sale or
otherwise and whether in a single transaction or a related series
of transactions;
(b) part with possession of or dispose of any property or interest in
its property other than under an arm's length transaction or for
full value;
(c) create any Encumbrance, (excepting only any such encumbrance
arising by way of operation of law) or cause or permit the amount
of the actual or contingent liabilities secured by any
Encumbrance created by it before the date of this Agreement to be
increased;
(d) become liable for any person's failure to perform its obligations
(other than its employees or independent contractors in
connection with fuel and gas conversions), or where any such
liability is in existence as at the date of this Agreement,
increase the amount of that liability.
6. RELIQUEFYING BILLS
6.1 When requested by the Bank to do so, the Borrower will deliver Bills
to the Bank having an aggregate Face Value in respect of each
outstanding Advance or Loan not exceeding the amount of the Advance or
Loan and maturing no later than that Advance's or Loan's Maturity
Date.
<PAGE>8
6.2 Each Bill will be drawn by the Borrower on the Bank, be payable to the
Borrower or order, be payable at such place and, subject to clause
6.1, on the date and in the amount the Bank may require and be
endorsed in blank.
6.3 The Borrower's discharging by payment any Bill delivered to the Bank
under this clause will satisfy the Borrower's liability to the Bank in
respect of the relevant Advance or Loan in an amount equal to the Face
Value of that Bill.
If for any reason the Borrower is required to repay an Advance or Loan
before the Maturity Date of that Advance or Loan the Borrower shall do
so even if there are then outstanding Bills delivered to the Bank
under this clause 6.
The Bank indemnifies the Borrower against all liability in respect of
every Bill delivered to the Bank under this clause 6 and will pay the
costs of preparation of and all stamp duty in respect of those Bills.
7. EVENTS OF DEFAULT
7.1 The occurrence of any of the following events shall be an Event of
Default:-
(a) the Borrower fails to pay at or before the due time on the due
date for payment any interest, fee or other moneys payable under
this Agreement or fails to observe any of its other obligations
under this Agreement, and if that default is non-monetary in
nature and is capable of remedy, it is not remedied within 7 days
of its occurrence;
(b) any representation or warranty made by the Borrower or any Surety
to the Bank proves to have been false or misleading in any
material respect when made or when deemed to have been made;
(c) any Company and Surety stops or threatens to stop payment to the
Bank or to some or all of its creditors or makes an assignment
for the benefit of, or enters into an arrangement or composition
with, its creditors or is unable to pay its debts when they
become due;
(d) a liquidator or provisional liquidator or an administrator is
appointed in respect of a Company and Surety,
(e) an order is made or a resolution is passed for the winding up of
any Company and Surety (except for the purpose of reconstruction
or amalgamation with the prior written consent of the Bank), or
for determining that any portion of its uncalled share capital
shall not be capable of being called up (except for the purposes
of the Company and Surety being wound up) or for the reduction of
its issued capital;
(f) an administrator, a receiver or receiver and manager, or any
encumbrances shall take possession of any Company and Surety's
assets and/or undertakings, any action is taken in respect of a
Company and Surety under any law for the relief of debtors or an
investigation is commenced under the Corporations Law or any
equivalent legislation into any part of the business or affairs
of any Company and Surety;
(g) any default occurs under any financial accommodation to which any
Company and Surety may be a party as borrower or guarantor, if
the default is a failure to pay any moneys on their due date for
<PAGE>9
payment or any event occurs which gives, or with the giving of
notice or the lapse of time or both would give, to the holder of
the obligation concerned the right to terminate the financial
accommodation or to accelerate the repayment of indebtedness
under the financial accommodation;
(h) any event occurs which, in the opinion of the Bank, acting in
good faith, is likely to have a Material Adverse Effect;
(i) any default occurs under any Support, any Support becomes
enforceable, any Support in whole or part is or becomes void,
voidable, ineffective or unenforceable or any Surety gives or
purports to give notice of discontinuance of further liability
under any Support; .
(j) any execution is issued or levied against any Company and Surety
in an amount exceeding $100,000 and is not satisfied or stayed
within 14 days;
(k) any person referred to in clause 4(c)(iii) is, or becomes at any
time, unacceptable to the Bank;
(1) the Borrower its Subsidiaries or any Surety breaches an
Environmental Law or Environmental Authorisation and, in the
opinion of the Bank, that breach may have a Material Adverse
Effect;
(m) a claim or demand is made against the Borrower its Subsidiaries
or any Surety or its assets by a Governmental Agency or any other
person requiring either:
(i) the cessation or modification of any activities being, or
proposed to be, conducted by the Borrower its Subsidiaries
or any Surety; or
(ii) the carrying out of, or demand for payment for, any claim
up, rehabilitation or remediation of any of its assets or
any other part of the Environment;
(n) Borrower or any Surety fails:
(i) to maintain its useful land and buildings or its useful
plant and equipment in good repair, ordinary wear and tear
excepted;
(ii) to maintain insurance with an external insurer covering the
replacement cost of all its useful property and
consequential losses arising out of business interruption;
(iii) to comply with (and to cause its subsidiaries to comply
with) applicable laws except where compliance is contested
in good faith;
(o) the Borrower or any Surety changes its general type of business; or
(p) any guarantee is given to secure or support any obligation of the
Borrower in respect of any financial accommodation unless the
guarantee is also granted or issued rateably to the Bank to
secure or support all amounts from time to time outstanding under
or in connection with this Agreement.
(q) diminution of ownership by Impco Technologies, Inc below 100% of
the Borrower's equity.
<PAGE>10
7.2 The occurrence of an Event of Default shall:
(a) terminate any obligation on the part of the Bank to continue the
Facilities and shall make at the option of the Bank all sums
payable under this Agreement immediately due and payable;
(b) oblige the Borrower to pay immediately to the Bank all sums
expressed to be payable by the Borrower under this Agreement
together with an amount equal to the sum of
(i) the Face Value of all outstanding Bills accepted or
endorsed by the Bank under any of the Facilities (excluding
any reliquefication Bills); and
(ii) all other contingent liabilities assumed by the Bank under
any of the Facilities.
8. DEFAULT INTEREST AND INDEMNITY
Interest shall accrue on unpaid amounts which have become due for
payment from the date of default until payment calculated (after as
well as before judgment) at the rate of 2% per annum above the rate
from time to time fixed by the Bank as its Prime Lending Rate. The
Bank may at intervals of not less than 90 days capitalise interest
under this clause, and treat that interest as principal carrying
interest under this clause. All such interest whether so capitalised
or not shall be payable by the Borrower on demand. In addition the
Borrower will reimburse to the Bank all amounts which the Bank may
specify to be necessary to compensate it for all costs, expenses,
liabilities and losses sustained or incurred by it howsoever as a
result of the Bank receiving payment of moneys under this Agreement
earlier than would otherwise be the case because of the occurrence of
an Event of Default.
9. UNLAWFUL FOR THE BANK TO FUND OR MAINTAIN ITS OBLIGATIONS
If, by reason of the application, interpretation or change in any
present or future law, regulation, regulatory requirement, judicial
decision, or by reason of any direction or request from the Reserve
Bank of Australia it becomes unlawful for the Bank to maintain or give
effect to any of its obligations, rights, powers or remedies under
this Agreement or the Support, then the Bank may cancel any or all the
Facilities by notice to the Borrower. No further use may then be made
of those Facilities and the Borrower shall immediately prepay to the
Bank all moneys owing under this Agreement in respect of those
Facilities including any accrued interest and fees.
10. RESERVE REQUIREMENTS
10.1 The Borrower shall pay to the Bank on demand the cost of maintaining
any reserves or special deposits and any other costs incurred by the
Bank (other than taxes on the Bank's overall net income) in complying
with any law, regulation or condition with respect to any, all or part
of the Facilities or relating in any way to funding or renewing any,
all or any part of the Facilities where those reserves, special
deposits or other costs arise out of any act of any governmental
authority after the date of this Agreement. The protection of this
paragraph shall apply to any act by the Reserve Bank of Australia, any
government, governmental agency or department having authority over
the Bank but shall not extend to any cost incurred by the Bank in
consequence of any default on its behalf. The protection of this
paragraph shall apply to compliance by the Bank with restraints,
<PAGE>11
guidelines or policies not having the force of law but with which it
is in practice necessary for the Bank and institutions similarly
situated to comply, and shall apply irrespective of any possible
contention of invalidity or nonapplicability.
10.2 If the Bank makes a demand under clause 1O.1 or gives any notice under
clause 10.3, the Borrower may prepay all amounts advanced by the Bank
under the Facilities or any portion affected by any matter referred to
in this clause 10 (so long as it pays all interest accrued to the date
of the prepayment on the amount prepaid) upon giving the Bank a
minimum of 14 days' written notice (which shall be irrevocable).
10.3 The Bank shall give to the Borrower as much advance notice as may be
reasonably practicable of circumstances giving rise to a claim for
payment under clause 10.1 provided that the Bank shall not be liable
for any failure to give such notice.
10.4 The determination by the Bank of the relevant costs incurred under
this clause 10 shall, in the absence of manifest error, be conclusive
and binding on the Borrower.
11. INDEMNITY IN RESPECT OF FACSIMILE INSTRUCTIONS
11.1 The Bank is entitled, but not obliged:
(a) to rely upon any facsimile transmission received by the Bank
purporting to be given on the Borrower's behalf without enquiry
on the Bank's part as to the source of the transmission or the
identity of the person(s) making or purporting to make the
communication and regardless of the circumstances prevailing at
the time of such transmission or communication so long as any
signature appearing in the transmission appears on reasonable
examination to correspond with the specimen signature of a person
it reasonably believes to be authorised to make that
transmission;
(b) to treat these transmissions as fully authorised by and binding
upon the Borrower and the Bank,
(c) to take such steps in connection with or in reliance upon these
communications as it may in good faith consider appropriate,
whether these communications include instructions to pay money or
otherwise to debit or credit any account, or relates to the
disposition of any money, securities or documents, or purports to
bind the Borrower to any agreement or other arrangement with the
Bank or with any other person(s) or to commit the Borrower to any
other type or transaction or arrangement whatsoever, regardless
of the nature of the transaction or arrangement or the amount of
money involved and notwithstanding any error or misunderstanding
or lack of clarity in the terms of such communication or
transmission so long as if the instructions are to make a payment
or disposition to a third party (not related to the Borrower) the
Bank shall not act on those instructions within 1 hour of it
transmitting to the Borrower's facsimile number a copy of the
communication with notice that the Bank proposes to act on it.
11.2 The Borrower undertakes to indemnify the Bank and to keep the Bank
indemnified against all losses claims actions proceeding demands
damages costs and expenses incurred or sustained by the Bank of
whatever nature and howsoever arising, as a result of the Bank acting
consistently with clause 11.1.
<PAGE>12
12. CONFIDENTIALITY
Except as otherwise provided in this clause, the Bank shall maintain
the confidentiality of the Customer Information. The Borrower
acknowledges that the Bank may disclose from time to time Customer
Information to other offices and branches of the Bank and to the
Bank's Subsidiaries and affiliates. The Borrower also consents to the
disclosure of Customer Information by the Bank, or any of its
Subsidiaries or affiliates:
(i) at the request of any governmental, regulatory or other similar
agency or authority having jurisdiction over the Bank or any of
its Subsidiaries or affiliates;
(ii) pursuant to any subpoena or other court process, or to the
extent required in connection with any litigation between the
Bank, Subsidiary or affiliate and the Borrower, provided that
the disclosure is subject to an appropriate protective order if
such protective order is available;
(iii) where the Customer Information is in the public domain;
(iv) to its legal advisers and its consultants so long as it advises
them of the confidential nature of the information or documents
or that nature is clear from the circumstances of the
disclosure;
(v) to a proposed assignee or transferee or sub-participant with the
Borrower's prior written consent which consent shall not
unreasonably be withheld or delayed and will be deemed to have
been given if not refused within 5 Banking Days of the Bank's
request; and
(vi) when otherwise required to do so in accordance with applicable
law or as permitted under another arrangement between the Bank
(or any of its Subsidiaries or affiliates) and the Borrower (or
any Surety which is the Borrower's Holding Company).
13. RECEIPTS IN INCORRECT CURRENCY
All payments to the Bank shall be made in the currency in which the
Borrower's obligations to pay that amount is denominated. If the Bank
receives any amount on account of any of the Borrower's obligations to
the Bank in a currency other than the currency in which that
obligation is denominated (whether or not the currency of receipt is
paid pursuant to a judgment) the Borrower shall be discharged from its
obligations only to the extent of the amount of the currency in which
the obligation was denominated (as the Bank is able to purchase in
accordance with its usual practice, using the amount of currency
received) after deduction of any transaction costs in making the
purchase.
<PAGE>13
14. ENVIRONMENTAL COMPLIANCE
14.1 Without limiting any other representations or warranties the Borrower
represents and warrants that it is in compliance with all applicable
Environmental Law and Environmental Authorisations. No act or
omission has occurred and there is no circumstance relating to its
assets or its business which has given rise or may give rise to:
(a) a substantial claim against it;
(b) a requirement of substantial expenditure by it; or
(c) a requirement that it ceases or substantially alters an activity,
under Environmental Law.
Without limitation none of its assets is contaminated, all assets are
within applicable environmental standards and all emissions and
discharges are within standards or limits imposed by or under
Environmental Authorisations.
14.2 Without limiting any other undertakings the Borrower shall:
(a) comply and procure that every other Related Corporation complies
with Environmental Law and Environmental Authorisations.
(b) maintain and procure that every other Related Corporation
maintains procedures which in the opinion of the Bank are
adequate to monitor:
(i) its compliance with Environmental Law and Environmental
Authorisations; and
(ii) circumstances which may give rise to a claim, to a
requirement of substantial expenditure by it, or to a
requirement that it cease or materially change any of its
activities.
15. MISCELLANEOUS
15.1 The Bank may apply amounts received to the Borrower's account in
satisfaction of principal or interest under any Facility.
15.2 The Bank shall only be bound by waivers or guarantees given or
confirmed by the Bank in writing.
15.3 The Bank may at any time dispose of any of the Bank's rights under
this Agreement. The Borrower shall, at the Bank's reasonable request,
execute and deliver to the Bank any instrument to give effect to the
disposition.
15.4 To the fullest extent permitted by law the Borrower waives any rights
it may have or come to have to prejudicially affect the exercise by
the Bank of all or any of its rights, powers and remedies under this
Agreement.
<PAGE>14
15.5 The Bank may remedy any of the Borrower's defaults under this
Agreement at the Borrower's cost. Unpaid costs shall carry interest
at the rate referred to in clause 8. The Bank may draw down any of the
Facilities on the Borrower's behalf by way of payment of those costs
and may appropriate the drawdown to its own account.
15.6 The exercise by the Borrower of any rights to cancel any Facility
Limit shall not in any way relieve the Borrower of any unsatisfied
liabilities under this Agreement.
15.7 If any provision of this Agreement is or becomes, illegal, invalid or
unenforceable in any respect under any applicable law no other
provision of this Agreement shall be affected nor shall the legality,
validity or enforceability of the provision under any other law be
affected.
15.8 The Bank's certificate as to the rate of interest applicable at any
time or the date upon which any moneys will become due and payable or
the amount of costs expenses or losses incurred by the Bank will be
conclusive in the absence of manifest error on the face of the
certificate.
15.9 The Borrower irrevocably authorises the Bank to debit to any of the
Borrower's accounts with the Bank all amounts due under any financial
accommodation extended by the Bank to it. The Bank may apply the
proceeds of any Advance or Loan in reduction of any amount then
payable by the Borrower to the Bank.
15.10 Any notice or other communication by one party to the other may be
given by telex cable telegram prepaid post or facsimile addressed to
the recipient party at the last physical or electronic address advised
by the recipient party for service of notices or to the recipient
party's registered office for the time being. Notices given by
prepaid post shall be deemed to have been duly given on the third day
following the day it was posted and all other notices shall be deemed
to have been duly given on the day of delivery or transmission.
15.11 The Borrower will pay to the Bank on demand all out-of-pocket expenses
incurred by it (including stamp duty, financial institutions duty and
bank accounts debit tax, (whether payable by the Bank directly or by
way of reimbursement to another party) and fines or penalties for late
payment and legal costs (including the Bank's reasonable allocation of
the cost of using its internal legal counsel)) in relation to the
negotiation and documentation of any Facility and in relation to all
payments, receipts, transactions, documents, support recoveries,
attempted enforcements and other matters connected with any Facility
and the Bank may in anticipation of any such out-of-pocket expenses
make deductions from any moneys to be provided by it under any
Facility.
15.12 All sums which accrue due to the Bank over time shall accrue from day
to day and be calculated on the basis of actual days elapsed and a
365-day year.
15.13 No failure or delay on the Bank's part in exercising any right power
privilege or remedy and no course of dealing between the Borrower and
the Bank shall operate as a waiver of any breach by the Borrower or by
any Surety and no waiver of a breach shall be construed as a waiver of
any similar future breach nor shall any single or partial exercise of
any such right power privilege or remedy preclude any further or other
exercise of that or of any other right power or remedy. All the
Bank's remedies under any agreement or by law or otherwise shall be
cumulative and not alternative. No single or partial exercise of any
right power privilege or remedy shall preclude any further exercise of
any right power privilege or remedy. The Bank's rights powers
privileges and remedies are cumulative and not exclusive of any rights
provided by law.
<PAGE>15
15.14 The Borrower may not assign any of its rights or obligations under
this Agreement.
15.15 Every agreement between the Bank and the Borrower shall be in all
respects governed by and construed in accordance with the laws
applying in New South Wales. The Borrower will submit to the
non-exclusive jurisdiction of the Courts of that place.
15.16 If the Borrower has requested the Bank to provide funds for a specific
purpose, none of those funds will be applied by the Borrower for
another purpose.
15.17 The Bank shall not be obliged to discharge any security for the
Borrower's obligations until the later of the date that it has fully
and finally received all moneys payable by the Borrower under this
Agreement and the date that the Bank has no potential liability under
any instrument issued by the Bank pursuant to any of the Facilities.
15.18 In any agreement between the Bank and the Borrower unless the contrary
intention appears the phrase "Authorised Officer" means in relation to
any matter any person or persons mentioned below and any other person
or persons who is or are authorised to act on behalf of the Borrower
in relation to that matter according to a document purporting to be
signed by a Director or Secretary of the Borrower and expressed to be
a true copy or purporting to set out a true extract from a resolution
of the Directors of the Borrower and lodged with a Lending Office of
the Bank.
Pearl Kamdar General Manager
Todd A. Schock Head of Financial Planning
15.19 Any signature on any document which purports to have been made on
behalf of the Borrower by any "Authorised Officer" shall be
conclusively deemed for all purposes in favour of the Bank to be a
valid execution binding on the Borrower.
<PAGE>16
APPENDIX A
TERM LOAN FACILITY (in this Appendix referred to as "this Facility")
1. LIMIT
The limit under this Facility ("this Facility's Limit") is:
Two million, five hundred thousand Australian dollars only until
September 30, 1996 (A$2,500,000); then Two million, three hundred and
seventy five thousand Australian dollars only until December 31, 1996
(A$2,375,000); then
Two million, two hundred and fifty thousand Australian dollars only
until March 29, 1997 (A$2,250,000); then
Two million, one hundred and twenty five thousand Australian dollars
only until June 28, 1997 (A$2,125,000); then
Two million Australian dollars only until September 30, 1997
(A$2,000,000); then
One million, eight hundred and seventy five thousand Australian
dollars only until December 31, 1997 (A$1,875,000); then
One million, seven hundred and fifty thousand Australian dollars only
until March 31, 1998 (A$1,750,000); then
One million, six hundred and twenty five thousand Australian dollars
only until June 30, 1998 (A$1,625,000); then
One million, five hundred thousand Australian dollars only until
September 30, 1998 (A$1,500,000); then, One million, three hundred and
seventy five thousand Australian dollars only until December 31, 1998
(A$1,375,000); then
One million, two hundred and fifty thousand Australian dollars only
until March 31, 1999 (A$1,250,000); then
One million, one hundred and twenty five thousand Australian dollars
only until June 30, 1999 (A$1,125,000) then NIL.
2. UTILISATION
2.1 The Borrower may make a Drawing on any Banking Day during the
Availability Period (but not thereafter) if
(a) the Drawing does not exceed the undrawn amount of this Facility's
Limit as at the date of the Notice of Drawing;
(b) the Bank has received a Notice of Drawing in the form of Appendix
AA for the Drawing before 11.00 am (local time in the place of
the Bank's Lending Office) on the second Banking Day before the
Drawing is to be made;
(c) the Drawing is an integral multiple of A$2,500,000 and a minimum
of A$2,500,000; and
(d) the Notice of Drawing specifies an Interest Period.
2.2 Notices of Drawing shall be irrevocable.
<PAGE>17
2.3 Any part of this Facility undrawn at the end of the Availability
Period shall be cancelled.
2.4 The Bank's confirmations of any Interest Period or the rate of
interest applicable to an Interest Period shall, save for any manifest
error, be conclusive as to those matters.
3. REPAYMENT
The Borrower shall pay to the Bank on each of the dates set out below
("Repayment Dates") the following amounts on account of repayment of
the Loan:
Repayment Date Amount to be Paid
September 30, 1996 A$125,000
December 31, 1996 125,000
March 29, 1997 125,000
June 28, 1997 125,000
September 30, 1997 125,000
December 31, 1997 125,000
March 31, 1998 125,000
June 30, 1998 125,000
September 30, 1998 125,000
December 31, 1998 125,000
March 31, 1999 125,000
and shall on June 30, 1999 pay to the Bank the whole of the balance of
the Loan being A$1,125,000.
4. PREPAYMENT AND CANCELLATION
4.1 The Borrower may only prepay the whole or part of the Loan if.
(i) the Borrower gives to the Bank a minimum of 30 days' irrevocable
prior notice (or such less notice as the Bank may agree) of a
Banking Day it intends to prepay a specified amount;
(ii) the amount to be prepaid is a minimum of A$250,000 and is an
integral multiple of A$125,000;
(iii) the prepayment is effected on the last day of the Interest
Period applicable to the part of the Loan to be prepaid; or
the Borrower pays to the Bank on demand interest on a daily
basis on the amount prepaid for the balance of the current
Interest Period at an annual rate equal to the excess of the
annual rate applying to the amount prepaid under this Facility
over the annual rate the Bank would advance the amount prepaid
under this Facility on the prepayment date for the balance of
that Interest Period.
4.2 No amount prepaid may be redrawn.
<PAGE>18
4.3 Any partial prepayment shall be applied towards reducing the repayment
instalments referred to in clause 3 of this Facility in inverse order
of maturity.
5. INTEREST
5.1 On every Interest Payment Date the Borrower shall pay interest for
each Interest Period in arrears on each part of the Loan as is
outstanding from time to time at a rate per annum of 2.10% above Bank
Bill Buying Rate. Interest shall accrue on a daily basis from and
including the first day to but excluding the last day of each Interest
Period.
6. DEFINITIONS
In this Appendix the following expressions shall have the following
meanings unless the context otherwise requires:
6.1 "AVAILABILITY PERIOD" means the period commencing on and including the
date of this Agreement and ending on and including July 31, 1996.
6.2 "DRAWING" means a drawing of all or part of the Loan made under clause
2 of this Appendix.
6.3 "INTEREST PAYMENT DATE" means calendar monthly in arrears calculated
from the date of drawing on a 365 day basis, and additionally the last
Repayment Date.
6.4 "LOAN" means the aggregate principal amount advanced and for the time
being outstanding under this Facility.
6.5 "REPAYMENT DATE" means each of the dates referred to in clause 3 of
this Appendix.
6.6 "BANK BILL BUYING RATE" in relation to a part of the Loan for a given
Interest Period means that rate determined by the Bank at or before
the commencement of that period, in accordance with its usual practice
and having regard to the prevailing market for Bills, as fairly
representative of the percentage per annum yield rates to maturity at
which the Bank would at the commencement of that period purchase Bills
accepted or endorsed by Trading Banks with an aggregate face value
similar to that part of the Loan and of a tenor most closely
corresponding to that Interest Period.
6.7 "INTEREST PERIOD" means a period of 30, 60, or 90 days shortened as
necessary to mature on a Banking Day (or any other period as the Bank
may agree) for the whole or a part of the Loan as selected by the
Borrower in a Notice of Drawing given to the Bank before 11.00 am
local time in the place of the Bank's Lending Office on the Banking
Day preceding the date on which the relevant Interest Period
commences, provided that:
(a) different Interest Periods may be selected for different parts of
the Loan so long as each part is an integral multiple of
A$2,500,000 and a minimum of A$2,500,000, or as reduced through
amortisation per repayment schedule (Clause 3) and any
prepayments (Clause 4);
(b) each first Interest Period shall continence on the date on which
the Drawing is made;
(c) the first day of each Interest Period (except the first Interest
Period for any part of the Loan) shall be the last day of the
immediately preceding Interest Period;
<PAGE>19
(d) those parts of the Loan which equal in aggregate the repayment
instalment due on each Repayment Date shall be deemed to have a
final Interest Period expiring on that Repayment Date;
(e) if the Borrower fails to select the duration of any Interest
Period or if its selection does not conform with the rules in
this definition, the Borrower shall be deemed to have selected a
period of 30 days for the relevant Interest Period, modified to
give effect to those rules.
<PAGE>20
CONSENT OF ERNST & YOUNG, INDEPENDENT AUDITORS
We consent to the incorporation by reference in (a) Amendment No. 3 to the
Registration Statement (Form S-3, No. 33-56610) pertaining to shares of
common stock of AirSensors, Inc. and in the related Prospectus, (b) Amendment
No. 1 to the Registration Statement (Form S-8, No. 33-38649) pertaining to
the 1989 Incentive Stock Option Plan of AirSensors, Inc. and in the related
Prospectus, (c) the Registration Statement (Form S-8, No. 33-72008)
pertaining to the 1991 Executive Stock Option Plan of AirSensors, Inc. and in
the related Prospectus, (d) the Registration Statement (Form S-3, No. 33-
37035) pertaining to the 1996 Incentive Stock Option Plan of AirSensors,
Inc., and (e) the Registration Statement (Form S-8, No. 33-62889) pertaining
to the IMPCO Investment and Tax Savings Plan, of our report dated June
21,1996, with respect to the financial statements of the Gas Division of
Ateco Automotive Pty. Ltd. included in this Form 8-K/A.
/s/ Ernst & Young
Melbourne, Australia
September 12, 1996
