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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
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 17, 1995.
GENERAL PARAMETRICS CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware (0-14836) (94-2835068)
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
1250 Ninth Street, Berkeley, California 94710
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (510) 524-3950
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(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS
On July 17, 1995, Herbert B. Baskin (the "Seller"), currently the President,
Chief Executive Officer and Chairman of the Board of Directors of General
Parametrics ("the Registrant"), sold an aggregate of 1,400,000 shares of Common
Stock of the Registrant (the "Shares") to Gerard M. Jacobs, T. Benjamin
Jennings, Donald F. Moorehead and Blue Bird Partners ("the Purchasers") at a
purchase price of $2.00 per share, for a total of purchase price of $2,800,000
pursuant to a Common Stock Purchase Agreement between the Seller and the
Purchasers dated July 7, 1995 (the "Agreement"). The purchase price paid by each
Purchaser was paid in cash out of personal funds or working capital. Following
the purchase of the Shares, the Purchasers held an aggregate of approximately
27.4% of the outstanding Common Stock of the Registrant. The Agreement provides
that Messrs. Jennings and Jacobs will indemnify the Seller for any losses or
damages that arise out of (1) any action by the Purchasers any affiliate of the
Purchasers, or any designee of the Purchasers on the Registrant's Board of
Directors that occurs after July 17, 1995 or (2) any claim by any third party
challenging the lawfulness of the Seller's sale of the Shares if any action
against the Seller by the Purchasers, any affiliate of the Purchasers or any
designee of the Purchasers on the Registrant's Board of Directors is a material
component of such claim. Pursuant to such indemnification provisions, Messrs.
Jennings and Jacobs will reimburse the Seller for any legal or other expenses
reasonably incurred by Seller in connection with investigating or defending
against any such loss or damage. Such indemnification obligations of Messrs.
Jennings and Jacobs are joint and several. The description of the Agreement is
qualified by reference to the copy of the Agreement attached as an exhibit to
this Form 8-K.
The Purchasers have delivered a written request to the Registrant to hold a
Special Meeting of Stockholders on August 30, 1995 in order to elect a slate of
directors chosen by the Purchasers. The Registrant plans to hold a Special
Meeting of Stockholders on such date and for such purpose.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
GENERAL PARAMETRICS CORPORATION
/s/ William A. Spazante
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William A. Spazante,
Vice President, Finance and
Chief Financial Officer
Date: July 25, 1995
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COMMON STOCK PURCHASE AGREEMENT
This Common Stock Purchase Agreement is made as of July 7, 1995, by and
among Herbert B. Baskin ("Baskin" or "Seller") and T. Benjamin Jennings and
Gerard M. Jacobs (the "Purchasers").
The parties agree as follows:
1. Sale of Common Shares.
1 Sale of Shares. Subject to the terms and conditions of this Agreement,
Baskin will sell to the Purchasers and Purchasers will purchase from Baskin an
aggregate of 1,400,000 shares of the Common Stock of GPC (the "Common Shares")
at a price of $2.00 per share, for a total purchase price of $2,800,000.
2 Allocation of Shares; Additional Purchasers. The allocation of the
Common Shares to be sold by Baskin shall be as set forth in the Schedule of
Purchasers attached as Exhibit A hereto. At any time prior to Closing Date (as
herein defined), the Purchasers may elect to add either Donald F. Moorehead or
Louis D. Paolino or both as additional purchasers of the Common Shares (the
"Additional Purchasers") by delivering to the Company a new Schedule of
Purchasers prior to the Closing Date. In such a case the Purchasers shall
reallocate the Common Shares to be sold by Baskin among the Purchasers and the
Additional Purchasers in such a manner as the Purchasers determine; provided,
however, that any Additional Purchasers shall execute the signature page to this
Agreement and provided further that the total number of Common Shares to be
purchased by the Purchasers and the Additional Purchasers shall not exceed
1,400,000.
3 Earnest Deposit; Escrow. Concurrently with the execution of this
Agreement, the Purchasers will deliver to Wilson, Sonsini, Goodrich & Rosati,
P.C. ("WSGR"), as counsel for the Seller, the sum of $250,000 as an earnest
deposit to be credited against the purchase price at Closing (the "Earnest
Deposit"), by check made payable to "Wilson, Sonsini, Goodrich & Rosati Client
Trust Account" or by wire transfer as follows:
Account Name: Wilson, Sonsini, Goodrich & Rosati Client Trust Account
Account Number: 14843-00544
Bank: Bank of America
530 Lytton Avenue
Palo Alto, CA 94301
ABA Number:#121000358
International: Telex #34346
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Reference: GPC; Robert T. Clarkson
4 Closing Date. The closing of the purchase and sale of the Common
Shares (the "Closing") shall be held at the offices of Wilson, Sonsini, Goodrich
& Rosati, 650 Page Mill Road, Palo Alto, California, at 1:00 p.m. on July 17,
1995 (the date of the Closing is hereinafter referred to as the "Closing Date").
5 Delivery. Subject to the terms and conditions of this Agreement, at
the Closing, Seller will deliver to Purchasers or its legal counsel stock
certificates representing 1,400,000 Common Shares, together with guaranteed
stock powers assigning the Common Shares to the Purchasers and Additional
Purchasers, if any, against delivery by the Purchasers and Additional
Purchasers, if any, of the purchase price therefor, including the Earnest
Deposit to be delivered by WSGR at the Closing.
2. Representations and Warranties.
1 Representations and Warranties of Seller. Seller represents and
warrants to the Purchasers and Additional Purchasers, if any, as follows:
(a) Title to Common Shares. Upon and immediately prior to the Closing,
the Seller shall own and hold good and marketable title to the Common Shares
free and clear of any liens, security interests, restrictions, options or
encumbrances (other than restrictions on transfer under applicable securities
laws). The Seller has not granted any options of any sort with respect to the
Common Shares or any right to acquire the Common Shares other than as
contemplated under this Agreement.
(b) Authority to Convey. The Seller has the full and unrestricted
right, power, capacity and authority to enter into, execute and deliver this
Agreement, and as of the Closing will have the full unrestricted right, power,
capacity and authority to transfer and deliver good and marketable title to the
Common Shares free and clear of any liens, security interests, restrictions,
options or encumbrances (other than restrictions on transfer under applicable
securities laws) or any community property interest in the Common Shares, and to
transfer and deliver the Common Shares. This Agreement is a valid and binding
obligation of the Seller enforceable in accordance with its terms.
(c) Valid Transfer. Upon the payment by the Purchasers and Additional
Purchasers, if any, of the purchase price of the Common Shares in accordance
with the terms of this Agreement, and the delivery to the Purchasers and
Additional Purchasers, if any, of the certificates for the Common Shares (in
form appropriate for transfer), the Purchasers and Additional Purchasers, if
any, will have obtained good and marketable title to the Common Shares, free and
clear of any liens,
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security interests, restrictions, options or encumbrances (other than
restrictions on transfer under applicable securities laws and this Agreement).
(d) No Conflicts. The execution, delivery and performance of this
Agreement will not result in any violation of, be in conflict with, or
constitute a default under: (i) any provision of any judgment, decree or order
to which the Seller is a party or by which it is bound; (ii) any contract,
obligation or commitment to which the Seller is a party or by which it is bound;
or (iii) to the best of Seller's knowledge, any statute, rule or governmental
regulation applicable to the Seller.
(e) Consents. No consent, approval or authorization of, or
designation, declaration or filing with, any governmental authority or agency is
required on the part of the Seller in connection with the valid execution and
delivery of this Agreement or the offer and sale of the Common Shares.
(f) Financial Statements and Condition. The GPC audited financial
statements included in the GPC Annual Report on Form 10-K for the fiscal year
ended October 31, 1994, and the unaudited interim financial statements included
in the GPC quarterly reports on Form 10-Q for the fiscal quarters ended January
31, 1995 and April 30, 1995 (in each case as filed with the Securities and
Exchange Commission) are complete and correct in all material respects, have
been prepared in accordance with generally accepted accounting principles
applied on a consistent basis throughout the periods indicated and fairly
present the financial condition and results of operation of GPC as of the date
and during the periods indicated therein, subject, in the case of the unaudited
financial statements included in the quarterly reports on Form 10-Q, to normal
year-end audit adjustments, which Seller has no reason to believe will be
material. Subject to the proviso in Section 2.1(i) below, to Seller's knowledge
there has been no material adverse change in the financial conditions or
operations of the Company since April 30, 1995.
(g) Capitalization. The authorized stock of GPC consists of 20,000,000
shares of common stock of which 5,113,635 shares are issued and outstanding and
2,000,000 shares of undesignated preferred stock, none of which are issued or
outstanding. All of such shares have been duly authorized and all such issued
and outstanding shares have been validly issued and are fully paid and
nonassessable. GPC has reserved 976,050 shares of common stock for issuance
under its stock option plans, of which options for 477,050 shares have been
granted and are outstanding. There are no other options, warrants, conversion
privileges or other rights presently outstanding to purchase or otherwise
acquire, any authorized but unissued shares of capital stock or other securities
of GPC.
(h) Litigation, etc. Except as described in GPC filings made with the
Securities and Exchange Commission ("SEC") or as set forth on Exhibit B, there
are no actions, suits, proceedings or investigations pending against GPC or its
properties before any court or governmental agency, nor, to the best of the
Seller's knowledge, is there any threat thereof, which, either in any case or in
the aggregate, could reasonably be expected to result in a material adverse
change in the business or financial condition of GPC or any of its properties or
assets. GPC is not a party or
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subject to the provisions of any order, writ, injunction, judgment or decree of
any court or governmental agency or instrumentality.
(i) Disclosure. Seller has no reason to believe that any statement by
the Seller contained in this Agreement or by GPC in GPC's most recent reports on
Form 10-K and 10-Q filed with the SEC, when read together, contains any untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements contained herein or therein not misleading in light
of the circumstances under which they were made; it being understood, however,
that the Purchasers and Additional Purchasers, if any, understand that the GPC
operating business is in a state of decline and that, if such decline were to
continue without change, there would be a material adverse impact on the
financial condition and results of operations of GPC.
(j) Charter Documents. Attached hereto as Exhibit C are true and
correct copies of the Certificate of Incorporation and Bylaws of GPC, as amended
through the date hereof and such documents have not been otherwise amended,
rescinded or repealed and are in full force and effect as of the date hereof.
2 Representations and Warranties of Purchasers and Additional
Purchasers. The Purchasers and Additional Purchasers, if any, represent and
warrant to the Seller as follows:
(a) Power. The Purchasers and Additional Purchasers, if any, have now,
or will have at the Closing Date, all requisite legal power and authority to
enter into this Agreement, to purchase the Common Shares and to carry out and
perform their respective obligations under the terms of this Agreement. This
Agreement is a valid and binding obligation of the Purchasers and Additional
Purchasers, if any, enforceable in accordance with its terms.
(b) Governmental Consent, etc. No consent, approval or authorization
of or designation, declaration or filing with any governmental entity or
authority is required on the part of the Purchasers and Additional Purchasers,
if any, in connection with the valid execution and delivery of this Agreement or
the consummation of the transactions contemplated by this Agreement or the
purchase of the Common Shares.
(c) No Conflicts. The execution, delivery and performance of this
Agreement will not result in any violation of, be in conflict with, or
constitute a default under: (i) any provision or any judgment, decree or order
to which the Purchasers and Additional Purchasers, if any, are party or by which
any of them is bound; (ii) any contract, obligation or commitment to which the
Purchasers and Additional Purchasers are party or by which any of them is bound;
or (iii) to the best of Purchasers' and Additional Purchasers' knowledge, any
statute, rule or governmental regulation applicable to the Purchasers and
Additional Purchasers.
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(d) Investment Representations.
(i) The Purchasers and Additional Purchasers, if any, are aware of
GPC's business affairs and financial condition and have acquired sufficient
information about GPC to reach an informed and knowledgeable decision to acquire
the Common Shares and are acquiring the Common Shares for investment for
Purchasers' and Additional Purchasers' own account only and not with a view to,
or for resale in connection with, any "distribution" thereof within the meaning
of the Securities Act of 1933, as amended (the "Securities Act").
(ii) The Purchasers and Additional Purchasers, if any, acknowledge
and understand that the Common Shares constitute "restricted securities" under
the Securities Act and have not been registered under the Securities Act in
reliance upon a specific exemption therefrom, which exemption depends upon,
among other things, the bona fide nature of Purchasers' and Additional
Purchasers' investment intent as expressed herein. In this connection, the
Purchasers and Additional Purchasers, if any, understand that, in the view of
the SEC, the statutory basis for such exemption may be unavailable if
Purchasers' representation were predicated solely upon a present intention to
hold the Common Shares for the minimum capital gains period specified under tax
statutes, for a deferred sale, for or until an increase or decrease in the
market price of the securities, or for a period of one year or any other fixed
period in the future. The Purchasers and Additional Purchasers, if any, further
understand that the securities must be held indefinitely unless they are
subsequently registered under the Securities Act or an exemption from such
registration is available. Purchasers and Additional Purchasers, if any, further
acknowledge and understand that GPC is under no obligation to register the
Common Shares. Purchasers and Additional Purchasers, if any, understand that the
certificates evidencing the Common Shares will be imprinted with a legend which
prohibits the transfer of the securities unless they are registered or such
registration is not required in the opinion of counsel satisfactory to GPC.
(iii) The Purchasers and Additional Purchasers, if any, are
familiar with the provisions of Rule 144 promulgated under the Securities Act
which, in substance, permits limited public resale of "restricted securities"
acquired, directly or indirectly from the issuer thereof, (including, for this
purpose, an affiliate of the issuer), in a non-public offering subject to the
satisfaction of certain conditions. The Purchasers and Additional Purchasers, if
any, acknowledge that the Seller may be an affiliate of GPC.
(iv) The Purchasers and Additional Purchasers, if any, further
understand that in the event all of the applicable requirements of 144 are not
satisfied, registration under the Securities Act, compliance with Regulation A,
or some other registration exemption will be required; and that, notwithstanding
the fact that Rule 144 is not exclusive, the staff of the SEC has expressed its
opinion that persons proposing to sell private placement securities other than
in a registered offering and otherwise than pursuant to Rule 144 will have a
substantial burden of proof in establishing that an exemption from registration
is available for such offers or sales, and that such persons and their
respective brokers who participate in such transactions do so at their own risk.
The
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Purchasers and Additional Purchasers, if any, understand that no assurance can
be given that any such other registration exemption will be available in such
event.
3. Closing Conditions.
1 Conditions to Obligation of Seller. The Seller's obligation to sell the
Common Shares to be sold at the Closing is, at the option of the Seller, subject
to the fulfillment on or prior to the Closing Date of the following conditions,
any of which may be waived by the Seller:
(a) Representations and Warranties Correct. The representations and
warranties made by the Purchasers and Additional Purchasers, if any, in Section
2.2 hereof shall be true and correct when made, and shall be true and correct on
the Closing Date with the same force and effect as if they had been made on and
as of said date.
(b) No Order Pending, etc. At the time of the Closing, the purchase of
the Common Shares by the Purchasers and Additional Purchasers, if any, hereunder
and the consummation of the transactions contemplated by this Agreement shall be
legally permitted by all laws and regulations to which the Seller and the
Purchasers and Additional Purchasers, if any, are subject. There shall not then
be in effect any order enjoining or restraining the transactions contemplated by
this Agreement.
(c) Execution of Agreement. In the event that Additional Purchasers
agree to buy any of Baskins' Common Shares, such Additional Purchasers shall
have executed signature pages to this Agreement.
(d) Financial Statements. The Purchasers shall have delivered to Seller
personal financial statements evidencing net worth of at least $2,000,000 each.
2 Conditions to Obligation of Purchasers and Additional Purchasers. The
Purchasers' and Additional Purchasers' obligation to purchase the Common Shares
at the Closing is, at the option of the Purchasers and Additional Purchasers,
subject to the fulfillment on or prior to the Closing Date of the following
conditions:
(a) Representations and Warranties Correct. The representations and
warranties made by the Seller in Section 2.1 hereof shall be true and correct
when made, and shall be true and correct on the Closing Date with the same force
and effect as if they had been made on and as of said date.
(b) Covenants. All covenants contained in the Agreement to be performed
by the Seller on or prior to the Closing Date shall have been performed or
complied with in all respects.
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(c) No Order Pending, etc. At the time of the Closing, the purchase
of the Common Shares by the Purchasers and Additional Purchasers, if any,
hereunder and the consummation of the transactions contemplated by this
Agreement shall be legally permitted by all laws and regulations to which the
Sellers and the Purchasers and Additional Purchasers, if any, are subject. There
shall not then be in effect any order enjoining or restraining the transactions
contemplated by this Agreement.
(d) Compliance Certificate. The Purchasers and the Additional
Purchasers, if any, shall have received a certificate executed by Seller to the
effect that (A) the Seller's warranties contained in Section 2 hereof are true
and correct in all respects as of the Closing Date as if they had been made on
and as of the Closing Date and (B) all covenants, agreements and obligations
required to be performed by Seller at or prior to the Closing Date have been
performed or complied with in all respects.
(e) The Purchasers and Additional Purchasers, if any, shall have
received a legal opinion of WSGR in substantially the form attached hereto as
Exhibit D.
4. Indemnification.
1 Indemnification. The Purchasers (but not the Additional Purchasers, if
any) will indemnify Seller and hold Seller harmless from and against any and all
losses, claims, damages or liabilities, joint or several, to which Seller may
become subject, insofar as such losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) arise out of or are based upon
(i) any action by the Purchasers or by Additional Purchasers, by any
affiliate of the Purchasers or of Additional Purchasers, or by any
designee of the Purchasers or of Additional Purchasers on the GPC Board
of Directors, that occurs after the Closing or
(ii) a claim by any person challenging the lawfulness or propriety of
Baskin's sale of the Common Shares hereunder if (but only if) any
action that occurs after the Closing described in clause (i) of this
sentence is a material component of such claim,
and in any such circumstance will reimburse the Seller, as incurred, for any
legal or other expenses reasonably incurred by Seller in connection with
investigating or defending against any such loss, claim, damage, liability,
action or proceeding. The Purchasers' obligations hereunder shall not be
construed to indemnify Seller for any claim (A) that is not covered by clauses
(i) or (ii) above or (B) to the extent that such claim arises out of facts or
circumstances which also constitute a breach of Seller's representations and
warranties in Section 2.1. The obligations of the Purchasers are joint and
several.
2 Participation in Proceedings. Promptly after receipt by Seller of
notice of the commencement of any action within the scope of Section 4.1 above,
Seller shall, if a claim for indemnification is to be made against Purchasers
under such section, notify the Purchasers in writing
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of the commencement thereof; but the omission so to notify the Purchasers (a)
shall not relieve any Purchaser from any liability which he may have to Seller
otherwise than under such section and (b) shall not relieve any Purchaser from
liability under such section except to the extent that any such omission
actually and directly prejudiced such Purchaser's ability to defend against such
claim. In case any such action shall be brought against Seller, and he shall
notify the Purchasers of the commencement thereof, the Purchasers shall be
entitled to participate in, and, to the extent that they shall wish, to assume
the defense thereof, with counsel satisfactory to Seller, and after notice from
the Purchasers to Seller of the Purchasers' election so to assume the defense
thereof, the Purchasers shall not be liable to Seller under such section for any
legal or other expenses subsequently incurred by Seller in connection with the
defense thereof other than reasonable costs of investigation; provided, however,
that (i) if the Seller reasonably determines that there may be a conflict
between the positions of the Purchasers and of the Seller in conducting the
defense of such action or that there may be legal defenses available to Seller
different from or in addition to those available to the Purchasers, then counsel
for the Seller shall be entitled to conduct the defense to the extent reasonably
determined by such counsel to be necessary to protect the interests of the
Seller and (ii) in any event, the Seller shall be entitled to have counsel
chosen by Seller participate in, but not conduct, the defense. The Purchasers
shall jointly and severally bear the legal and other expenses incurred in
connection with the conduct of the defense as referred to in clause (i) of the
proviso to the preceding sentence and the Purchasers shall jointly and severally
bear such other expenses as the Purchasers have authorized to be incurred by
Seller. The Purchasers will pay legal and other expenses to be borne by the
Purchasers in accordance with the preceding sentence no less frequently than
every sixty (60) days, provided that the Seller shall have provided the
Purchasers with such written documentation with respect to such expenses as is
reasonably requested by the Purchasers. If, within a reasonable time after
receipt of the notice, the Purchasers shall have not elected to assume the
defense of the action, the Purchasers shall be responsible for any legal or
other expenses incurred by the Seller in connection with the defense of the
action, suit, investigation, inquiry or proceedings.
5. Termination.
1 Termination by Seller. Seller may terminate this Agreement after July
17, 1995 if the Closing has not occurred by July 17, 1995 through no fault of
Seller.
2 Termination by Purchasers. The Purchasers may terminate this Agreement
after July 17, 1995 if the Closing has not occurred by July 17, 1995 through no
fault of the Purchaser or Additional Purchasers.
3 Effect of Termination. Upon any termination of this Agreement, all
obligations hereunder shall terminate and be of no further force or effect. If
the Agreement is terminated by Seller pursuant to Section 5.1, and prior to such
termination all conditions to Purchasers' and Additional Purchasers' obligation
to close the transaction as set forth in Section 3.2 have been satisfied, WSGR
shall pay to the Seller the Earnest Deposit. If the Agreement is terminated by
the Purchasers pursuant to Section 5.2 because the conditions set forth in
Section 3.2 have not all been satisfied, WSGR shall return the Earnest Deposit
to the Purchasers.
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6. Miscellaneous.
1 Further Instruments. Each party agrees to execute and deliver such
further instruments and documents, and to take such further actions, as may be
reasonably requested by the other after the Closing to carry out the purposes of
this Agreement.
2 Waivers and Amendments. This Agreement or any provision hereof may be
amended only by a statement in writing signed by the party against which
enforcement of the amendment is sought.
3 Representation by Counsel. Each party acknowledges that it has been
represented by independent legal counsel of its own choice throughout all of the
negotiations which preceded the execution of this Agreement and that it has
executed this Agreement with advice of such independent legal counsel. Each
party further acknowledges that it and its counsel have had adequate opportunity
to make whatever investigation or inquiry they may deem necessary or desirable
in connection with the subject matter of this Agreement prior to the execution
hereof and the delivery and acceptance of the consideration specified herein.
4 Severability. If any term, provision, covenant or condition of this
Agreement is held invalid or unenforceable for any reason, the parties agree
that such invalidity will not affect the validity of the remaining provisions of
this Agreement, and further agree to substitute for the invalid provision a
valid provision which most closely approximates the intent and economic effect
of the invalid provision.
5 Construction of Agreement. This Agreement has been negotiated by the
respective parties hereto and their attorneys and the language hereof shall not
be construed for or against any party. The titles and headings herein are for
reference purposes only and shall not in any manner limit the construction of
this Agreement, which shall be considered as a whole. Whenever in this Agreement
the context so requires, the neuter gender shall be deemed to refer to and
include the feminine and masculine, and the singular to refer to and include the
plural.
6 Governing Law. This Agreement shall be governed in all respects by the
laws of the State of California as such laws are applied to agreements between
California residents entered into and to be performed entirely within
California.
7 Successors and Assigns. Except as otherwise provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties hereto.
8 Entire Agreement. This Agreement constitutes the full and entire
understanding between the parties with regard to the subjects hereof, and
supersedes and terminates all prior discussions and agreements, oral or written.
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9 Fees and Expenses. Each of the Seller and the Purchasers and Additional
Purchasers, if any, shall pay for its own commissions, fees or other expense
incurred with respect to the transactions covered by this Agreement.
10 Notices, etc. All notices and other communications required or
permitted hereunder shall be in writing and shall be delivered personally,
mailed by first class mail, postage prepaid, or delivered by facsimile or by
Federal Express or other reputable overnight courier, addressed if to the
Seller, Purchasers and Additional Purchasers, if any, at their respective
addresses appearing on Exhibit A attached to this Agreement.
11 Arbitration. Any dispute arising out of this Agreement will be
submitted to binding arbitration pursuant to the California Arbitration Act
(California Code of Civil Procedure, Section 1280 and following) to the fullest
extent permitted by law. Any party may, within 90 days of the occurrence of the
event giving rise to the dispute, initiate arbitration by notifying the other in
writing. Failure to initiate arbitration within such 90 day period, or such
extended period as may be mutually agreed upon in writing within such 90 day
period, shall constitute a waiver of any and all such claims and they shall be
forever barred. All parties will attempt to agree upon a mutually acceptable
arbitrator. If the Purchasers and the Seller are unable to agree upon one
arbitrator, then the Purchasers shall collectively pick one arbitrator, the
Seller shall pick a second arbitrator and the two arbitrators shall together
select a third arbitrator and the three shall act as a panel of arbitrators,
acting by majority vote of the three arbitrators. The arbitrator's decision will
be final and binding on both parties. Arbitration proceedings shall be held in
San Francisco, California. The Purchasers and the Seller will each bear their
own costs in connection with any such arbitration. The cost of the arbitrator
shall be shared 50% by the Purchasers and 50% by the Seller. The arbitrator
shall have no authority to award punitive or exemplary damages against any
party, nor shall the arbitrator have any authority to grant injunctive relief.
This arbitration provision shall constitute the exclusive remedy for any and all
claims under this Agreement. Any damages awarded by the arbitrator as set forth
above shall bear interest at the lower of (i) 1.5% per month or (ii) the highest
maximum permissible interest rate under California law. Interest shall run from
the date any payment was due, in the case of any damages arising from any
party's failure to pay any sums when due, or from the date the Agreement was
breached, in the case of any other breach of the Agreement.
12 Additional Purchasers. Purchasers acknowledge that in purchasing the
Common Shares they are acting as a "group" for purposes of the rules and
regulations under the Securities Exchange Act of 1934. Nothing in this Agreement
shall be deemed to constitute any Additional Purchaser as a part of such "group"
or be deemed an admission by any such Additional Purchaser that he is acting in
concert with any other person.
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IN WITNESS WHEREOF, the parties have executed this Agreement effective as of
the day and year first written above.
"SELLER" "PURCHASERS"
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Herbert B. Baskin T. Benjamin Jennings
-----------------------------
Gerard H. Jacobs
"ADDITIONAL PURCHASERS"
-----------------------------
Donald F. Moorehead
-----------------------------
Louis D. Paolino
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<PAGE> 15
EXHIBIT A
ADDRESSES; ALLOCATION OF SHARES
I. ADDRESSES
SELLER NAME AND ADDRESS
Herbert B. Baskin
264 Yale Avenue
Berkeley, CA 94708
NAMES AND ADDRESSES OF PURCHASERS
T. Benjamin Jennings
622 Meadowview Lane
Coppell, Texas 75019
Gerard M. Jacobs
7600 Augusta Street
River Forest, Illinois 60305
NAMES AND ADDRESSES OF ADDITIONAL PURCHASERS
Donald. F. Moorehead
1801 Burningtree Lane
River Forest, Illinois 60305
Louis D. Paolino, Trustee for Blue Bird Partners
500 E. Mantua Avenue
Wenonah, New Jersey 08090
II. ALLOCATION OF SHARES
<TABLE>
<CAPTION>
Number of
Common Shares
Name to be Purchased
----------------------------- ----------------
<S> <C>
T. Benjamin Jennings 450,000
Gerard M. Jacobs 450,000
Donald F. Moorehead 250,000
</TABLE>
<PAGE> 16
<TABLE>
<S> <C>
Louis D. Paolino, Trustee for Blue Bird Partners 250,000
</TABLE>
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