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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) June 14, 1996 (May 31, 1996)
BUILDERS WAREHOUSE ASSOCIATION, INC.
(Exact name of Registrant as specified in charter)
Colorado 0-2108-2 84-1090968
State or other juris- (Commission (IRS Employer
diction of incorporation File Number) Identification No.)
2800 28th Street, Suite 100, Santa Monica, CA 90405
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (310) 453-4371
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On May 31, 1996, Builders Warehouse Association, Inc., (the "Company"),
acquired 100% of Sciteq Electronics, Inc. ("Sciteq"), for a total of $600,000
in cash for the purchase of all Sciteq preferred stock and $2.4 million in
stock and stock options for the purchase of all Sciteq common stock and stock
options. A final payment in stock worth $2 million will be made 12 months from
closing, subject to pro rata adjustment based on the benchmark that Sciteq earn
$750,000 pre-tax net income in the twelve months ending December 31, 1996. The
purchase price was determined by negotiations between the buyer and seller.
Sciteq designs, manufactures and markets Phase-Locked Loop, direct-analog, and
direct-digital RF synthesis products, ranging from a single device to
multi-channel systems. Frequency synthesis is the principal tuning technology
in a wide array of emerging electronic systems, for applications such as
wireless communications, transmission over copper and fiber optic cables, and
satellite systems. Sciteq employs 18 at its San Diego, California offices.
All assets acquired in this transaction will continue to be used in the conduct
of the normal business activities of Sciteq and the Company. No significant
business relationship existed between Sciteq and the Company or their officers
or directors.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) The financial statements and pro forma financial information of the
business acquired are expected to be filed by amendment to this filing within
sixty (60) days of the earliest date reported herein.
(b) Exhibit 2.1 Plan of Acquisition -- Stock Purchase and Merger
Agreement between Builders Warehouse Association, Inc., and Sciteq
Communications, Inc.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Builders Warehouse Association Inc.
-----------------------------------
(Registrant)
Dated: June 14, 1996 By: /s/ Barry Witz
-----------------------------------
Barry Witz
Chief Executive Officer
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EXHIBIT 2.1
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STOCK PURCHASE AND MERGER AGREEMENT
between
BUILDERS WAREHOUSE ASSOCIATION, INC.
and
SCITEQ COMMUNICATIONS, INC.
Dated: March 1, 1996
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TABLE OF CONTENTS
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STOCK PURCHASE AND MERGER AGREEMENT....................................... 1
ARTICLE I - ACQUISITION OF THE CORPORATION................................ 1
1.01. Purchase and Sale.......................................... 1
1.02. Purchase Price............................................. 2
1.03. The Merger................................................. 2
1.04. Certificate of Incorporation............................... 2
1.05. By-Laws.................................................... 2
1.06. Directors and Officers..................................... 2
1.07. Effective Time............................................. 2
1.08. Effect of Merger........................................... 3
1.09. Additional Actions......................................... 3
1.10. Conversion of Shares....................................... 4
1.11. Additional Consideration................................... 4
1.12. Market Value............................................... 4
1.13. Conversion of Options...................................... 4
1.14. Cash Contribution to Corporation........................... 5
ARTICLE II - ADDITIONAL TRANSACTIONS...................................... 5
2.01. Rights in BWAI Stock....................................... 5
2.02. Acquisition of BWAI Stock.................................. 5
2.03. Restrictive Legend......................................... 6
2.04. Receipt of Information..................................... 6
2.05. Accredited Investor Status................................. 6
2.06. Registration Rights........................................ 6
ARTICLE III - REPRESENTATIONS AND WARRANTIES OF THE
SHAREHOLDERS AND OPTIONHOLDERS.............................. 7
3.01. Valid Corporate Existence; Qualification................... 7
3.02. Capitalization............................................. 7
3.03. Subsidiaries............................................... 8
3.04. Consents................................................... 8
3.05. Binding Nature of Agreement; Title to Shares............... 8
3.06. Financial Statements....................................... 8
3.07. Liabilities................................................ 9
3.08. Action Since Balance Sheet Date............................ 9
3.09. Adverse Developments....................................... 9
3.10. Taxes...................................................... 10
3.11. Ownership of Assets........................................ 10
3.12. Insurance.................................................. 11
3.13. Litigation, Compliance with Law............................ 11
3.14. Real Property.............................................. 11
3.15. Agreements and Obligations; Performance.................... 12
3.16. Condition of Assets........................................ 13
3.17. Accounts Receivable........................................ 13
3.18. Permits and Licenses....................................... 13
3.19. Banking Arrangements....................................... 13
3.20. Interest in Assets......................................... 14
3.21. Salary Information......................................... 14
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3.22. Employee Benefit Plans..................................... 14
3.23. No Breach.................................................. 16
3.24. Brokers.................................................... 17
3.25. Labor Discussions.......................................... 17
3.26. Change of Name............................................. 17
3.27. Backlog.................................................... 17
3.28. Environmental.............................................. 17
ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF BWAI....................... 18
4.01. Organization............................................... 18
4.02. No Breach.................................................. 18
4.03. Authority for and Binding Nature of Agreement.............. 18
4.04. Brokers.................................................... 18
4.05. Public Reports............................................. 19
4.06. BWAI Stock................................................. 19
4.07. Acquisition of BWAI Stock.................................. 19
4.08. Receipt of Information..................................... 19
4.09. Accredited Investor Status................................. 20
ARTICLE V - PRE-CLOSING COVENANTS......................................... 20
5.01. Access..................................................... 20
5.02. Conduct of Business........................................ 20
5.03. Insurance.................................................. 20
5.04. Liabilities................................................ 20
5.05. Preservation of Business................................... 20
5.06. Financial Statements....................................... 21
5.07. No Breach.................................................. 21
5.08. No Negotiations............................................ 21
ARTICLE VI - CONDITIONS PRECEDENT TO THE OBLIGATIONS
TO BWAI TO CLOSE............................................. 21
6.01. Representations and Warranties............................. 21
6.02. Covenants.................................................. 21
6.03. No Action.................................................. 21
6.04. Consents, Licenses and Permits............................. 22
6.05. Certificate................................................ 22
6.06. Opinion.................................................... 22
6.07. Employment and Consulting Agreements....................... 22
6.08. No Material Adverse Change................................. 22
ARTICLE VIII - CONDITIONS PRECEDENT TO THE OBLIGATION
OF THE SHAREHOLDERS AND OPTION
HOLDERS TO CLOSE........................................... 22
7.01. Representations and Warranties............................. 22
7.02. Covenants.................................................. 23
7.03. No Actions................................................. 23
7.04. Certificates............................................... 23
ARTICLE VIII - CLOSING.................................................... 23
8.01. Location................................................... 23
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8.02. Items to be Delivered by the
Shareholders and Optionholders............................. 23
8.03. Items to be Delivered by BWAI.............................. 24
ARTICLE IX - SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION............... 24
9.01. Survival................................................... 24
9.02. Indemnification............................................ 24
9.03. Defense of Claims.......................................... 25
9.04. Tender of Shares........................................... 25
ARTICLE X - TERMINATION AND WAIVER..................................... 26
10.01. Termination................................................ 26
10.02. Waiver..................................................... 26
ARTICLE XI - MISCELLANEOUS PROVISIONS................................... 27
11.01. Expenses................................................... 27
11.02. Confidential Information................................... 27
11.03. Modification, Termination or Waiver........................ 27
11.04. Publicity.................................................. 27
11.05. Notices.................................................... 27
11.06. Binding Effect and Assignment.............................. 28
11.07. Entire Agreement........................................... 28
11.08. Schedules.................................................. 28
11.09. Governing Law.............................................. 28
11.10. Counterparts............................................... 29
11.11. Section Headings........................................... 29
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STOCK PURCHASE AND MERGER AGREEMENT
AGREEMENT made as of the 1 day of March 1996, by and between Builders
Warehouse Association, Inc., a Colorado corporation ("BWAI") and Sciteq
Communications, Inc., a Nevada corporation ("Newco"), both having an address at
1800 Stewart Street, Santa Monica, California 90404, Sciteq Electronics, Inc., a
California corporation (the "Corporation") having an address at 4775 Viewridge
Avenue, San Diego, California 92123, the shareholders of the Corporation listed
on Schedule 1.01 (the "Shareholders") and the optionholders of the Corporation
listed on Schedule 1.01 (the "Optionholders").
WHEREAS, the Shareholders are the owners of 504,343 shares of common
stock, without par value (the "Common Stock") and 132,241 shares of preferred
stock, without par value (the "Preferred Stock") (collectively, the "Shares"),
of Corporation which constitutes all of the issued and outstanding shares of
capital stock of the Corporation as of the date hereof; and
WHEREAS, the Optionholders are the owners of options (the "Options") to
purchase 151,250 shares of the Corporation's Common Stock; and
WHEREAS, Raytheon Company ("Raytheon"), one of the Shareholders,
desires to sell to BWAI, and BWAI desires to acquire from Raytheon, the Shares
owned by Raytheon upon the terms and subject to the conditions set forth
herein; and
WHEREAS, the Shareholders other than Raytheon (the "Non-Raytheon
Shareholders") wish to receive in exchange for their Shares in the merger of
the Corporation with Newco shares of BWAI's common stock (the "BWAI Stock") on
the terms and subject to the conditions set forth in this Agreement; and
WHEREAS, in connection with such merger, the Optionholders wish to
exchange the Options for options to acquire BWAI Stock, on the terms and
subject to the conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual agreements recited
herein, the parties agree as follows:
ARTICLE I
ACQUISITION OF THE CORPORATION
1.01. PURCHASE AND SALE. Subject to the terms and conditions of this
Agreement, and in reliance on the representa-
<PAGE> 6
tions and warranties set forth herein, on the Closing Date, as defined herein,
(a) Raytheon will sell, transfer and deliver to BWAI, and BWAI shall acquire
from Raytheon, all of the shares of Common Stock and Preferred Stock of the
Corporation as are set forth opposite Raytheon's name on Schedule 1.01,
(collectively, the "Raytheon Shares"), free and clear of all liens, pledges,
encumbrances, charges and claims thereon. Certificates evidencing the Shares
shall be either duly endorsed in blank or accompanied by appropriate stock
powers endorsed in blank. Such certificates shall also be accompanied by
evidence satisfactory to BWAI of Raytheon's payment of any applicable transfer
taxes.
1.02. PURCHASE PRICE. In consideration of the sale, transfer, and
delivery of the Raytheon Shares by Raytheon to BWAI, on the Closing Date, BWAI
will pay to Raytheon the sum of Six Hundred Thousand Dollars ($600,000) by wire
transfer of immediately available funds (the "Purchase Price").
1.03. THE MERGER. In accordance with the provisions of this
Agreement and the General Corporation Law of the State of California (the
"GCL"), on the Closing Date, Newco will be merged with and into the Corporation
(the "Merger"), and Newco shall be the surviving corporation in the Merger
(hereinafter sometimes called the "Surviving Corporation"), shall continue its
corporate existence under the laws of the State of Nevada, and shall be a
wholly-owned subsidiary of BWAI. At the Effective Time, the separate existence
of the Corporation shall cease. The name of the Surviving Corporation shall be
changed to "SCITEQ Electronics, Inc." By signing this Agreement, each
non-Raytheon Shareholder hereby consents to the Merger.
1.04. CERTIFICATE OF INCORPORATION. The Certificate of Incorporation
of Newco, as in effect immediately prior to the Closing Date, shall be the
Certificate of Incorporation of the Surviving Corporation until thereafter
amended as provided by law.
1.05. BY-LAWS. The By-Laws of Newco, as in effect immediately prior
to the Closing Date, shall be the By-Laws of the Surviving Corporation until
thereafter amended as provided by law.
1.06. DIRECTORS AND OFFICERS. The directors of Newco immediately
prior to the Closing Date shall, after the Effective Time, be the directors of
the Surviving Corporation. The officers of Newco immediately prior to
the Closing Date shall, after the Closing Date, be the officers of the
Surviving Corporation. Each director and officer of the Surviving Corporation
shall hold office in accordance with the Certificate of Incorporation and
By-Laws of the Surviving Corporation.
1.07. EFFECTIVE TIME. The Merger shall become effective at the time
of filing of a certificate of merger (substantially in the form of Exhibit 1.06
annexed hereto) with the Secretary of State of the State of California in
accordance with
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the provisions of Section 1103 of the GCL (the "Certificate of Merger"). The
Certificate of Merger shall be filed at the time of the Closing.
1.08. EFFECT OF MERGER. Upon consummation of the Merger, the
Surviving Corporation shall thereupon and thereafter possess all the rights,
privileges, powers and franchises, including those of a public as well as of a
private nature, of each of Newco and the Corporation (collectively, the
"Constituent Corporations"), and be subject to all the restrictions,
disabilities and duties of each of the Constituent Corporations; and all of the
rights, privileges, powers and franchises of each of the Constituent
Corporations, and all property, real, personal and mixed, and all debts due to
either of the Constituent Corporations on whatever account, as well for stock
subscriptions as for all other choses in action or belonging to each of the
Constituent Corporations shall be vested in the Surviving Corporation; and all
property, rights, privileges, powers and franchises and all and every other
interest shall be thereafter as effectually the property of the Surviving
Corporation as they were of the several and respective Constituent
Corporations; and the title to any real estate, vested by deed or otherwise,
under the laws of California or elsewhere in either of the Constituent
Corporations, shall not revert or be in any way impaired by reason of the
Merger; but all rights of creditors and all liens upon any property as of the
Effective Time of either of the Constituent Corporations shall be preserved
unimpaired, and all debts, liabilities and duties of each of the Constituent
Corporations as of the Effective Time shall thenceforth attach to the Surviving
Corporation, and may be enforced against it to the same extent as if said
debts, liabilities and duties had been incurred or contracted by it.
1.09. ADDITIONAL ACTIONS. If, at any time after the Effective Time,
the Surviving Corporation shall believe or be advised that any further
assignments or assurances in law or any other acts are necessary or desirable
(a) to vest, perfect or confirm, of record or otherwise, in the Surviving
Corporation, title to and possession of any property or right of
either Constituent Corporation acquired or to be acquired by reason of, or as a
result of, the Merger, or (b) otherwise to carry out the purposes of this
Agreement, either Constituent Corporation and its proper officers and
directors shall be deemed to have granted to the Surviving Corporation an
irrevocable power of attorney to execute and deliver all such proper deeds,
assignments and assurances in law and to undertake all such acts necessary or
desirable to vest, perfect or confirm, of record or otherwise, such property or
rights in the Surviving Corporation and otherwise to carry out the purposes of
this Agreement; and the proper officers and directors of the Surviving
Corporation are fully authorized in the name of either Constituent Corporation
or otherwise to take any and all such action.
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1.10. CONVERSION OF SHARES. In consideration of the Merger, all of
the Shares held by the Non-Raytheon Shareholders will be exchanged for that
number of shares of BWAI Stock as has a market value (defined in Section 1.13)
equal to One Million Nine Hundred Ninety Three Thousand Five Hundred
Seventy-Eight Dollars ($1,993,578) on the Closing Date.
1.11. ADDITIONAL CONSIDERATION. As additional consideration for the
Non-Raytheon Shares exchanged in the Merger, BWAI shall issue additional shares
of BWAI Stock to the Non-Raytheon Shareholder not later than February 15, 1997,
provided that the surviving Corporation's net income before tax for the year
ending December 31, 1996 ("Pre-Tax Income") is greater than $500,000. BWAI will
issue $2,000,000 in market value of BWAI Stock to the Non-Raytheon Shareholders
if Pre-Tax Income is equal to or greater than $750,000, and a pro rata amount
of $2,000,000 to the extent Pre-Tax Income is equal to or greater than
$750,000, and a pro rata amount of $2,000,000 to the extent Pre-Tax Income is
greater than $500,000) (i.e., $8.00 of BWAI Stock for each $1.00 of Pre-Tax
Income in excess of $500,000). By way of example, if Pre-Tax Income were
$600,000, BWAI would issue $800,000 in market value of BWAI Stock to the
Non-Raytheon Shareholders. BWAI will issue any BWAI Stock to the Shareholders
under this Section 1.11 pro-rata to the respective holdings of the Shareholders
set forth on Schedule 1.01. Pre-Tax Income shall be computed in a manner
consistent with the past practice for the Corporation on a stand-alone basis
and shall not include any changes or other similar costs for corporate overhead
of BWAI or other similar costs resulting from purchase accounting with respect
to the transactions contemplated by this Agreement. The amount of Pre-Tax Income
shall be certified by BWAI's independent certified public accountants. In the
event that Non-Ratheon Shareholders holding a majority of the Non-Raytheon
Shares shall object to such determination of Pre-Tax Income, they may request
review of such determination by a "Big 6" accounting firm other than Deloitte &
Touche. In the event that Pre-Tax Income following such review remains
unchanged, is reduced or is increased by less than $37,500, the costs of such
accounting review shall be borne by the requesting Non-Raytheon Shareholders
pro rata and, in the event that Pre-Tax Income is increased by $37,500 or more,
the costs of such accounting review shall be borne by BWAI.
1.12. MARKET VALUE. For purposes of this Agreement, the market value
of the BWAI Stock shall be the average closing bid and asked prices of such
stock as reported by NASDAQ for the ten (10) trading days preceding the
applicable payment date (eg., the Closing Date in the case of Section 1.10).
1.13. CONVERSION OF OPTIONS. In connection with the Merger, all of
the Options will be exchanged by the Optionholders with BWAI, which will issue
options to purchase BWAI Stock ("BWAI Options") to the Optionholders. The BWAI
Options will apply to shares of BWAI Stock having a market value equal to
$708,922 and will have an exercise price per share of BWAI Stock of (a)
$302,500 divided by (b) the number of BWAI Option issued pursuant to this
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Section 1.13, and will include similar provisions regarding exercise and
termination.
1.14. Cash Contribution to Corporation. BWAI shall, at Closing,
provide the Corporation with $200,000 cash working capital and allow payments
of $20,000 per month commencing one (1) month following the Closing Date to
reimburse certain employees of the Corporation for past wages in arrears to a
maximum of $200,000 in the aggregate as accrued on the Corporation's financial
statements. Each employee entitled to such payments shall deliver to the
Corporation prior to Closing a letter acknowledging the amount of past wages due
to him or her and agreeing to be paid such amounts in a manner consistent with
the first sentence of this Section 1.14.
ARTICLE II
ADDITIONAL TRANSACTIONS
2.01. Rights in BWAI Stock. Each of the Non-Raytheon Shareholders
and Optionholders who have exercised their BWAI Options shall have the right,
commencing on the first anniversary of the Closing Date and terminating ten
(10) days thereafter, to tender to BWAI any of the shares of BWAI Stock issued
to him or her pursuant to Section 1.10 or 1.11 of this Agreement and be paid an
amount equal to the market value of such stock as of the Closing Date. BWAI
will make such payment by check within thirty (30) days after the first
anniversary of the Closing Date. A Shareholder's or Optionholder's rights under
this Section 2.01 will expire when exercised by written notice to BWAI,
accompanied by the certificate(s) representing the BWAI Stock to be redeemed,
which notice is received by BWAI within ten (10) days after the first
anniversary of the Closing Date.
2.02. Acquisition of BWAI Stock. Each Shareholder and Optionholder
represents and warrants that the BWAI Stock to be acquired by him pursuant to
the terms of this Agreement is being acquired for his own account, with no
intention of assigning any participation or interest therein, and without a
view to the distribution of any portion thereof, except in accordance with the
Securities Act of 1933, as amended (the "Act") and as security for a loan, line
of credit or similar borrowing from a financial institution. Each Shareholder
and Optionholder will not sell, assign, transfer or encumber any of such shares
unless (i) a registration statement under the Act with respect thereto is in
effect and the prospectus included therein meets the requirements of Section 10
of the Act, or (ii) a non-action letter is obtained from the staff of the
Commission in respect of such proposed sale, assignment, transfer or
encumbering, or (iii) BWAI has received a written opinion of counsel reasonably
satisfactory to BWAI that, after an investigation of the relevant facts, such
counsel is of the opinion that such proposed sale, assignment, transfer or
encumbering does not require registration under the Act.
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Each Shareholder and Optionholder understands that the BWAI Stock is
not being registered under the Act and must be held indefinitely unless it is
subsequently registered thereunder or an exemption from such registration is
available. Each Shareholder and Optionholder understands that, except as
otherwise provided in this Agreement, the BWAI Stock is not being registered
under the Act in part on the grounds that the issuance thereof is exempt under
Section 4(2) of the Act as a transaction by an issuer not involving any public
offering; that BWAI's reliance on such exemption is predicated in part on the
foregoing representation and warranty of each Shareholder and Optionholder and
that in the view of the Commission, the statutory basis for the exemption
claimed would not be present if, notwithstanding such representation and
warranty, any Shareholder or Optionholder contemplates acquiring any of the
BWAI Stock for sale upon the occurrence or non-occurrence of some predetermined
event.
2.03. RESTRICTIVE LEGEND. Each Shareholder understands that BWAI will
have an appropriate stop order placed on its records indicating the existence
of the terms of this Agreement, and that the certificates representing BWAI's
Stock shall bear the following legend:
"THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, AND MAY BE SOLD, TRANS-
FERRED OR ENCUMBERED ONLY PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, PURSUANT
TO A NO-ACTION LETTER FROM THE STAFF OF THE
SECURITIES AND EXCHANGE COMMISSION OR PURSUANT
TO AN OPINION OR COUNSEL SATISFACTORY TO THE
COMPANY THAT SUCH REGISTRATION IS UNNECESSARY."
2.04. RECEIPT OF INFORMATION. Each Shareholder and Optionholder, by
delivering the Shares or Options owned by him at the Closing pursuant to
Section 8.02 of this Agreement, shall be deemed without further action of any
kind to have acknowledged receipt of all information required to be delivered
to him with respect to the transactions contemplated by this Agreement pursuant
to Regulation D promulgated by the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended ("Regulation D").
2.05. ACCREDITED INVESTOR STATUS. Each Shareholder and Optionholder
represents and warrants to BWAI that he is an accredited investor, as defined
in Regulation D, except as disclosed on Schedule 2.05.
2.06. REGISTRATION RIGHTS. BWAI hereby agrees to prepare and file, at
its expense, a registration statement with the
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Commission on or before August 31, 1996 for all the BWAI Stock to be issued
pursuant to this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS
AND OPTIONHOLDERS
Each Non-Raytheon Shareholder and Optionholder, severally for himself
or itself alone, makes the following representations and warranties to BWAI.
Raytheon hereby makes only the representations and warranties contained in
Section 3.05 and no others. BWAI, in executing, delivering and consummating
this Agreement, has relied and will rely upon the correctness and completeness
of each of such representations and warranties:
3.01. VALID CORPORATE EXISTENCE; QUALIFICATION. The Corporation is a
corporation duly organized, validly existing and in good standing under the
laws of the State of California. The Corporation has the corporate power to
carry on its business as now conducted and to own its assets. The Corporation
is duly qualified to conduct business and is in good standing as a foreign
corporation in those jurisdictions set forth on Schedule 3.01, which are the
only jurisdictions in which the Corporation is required to qualify in order to
own its assets or properties or to carry on its business as now conducted
(except for such jurisdictions where the failure to so qualify would not have a
material adverse effect on the Company), and there has not been any claim by
any other jurisdiction to the effect that the Corporation is required to
qualify or otherwise be authorized to do business as a foreign corporation
therein (except for such jurisdictions where the failure to so qualify would
not have a material adverse effect on the Company). The copies of the
Corporation's Certificate of Incorporation (certified by the Secretary of State
of California) and By-Laws (certified by the Corporation's secretary), as
amended to date, which have been delivered to BWAI, are true and complete
copies of those documents as now in effect. The minute books of the Corporation
contain accurate records of all material meetings of its Board of Directors,
Executive Committee of the Board, if any, and shareholders since its
incorporation, and accurately reflect all transactions authorized therein in
all material respects.
3.02. CAPITALIZATION. The authorized capital stock of the Corporation
consists of 1,000,000 shares of Common Stock, without par value, of which
504,343 shares are issued and outstanding, and 1,000,000 shares of Preferred
Stock, without par value, of which 132,241 shares are issued and outstanding.
All of such shares of Common Stock and Preferred Stock are duly authorized and
validly issued and outstanding, fully paid and nonassessable. Except for the
Options, there are no subscriptions, options, warrants, rights or calls or
other commitments or agreements to which the Corporation or any of the
Shareholders is a party or by which any of such persons is bound, calling for
the issuance,
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transfer, sale or other disposition of any class of securities of the
Corporation. Other than the Preferred Stock referred to above and the Options,
there are no outstanding securities of the Corporation convertible or
exchangeable, actually or contingently, into shares of Common Stock or any
other securities of the Corporation.
3.03. SUBSIDIARIES. There are no corporations, partnerships or other
business entities controlled by the Corporation. As used herein, "controlled
by" means (i) the ownership of not less than 50% of the voting securities or
other interests of a corporation, partnership or other business entity, or (ii)
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a corporation, partnership or other
business entity, whether through the ownership of voting shares, by contract or
otherwise. The Corporation has not made any investments in, nor does it own,
any of the capital stock of, or any other proprietary interest in, any other
corporation, partnership or other business entity.
3.04. CONSENTS. All requisite consents of governmental and other
regulatory agencies, foreign or domestic, and of other parties required to be
received by or on the part of the Corporation, the Subsidiaries or any of the
Shareholders and Optionholders to enable the Shareholders and Optionholders to
enter into and carry out this Agreement in all material respects have been, or
prior to the Closing will have been, obtained.
3.05. BINDING NATURE OF AGREEMENT; TITLE TO SHARES. This Agreement
constitutes each Shareholder's and Optionholder's valid and binding obligation
and is enforceable in accordance with its terms. The execution, delivery and
performance of this Agreement by Raytheon Company has been approved by all
necessary corporate action on its part. The Shareholders are, and at the
Closing will be, the sole record and beneficial owners of their respective
Shares, free and clear of all manner of liens, charges, encumbrances, and
claims. Each Shareholder at the Closing will have good and marketable title to
his respective Shares in the amount set forth opposite his name on Schedule
1.01, and has, and at the Closing will have, the absolute and unqualified right
to sell, transfer and deliver such Shares to BWAI. The delivery of the Shares
to BWAI at the Closing pursuant to the provisions of this Agreement will
transfer valid title thereto, free and clear of all manner of liens, charges,
encumbrances and claims.
3.06. FINANCIAL STATEMENTS. The books of account of the Corporation
fairly reflect its income, expenses, assets and liabilities in all material
respects. The audited financial statements of the Corporation for the year
ended December 31, 1994 and the unaudited financial statements for the year
ended December 31, 1995 and the two (2) months ended February 29, 1996 fairly
present the financial position of the Corporation as of the said dates and the
results of its operations for such fiscal years and
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<PAGE> 13
period and, except as set forth therein, were prepared in conformity with
generally accepted accounting principles consistently applied throughout the
periods covered thereby.
3.07. LIABILITIES. Except as set forth on Schedule 3.07, as at
February 29, 1996, (the "Balance Sheet Date"), the Corporation had no material
debts, liabilities or obligations, contingent or absolute, other than those
debts, liabilities and obligations reflected or reserved against the
Corporation's Balance Sheet at the Balance Sheet Date (the "Balance Sheet") or
arising after the Balance Sheet Date in the ordinary course of the
Corporation's business.
3.08. ACTION SINCE BALANCE SHEET DATE. Except as otherwise expressly
provided or set forth in, or required by, this Agreement or as set forth in
Schedule 3.08, since the Balance Sheet Date, the Corporation has not: (i)
issued or sold, or agreed to issue or sell any of its capital stock, options,
warrants, rights or calls to purchase such stock, any securities convertible or
exchangeable into such capital stock or other corporate securities, or effected
any subdivision or other recapitalization affecting its capital stock; (ii)
incurred any material obligation or liability, absolute or contingent, except
those arising in the ordinary and usual course of its business; (iii)
discharged or satisfied any lien or encumbrance, except in the ordinary and
usual course of business, or paid or satisfied any liability, absolute or
contingent, other than liabilities as of the Balance Sheet Date and current
liabilities incurred since the Balance Sheet Date and current liabilities
incurred since Balance Sheet Date in the ordinary and usual course of business;
(iv) made any wage or salary increases or granted any bonuses other than wage
and salary increases and bonuses granted in accordance with its normal salary
increase and bonus policies; (v) mortgaged, pledged or subjected to any lien or
other encumbrance any of its properties or assets, or permitted any of its
property or assets to be subjected to any lien or other encumbrance, except in
the ordinary and usual course of business; (vi) sold, assigned or transferred
any of its properties or assets, except in the ordinary and usual course of
business; (vii) entered into any transaction except in the ordinary course of
its business; (viii) waived any rights of substantial value, or cancelled,
modified or waived any indebtedness for borrowed money held by it, except in
the ordinary and usual course of business; (ix) declared, paid or set aside any
dividends or other distributions or payments on its capital stock, or redeemed
or repurchased, or agreed to redeem or repurchase, any shares of its capital
stock; (x) made any loans or advances to any person, or assumed, guaranteed,
endorsed or otherwise became responsible for the obligations of any person; or
(xi) incurred any indebtedness for borrowed money (except for endorsement, for
collection or deposit of negotiable instruments received in the ordinary and
usual course of business).
3.09. ADVERSE DEVELOPMENTS. Except as otherwise expressly provided or
set forth in, or required by, this Agreement, since the Balance Sheet Date, to
the best knowledge of the
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<PAGE> 14
Shareholders and the Optionholders, there have been no changes in the
properties, operations or financial condition of the Corporation, and no event
has occurred other than in the ordinary and usual course of business which
could be reasonably expected to have a materially adverse effect upon the
business of the Corporation.
3.10. TAXES. The Shareholders have delivered to BWAI true and
complete copies of the Federal income tax returns on Form 1120 of the
Corporation as filed with the Internal Revenue Service for each of the fiscal
years ended December 31, 1994 and 1995, respectively. Except as set forth on
Schedule 3.10, each of such returns was prepared in conformity with information
contained in the books and records of the Corporation and contains no untrue
statement of a material fact or omits to state any fact required to make any
such return correct and complete in all material respects. All taxes,
including, without limitation, income, property, sales, use, franchise, capital
stock, excise, added value, employees' income withholding, social security and
unemployment taxes imposed by the United States, any state or any foreign
country, or by any other taxing authority, which have or may have become due or
payable by the Corporation and all interest and penalties thereon, whether
disputed or not, have been paid in full or adequately provided for by reserves
shown in its books of account; all deposits required by law to be made by the
Corporation with respect to estimated income, franchise and employees'
withholding taxes have been duly made and all tax returns, including estimated
tax returns, required to be filed have been duly filed. No extension of time
for the assessment of deficiencies for any year is in effect. No deficiency is
proposed or, to the knowledge of each of the Shareholders and Optionholders,
after reasonable inquiry, threatened against the Corporation. Schedule 3.10
sets forth a list of those states in which income, franchise or sales and use
tax returns were filed by the Corporation for the fiscal years ended December
31, 1994 and December 31, 1995, respectively.
3.11. OWNERSHIP OF ASSETS. Except as set forth in Schedule 3.11, the
Corporation owns outright, and has good and marketable title to all of their
respective assets, properties and business (including all assets reflected in
the Balance Sheet, except as the same may have been disposed of in the ordinary
course of business since the Balance Sheet Date), free and clear of all liens,
mortgages, pledges, conditional sales agreements, restrictions on transfer or
other encumbrances or charges (collectively, the "Encumbrances") except for
Encumbrances arising by operation of law rather than by grant of the
Corporation (for example, tax liens and mechanics liens) in the ordinary course
of the Corporation's business for liabilities reflected in the Balance Sheet
and not more than $25,000 in the aggregate. Schedule 3.11 sets forth a true and
complete list and brief description of all patents, copyrights, trademarks,
trade names and other similar intangible assets which are either owned by the
Corporation or in which it has an interest. Except as set forth on Schedule
3.11, no other person, firm or corporation has any proprietary or other interest
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<PAGE> 15
in any such intangible assets. Such assets so owned or leased are, in the
reasonable business judgment of each of the Shareholders and Optionholders,
sufficient to permit the Corporation to conduct its business as now conducted
in all material respects. Except as set forth on Schedule 3.11, the Corporation
is not a party to or bound by any license or agreement requiring the payment to
any person, firm or corporation of any royalty. None of the Shareholders or
Option-holders, after reasonable inquiry, knows, or has reasonable grounds to
know of any violation by others of the trademark, trade name or patent rights
of the Corporation. The Corporation is not infringing upon any patent,
copyright, trade name or trademark or otherwise is violating the rights of any
third party with respect thereto, and no proceedings have been instituted or,
to the knowledge of each of the Shareholders and Optionholders, after
reasonable inquiry, are threatened, and no claim has been received by the
Corporation or any Shareholder or Optionholders alleging any such violation.
3.12. INSURANCE. Schedule 3.12 sets forth a list and brief
description of all policies of fire, liability and other forms of insurance
held by the Corporation and the Subsidiaries as of the date hereof. Except as
set forth in Schedule 3.12, such policies are valid, outstanding and
enforceable policies, as to which premiums have been paid currently. Except as
set forth on Schedule 3.12, none of the Shareholders, after reasonable inquiry,
knows of any state of facts, or of the occurrence of any event which might
reasonably form the basis for any claim exceeding $25,000 against the
Corporation not fully covered by insurance for liability on account of any
express or implied warranty or tortious omission of commission.
3.13. LITIGATION, COMPLIANCE WITH LAW. Except as set forth on
Schedule 3.13, there are no actions, suits, proceedings or governmental
investigations relating to the Corporation or to any of its properties, assets
or businesses pending or, to the knowledge of each of the Shareholders and
Optionholders, after reasonable inquiry, threatened, or any order, injunction,
award or decree outstanding against the Corporation or against or relating
to any of its properties, assets or businesses. Except as set forth in Schedule
3.13, to the best knowledge of the Shareholders and the Optionholders, the
Corporation is not in violation or any law, regulation, ordinance, order,
injunction, decree, award or other requirement of any governmental body, court
or arbitrator relating to its properties, assets or business which violation
could have a material adverse effect on the Corporation.
3.14. REAL PROPERTY. Schedule 3.14 sets forth a brief description of
all real property which is owned by, or leased to the Corporation, including
all material structures located hereon. The Corporation owns outright the fee
simple title in and to the real properties shown on Schedule 3.14 as being
owned by it, free and clear of all claims, liens, mortgages, charges, or
encumbrances of any nature whatsoever, except as otherwise described on
Schedule
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<PAGE> 16
3.14. The real property leases described on Schedule 3.14 that relate to the
leased properties described therein are now in full force and effect, and all
material amounts payable thereunder have been paid. Except as set forth on
Schedule 3.14, none of such leases could reasonably be expected to result in
material liability for restoration of premises. All uses of such owned or
leased property by the Corporation conform, in all material respects, to all
applicable building and zoning ordinances, laws, and regulations and, in the
case of leased property, to all terms of the leases relating thereto.
3.15. AGREEMENTS AND OBLIGATIONS; PERFORMANCE. Except as listed and
briefly described on Schedule 3.15 (the "Listed Agreements"), the Corporation
is not a party to, or bound by any: (i) written or oral agreement or
other contractual commitment, understanding or obligation which involves
aggregate payments or receipts in excess of $25,000; (ii) contract,
arrangement, commitment or understanding which involves aggregate payments or
receipts in excess of $25,000 that cannot be cancelled on thirty (30) days or
less notice without penalty or premium or any continuing obligation or
liability; (iii) contractual obligation or contractual liability of any kind to
the Shareholders; (iv) contract, arrangement, commitment or understanding with
its customers or any officer, employee, shareholder, director, representative or
agent thereof for the repurchase of products, sharing of fees, the rebating of
charges to such customers, bribes, kickbacks from such customers or other
similar arrangements; (v) contract for the purchase or sale of any materials,
products or supplies which contain, or which commits or will commit it for a
fixed term; (vi) contract of employment with any officer or employee not
terminable at will without penalty or premium or any continuing obligation of
liability, (vii) deferred compensation, bonus or incentive plan or agreement
not cancelable at will without penalty or premium or any continuing obligation
or liability; (viii) management or consulting agreement not terminable at will
without penalty or premium or any continuing obligation or liability; (ix)
lease for real or personal property (including borrowings thereon), license or
royalty agreement; (x) union or other collective bargaining agreement; (xi)
agreement, commitment or understanding relating to the indebtedness for borrowed
money; (xii) contract involving aggregate payments or receipts of $25,000 or
more which, by its terms, requires the consent of any party thereto to the
consummation of the transactions contemplated hereby; (xiii) contract
containing covenants limiting the freedom of the Corporation to engage or
compete in any line or business or with any person in any geographical area;
(xiv) contract or opinion relating to the acquisition or sale of any business;
(xv) voting trust agreement or similar shareholders' agreement; (xvi) other
contract, agreement, commitment or understanding which materially affects any
of its properties, assets or business, whether directly or indirectly, or which
was entered into other than in the ordinary course of business. Except as set
forth on Schedule 3.15, the Corporation has not during the last 36 months
entered into any of the types of contracts, arrangements, commit-
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<PAGE> 17
ments or understandings with any of its suppliers or customers referred to in
item (iv) of this Section 3.15. A true and correct copy of each of the written
listed Agreements, has been and delivered to BWAI. The Corporation has in all
material respects performed all obligations required to be performed by it to
date under all of the Listed Agreements, is not in default in any material
respect under any of the Listed Agreements and has received no notice of any
default or alleged default thereunder which has not heretofore been cured or
which notice has not heretofore been withdrawn. None of the Shareholders or
Optionholders, after reasonable inquiry, knows of any material default under
any of the Listed Agreements by any other party thereto or by any other person,
firm or corporation bound thereunder.
3.16. CONDITION OF ASSETS. Except for normal breakdowns and
servicing requirements, substantially all machinery and equipment regularly
used by the Corporation in the conduct of its business is in reasonably good
operating condition and repair, ordinary wear and tear excepted. The
inventories of the Corporation are accurately reflected on the Corporation's
financial statements in all material respects in accordance with generally
accepted accounting principles.
3.17. ACCOUNTS RECEIVABLE. To the knowledge of each of the
Shareholders and Optionholders, after due inquiry, except as set forth on
Schedule 3.17, all of the accounts receivable reflected in the books of account
of each of the Corporation and the Subsidiaries in accordance with generally
accepted accounting principles and arose in the ordinary course of its
business, from the sale of services or goods.
3.18. PERMITS AND LICENSES. Schedule 3.18 sets forth all permits,
licenses, orders, franchises and approvals from all federal, state, local and
foreign governmental regulatory bodies held by the Corporation. The Corporation
has all permits, licenses, orders and approvals of all federal, state, local
and foreign governmental or regulatory bodies required of it to carry on its
business as presently conducted in all material respects; all such other
permits, licenses, orders, franchises and approvals are in full force and
effect, and to the knowledge of each of the Shareholders, after reasonable
inquiry, no suspension or cancellation or any of such other permits, licenses,
etc. is threatened; and the Corporation and the Subsidiaries are each in
compliance in all material respects with all requirements, standards and
procedures of the federal, state, local and foreign governmental bodies which
have issued such permits, licenses, orders, franchises and approvals. Said
Schedule 3.18 also sets forth a brief description of all vans, automobiles,
trucks or other vehicles owned or leased by each of the Corporation and the
Subsidiaries and the state of title thereof.
3.19. BANKING ARRANGEMENTS. Schedule 3.19 sets forth the name of each
bank in or with which the Corporation has an
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<PAGE> 18
account, credit line or safety deposit box, and a brief description of each
such account, credit line or safety deposit box including the names of all
persons currently authorized to draw thereon or having access thereto, and the
names of all persons, if any, now holding powers of attorney from the
Corporation and a summary statement of the terms thereof.
3.20. INTEREST IN ASSETS. Except as set forth on Schedule 3.20, no
Shareholder or Optionholder nor any member of his family nor any affiliate of a
Shareholder or Optionholder, owns any property or rights, tangible or
intangible, including without limitation technology and intellectual property
rights, used in or related, directly or indirectly, to the respective
businesses of the Corporation and its Subsidiaries.
3.21. SALARY INFORMATION. Schedule 3.21 contains a list of the names
and current salary rates of and bonus commitments to all present officers of
the Corporation, and the names and current annual salary rates of all other
persons employed by the Corporation whose annual salaries exceeds $10,000.00.
3.22. EMPLOYEE BENEFIT PLANS. Schedule 3.22 includes a list of all
of the "pension" and "welfare" benefit plans (within the respective meanings of
sections 3(2) and 3(1) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA")) maintained by the Corporation or to which it makes
employer contributions with respect to its employees, a complete and correct
copy of each of which has been delivered to BWAI. There are not vested and
unfunded benefits under any such plans.
3.22.1. All of the pension and profit sharing plans maintained by the
Corporation (herein collectively referred to as the "Pension Plans") are listed
in Part A of Schedule 3.22. Each of the Pension Plans has received a favorable
determination letter as to its qualification under section 401(a) of the
Internal Revenue Code of 1986, as amended (the "Code") (including, but not
limited to, amendments made by ERISA), nothing has occurred with respect to any
such Pension Plan which would cause the loss of such qualification, and the
Corporation has delivered to BWAI true and correct copies of all such
determination letters.
3.22.2. All of the pension plans not maintained by the Corporation but
to which it makes employer contributions with respect to its employees (herein
collectively referred to as the "Other Pension Plans"), are listed in Part B of
Schedule 3.22. Each of the Other Pension Plans is a multi-employer plan (within
the meaning of section 3(37) of ERISA), but the Corporation is not a
substantial employer (within the meaning of section 4001(a)(2) of ERISA) with
respect to any of the Other Pension Plans.
3.22.3. All contributions required by law or required under the Pension
Plans with respect to plan years ended prior to the Closing Date shall have
been made on or prior to the Closing
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<PAGE> 19
Date by the Corporation. With regard to the current plan year of each of the
Other Pension Plans, all contributions required to meet the employer
contribution obligations of the Corporation, under Section 412 of the Code,
Part 3 of Title I(B) of ERISA, such other Pension Plan or any applicable
collective bargaining agreement, with respect to that portion of the current
plan year ending on the Closing Date, shall have been made on or prior to the
Closing Date by the Corporation.
3.22.4. No Pension Plan or related trust has terminated, and no
"reportable event" (within the meaning of section 4043(b) of ERISA) has
occurred with respect to either any of the Pension Plans of the participation
of the Corporation in any of the Other Pension Plans, other than the
transactions contemplated by this Agreement, since the effective date of ERISA.
3.22.5. None of the Pension Plans which are subject to provisions of
Section 412 of the Code or Part 3 of Title I(B) of ERISA or their related
trusts has incurred any "accumulated funding deficiency" (within the meanings
of Section 412(a) of the Code and section 302 of ERISA) since the effective
date of ERISA.
3.22.6. The Corporation has not incurred any liability (except for
required premium payments, which premium payments have been made for plan years
ended prior to the Closing Date, to the Pension Benefit Guaranty Corporation)
with respect to the Pension Plans.
3.22.7. All of the welfare plans maintained by the Corporation or to
which it makes employer contributions with respect to its employees (herein
collectively referred to as the "Welfare Plans") are listed in Part C of
Schedule 3.22. There are no actions, suits or claims, pending or threatened,
and the Shareholders and Optionholders, after reasonable inquiry, have no
knowledge of any facts which could give rise to any actions, suits or claims
against any of the Pension Plans, or (with respect to the participation of the
Corporation therein) against any of the Other Pension or Welfare Plans, or
against the Corporation with respect to any thereof.
3.22.8. The Corporation has satisfied in all material respects all
reporting and disclosure requirements applicable to it under ERISA, and the
Department of Labor and Internal Revenue Service regulations promulgated
thereunder, with respect to all of the Pension and Welfare Plans, and the
Corporation will deliver to BWAI prior to the Closing Date true and complete
copies of the most recently filed and disclosed Forms EBS-1, Forms 5500 and
5500-C (with exhibits), 1976 "ERISA Notices" and summary plan description for
the Pension and Welfare Plans.
3.22.9. None of the Pension and Welfare Plans or any of their related
trusts, nor the Corporation or any trustee, administrator or other "party in
interest" or "disqualified person"
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(within the meaning of section 3(14) of ERISA or section 4975(e)(2) of the
Code, respectively) with respect to the Plans, has engaged in any "prohibited
transaction" (within the meaning of section 408 of ERISA or section 4975(c)(23)
or (d) of the Code), with respect to the participation of the Corporation
therein, which could subject any of the Pension or Welfare Plans or related
trusts, or any trustee, administrator or other fiduciary of the Plan, or the
Corporation or BWAI, or any other party dealing with the Plans, to the
penalties or excise tax imposed on prohibited transactions by section 502(i) or
ERISA or section 4975 of the Code.
3.22.10. The Trustees of each of the Pension Plans have completed their
required annual accountings for the plan years ended December 31, 1995, such
accountings accurately reflect the financial positions of the Pension Plans as
at such date, and true and complete copies of the Trustees' reports or
schedules of such accountings have been delivered to BWAI.
3.23. NO BREACH. Neither the execution and delivery of this
Agreement nor compliance by the Corporation and each of the Shareholders
Optionholders with any of the provisions hereof nor the consummation of the
transactions contemplated hereby, will:
(a) violate or conflict with any provision of the Certificate
of Incorporation or By-Laws of the Corporation;
(b) violate or, alone or with notice of the passage of time,
result in the material breach or termination of, or otherwise give any
contracting party the right to terminate, or declare a material default under,
the terms of any agreement or other document or undertaking, oral or written to
which the Corporation or any Shareholder or Optionholder is a party or by which
any of them or any of their respective properties or assets may be bound
(except for such violations, conflicts, breaches or defaults as to which
required waivers or consents by other parties have been, or will, prior to the
Closing, be, obtained or which will not have a material adverse effect on the
Corporation);
(c) result in the creation of any lien, security interest,
charge or encumbrance upon any of the properties or assets of the Corporation
or any of the Subsidiaries pursuant to the terms of any such agreement or
instrument;
(d) violate any judgment, order, injunction, decree or award
against, or binding upon, any of the Corporation, the Subsidiaries or any
Shareholder or upon their respective properties or assets; or
(e) violate any law or regulation of any jurisdiction relating
to either of the Corporation or any of the Subsidiaries or any of their
respective securities, assets or properties.
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<PAGE> 21
3.24. BROKERS. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried on directly with BWAI by the
Corporation and the Shareholders and Optionholders without the intervention of
any broker, finder, investment banker or other third party except for JHM
Executive Alliance and another party (collectively, the "Brokers") to be paid
by BWAI. Neither the Corporation nor any of the Shareholders or Optionholders
has engaged, consented to, or authorized any broker, finder, investment banker
or other third party to act on his or its behalf, directly or indirectly, as a
broker or finder in connection with the transaction contemplated by this
Agreement other than the Brokers.
3.25. LABOR DISCUSSIONS. Except with respect to the agreements listed
in Schedule 3.15 pursuant to Section 3.15(x), the Corporation is not, and
during the past three years has not been, involved in any labor discussions
with any unit or group seeking to become the bargaining unit for any of its
employees. With respect to said Agreements, Schedule 3.15 sets forth a
description of the status thereof, including any demands or proposals with
respect to the renewal, extension or replacement thereof.
3.26. CHANGE OF NAME. The Corporation has not conducted business
under any name during the past three (3) years except those set forth on
Schedule 3.27.
3.27. BACKLOG. Schedule 3.27 sets forth as of February 29, 1996, the
name, aggregate contract price, revenues received to date and balance remaining
upon all orders then in progress or under contract.
3.28. ENVIRONMENTAL. As used in this Agreement, the term "Hazardous
Materials" shall mean any waste material which is regulated by any state or
local governmental authority in the states in which the Corporation conducts
business, or the United States Government, including, but not limited to, any
material or substance which is (i) defined as "hazardous waste," "hazardous
material," "hazardous substance," "extremely hazardous waste" or "restricted
hazardous waste" under any provision of California law, (ii) petroleum, (iii)
asbestos, (iv) designated as "hazardous substance" pursuant to Section 311 of
the Clean Water Act, 33 U.S.C. 1251 et seq. (33 U.S.C. 1321) or listed pursuant
to Section 307 of the Clean Water Act (33 U.S.C. 1317), (v) defined as a
"hazardous waste" pursuant to Section 1004 of the Resource Conservation and
Recovery Act, 42 U.S.C. 6901 et seq. (42 U.S.C. 6901), or (vi) defined as a
"hazardous substance" pursuant to Section 101 of the Comprehensive
Environmental Response, Compensation, and Liability Act, 42 U.S.C. 9601 et seq.
(42 U.S.C. 9601). Except as set forth on Schedule 3.27, the current operations
of the Corporation and its current and, to the best knowledge of the
Shareholders and the Optionholders, its past use comply and then complied in
all material respects with all applicable laws and governmental regulations
including all applicable federal, state
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and local laws, ordinances, and regulations pertained to air and water quality,
Hazardous Materials, waste, disposal or other environmental matters, including
the Clean Water Act, the Clean Air Act, the Federal Water Pollution Control
Act, the Solid Waste Disposal Act, the Resource Conservation Recovery Act, the
Comprehensive Environmental Response, Compensation and Liability Act, and the
statutes, rules, regulations and ordinances or the state, city and country in
which the Corporation's property is located.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BWAI
BWAI makes the following representations and warranties to each of the
Shareholders and Option holders, and the Shareholders and Optionholders, in
executing this Agreement, have relied and will rely on the correctness and
completeness of such representations and warranties:
4.01. ORGANIZATION. BWAI is a corporation, duly organized, validly
existing and in good standing under the laws of the State of Colorado, and has
the corporate power to carry on its business as now conducted and to own its
assets.
4.02. NO BREACH. The execution and delivery of this Agreement by BWAI
and the consummation of the transactions contemplated hereby will not violate
any provision of the Certificate of Incorporation or By-Laws of BWAI or any
judgment, order, injunction, decree or award against, or binding upon, BWAI or
upon its properties or assets.
4.03. AUTHORITY FOR AND BINDING NATURE OF AGREEMENT. All corporate
and other proceedings required to be taken by or on behalf of BWAI including,
without limitation, all actions required to be taken by its Board of Directors,
to authorize BWAI to enter into and carry out this Agreement will have been
duly and properly taken at or prior to the Closing Date. This Agreement has
been duly executed and delivered by BWAI and is valid and binding upon BWAI in
accordance with its terms.
4.04. BROKERS. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried on directly with the
Corporation and the Shareholders and Optionholders by BWAI without the
intervention of any broker, finder, investment banker or other third party
other than the "Brokers". BWAI has not engaged, consented to, or authorized any
broker, finder, investment banker or third party to act on its behalf, directly
or indirectly, as a broker or finder in connection with the transactions
contemplated by this Agreement other than the "Brokers", and BWAI agrees to
indemnify each of the Shareholders and Optionholders against, and to hold each
of them harmless from, any claim for brokerage or similar commission or other
compensation which may be made against any Shareholder by any third party in
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connection with the transactions contemplated hereby, which claim is based upon
any action by BWAI.
4.05. PUBLIC REPORTS. BWAI has filed with the Commission all reports
required to be filed pursuant to the Securities Exchange Act of 1934, as
amended. Such reports are accurate and complete in all material respects.
4.06 BWAI STOCK. The BWAI Stock to be issued under this Agreement
has been duly authorized and reserved for issuance and, when issued in
accordance with this Agreement, will be validly issued and outstanding, fully
paid and non-assessable.
4.07 ACQUISITION OF BWAI STOCK. BWAI represents and warrants to the
Shareholders that the Shares to be acquired by it pursuant to the terms of this
Agreement are being acquired for its own account, with no intention of
assigning any participation or interest therein, and without a view to the
distribution of any portion thereof, except in accordance with the Securities
Act of 1933, as amended (the "Act"). BWAI will not sell, assign, transfer or
encumber any of such shares unless (i) a registration statement under the Act
with respect thereto is in effect and the prospectus included therein meets the
requirements of Section 10 of the Act, or (ii) a no-action letter is obtained
from the staff of the Commission in respect of such proposed sale, assignment,
transfer or encumbering, or (iii) BWAI has received a written opinion of
counsel reasonably satisfactory to BWAI that, after an investigation of the
relevant facts, such counsel is of the opinion that such proposed sale,
assignment, transfer or encumbering does not require registration under the Act.
BWAI understands that the shares are not being registered under the Act
and must be held indefinitely unless they are subsequently registered
thereunder or an exemption from such registration is available. BWAI
understands that, except as otherwise provided in this Agreement, the Shares
are not being registered under the Act in part on the grounds that the issuance
thereof is exempt under Section 4(2) of the Act as a transaction by an issuer
not involving any public offering; that the shareholders' reliance on such
exemption is predicated in part on the foregoing representation and warranty of
BWAI and that in the view of the Commission, the statutory basis for the
exemption claimed would not be present if, notwithstanding such representation
and warranty, BWAI contemplates acquiring any of the Shares for sale upon the
occurrence of non-occurrence of some predetermined event.
4.08 RECEIPT OF INFORMATION. BWAI acknowledges receipt of all
information required to be delivered to it with respect to the transactions
contemplated by this Agreement pursuant to Regulation D.
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<PAGE> 24
4.09. ACCREDITED INVESTOR STATUS. BWAI Optionholder represents and
warrants to the Shareholders that it is an accredited investor, as defined in
Regulation D.
ARTICLE V
PRE-CLOSING COVENANTS
The Non-Raytheon Shareholders, jointly and severally, hereby covenant
that, from and after the date hereof, and until the Closing or earlier
termination of this Agreement:
5.01. ACCESS. The Corporation shall afford to the officers,
attorneys, accountants and other authorized representatives of BWAI free and
full access, during regular business hours and upon reasonable notice, to the
books, records, personnel and properties of the Corporation (including, without
limitation, the work papers prepared by the Corporation's auditors) so that
BWAI may have full opportunity to make such review, examination and
investigation as it may desire of their respective businesses and affairs. The
Corporation will cause its employees, accountants and attorneys to cooperate
fully with said review, examination and investigation and to make full
disclosure to BWAI of all material facts affecting their respective financial
conditions and business operations.
5.02. CONDUCT OF BUSINESS. The Corporation shall conduct its business
only in the ordinary and usual course and make no material change in any of
their policies without the prior written consent of BWAI.
5.03. INSURANCE. The Corporation shall maintain in force the
insurance policies listed on Schedule 3.12, except to the extent that they may
be replaced with equivalent policies at the same or lower rates approved by
BWAI.
5.04. LIABILITIES. The Corporation shall not incur any obligation or
liability, absolute or contingent, except for those incurred in the ordinary
and usual course of its business; nor shall it pay any obligation or liability
other than: (i) the foregoing obligations and liabilities, (ii) debts,
liabilities, and obligations set forth in the Balance Sheet; (iii) debts,
liabilities and obligations arising after the Balance Sheet Date in the
ordinary course of their respective businesses; and (iv) debts, liabilities and
obligations under the contracts, agreements, past practices, arrangements,
relationships, documents and instruments listed, described or contained in this
Agreement or in the Schedules annexed to this Agreement.
5.05. PRESERVATION OF BUSINESS. The Shareholders will use their best
efforts to preserve the Corporation's business organization intact, to keep
available the services of their present officers, employees and consultants
(except as BWAI may otherwise approve), and to preserve its goodwill.
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<PAGE> 25
5.06. FINANCIAL STATEMENTS. The Shareholders will provide BWAI with
such unaudited financial statements of the Corporation up to and including the
Closing Date as BWAI may reasonably request.
5.07. NO BREACH. The Shareholders and Optionholders will each (i) use
his best efforts to assure that all of his representations and warranties
contained herein are true in all material respects of the Closing as if
repeated at and occur with respect to any of its covenants, representations or
warranties contained herein that has not been cured by the Closing; (ii) not
voluntarily take any action or do anything which will cause a material breach
of or default respecting such covenants, representations or warranties; and
(iii) promptly notify BWAI of any event or fact which represents or is like to
cause such a breach or default.
5.08. NO NEGOTIATIONS. Neither the Corporation nor any of its
officers or directors nor any of the Shareholders or Optionholders shall enter
into or conduct negotiations, or enter into any agreement or understanding, for
the sale or possible sale of any securities of the Corporation of the business
or the assets of the Corporation, with anyone other than BWAI unless the
Closing shall not have occurred by May 31, 1996.
ARTICLE VI
CONDITIONS PRECEDENT TO THE OBLIGATIONS TO BWAI TO CLOSE
The obligations of BWAI to enter into and complete the Closing is
subject to the fulfillment, prior to or on the Closing Date, of each of the
following conditions, any one or more of which may be waived by BWAI (except
when the fulfillment of such condition is a requirement of law).
6.01. REPRESENTATIONS AND WARRANTIES. All representations and
warranties of the Shareholders and Optionholders contained in this Agreement
and in any written statement (including financial statements), exhibit,
certificate, schedule or other document delivered pursuant hereto or in
connection with the transactions contemplated hereby shall be true and correct
in all material respects as at the Closing Date, as if made at the Closing and
as of the Closing Date.
6.02. COVENANTS. The Shareholders and Optionholders shall have
performed and complied in all material respects with all covenants and
agreements required by this Agreement to be performed or complied with by them
prior to or at the Closing.
6.03. NO ACTION. No action, suit, proceeding or investigation shall
have been instituted, and be continuing before a court or before or by a
governmental body or agency, and be unresolved, to restrain or to prevent or to
obtain damages in respect of, the carrying out of the transactions contemplated
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<PAGE> 26
hereby, or which might materially and adversely affect the right of BWAI to
consummate the Merger or to operate or control the assets, properties and
business of the Corporation after the Closing Date, or which might have a
materially adverse effect thereon.
6.04. CONSENTS, LICENSES AND PERMITS. The Corporation, the
Shareholders, the Optionholders and BWAI shall have each obtained all consents,
licenses and permits of third parties necessary for the performance by each of
them of all of their respective obligations under this Agreement, and such
other consents, if any, to prevent (i) agreements of the Corporation from
terminating, the termination of which, in the aggregate, would have a material
adverse effect on the business, financial condition or assets of the
Corporation, or (ii) any material indebtedness of any of the Corporation from
becoming due or being subject to becoming due with the passage of time or on
notice as a result of the performance of this Agreement, any other provisions
of this Agreement to the contrary notwithstanding.
6.05. CERTIFICATE. BWAI shall have received a certificate dated the
Closing Date, signed by each of the Shareholders and Optionholders as to the
satisfaction of the conditions contained in Section 6.01 and 6.02.
6.06. OPINION. BWAI shall have received the written opinion of the
Shareholders' counsel, dated the Closing Date, in form and substance
satisfactory to BWAI and its counsel to the effect set forth on Schedule 6.06
hereto.
6.07. EMPLOYMENT AND CONSULTING AGREEMENTS. The Corporation shall
have entered into employment agreements with Bar-Giora Goldberg and Anthony
Mauro and a consulting and non-competition agreement with William Lennartz,
which agreements will be substantially in the form of Exhibit 6.07 to this
Agreement.
6.08 NO MATERIAL ADVERSE CHANGE. There shall have been no
materially adverse change at the Closing Date in the business, assets and
properties or financial status of the Corporation since the Balance Sheet Date.
ARTICLE VIII
CONDITIONS PRECEDENT TO THE OBLIGATION OF
THE SHAREHOLDERS AND OPTIONHOLDERS TO CLOSE
The obligation of the Shareholders and Optionholders to enter into and
complete the Closing is subject to the fulfillment, prior to or on the Closing
Date, of each of the following conditions, any one or more of which may be
waived by the Shareholders and Optionholders (except when the fulfillment of
such condition is a requirement of law).
7.01 REPRESENTATIONS AND WARRANTIES. All representations and
warranties of BWAI contained in this Agreement and in any
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<PAGE> 27
written statement, schedule or other document delivered pursuant hereto or in
connection with the transactions contemplated hereby shall be true and correct
in all material respects as at the Closing Date, as if made at the Closing and
as of the Closing Date.
7.02. COVENANTS. BWAI shall have performed and complied in all
material respects with all covenants and agreements required by this Agreement
to be performed or complied with by it prior to or at the Closing.
7.03. NO ACTIONS. No action suit, proceedings, or investigation shall
have been instituted, and be continuing, before a court or before or by a
governmental body or agency, or have been threatened, and be unresolved, by any
governmental body or agency to restrain or prevent, or obtain damages in
respect of, the carrying out of the transactions contemplated hereby.
7.04. CERTIFICATES. The Shareholders shall have received a
certificate of BWAI, dated the Closing Date, signed by the President or any
Vice President of BWAI as to the satisfaction of the conditions contained in
Sections 7.01 and 7.02.
ARTICLE VIII
CLOSING
8.01. LOCATION. The Closing provided for herein shall take place at
the office of Greenbaum, Rowe, Smith, Ravin & Davis, 99 Wood Avenue South,
Woodbridge, New Jersey at 10:00 o'clock a.m. on May 17, 1996 or at such other
time and place as may be mutually agreed to by the parties hereto. Such date is
referred to in this Agreement as the "Closing Date."
8.02. ITEMS TO BE DELIVERED BY THE SHAREHOLDERS AND OPTIONHOLDERS. At
the Closing, the Shareholders and Optionholders will deliver or cause to be
delivered to BWAI:
(a) Certificates representing the Shares in accordance with
Section 1.01 or 1.10 hereof, accompanied by all instruments and documents as in
the opinion of BWAI's counsel shall be necessary to effect the cancellation of
the Shares, free and clear of all manner of liens, pledges, encumbrances,
charges and claims thereon;
(b) The Options, along with appropriate instruments of transfer
duly endorsed;
(c) The Certificate of Merger;
(d) The certificates required by Section 6.05;
(e) The opinion of the Shareholders' and Optionholders' Counsel
as required by Section 6.06;
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<PAGE> 28
(f) The resignation of the Corporation's officers and
directors; and
(g) Such other certified resolutions, documents and
certificates as are required to be delivered by the Corporation and the
Shareholders and the Optionholders pursuant to the provisions of this Agreement.
8.03. ITEMS TO BE DELIVERED BY BWAI. At the Closing, BWAI will
deliver or cause to be delivered to the Shareholders:
(a) The Purchase Price in accordance with Section 1.02 hereof;
(b) The Certificate of Merger;
(c) The certificates representing the BWAI Stock to be issued
pursuant to Section 1.10;
(d) The BWAI Options;
(e) The certificate required by Sections 7.04; and
(f) Such other certified resolutions, documents and
certificates as are required to be delivered by BWAI pursuant to the provisions
of this Agreement.
ARTICLE IX
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
9.01. SURVIVAL. The parties hereto agree that their respective
representations, warranties, covenants and agreements contained in this
Agreement shall survive the Closing for a term of eighteen (18) months with the
exception of those regarding taxes set forth in Section 3.10 which shall
survive until the expiration of the respective periods within which such taxes
may be assessed.
9.02. INDEMNIFICATION. (a) It is expressly agreed and understood that
Raytheon is not providing and shall not under any circumstances be deemed to
have provided indemnification to any party (nor shall Raytheon have any
obligation or liability to join in any such indemnification) in connection with
any representation, warranty, covenant or agreement contained in this Agreement
except as to the matters relating to Raytheon's ownership of the Shares set
forth in Section 3.05 hereof. The non-Raytheon Shareholders and Optionholders,
pro rata to their respective shareholdings and optionholdings set forth on
Schedule 1.01, agree to save, defend and indemnify BWAI against and hold it
harmless from any and all liabilities, of every kind, nature and description,
fixed or contingent (including, without limitation, counsel fees and expenses
in connection with any action, claim or proceeding relating to such
liabilities) (collectively, "Damages") arising out of any transaction or event
commencing or occurring on or prior to the
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<PAGE> 29
Closing Date, which is not fully disclosed or provided for in the Balance
Sheet, this Agreement or the several exhibits hereto, including, without
limitation, any tax liabilities to the extent not so reflected or reserved
against the Balance Sheet.
(b) Anything herein to the contrary notwithstanding, "Damages"
with respect to any breach or claim under this Article IX hereof shall be
strictly out-of-pocket costs, out-of-pocket expenses and out-of-pocket
deficiencies arising out of, based upon or otherwise in respect of the breach
or claim, and interest on such costs, expenses and deficiencies.
(c) The Shareholders and Optionholders shall not be liable
under this Article IX for any Damages until the amount otherwise due any other
party entitled to indemnification hereunder exceeds Seventy-Five Thousand
Dollars ($75,000) plus, solely for the purpose of the FEL receivable, the
amount by which Pre-Tax Income exceeds $750,000 in the aggregate, in which case
the Shareholders and Optionholders will be liable to the Buyer for all such
amounts in excess of Seventy-Five Thousand Dollars. The liability of the
Shareholders and Optionholders for indemnification shall be several among the
Shareholders and Optionholders and each Shareholder and Optionholder shall be
liable only for such pro rata portion of the amount in excess of said $75,000
of indemnity as shall equal their pro rata interest as set forth on Schedule
1.01. In no event shall the liability of any Shareholder or Optionholder under
this Article IX exceed the market value (valued as of the issuance date in
accordance with Section 1.12 of this Agreement) of any BWAI Stock or BWAI
Options (less the exercise price of such Options) issued pursuant to this
Agreement to such Shareholder or Optionholder. In no event shall Raytheon have
any liability under this Article IX.
9.03. DEFENSE OF CLAIMS. BWAI agrees to notify the Shareholders and
Optionholders with reasonable promptness of any claim asserted against it in
respect of which the Shareholders and Optionholders, or any of them, may be
liable under this Agreement, which notification shall be accompanied by a
written statement setting forth the basis of such claim and the manner of
calculation thereof. The Shareholders and Optionholders shall have the right to
defend any such claim at their own expense and with counsel of their choice;
provided, however, that such counsel shall have been approved by BWAI prior to
engagement, which approval shall not be unreasonably withheld, or delayed; and
provided further, that BWAI may participate in such defense, if it so chooses,
with its own counsel and at its own expense.
9.04. TENDER OF SHARES. At the option of a Shareholder or
Optionholder, he or she may satisfy any indemnification obligation under this
Agreement by tendering, in lieu of cash, shares of BWAI Stock having a market
value at the time of tender equal to the amount of the indemnification
obligation.
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<PAGE> 30
ARTICLE X
TERMINATION AND WAVIER
10.01. TERMINATION. Anything herein or elsewhere to the contrary
notwithstanding, this Agreement may be terminated and the transactions provided
for herein abandoned at any time prior to the Closing Date:
(a) By mutual consent of BWAI and the Shareholders and
Optionholders;
(b) By BWAI if any of the conditions set forth in Article VI
hereof shall not have been fulfilled on or prior to May 31, 1996, or shall
become incapable of fulfillment at any time, and shall not have been waived;
(c) By the Shareholders and Optionholders if any of the
conditions set forth in Article VII hereof shall not have been fulfilled on or
prior to May 31, 1996, or shall have become incapable of fulfillment at any
time, and shall not have been waived;
(d) By BWAI if any material legal action or proceeding shall
have been instituted or threatened seeking to restrain, prohibit, invalidate or
otherwise affect the consummation of the transactions contemplated by this
Agreement which makes it inadvisable, in the judgment of BWAI, to consummate
same.
In the event that this Agreement is terminated as described above, this
Agreement shall be void and of no force and effect, without any liability or
obligation on the part of any of the parties hereto except for any liability
which may arise pursuant to Section 11.02.
10.02. WAIVER. Any condition to the performance of the Shareholders
and Optionholders or BWAI which legally may be waived on or prior to the
Closing Date may be waived at any time by the party entitled to the benefit
thereof by action taken or authorized by an instrument in writing executed by
the relevant party or parties. The failure of any party at any time or times to
require performance of any provision hereof shall in no manner affect the right
of such party as a later time to enforce the same. No waiver by any party of
the breach of any term, covenant, representation or warranty contained in this
Agreement as a condition to such party's obligations hereunder shall release or
affect any liability resulting from such breach, and no waiver of any nature,
whether by conduct or otherwise, in any one or more instances, shall be deemed
to be or construed as a further or continuing waiver of any such condition or
of any breach of any other term, covenant, representation or warranty of
this Agreement.
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<PAGE> 31
ARTICLE XI
MISCELLANEOUS PROVISIONS
11.01. EXPENSES. Each of the parties hereto shall bear its own
expenses in connection herewith. However, at the Closing, BWAI shall cause the
Corporation to pay the attorneys' fees related to this Agreement, not to exceed
$25,000, and the fees of the Brokers.
11.02. CONFIDENTIAL INFORMATION. Each party agrees that such party and
its representatives will hold in strict confidence all information and
documents received from the other parties and, if the transactions herein
contemplated shall not be consummated, each party will continue to hold such
information and documents in strict confidence and will return to such other
party all such documents (including the documents annexed to this Agreement)
then in such receiving party's possession without retaining copies thereof:
provided, however, that each party's obligations under this Section 11.02 to
maintain such confidentiality shall not apply to any information or documents
that are in the public domain at the time furnished by the others or that
become in the public domain thereafter through any means other than as a result
of any act of the receiving party or of its agents, officers, directors or
shareholders which constitutes a breach of this Agreement, or that are required
by applicable law to be disclosed.
11.03. MODIFICATION, TERMINATION OR WAIVER. This Agreement may be
amended, modified, superseded or terminated, and any of the terms, covenants,
representations, warranties or conditions hereof may be waived, but only by a
written instrument executed by the party waiving compliance. The failure of any
party at any time or times to require performance of any provision hereof shall
in no manner affect the right of such party at a later time to enforce the
same.
11.04. PUBLICITY. The parties agree that no publicity release or other
public announcement concerning the transactions contemplated by this Agreement
shall be issued by either party without the advance approval of both the form
and substance of the same by the other party and its counsel, which approval,
in the case of any publicity, release or other public announcement required by
applicable law, shall not be unreasonably withheld or delayed.
11.05. NOTICES. Any notice or other communication required or which
may be given hereunder shall be in writing and either be delivered personally
or by reputable overnight delivery service, or be mailed, certified or
registered mail, postage prepaid, as follows:
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<PAGE> 32
If to the Shareholders or Optionholders, to:
the addresses set forth on Schedule 1.01
With a copy to:
Latham & Watkins
701 B Street, Suite 2100
San Diego, California 92101
Attention: Thomas A. Edwards
and if to BWAI, to:
1800 Stewart Street
Santa Monica, California 90402
With a copy to:
Greenbaum, Rowe, Smith, Ravin & Davis
99 Wood Avenue South
P.O. Box 5600
Woodbridge, New Jersey 07095
Attention: W. Raymond Felton
The parties may change the persons and addresses to which the notices
or other communications are to be sent to it by giving written notice of any
such change in the manner provided herein for giving notice.
11.06. BINDING EFFECT AND ASSIGNMENT. This Agreement shall be binding
upon and inure to the benefit of the successors and assigns of the parties
hereto; provided, however, that no assignment of any rights or delegation of
any obligations provided for herein may be made by any party without the
express consent of the other parties, and except that BWAI may assign this
Agreement to our affiliate of BWAI.
11.07. ENTIRE AGREEMENT. This Agreement contains the entire agreement
between the parties with respect to the subject matter hereof.
11.08. SCHEDULES. All Schedules annexed hereto and the documents and
instruments referred to herein or required to be delivered simultaneously
herewith or at the Closing are expressly made a part of this Agreement as fully
as though completely set forth herein, and all references to this Agreement
herein or in any of such Schedules, documents or instruments shall be deemed to
refer to and include all such Schedules, documents and instruments.
11.09. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of California applicable to
agreement made and to be performed
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<PAGE> 33
entirely within that state, excluding the choice of law rules thereof.
11.10. COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original, but which together shall
constitute one and the same instrument.
11.11 SECTION HEADINGS. The section headings contained in this
Agreement are inserted for conveniences of reference only and shall not affect
the meaning or interpretation of this Agreement.
WITNESS the execution of this Agreement as of the date first above
written.
BUILDERS WAREHOUSE ASSOCIATION, INC.
By: Par Chadha
----------------------------------
Name: Par Chadha
--------------------------------
Title: Chairman
-------------------------------
SCITEQ COMMUNICATIONS, INC.
By: /s/ Barry Witz
---------------------------------
Name: Barry Witz
-------------------------------
Title: C.E.O.
------------------------------
SHAREHOLDERS:
------------------------------------
------------------------------------
------------------------------------
------------------------------------
------------------------------------
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<PAGE> 34
entirely within that state, excluding the choice of law rules thereof.
11.10. COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original, but which together shall
constitute one and the same instrument.
11.11 SECTION HEADINGS. The section headings contained in this
Agreement are inserted for conveniences of reference only and shall not affect
the meaning or interpretation of this Agreement.
WITNESS the execution of this Agreement as of the date first above
written.
BUILDERS WAREHOUSE ASSOCIATION, INC.
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
SCITEQ COMMUNICATIONS, INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
SHAREHOLDERS:
RAYTHEON COMPANY
By: /s/ David S. Dwelley
---------------------------------
David S. Dwelley
Vice President
------------------------------------
------------------------------------
------------------------------------
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<PAGE> 35
and shall not affect the meaning or interpretation of this Agreement.
11.12. FURTHER ASSURANCES. Upon the terms and subject to the
conditions herein, each of the parties hereto agrees, both before and after the
Closing, (a) to use all reasonable efforts to take, or cause to be taken, all
actions and to do, or cause to be done, all things necessary, proper or
advisable to consummate and make effective the transactions contemplated by
this Agreement, (b) to execute any documents, instruments or conveyance of any
kind which may be reasonably necessary or advisable to carry out any of the
transactions contemplated hereunder, (c) to provide access to any books and
records of the Corporation necessary or advisable to determine the rights and
responsibilities of the parties under this Agreement and (d) to cooperate with
each other in connection with the foregoing.
WITNESS the execution of this Agreement as of the date first above
written.
BUILDERS WAREHOUSE ASSOCIATION, INC.
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
SHAREHOLDERS
-------------------------------------
/s/ William R. Lennartz
-------------------------------------
-------------------------------------
/s/ William R. Lennartz
-------------------------------------
-------------------------------------
-------------------------------------
-------------------------------------
-------------------------------------
-------------------------------------
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<PAGE> 36
and shall not affect the meaning or interpretation of this Agreement.
11.12. FURTHER ASSURANCES. Upon the terms and subject to the
conditions herein, each of the parties hereto agrees, both before and after the
Closing, (a) to use all reasonable efforts to take, or cause to be taken, all
actions and to do, or cause to be done, all things necessary, proper or
advisable to consummate and make effective the transactions contemplated by
this Agreement, (b) to execute any documents, instruments or conveyance of any
kind which may be reasonably necessary or advisable to carry out any of the
transactions contemplated hereunder, (c) to provide access to any books and
records of the Corporation necessary or advisable to determine the rights and
responsibilities of the parties under this Agreement and (d) to cooperate with
each other in connection with the foregoing.
WITNESS the execution of this Agreement as of the date first above
written.
BUILDERS WAREHOUSE ASSOCIATION, INC.
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
SHAREHOLDERS
-------------------------------------
/s/ William R. Lennartz
-------------------------------------
/s/ Henry Eisenson
-------------------------------------
-------------------------------------
-------------------------------------
-------------------------------------
-------------------------------------
-------------------------------------
-------------------------------------
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<PAGE> 37
and shall not affect the meaning or interpretation of this Agreement.
11.12. FURTHER ASSURANCES. Upon the terms and subject to the
conditions herein, each of the parties hereto agrees, both before and after the
Closing, (a) to use all reasonable efforts to take, or cause to be taken, all
actions and to do, or cause to be done, all things necessary, proper or
advisable to consummate and make effective the transactions contemplated by
this Agreement, (b) to execute any documents, instruments or conveyance of any
kind which may be reasonably necessary or advisable to carry out any of the
transactions contemplated hereunder, (c) to provide access to any books and
records of the Corporation necessary or advisable to determine the rights and
responsibilities of the parties under this Agreement and (d) to cooperate with
each other in connection with the foregoing.
WITNESS the execution of this Agreement as of the date first above
written.
BUILDERS WAREHOUSE ASSOCIATION, INC.
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
SHAREHOLDERS
-------------------------------------
/s/ William R. Lennartz
-------------------------------------
-------------------------------------
/s/ Bar-Giora Goldberg
-------------------------------------
-------------------------------------
-------------------------------------
-------------------------------------
-------------------------------------
-------------------------------------
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<PAGE> 38
and shall not affect the meaning or interpretation of this Agreement.
11.12. FURTHER ASSURANCES. Upon the terms and subject to the
conditions herein, each of the parties hereto agrees, both before and after the
Closing, (a) to use all reasonable efforts to take, or cause to be taken, all
actions and to do, or cause to be done, all things necessary, proper or
advisable to consummate and make effective the transactions contemplated by
this Agreement, (b) to execute any documents, instruments or conveyance of any
kind which may be reasonably necessary or advisable to carry out any of the
transactions contemplated hereunder, (c) to provide access to any books and
records of the Corporation necessary or advisable to determine the rights and
responsibilities of the parties under this Agreement and (d) to cooperate with
each other in connection with the foregoing.
WITNESS the execution of this Agreement as of the date first above
written.
BUILDERS WAREHOUSE ASSOCIATION, INC.
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
SHAREHOLDERS
-------------------------------------
/s/ William R. Lennartz
-------------------------------------
-------------------------------------
-------------------------------------
-------------------------------------
-------------------------------------
-------------------------------------
-------------------------------------
/s/ Mike Kirby
-------------------------------------
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<PAGE> 39
and shall not affect the meaning or interpretation of this Agreement.
11.12. FURTHER ASSURANCES. Upon the terms and subject to the
conditions herein, each of the parties hereto agrees, both before and after the
Closing, (a) to use all reasonable efforts to take, or cause to be taken, all
actions and to do, or cause to be done, all things necessary, proper or
advisable to consummate and make effective the transactions contemplated by
this Agreement, (b) to execute any documents, instruments or conveyance of any
kind which may be reasonably necessary or advisable to carry out any of the
transactions contemplated hereunder, (c) to provide access to any books and
records of the Corporation necessary or advisable to determine the rights and
responsibilities of the parties under this Agreement and (d) to cooperate with
each other in connection with the foregoing.
WITNESS the execution of this Agreement as of the date first above
written.
BUILDERS WAREHOUSE ASSOCIATION, INC.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
SHAREHOLDERS:
/s/ John Stiska
-------------------------------------------
/s/ William R. Lennartz
-------------------------------------------
-------------------------------------------
-------------------------------------------
-------------------------------------------
-------------------------------------------
-------------------------------------------
-------------------------------------------
-------------------------------------------
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<PAGE> 40
and shall not affect the meaning or interpretation of this Agreement.
11.12. FURTHER ASSURANCES. Upon the terms and subject to the
conditions herein, each of the parties hereto agrees, both before and after the
Closing, (a) to use all reasonable efforts to take, or cause to be taken, all
actions and to do, or cause to be done, all things necessary, proper or
advisable to consummate and make effective the transactions contemplated by
this Agreement, (b) to execute any documents, instruments or conveyance of any
kind which may be reasonably necessary or advisable to carry out any of the
transactions contemplated hereunder, (c) to provide access to any books and
records of the Corporation necessary or advisable to determine the rights and
responsibilities of the parties under this Agreement and (d) to cooperate with
each other in connection with the foregoing.
WITNESS the execution of this Agreement as of the date first above
written.
BUILDERS WAREHOUSE ASSOCIATION, INC.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
SHAREHOLDERS:
-------------------------------------------
/s/ William R. Lennartz
-------------------------------------------
-------------------------------------------
-------------------------------------------
/s/ Richard Keyser
-------------------------------------------
-------------------------------------------
-------------------------------------------
-------------------------------------------
-------------------------------------------
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<PAGE> 41
and shall not affect the meaning or interpretation of this Agreement.
11.12. FURTHER ASSURANCES. Upon the terms and subject to the
conditions herein, each of the parties hereto agrees, both before and after the
Closing, (a) to use all reasonable efforts to take, or cause to be taken, all
actions and to do, or cause to be done, all things necessary, proper or
advisable to consummate and make effective the transactions contemplated by
this Agreement, (b) to execute any documents, instruments or conveyance of any
kind which may be reasonably necessary or advisable to carry out any of the
transactions contemplated hereunder, (c) to provide access to any books and
records of the Corporation necessary or advisable to determine the rights and
responsibilities of the parties under this Agreement and (d) to cooperate with
each other in connection with the foregoing.
WITNESS the execution of this Agreement as of the date first above
written.
BUILDERS WAREHOUSE ASSOCIATION, INC.
By:
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Name:
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Title:
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SHAREHOLDERS:
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/s/ William R. Lennartz
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/s/ Charles E. Salik
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<PAGE> 42
OPTIONHOLDERS:
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/s/ William R. Lennartz
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/s/ A. P. Mauro
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/s/ William R. Lennartz
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-30-
<PAGE> 43
OPTIONHOLDERS:
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/s/ William R. Lennartz
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/s/ Thanh Tran
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-30-
<PAGE> 44
OPTIONHOLDERS:
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/s/ William R. Lennartz
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/s/ Chris Hill
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-30-
<PAGE> 45
OPTIONHOLDERS:
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/s/ William R. Lennartz
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/s/ Philip Feinberg
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-30-
<PAGE> 46
OPTIONHOLDERS:
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/s/ William R. Lennartz
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/s/ Roberta Wright
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-30-
<PAGE> 47
SCITEQ ELECTRONICS, INC.
By: /s/ WILLIAM R. LENNARTZ
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Name: William R. Lennartz
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Title: President & C.E.O.
----------------------
-31-
